ETFs Point To A Goodbye For Style Boxes

December 08, 2014

Understanding The Road Ahead

An advisor's job becomes easier, not more complicated, allowing far more time to devote to tax, estate and planning aspects of a client relationship. But the tools to analyze relevant risk data are not widely available where advisors actually buy funds or portfolios.

As an asset allocation firm with a credit-driven macro approach to building portfolios and funds, JAForlines highlights a range of risk statistics relative to the returns we seek. Understanding the benefits of multi-asset portfolios shouldn't be complicated because regulators and the informational technology available on dealer platforms is behind the times.

In fact, our institutional clients, like foundation and endowment investors, have long understood the need to evaluate asset allocators with multiple lenses. The favorite benchmarks for these investors have always been a risk spread over inflation or TIPS, as this gets to the notion of real and absolute returns.

The point is to have a flow of returns and income to distribute to beneficiaries on a regular basis, similar to what goes on in an IRA or a 401(k) plan, or for a pool of savings meant to distribute to heirs and charities. Regulators and dealers to date have decided that advisors servicing individual clients and plans are not capable of articulating such useful information.

Our portfolio and funds are like the "Internet of things" in that the networks in which they exist aren't ready for the reality of their value and utility in the marketplace, but some sophisticated advisors have figured this out on their own.

Ultimately, innovation in financial markets, as in all markets, will happen as clients eventually demand change.

JAForlines Global (JFG) provides investment advisory services to clients of broker dealers, their registered representatives and independent RIAs. JFG specializes in constructing actively indexed portfolios using ETFs, which are available for private wealth management investment or in qualified retirement plans via a Collective Investment Trust (CIT). Contact the firm or visit their website below at 516-609-3370 or [email protected] or



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