Tools to Deliver Personalized Portfolios


Recorded at the Envestnet Advisors Summit 2022.  Presented by:

Advisorpedia Interviewed Dana D'Auria the Co-Chief Investment Officer at Envestnet, at the Envestnet Advisor Summit in May, 2022.

Related: Delivering the Complete Ecosystem to Serve Your Clients



We find that advisors are reevaluating the tax efficiency and client portfolios. Certainly after last year, when there was a concern about a lot of tax increase that didn't materialize. Now that's coming back up. Envestnet has a lot of tools that we're offering to help advisors with this main one Overlay Services. . .

So if you have a an equity SMA account in a unified managed account, we can overlay that we can do tax loss, harvesting tax management throughout the course of the year, and really turn any equity SMA manager into a tax manage SMA manager, we also have a FSP or model version of this overlay. It's really about tax mitigation throughout the course of the entire year. I think sustainability has become a real passion point for investors, certainly we're seeing through surveys, clients want the ability to express their social preferences in their investments, advisors now need to engage on this, they're looking for information on how to do that, as well as services.

Envestnet has really invested in this area, we have an entire curriculum for advisors to talk about what is sustainable, how should I approach sustainable? And why should I care about sustainable? And then we have a roadmap, a proposal system that allows the advisor to assess the client's preferences to look at portfolios that they have and say how well are they holding up for those preferences and build a better portfolio that more reflects what they want in those investments? And then probably most important of all report out on that so that you can see how diverse are my boards? How does my investment look relative to the benchmark on the things that I care about, you know, barrels of oil, etc. The traditional 60/40 model right now is going through some of its worst time in decades, right? It's not just equities with double digit declines. We're looking at fixed income losses in the double digit range.

This is very hard on investors, right, you know, fixed income, expected to at least be the ballast in the portfolio. So I think inevitably, we have to ask is the 60/40 the right mechanism to go forward? And certainly look at how can we diversify that 60/40. And there are different ways to do that. You know, certainly factor investing. We think a quantitative approach to investing is helpful in these portfolios. Alternatives investments, looking at private market instruments, hedge funds to diversify that have low beta both to equity and fixed income.