The strategies on the SMA Advantage platform also include direct indexing and municipal bond SMAs, which, in addition to model portfolios, are in high demand among clients, said Jeff Strange, relationship manager at FUSE Research Network. “A lot of the flows in advisory are … going toward model portfolios, they’re going toward direct indexing, they’re going toward munis,” he said. “Even outside of the fee structure, which is unique, these are the kinds of strategies where we see a lot of advisory flows going.” Other firms have yet to follow suit with a similar pricing structure for separately managed accounts, Strange said. “What it tries to do is really clean up the advisory fee of the client,” he said. “They’re not seeing multiple charges and the product doesn’t have explicit costs. This is a UMA so it’s going to have different things in it, but as a client you’re only paying one fee. There are some add-ons, but for the financial advisors, it makes it a cleaner way of establishing a relationship with the client.”
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Article published on April 27, 2022