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SMartX CEO Evan Rapoport
SMartX CEO Evan Rapoport

SMArtX To Launch Free Managed Account Platform

SMArtY is meant to appeal to advisors who want to use models yet do not have access to sophisticated SMArtX UMA technology.

SMArtX Advisory Solutions on Tuesday announced it has built a new, slimmed down version of its platform, called SMartY.

The free managed account platform has not yet launched, but advisors can sign up for it on a waitlist, with an expected release date of the fall, likely in September.

“It will be first come first served,” said SMArtX CEO Evan Rapoport, who added advisors will be able to use it for free because it is entirely manager sponsored.

In other words, asset management firms will offset the technology fee normally charged by SMArtX, Rapoport said.

“SMArtY is a slimmed down version of SMArtX that is focused specifically on strategist portfolios, and those that contain ETFs and mutual funds,” he said, versus others that contain individual equities and require the full feature set that SMArtX has to offer.

Under the hood, advisors will find award-winning managed accounts technology tools, including asset allocation and a new portfolio construction tool (UMAi), as well as intra-day trading (SMArtX has integrations with eight custodians), tax transition and harvesting, billing services, and access to “some of the world's largest and most reputable asset managers' models,” according to the firm.

SMArtY will provide client account reporting down to the sleeve level, performance reporting, as well as sleeve-level reconciliation when it launches.

“Where this really gets exciting is advisors that have never been able to use TAMPS because of the cost—like wrap-fee advisors—now they can come to SMArtY and allow us to do the work for them,” said Rapoport.

He said it will be appealing to different types of advisors and some for different reasons, for example, those with many small accounts, or those that outsource their asset management. He said it would also appeal to advisors who believe their true value-add is financial and estate planning.

“If you are using an outsourced CIO shop like an SEI or AssetMark and are paying 45 bps, our intention is that you could come to SMartY and re-create those portfolios for free,” said Rapoport.

“We can transition others onto your portfolios, but there will be a cost to that, like using Clearbridge, or if you use a lot of rep as portfolio manager, that’s better for SmartX, that’s going to be more cost effective for you,” he added.

He said that there is no fee for transitioning to using SmartY and the firm has built a new “Smart” transition tool, which is meant to help advisors move from another provider and reduce what would otherwise be large embedded gains.

SMArtX closed a Series D funding round in May 2022, with a $30 million investment from Morningstar Investment Management, the unit of Morningstar that provides discretionary investment management and advisory services. That investment followed a November 2021 announcement that Morningstar would begin using SMArtX’s unified managed account technology to power its turnkey asset management platform (and still does).

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