As Neo from The Matrix prophetically outlined, “Choice. The problem is choice.” when realizing the best way to control a human system was by giving them the illusion of choice. In doing so, everyone was ‘happy’, and the system was stable. This idea is not too far from how many wealth management platforms oversee their users. Internal platforms offer specific products that are pushed by internal research, ‘product’ platforms offer limited solutions, and other technology platforms offer a wide selection of long only strategies but all fall within a small range of return characteristics. It is the illusion of choice.
SMArtX Advisory Solutions works with its advisory clients to provide a choice of strategies and give them opportunities to grow their business. These strategies include a more diverse range with access to long/short strategies, blockchain and cryptocurrencies, direct indexes, and private placement investments such as pre-IPO opportunities. With these options, advisors are able to create unique portfolios for each one of their clients, providing the client confidence that their advisor is working for them. SMArtX even has solutions to tax efficiently raise cash from existing allocations to rotate into more diverse strategies. Now SMArtX clients are able to stand out in an increasingly competitive marketplace that has seen technologies going straight to end clients, pushing the narrative that they do not need the subjective advice of an advisor as computers and AI are better. Investment strategy choice is a key element in the ability for advisors to construct investment portfolios that meet each clients’ investment objectives. Even when advisors have the ‘choice’ of hundreds, or even thousands, of strategies but they all tend to be highly correlated to each other. When one strategy is easily switched out for another because their investment profiles are so similar, then it is not really a choice at all.
SMArtX Advisory Solutions recognizes that too much choice can also be overbearing, which is why we created systems to help support clients by identifying strategies and building portfolios relevant to their mandates. Creating risk/reward profiles that specifically meet a client’s investment mandate and providing the human interaction to support the client are key elements driving asset growth. Just as advisors support their clients, SMArtX’s technology empowers advisors to stand out in a crowd and make themselves known.
Regardless of how a wealth manager decides to run their business, there should be no illusion of choice. Rather, the choice is indeed there to build and maintain investment portfolios that meet the objectives of each and every client. The choice exists on whether to maintain the status quo just like everyone else or differentiate your firm with a solution set that goes above and beyond. In today’s Fintech resurgence, choice is not an illusion, but a reality.