The firm establishes a downside risk target for each strategy that represents the expected one-year loss potential over a 12-month period. One particular strategy, Frontier’s Balanced Strategy, has a downside risk target of 10%, for example. The strategies are built around the idea of not losing more than the downside risk target 95% of the time, Miller said.

To keep that target, Frontier’s investment team meets monthly to go over the strategies to see if any changes are required in the underlying investments, according to Miller. In most instances, the team will make alterations to the strategy about once a quarter but will make more or less frequent changes if necessary.

“We look every month, we’re changing maybe once a quarter moving five to seven percent of the portfolio,” Miller said. “In times of high volatility, there will be more movement then as the markets move less you won’t see as much [movement].”

Since the firm does not manage its own proprietary funds, it has the flexibility to move assets around to whatever investment makes sense to accommodate the necessary risk factor. These underlying investments can include managed futures, floating rate securities, or high yield bonds, according to Miller.

55ip, meanwhile, offers tax management for a variety of products including model portfolios, ETFs, direct indexing, and active separately managed accounts. It does that through proprietary algorithms, which keep track of the different portfolios the firm oversees along with every tax position and tax law related to those portfolios.

The system identifies the proper tax-loss level and based on that makes a decision on when it makes sense to execute and move assets into a similar investment strategy where they continue to be used in a similar investment style. The system makes these moves automatically so advisors need not worry about having to make any changes themselves.

By incorporating its technology into Frontier’s risk management solutions, 55ip is hoping to provide advisors and their clients with more and better investment options.

“Combining a risk-management product with automated tax management ... makes a unique offering in the marketplace,” Shah said. “Combining the risk and the tax together and doing that in a way that is automated, [means] advisors can use it for different sleeves of their advisor practice.”

Given the tumultuous market conditions, advisors are seeking to limit their exposure to risk. By using Frontier’s ETF Strategies, they can do while maximizing their returns even in a down year. And with 55ip’s tax management technology overlaid on the ETFs, advisors can even turn tax losses into future gains.

“When portfolios are down, this gives us big opportunities to then book losses that will carry forward into the future,” Miller said. “So, the gains we have in years coming, will be able to offset some of those taxes because of the active tax management that was done now.”