The Unique Value of Custom SMAs

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Customizable Separately Managed Accounts (Custom SMAs) offer advisors an edge at a time when they need one, enabling efficient delivery of highly personalized portfolios with potential for after-tax outperformance.

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Key Insights

  • A Race to Meet Rising Expectations: Advisors face stiff competition in the race to meet rising investor expectations, putting a premium on scale and differentiation. The rise of direct indexing has shone a spotlight on the potential for customized separately managed accounts (custom SMAs) to help in this effort.
  • Quantitative Capabilities Drive Unique Value: The automation and scale offered through these solutions has the potential to significantly impact this race by enabling advisors to efficiently deliver highly personalized portfolios with potential for after-tax outperformance.
  • Impending Enhancements to Elevate This Value: This potential is fueling an evolution of custom SMA products. Forthcoming enhancements will enable deeper personalization and extend the automation and optimization capabilities of direct indexing to more traditional active strategies.
  • Prioritizing Work Towards Developing an Offering: Advisors and firm leaders should consider starting the necessary groundwork to be able to offer custom SMAs. Understand them, how current and forthcoming products may differ, and how they could fit into and enhance your practice.
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