Part 4: Ranking the Managers

Prima starts its screens with a large universe of managers similar to Mobius’s m-Search database, screens them for consistency of returns and style, and then its six analysts interview managers and read their marketing materials. Watson says Prima also finds new managers on its own by talking with clients and prospects. Style analysis, holdings-based analysis, and tax efficiency are among the 13 quantitative and qualitative factors evaluated. Managers input their holdings and returns into Prima’s online database, and a series of algorithms is used to convert that data into reports for analysts to use in making rankings and evaluations.

The product is not inexpensive. The entry level Base product, which contains mostly quantitative data and little qualitative information, costs $2,500 annually, while the Mid-Level product adds manager interviews, analysts’ opinions and commentary, as well as database search capabilities: it costs $7,000 annually. The Summit level, which adds Prima’s rankings and a more robust searching system, costs $12,000 a year.

Watson says that advisors who are managing substantial assets via a turnkey asset management provider may want to consider switching to his service. “If you are using a TAMP but conducting your own asset allocation studies for clients–and you are doing your own performance reporting on the separate account assets–you may have a need to differentiate yourself in the marketplace with respect to manager selection,” Watson says. “If you are simply unsatisfied with the typical wrap manager offerings in the TAMP and want to unbundled the service model, it could be more cost effective for you to outsource your due diligence to us.”