WE'RE AN RIA's PROFIT ENGINE
A Transformative TAMP as a Business Solution
We Smash Barriers to Higher Profitability
Personalized Portfolios
Clients expect portfolios reflecting their values and objectives, but this is time consuming to do
Marketing to Grow AUM
To grow your revenues, you must invest in marketing, but you don't have the expertise, time, budget, or confidence
Low Operating Costs
Operations must excel, but expertise is elusive and the staff are costly to find and retain
"Done-for-You" Revolutionizes
How Emerging RIAs Compete
Done-for-You: Marketing System at $0 Cost
Growth in AUM and Revenues at $0 Cost
Done-for-You: Operations at $0 Staffing Cost
Less Hassle;
More Profit (Yeah!)
Personalized Portfolios at Scale
Proprietary Solutions
with Your Branding
Become an Apex Competitor
Big Firm Capabilities with Local Authority
"What? I Get Ownership Too? For Free?"
Are our interests aligned? This is the key question for any strategic relationship you consider. If the answer is “Yes”, then the relationship is on a path to success. If the answer is “No”, then failure is at the door step with the potential for a good dose of toxicity.
If you grow your AUM, your revenues increase, and Advitalize benefits in increased revenues too. But if Advitalize grows, do you benefit? The answer is “Yes”, and in a remarkably meaningful structure.
For each RIA choosing Advitalize as their TAMP, we give equity grants at no cost. That’s right. You become equity owners in Advitalize with the payoff determined at Advitalize’s exit multiple.
Transforming Your Firm's Financials
(Other TAMPs Don't Talk About These Things, Do They?)
You Win; Your Clients Win
All-In Fee
(Tiers based on firm-level AUM
placed with Advitalize)
1: $25M – $50M: 40 bps
2: $51M – $75M: 38 bps
2: $76M – $100M: 36 bps
3: >$100M: Custom
Included:
TAMP Services
Portfolio Model Strategies
Operations Staffing
Full Marketing System
Compliant Content
Assigned Success Manager
Practice Management Considerations
Other than an allocation for oversight for marketing and operations, Advitalize displaces your current costs (i.e., marketing expenditures; operations staffing) in its “Done-for-You” system.
Since you no longer incur these costs – and with higher profits – you have more flexibility to negotiate your fee as needed (see “RIA Financial Story“).
Advitalize fronts all expenses in the “Done-for-You” system; you incur no out-of-pocket costs.
While you have the option to deduct the “Done-for-You” fees above from your client’s portfolio value in the UMA (as done for the TAMP fees), we recommend that your gross fee (e.g., 1% on AUM) be reduced by the “Done-for-You” fee to your clients. (For example, at the $25M AUM tier above, a firm’s 1% fee on AUM is netted to the client as an 85 bps advisory fee (100 bps gross fee – 15 bps “Done-for-You” fee).)
This makes your firm’s fees more competitive in your local market, yet your firm’s profits substantially increase compared to a DIY growth framework (for details, please see “RIA Financial Story“). In so doing, you balance the marketing and operational benefits your firm gains from Advitalize with your own client-investors paying for the TAMP services that directly impact their investment selections, portfolio structure, and risk-return optimization.
“Done-for-You” Tiers
(Tiers based on firm-level AUM
placed with Advitalize)
1: $25.0M: 15 bps
2: $37.5M: 12 bps
3: $50.0M: 10 bps
4: $62.5M: 8 bps
5: $75.0M: 7 bps
6: $87.5M: 6 bps
7: >$100M: 5 bps
Advitalize’s Fee Allocation
(AUM Allocation of the 60 bps at the $25M AUM Tier ($150,000); the advisory fee is additional)
TAMP (Turnkey Asset Management Platform) Fee: 4 bps = $10,000 (i.e., $25M*0.04%)
PLATFORM TECHNOLOGY: Advitalize’s Platform as a System (PaaS) functions including integrations.
Marketing: 20 bps = $50,000 (i.e., $25M*0.20%)
ADVISOR INFLUENCE MARKETING SYSTEM; $25M in advisory firm AUM at a 1% fee is $250,000 in revenue. The Advitalize marketing system cost designed to grow AUM would otherwise be 25% of this advisor revenue amount not including staff time allocations; the typical advisor allocates between 2% and 3% of revenue.
Portfolio Design: 18 bps = $45,000 (i.e., $25M*0.18%)
BUILD AND MANAGE PERSONALIZED PORTFOLIOS: The Advitalize platform allows any current ETF or mutual fund model to be replicated. However, much more to the investor market’s demands and “big firm” competition, Advitalize’s direct indexing capabilities allow advisors to build tightly personalized portfolios based on the client’s financial plan; these portfolios are branded to the advisor. Each portfolio is extremely low cost to setup, trade, and rebalance . . . and tax-loss harvesting is included.
The Advitalize platform includes a robust proposal generation system that produces a dynamic portfolio analysis presentation along with any number of firm-based content (e.g., advisor profiles; firm capabilities; pertinent articles, etc.). The proposal is packaged with high-design cover pages and page headers/footers.
Operations Staffing: 18 bps = $45,000 (i.e., $25M*0.18%)
BACKOFFICE OPERATIONS: Each Advitalize advisor is assigned to an operations system specialist that handles the account setup, trading, reporting, fee billing, and other essential tasks necessary to keep each client account operating smoothly. Each specialist is expert in Orion’s systems and would be difficult to replicate through internal staffing, much less paying the associated salary and benefit costs
Your Business Considerations
When considering a platform solution like Advitalize, it’s essential to calculate your clients’ total cost of investing. This includes the platform fee, investment strategy fees, investments’ internal expense charges, custody fees, and your advisory fee.
A lower total investment cost gives your clients’ portfolios a performance boost that compounds year after year. That’s what Advitalize delivers with its personalized UMA portfolios.
For example, a direct indexing portfolio with 10 investing themes and 100 total positions – including optimization to a client’s investment objective – costs an estimated 7 bps to manage, including rebalancing. (This compares to other TAMPs’ equity model strategy fees up to 55 bps.)
Add the firm’s 1% advisory fee, and a client’s total Advitalize investment cost is 107 bps.
Compare this to an ETF and/or MF model that would have total client investing costs fees (i.e., advisory fee; TAMP fee; strategy fee; ETF/MF charges) for low-asset accounts in a UMA from the average TAMP between 1.5% – 2.5%.
Therefore, there is ample room to allocate the portion of the Advitalize fee directly benefiting the client – the total 36 bps for portfolio design and operations staffing (see the Fee Allocations above). Adding 36 bps for client-focused investing and portfolio services has the client’s total investing cost at 143 bps (i.e., 107 bps + 36 bps), which remains highly competitive. (Note: the 36 bps (and other advisor-determined allocated charges to the client’s account) would be deducted from the gross UMA portfolio return.)
You can choose to place all or a portion of your firm’s assets on the Advitalize platform. For example, a larger AUM firm may want to process only the low-asset accounts (i.e., <$1M) through Advitalize. As long as the minimum AUM level is met, the fullness of Advitalize’s marketing execution applies to the entire firm.
Because your marketing expenses and operational staffing costs are included in the Advitalize fee – and also receiving lower Orion per-account costs – your firm’s profitability profile is substantially improved.
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Your Firm's Strategic Trajectory
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