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By Kerri Quinn
Head of Index Solutions
If you’ve been using traditional SMA subadvisors and found they don’t fully meet your needs, you’re not alone.
Perhaps you are seeking a solution that offers more frequent rebalancing, provides enhanced customization beyond basic ESG filters, or harnesses advanced technology like AI to create truly personalized portfolios. The shift in the financial services industry reflects these very needs, as technology now plays an increasingly crucial role in helping advisors deliver more flexible, real-time solutions.
One of the most significant advantages of incorporating technology into wealth management is its ability to streamline operations while enhancing personalization for clients. Platforms built on Software as a Service (SaaS) models enable advisors to make real-time adjustments to portfolios, perform AI-driven portfolio optimization, and improve tax efficiency through continuous tax-loss harvesting.
Research from Cerulli Associates confirms that technology positively impacts both advisor productivity and client experience. By utilizing these tools, advisors can deliver more dynamic and customized strategies that better align with their clients’ evolving goals and market conditions.
Those who have used traditional SMAs often recognize that while they are solid choices, there’s room for improvement in today’s fast-evolving world of portfolio management. This realization led us to create Alphathena—a more dynamic and personalized investment solution with real-time tax-loss harvesting and AI-enhanced portfolio management. Our goal is to provide a service that’s more agile in responding to market changes while also being more user-friendly and cost-effective for advisors. We’ve streamlined processes to make advanced strategies accessible and affordable for a broader range of investors.
Take your investment management to the next level with Alphathena:
- Real-Time Direct & Custom Indexing
- Real-Time Tax-Loss Harvesting
- Tax-Efficient Transitions
- AI-Enhanced Personalization at Scale
- Workflow & Custodian Integration
- End-to-End Lifecycle Support
Why do advisors choose traditional SMA subadvisors?
There are three key reasons why advisors have turned to traditional SMA subadvisors:
- Custom Indexing: Established systems for portfolio customization, with ESG filters and sector exclusions.
- Tax Management Expertise: Proven strategies for tax-loss harvesting and capital gains management.
- Reputation: A long history of reliability, giving advisors and their clients confidence in the approach.
However, the limitations of quarterly rebalancing and periodic tax-loss harvesting often leave advisors looking for more agile, flexible solutions.
Alphathena a Software as a Service Platform vs. Traditional SMA Subadvisors:
What Sets Us Apart?
The main difference between Alphathena and traditional SMA subadvisors is our approach to giving advisors more control. While SMA providers often act as outsourced portfolio managers, Alphathena empowers advisors to manage portfolios directly, using real-time rebalancing and personalized strategies. Here’s how we stand out:
Features | Software as a Service (SaaS) Technology: Alphathena | Traditional Separately Managed Subadvisors |
---|---|---|
Brand Recognition | ✘ Newer model of service than traditional subadvisors | ✔ Established business models and market presence |
Research Capabilities | ✔ AI-enhanced market analysis per account summary | ✔ Extensive in-house research teams with access to proprietary data and industry networks |
Minimum Investment | ✔ None | ✘ Typically $100,000 – $250,000 |
Customization | ✔ Highly customizable with real-time rebalancing and thematic direct indices using AI tools | ✘ Basic ESG Customization, sector exclusions, and factor tilts |
Tax-Loss Harvesting | ✔ Real-time, dynamic tax-loss harvesting with wash sale handling | ✘ Typically quarterly or monthly, based on predetermined schedules |
Optimization | ✔ AI-enhanced portfolio optimization | ✘ Traditional portfolio optimization, often limited to periodic updates |
Fees | ✔ Competitive, designed for a broader range of advisors | ✘ Typically 20-30 bps, often higher for customized portfolios |
Rebalancing | ✔ Real-time | ✘ Often quarterly or based on set schedules |
Portfolio Management / Portfolio Implementation | ✔ Advisor maintains direct control and management | ✘ Typically outsourced management / need to reach out to a third party. |
Seamless Transition Analysis | ✔ Advisor can close more deals by leveraging our transition analysis tool, which provides clients with a comprehensive breakdown of tax impact, and risk assessments, offering a transparent transition plan that minimizes disruption and enhances decision-making. | ✘ Typically lacks tools for detailed transition analysis, often requiring manual calculation or third-party tools to assess tax impacts and costs. |
Custodian Integration | ✔ Custodian-agnostic | ✘ Often tied to specific providers |
In an industry where every second matters and market shifts are unpredictable, adopting a SaaS solution like Alphathena can help advisors not only improve operational efficiency but also provide a more customized, responsive service for their clients. For those seeking to elevate their wealth management practices, embracing these technology-driven tools is a crucial step forward.