unified managed accounts and overlay portfolio management
TRANSCRIPT
Unified Managed Accounts and
Overlay Portfolio Management
Coordinating the investment recommendations across multiple managers;
Incorporating client restrictions or mandates;
Trade order management and execution with multiple custodians;
Active tax management
Overlay Portfolio Management (OPM) is the core process that drives a Unified Managed Account (UMA).
Effective OPM requires leading edge technology and experienced portfolio managers, resources few independent advisors can effectively muster.
OPM Active Tax Management
Taxes matter, creating a drag on overall return. Active tax management services seek to minimize that drag.
• Cross-manager coordination, wash sale avoidance
• Tax-sensitive rebalancing– Attempting to actively match gains and losses
• Transition management– Tax-sensitive legacy asset transfers and disposition
• Possible delay of gain recognition until… – Long-term gain status realized– Subsequent tax year
• Loss / Gain Harvesting– Ongoing, opportunistic harvesting in accordance to specified parameters– Mandated loss / gain targets (typically year-end)
• Integration of external tax events into management of the portfolio
• Low Cost-Basis and Concentration Stock Protection
Advisor
WealthADV
Money Money ManagerManager
How WealthADV Unified Managed
Accounts (UMAs) work
WealthADVUMA
Client
WealthADV Overlay Portfolio Management Process, Methodology and Organizational Workflow
Discussion
Overlay Portfolio Management Workflow
• Program Design• Client Proposals• Model Onboarding• Overlap Analysis• Composite Design and Validation
• Establish Cash In/Out Treatment• Define Portfolio Monitoring Rules• Define Tax Treatment • Establish Transition Plan• Build Pre-Trade Compliance Mandates
Overlay Portfolio Management Workflow
• Custodial Selection • Select Custodial Pricing Schedule• SMA to UMA Account Merge• Tax Lot and cost Basis Validation
* Component of Active Tax Management option
Overlay Portfolio Management Workflow
• Identify Security Inheritance• Tax Term • Low Basis Lot ID• Transition Planning
* Component of Active Tax Management option
Overlay Portfolio Management Workflow
• Tracking Error Drift• Cash Deposits• Liquidation Requests• Cash Floor Violations
• Cash Ceiling Violations•Compliance Violation•Tax Optimization
* Component of Active Tax Management option
Overlay Portfolio Management Workflow
• Manager Trades• Composite Reweightings• Manager Hire/Fires• Scheduled Rebalancing• Ad Hoc Tax Harvesting• Fees and Client Billing
* Component of Active Tax Management option
Overlay Portfolio Management Workflow
Portfolio Operations
• Trading• Allocations• Lot Level write-downs•Manager Lot Tagging•Settlement
Portfolio Administration
•Corporate Action Processing•Auditing •Manager Review•Trade Rotation Validation
* Component of Active Tax Management option
Overlay Portfolio Management Workflow
Portfolio Administration
• Client Billing•Manager Payment Remittance•Contract Management •Advisor Communication
Portfolio Operations
• Manager Onboarding• Manager ADV , Collateral, Performance Collection and Distribution
Overlay Portfolio Management Organization
Brokers Custodians FIX Network
Brokers Custodians FIX Network
Due Diligence Providers Model Providers
Due Diligence Providers Model Providers
Advisors Advisors