January 31, 2013

A Strategy for More Fee Income: Adhesion’s Stier

Company’s recent announcements focus on ease of use, revenue increase

“It’s really a high-quality solution with a low cost, which is something that really differentiates it,” Michael Stier told AdvisorOne at TD Ameritrade Institutional’s annual conference in San Diego on Thursday.

Stier, CEO of Adhesion Wealth Advisor Solutions, was referring to last week’s announcement that it is partnering with BlackRock (BLK) to offer the BlackRock Model Portfolios in its investment strategies lineup.

According to the company, Adhesion will offer the BlackRock models in an investable, turnkey solution—“giving RIAs the tools to put their clients’ money to work within these model portfolios, combined with a comprehensive Investing-Monitoring-Reporting service.

“Because they are low cost, advisors will think they’re for the bottom third of their books; those assets that don’t generate a lot of fee income. But it really is for any advisor that wants to move away from picking individual stocks for clients to more of a role with active asset allocation.”

Adhesion’s latest announcement follows on an announcement from November about upgrades to the company’s investing, monitoring and reporting platform.

“That’s really about the UMH,” Stier explained. “What it allows advisors to do is to report on assets that are held away.  They can then have a target allocation for total assets. We provide alerts as to when maintenance must be done on the account and they can charge fees for that; they can charge fees on those held-away assets.”

He added that it is also a business intelligence platform that does not swamp the advisor with data. It offers flexible filtering capabilities customized for their business.

Getting back to the BlackRock Model Portfolios, he noted they leverage BlackRock’s proprietary risk analytics and investment systems with the financial markets and business process. Implemented via Adhesion’s managed account platform, the BlackRock Model Portfolios deliver “an innovative, modular approach to constructing investment solutions for advisors’ clients.”

Specifics include:

Goal-oriented portfolio components that can be used independently or incorporated into a broader asset allocation program:

  • Target Income Models – Aim to help clients generate annual income targets in a risk-efficient manner
  • Hedged Income Models – Seek to deliver income while protecting against inflation and/or rising rates
  • Tactical Equity Model – Seeks to deliver outperformance versus a global equity benchmark through tactical selection of regional and sector equity exposures

 Strategic Index Models are a complete, turnkey asset allocation program using BlackRock ETFs and mutual funds; 

  • Portfolio construction process seeks to balance risk and return in a disciplined fashion leading to highly diversified and risk efficient portfolios for return delivery
  • Intended to serve as a foundational strategic asset allocation, long-term in nature, with low annual turnover

 

Reprints Discuss this story
This is where the comments go.