Tech Talk: Disrupting the Industry

Brendan McConnellBrendan McConnell, Chief Operating Officer

Over the last two years we have seen a tremendous amount of change driven by technology in the financial services industry—an industry that has gone from lagging around technology innovation to one that is very much at the forefront. With change comes disruption, and we are beginning to witness a tremendous amount as wealth management firms adjust to offer technology-driven investor experiences.

One recent disruption that has seemingly dominated headlines is that of the online digital advice firms, perhaps more widely known as the “robo advisor.” In most cases, these platforms provide a lower-cost, time-saving alternative for the average investor complete with a more frictionless experience through the use of technology. These firms have set a new baseline around portfolio management, and traditional advisory firms are reacting.

Charles Schwab, Fidelity and Vanguard are three major institutions now offering, or planning to offer, their own digital wealth platforms. They are making a conscious and deliberate investment to deliver this type of technology to the segment of investors who would prefer less human interaction and faster execution of transactions. These platforms also allow the financial advisor to bring additional scale to their own practices.

At Brinker Capital, we hear concerns from financial advisors on how this new class of investment management is impacting the industry and, more importantly, how it’s impacting them. Suffice it to say that the real impact on the rise of technology in the industry will ultimately be a positive impact for advisors and investors. These new technology innovations are making their way into the hands of financial advisors to in turn offer to their clients. This will lead to a more efficient and productive advisor with the ability to serve a broader audience of consumers looking for financial planning and advice. The future-ready advisor will be one that can offer comprehensive financial planning while maximizing the technology available in the industry.

Technology is changing the way consumers view financial advisors. The services that consumers value most from advisors has certainly started to shift. This has upended the advisor value stack. At a recent Fidelity Investment conference, Sanjiv Mirchandani, President at Fidelity National Financial Clearing and Custody, outlined Fidelity’s vision of the future advisor (images below) with a simple and easy-to-understand visual of the current advisor value stack.

The traditional financial advisor value stack:

Advisor_Value_Stack_Traditional

Source: Sanjiv Mirchandani, Fidelity

Now, technology and investor preference has upended and squeezed the top-end of the value stack:

Advisor_Value_Stack

Source: Sanjiv Mirchandani, Fidelity

What Fidelity is identifying here is that investors are putting greater importance on financial planning and behavioral management when selecting a financial advisor. This is the opportunity for a financial advisor to demonstrate their value and justify their fee over the digital advice offering. Fees are less of a concern with advisors who are following this new value model. The new future-ready architecture is one that supports goal-based financial planning and a digital experience. Advisors who focus on these values seem better positioned to succeed in this evolving landscape. Advisors should focus less on the portfolio management, outsourcing these duties, and more on a planning centric client relationship maximized by technology.

The views expressed are those of Brinker Capital and are for informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

Brinker Capital at the FSI OneVoice 2015 Conference

Noreen D. BeamanNoreen D. Beaman, Chief Executive Officer, Brinker Capital

Brinker Capital is once again proud to be a Premier Sponsor of the Financial Services Institute (FSI) and the 2015 OneVoice conference in San Antonio, TX from January 26-28. OneVoice is the annual gathering of home office executives from independent financial services firms providing networking and education opportunities to learn about the latest within the industry.

I am honored that Brinker Capital has been selected to participate in multiple session at this year’s conference. On January 27, Brinker Capital Vice Chairman, John E. Coyne, III, will be a participant in the Using Alternatives in Investment Advisory Accounts panel; Brinker Capital Senior Investment Manager and International Strategist, Stuart P. Quint, III, will partake in the Educating Clients in the Search for Yield panel discussion, and I am personally excited to moderate the Recruiting Successes and Challenges panel discussion.

With a culture rooted in accountability, dependability and innovation, Brinker Capital has been committed to being the best strategic partner to financial advisors since 1987. This is why we feel that our partnership with firms such as FSI is so valuable and helps to make a difference in the financial advisor community.

We’re looking forward to another great conference hosted by the FSI and hope to see many of you there!

Brinker Capital, Inc., a Registered Investment Advisor

Brinker Capital at the Envestnet Advisor Summit 2014 Conference

Jean LynchJean Lynch, Managing Director

Brinker Capital is pleased to be one of Envestnet’s Platinum Sponsors for 2014 and to be supporting the Advisor Summit 2014 for the third year in a row! Envestnet’s Advisor Summit is a great venue to network with our clients who access our investment strategies on the Envestnet platform, other investment professionals, and the Envestnet team. This year’s conference is focused on “The Next Big Idea” and the agenda is packed with innovative sessions that will help advisors elevate their business to the next level.

Brinker Capital’s latest “Big Idea” is the introduction of three new 40-Act liquid alternative mutual funds that leverage the strength of our 25+ years on investment management insight and expertise and more than a decade of embracing alternative investments.  These funds – Crystal Strategy Absolute Income Fund, Crystal Strategy Absolute Return Fund, and Crystal Strategy Leveraged Alternative Fund – are designed to mirror the investment strategy of our Crystal Strategy suite of global macro funds.  While each of these funds have their own specific investment strategies and places within an investment portfolio, they do share certain characteristics including broad asset class exposure, diverse strategies, highly-focused stock selection, portfolio hedging and risk management.  For more information on the funds visit, www.crystalstrategyfunds.com.

If you happen to be at the Advisor Summit, be sure to attend the Liquid Alts and Their Growing Role in Portfolio Construction panel on Thursday, May 15 from 2:00pm – 3:00pm to hear from Brinker Capital’s Chief Investment Officer, Bill Miller, as he discusses how our approach to incorporating liquid alternatives into our investment philosophy may help advisors potentially create better outcomes for clients.


Important Information
Please note that investing in alternative strategies involves a high level of risk and is not suitable for all investors. The Crystal Strategy Funds are subject to investment risks, including possible loss of the principal amount invested and therefore are not suitable for all investors. The Funds may not achieve their objectives. Diversification does not ensure a profit or guarantee against loss.

An investor should carefully consider investment objectives, risks, charges, and expenses before investing. To obtain this and other information about the Crystal Strategy Funds, see the Prospectus available from your financial advisor, visit www.crystalstrategyfunds.com, or call (855) 572-1722. Read the Prospectus carefully before investing.

The Crystal Strategy Family of Funds is distributed by ALPS Distributors, Inc., 1290 Broadway, Ste. 1100, Denver, CO 80203.  Separately managed accounts and related investment advisory services are provided by Brinker Capital. ALPS is not affiliated with Brinker Capital and does not distribute separately managed accounts. The Crystal Strategy Family of Funds is new and has limited operating history.

Not FDIC Insured – No Bank Guarantee – May Lose Value.

Investment Risks
Alternative Investment Risk. The Team will seek to manage the Fund to balance the potential risks and rewards that we believe are present at any given time and given market. Due to the use of leverage, the Fund will be more aggressive in nature. Likewise, due to the underlying investment process, we believe that there is a strong likelihood that the Fund will perform notably different than traditional strategies with comparable levels of volatility. Similarly, despite the ability to hedge and shift Fund exposures, due to the leveraged nature of the Fund, risks will be magnified and compounded.

Asset Allocation Risk. Portfolio management may favor one or more types of investments or assets that underperform other investments, assets, or securities markets as a whole. Anytime portfolio management buys or sells securities in order to adjust the Fund’s asset allocation, this adjustment will increase portfolio turnover and generate transaction costs.

Borrowing Risk. Borrowing creates leverage. It also adds to Fund expenses and at times could cause the Fund to sell securities when it otherwise might not want to.

Concentration Risk – Investment Companies. Any investment company that  concentrates in a particular segment of the market (such as commodities, gold-related investments, infrastructure-related companies and real estate securities) will generally be more volatile than a fund that invests more broadly. Any market price movements, regulatory or technological changes, or economic conditions affecting the particular market segment in which the investment company concentrates will have a significant impact on the investment company’s performance. While the Fund does not concentrate in a particular industry, it may hold a significant position in an investment company, and there is risk for the Fund with respect to the aggregation of holdings of investment companies. The aggregation of holdings of investment companies may result in the Fund indirectly having significant exposure to a particular industry or group of industries, or in a single issuer. Such indirect concentration may have the effect of increasing the volatility of the Fund’s returns. The Fund does not control the investments of the investment companies, and any indirect concentration occurs as a result of the investment companies following their own investment objectives and strategies.

Derivatives Risk. The Fund’s use of derivatives (which may include options, futures, swaps and credit default swaps) may reduce the Fund’s returns and/or increase volatility. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Additional, derivatives are subject to liquidity risk, interest rate risk, market risk, credit risk and management risk.

Short Sale Risk. If the Fund sells a security short and subsequently has to buy the security back at a higher price, the Fund will lose money on the transaction. Any loss will be increased by the amount of compensation, interest or dividends and transaction costs the Fund must pay to a lender of the security. The amount the Fund could lose on a short sale is theoretically unlimited (as compared to a long position, where the maximum loss is the amount invested). The use of short sales, which has the effect of leveraging the Fund, could increase the exposure of the Fund to the market, increase losses and increase the volatility of returns.

Investment Objectives
Absolute Income Fund:  The Fund seeks to provide current income and downside protection to conventional equity markets, with absolute (positive) returns over full market cycles as a secondary objective.

Absolute Return Fund:  The Fund seeks to provide positive (absolute) return over full market cycles.

Leveraged Alternative Fund:  The Fund seeks to provide long-term positive absolute return with reduced correlation to conventional equity markets as a secondary objective.

Budgets Get an Extreme Makeover

Sue BerginSue Bergin

The tight economy and some hip personal financial management tools have done the impossible.  They’ve made budgets sexy.

No one ever used to admit that they liked to budget.  Creating a budget was tedious and uncool; sticking to it was even harder.  Thanks to recent technology, however, budgets are being seen in a new light. Today’s economy has made it necessary for more Americans to know, with certainty how much money they have coming into and going out of their household.  As consumers delve into the budgetary process, they are realizing it isn’t nearly as overwhelming and time consuming as they may have thought.

A recent study showed that most Americans follow a spending plan. Nearly half (48%) say they “loosely” follow a budget.  25% “strictly” adhere to their budgets.” Only 27% say they have no budget at all.

Household income is the primary determinant of whether someone will commit to the budget discipline.  36% of those who earned under $30,000 annually followed a budget faithfully.  Only 18% of earners whose salaries exceed $75,000 a year were as vigilant about the budgetary process.

Personal financial management sites such as Mint, Betterment, MoneyDesktop, Yodlee and PNC Virtual Wallet have given the budgeting process an extreme makeover.  They’ve simplified the budgeting process, brought it to life, and even made it fun.  Financial planning software such as the offerings by eMoney Advisor and MoneyGuidePro includes budgeting tools that make it easy for financial advisors to offer an insightful analysis to their clients on how to maximize savings and create user-friendly budgets.

The key innovations that have revolutionized the budgeting process are account consolidation, aggregation and automated expense characterization.  Once accounts are linked and tracked in many of these services, the expenses are automatically pulled in, categorized, and updated regularly.  This simplifies the task of routine budgeting and offers huge relief when it comes time to preparing mortgage and loan applications.

The transparency these services offer into actual spending habits may also be behind the positive ranking survey participants gave to inquiries about their financial holdings.  Nearly half (47%) claimed to know their checking and savings account balances, and 48% have a “rough idea.”  Only 5% say they “do not know”.

When it comes to spending, 36% say they can calculate the “exact amount” while 58% has a “rough idea” of what they pay out each month.  6% had “no idea.”

Innovative technology offers a gateway to help clients become more mindful about spending.  Until a website or mobile app comes along that effectively prevents people from overspending; however, the face-lift offered by technology is simply cosmetic.[1]


[1] Survey statistics mentioned are from CashNetUSA, September 5, 2012