The benefits of active versus passive investing has been long debated.
While actively managed funds still dominate the landscape, conventional wisdom has clearly shifted toward passive investment vehicles. Many investors are advised to use ETFs and index funds almost exclusively and are warned that the high costs of actively managed funds will dilute their returns. Many advisers are understandably concerned about a world of limited returns that are further undercut by high manager fees and see in ETFs and index funds a more tax-advantaged way to be the best fiduciary for their clients.
Conversely, active managers contend that the only way to “beat the market” is to make active decisions about which stocks and bonds to select. In addition, in periods of volatility, active managers have the ability to steer clear of weak sectors and companies and shift gears dynamically with changed market conditions. Passive vehicles do not.
With recent advances in technology, companies offer passive investing by employing computer algorithms as a set of rules to choose appropriate investments based on investor risk tolerance and time horizon. These robo-advisor services are offered directly to investors for a fraction of the cost of a human financial advisor. RIAs/IBDs and IRAs have been left out of the equation. Until now.
With Valspresso’s Automated Asset Management Platform, Independent Broker Dealers can earn a fee by offering advisors robo-investing with a human advisor to deliver financial services to the underserved mass market clients’ can afford. RIAs then earn a fee on the client’s AUM without the need to invest more of their time, or to acquire additional staff. This program allows RIA/IBDs and IRAs the ability to customize how much of the Green Zone SelectTM online platform, they want to integrate into their portfolio management strategy to meet clients’ needs. This unique platform offers fiduciaries the best of active and passive investing that is scalable, with profitability for all parties.
The Green Zone SelectTM licensed platform with active management software efficiently allows independent RIA/IBDs and IRAs to serve a larger demographic with the same attention to detail in much less time. Advisors can offer their clients the combination of robo-investing with a human advisor to deliver financial services to the underserved mass market profitably, and at a fee client’s can afford. It is an innovative investment technology platform utilizing a patented positive momentum algorithm combined with a licensed active management strategy.
The platform uses a strategic three-point check system that determines the long-term success of any business by systematically analyzing their financial viability. The Automated Active Money manager constructs an initial portfolio which makes objective, reduced risk “buy” and “sell” decisions that are updated daily. This consistent strategy ensures informed investment choices are made. The advisor and client together can choose from a variety of active/passive allocations with customization options to fit each client’s needs. And, the service is completely turnkey.
RIA/IBDs and IRAs can manage more clients without adding more staff,
while earning a fee on all AUM generated. The automated platform has built-in compliance and provides clients with customized strategies to meet individual needs. Strategies are easy to understand, tactical asset allocations options are provided, with transparency into stock selection via on-line tools.
The greatest opportunity for fiduciaries is not choosing between active management and passive investing, but with embracing technology to profitably enable millions of investors to get in the game, and in so doing, change the game for themselves.