Who's doing what with in-house and third-party programs.

There's no doubt that separately managed accounts (SMAs) are a growing area in the world of financial advisors. Yet, historically, many independent advisors have been forced to sit on the sidelines while wirehouses lead the way in products and technology for SMAs. Increasingly, things seem to be changing in the world of independent broker-dealers.

"Until a year ago, we had a very standard SMA program," says Jeff Holland, vice president of consulting services for Raymond James Financial Services. "We had a due diligence process consisting of a slate of managers, and we'd give it to the field and say, 'Here you go.' But manager selection is only one of the various steps in the investment process."

Now, like many other broker-dealers, Raymond James is working to incorporate separately managed accounts into the firm's universal platform. According to Holland, Raymond James has also layered in portfolio construction tools and additional services taken directly from the institutional world.

Marc Kawakami, head of advisory services for ING, says his firm has put together a fairly robust SMA program. "There are 70 different disciplines available, spanning all the core asset classes as well as some of the more sector-oriented," he says. "It's one component of the overall platform, meaning that we consolidate all the quarterly reporting and billing of our non-SMA business in with it."

Kawakami explains that ING has built the system by incorporating various tools and products, as compared with the all-encompassing turnkey approach that has been the norm until now. As a result, advisors can take investment solutions such as an IRA account, mutual funds or others and work with those products in the same system that handles SMAs.

Some firms are calling it their "new UMA," short for unified managed account, which has been the talk of the town for the past year by other broker-dealers, wirehouses and third-party platforms.

"The beauty of it is not to single out separately managed accounts as the be-all and end-all starting point, but to make it part of the advisor's tool kit and help make the advisors themselves the cornerstone of the solution," says Kawakami.

Like ING, National Planning Holdings also has seen the benefits of creating one unified platform for SMAs and other products. "We've kept our four b/ds as separate entities, but consolidated technology so that we're all on the same platform," states Shawn Dreffein, president and CEO of the firm. "There's huge cost savings in that."

The end result is almost always a proprietary internal platform maintained and expanded in-house. Lincoln Financial, for example, has LincSolutions. The platform has three components: account aggregation, planning tools and back-end implementation. By pulling all the data into the b/d's planning tools, advisors are able to do Monte Carlo simulations and efficient frontier planning, allowing them to ensure that their recommendations meet a client's objectives. The account aggregation element allows advisors to see the client's assets at their firm and also at other brokerages.

Yet not every firm has gone this route. A year and a half ago, Securities America launched its SMA platform, Managed Opportunities, through a contract with Sunnyvale, Calif.-based Oberon Financial Technologies.

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