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Oct 29, 2008 2:53 am

I've spoken with several Advisors who were trying to determine whether they wanted to be an Asset Manager (Rep Directed) or Asset Manager (3rd Party Manager).  A trend of these two styles seems to be gaining more strength.

Firms like Litman/Gregory ( as many of you know consruct model portfolios for Advisors to implement and also recommend the underlying investments.  Essentially, they notify you of what to purchase, and when to rebalance and sell positions.  The Advisor then has to take this information and implement for their client accounts.  Some Advisors have mentioned to me several reasons why they are using these model portfolio type services:  A) Unsure of which investments to pick -- they like to leverage the research of another firm; B) Some don't feel the cost of 3rd Party Asset Managers (i.e. 50 bps +/-) is worth it and intrudes on their profitability.   Does anyone have an opinion on this emerging trend of these model portfolio subscription services and can you share any experiences (good or bad) of any firms you have used? 
Oct 29, 2008 4:10 am


I simply don’t have time to deal with my clients goals while also dealing with research.  I subscribe to Litman/Gregory, Leuthold, and a few others, and of course, there’s LPL Research backing me. 

For most clients, a model will help them achieve their goals.  From a small-business owner standpoint, this keeps my business model sane, scalable, organized, and sell-able. 

And then there are truly 3rd party manager services, DFA immediately comes to mind.  I’ve poked around with them, but once you enter in with them, you’re more or less bound.  They frown heavily on moving to cash, and you’re at the whim of their models/research/trades.  They are a long term strategy, and they don’t like you messing with it. 

Oct 31, 2008 1:26 pm

I switched from wirehouse to LPL late last year. Prior to my switch I only used third party asset management and although it is very hands-off for the advisor I’m glad I took control after my switch. I do use models based on LPL & my own research and I like having that flexibility. With the downturn over the last year I’m especially glad that I was able to tweak the asset allocation and manager selection (mostly funds & etf) because it really helped. My opinion is that most third party programs are simply not flexible enough and they add very little value to the client. I believe they are mostly concerned w/ keeping tracking error low as compared to their benchmark for legal reasons. I do believe you absolutely need a model to follow vs. creating different portfolios for each & every client but my experience is that advisors can do better than most if not all third party asset management programs.

  On that note, I'm always looking for good research services that provide asset allocation recommendations. I looked at the 2 listed on this thread but wonder if there are others you can share?
Nov 11, 2010 2:18 pm

I've flagged this post.  Let's see how long it takes for RR to delete it.


Very quick it seems.

Nov 11, 2010 2:46 pm

You guys are like women who get abused and then someone says, "baby, just give me one more chance, I promise I won't blacken your eye again".