Download the April 2016 Efficient Advisor Newsletter

Watch today's Orion Weekly to download the April 2016 Efficient Advisor newsletter, sign up for our event with FinaMetrica, and learn more about March software updates.

The post Download the April 2016 Efficient Advisor Newsletter appeared first on Orion Advisor Services.


Make Way for FinTech

Close-up of digital tablet in hands of two men

Content provided by Brian Towner, CLS Separate Account Product Manager

I’m the type of person that likes to look back to see where I’ve come from, before looking forward as to what to expect.

Try doing a Google search for “FinTech 2006” to see where Financial Technology stood just ten years ago and you won’t have much luck, trust me I tried to in preparation for this blog. There just wasn’t a lot happening with technological advances in financial services back then. Think about how far we’ve come in the industry since then though.  In 2006, Fiserv was declared the top fin tech company by American Banker and Financial Insights. In 2015 you couldn’t even find Fiserv on the list and there are many lists, even one’s for FinTech startups.

The financial services industry is changing and adapting to what has been made available: Technology! Which has resulted in a lot of mergers and acquisitions that was extremely noticeable last year, and you can expect even more this year.

Some of these acquisitions included: BlackRock acquired FutureAdvisor, Envestnet purchased Finance Logix, Upside and Yodlee, SS&C acquired Advent, Northwestern Mutual acquired LearnVest and Fidelity purchased eMoney.

In 2016 I’d keep my eye out for more acquisitions to happen. And, data aggregation technology will be key as clients are looking for a single source to oversee all of their money. Also, digital retirement advice will be a key feature.

Todd Clarke, CLS CEO, spoke on this multiple times, but clients will be looking for an advisor to do more than provide investment models.  Advisors need to be open and aware as to what is available in FinTech because  a client shouldn’t be more knowledgeable than the advisor.

As a shameless plug, check out Autopilot, provided by CLS.  Just one of the ways CLS is trying to stay ahead of the curve and provide advisors with a voice in the digital age.


The views expressed herein are exclusively those of CLS Investments, LLC, and are not meant as investment advice and are subject to change.  No part of this report may be reproduced in any manner without the express written permission of CLS Investments, LLC.  Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such. This information is prepared for general information only. 1334-CLS-3/15/2016

Tech Tip: Sweet New Items from the March Update

Our Tech Tip includes how to use new Orion Connect Search Updates, Login As functionality, and data query filters on your grids.

The post Tech Tip: Sweet New Items from the March Update appeared first on Orion Advisor Services.


Orion Opens Up to Alternatives

Gemini Alternative Funds has formed a new partnership with Orion Advisor Services to launch the “Galaxy Plus Managed Account Platform” app within Orion Connect. The Galaxy Plus MAP connects qualified investors with alternative strategies from multiple trading managers. The firm said the options would be inside a fixed-fee structure, would invest in only liquid securities and with full transparency. By providing access to a variety of pooled investment products, Orion president and CEO Eric Clarke said the Gemini Alt app will help advisors better manage more aspects of their business through Orion’s portfolio accounting software.


To read the full article click here.


Industry Disruption: Adapt, Survive, Grow Your Business

Content provided by Case Eichenberger, CIMA, CLS Client Portfolio Manager

In the financial industry, we are in a constant state of change. And, the future appears it will not be any different. A colossal shift from old to new technology (mutual funds to exchange traded funds or ETFs) is underway, a new breed of ETFs are “smarter” (smart beta/factor ETFs), advisors are being forced to look at the way they do business (commissions or fees), and clients now ask more than ever for advice, which introduces different types of benchmarking (goals-based investing).

Why do these changes matter? They will affect the way advisors build portfolios and conduct due diligence, potentially marking a shift toward advisory fee-based business, and challenge the way advisors interact with their clients. If advisors can embrace these disruptions, they will have a chance to not only survive, but to grow their businesses.

With Great Growth Comes Great Responsibility

ETFs have gathered large pools of assets every year; while mutual funds, their older, but larger, counterparts have bled assets. In 2015, ETFs had net inflows of about $240B, while mutual funds had net outflows of $125B. ETFs are relatively new. State Street Global Advisors (SSGA) launched the first ETF in 1993, but they have exploded in growth and popularity in the last decade (see chart below). We believe the tremendous growth of ETFs is a trend that will continue for years to come.

ETF Growth 2000-2017

With an explosion of growth in assets and new products comes additional responsibility for anyone investing their client’s hard-earned money in ETFs. CLS is no exception. We take our fiduciary responsibility very seriously and have extensive research tools and human capital invested to ensure we don’t miss a beat. We want advisors and their clients to rest easy knowing we have a firm grip on what’s happening in the industry, where it is headed, and what it can mean for investors.

We believe ETFs offer several advantages over mutual funds and are just flat out a better technology.

Extreme growth in assets also generates good questions on how to implement ETFs and utilize ETF strategists. As CLS’s Chief Strategist Scott Kubie, CFA, wrote recently on, there are segments of the investing public that approaches both in the wrong way.

What’s So Smart About Smart Beta?

CLS is one of the largest ETF managers in the nation, and we believe in the power of these well-established academic philosophies of smart beta ETFs (see below) to fortify risk management and potentially enhance returns. CLS is embracing these philosophies, which drive the effectiveness of smart beta. We have about 30% of our AUM in smart beta, above the industry average of 20%. We believe factor-based analysis and smart beta ETFs will become increasingly important in the years ahead.


Changing the Way We Do Business

Undoubtedly the most talked about, written about, and probably even shouted about disruptor this year is the U.S. Department of Labor’s (DOL) standards on fiduciary practice. Its final ruling is anticipated any day now, and it is should be in place before year end. We feel there will be a tremendous shift from commission to advisory-fee business as a result. Fee business is nothing new (CLS has been a registered investment advisor since 1989), and it is often more attractive than commission business alone. Studies from a recent CLS Advisor IQ paper show advisors can derive more revenue from fees than commissions, and a fee-based practice may be worth more (see charts below).

Commission-based  c to f chart

Incorporating a fee-based model can allow advisors to provide an enhanced level of service to investors. By outsourcing portfolio management, advisors can improve investors’ experiences. No matter which way the DOL rules, CLS will be here as a trusted partner to help advisors make tough decisions.

Moving the Goal Posts

One persistent challenge for advisors is answering questions from investors about performance versus benchmarks, whether it’s the S&P 500, Russell 2000, or real estate. The challenge is, and will always be, to help investors focus less on benchmarks (that encourages them to chase performance) and more on whether their portfolios are helping them achieve their goals. Goals-based investing allows advisors to discuss the ways recent performance fits in line with their clients’ bigger retirement picture, instead of comparing it to a benchmark that may not fit their objectives. The better clients understand their long-term goals, the better chance we have to keep a happy client. And that is something that should not be taken for granted.

CLS recognizes there are many obstacles facing financial advisors, clients, and the industry in general. But there always will be. Challenges bring opportunities; I’m a true believer in that. Today’s challenges will offer plenty of opportunities for financial advisors to adapt, survive, and eventually grow their businesses to be even stronger. Throughout, CLS will be here to empower financial advisors.

For further reading on related blogs, please see the list below:

  1. Mutual Funds to ETFs
  2. Smart Beta/Factor Revolution
  3. DOL Rules and Moving to a Fee-Based Practice
  4. Benchmarking to Client Outcomes


The views expressed herein are exclusively those of CLS Investments, LLC, and are not meant as investment advice and are subject to change.  Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such. This information is prepared for general information only. The graphs and charts contained in this work are for informational purposes only.  No graph or chart should be regarded as a guide to investing. Past performance is not a guide to future performance. This post may include direct access or ‘links’ to other Internet websites. These sites contain information that has been created, published, maintained or otherwise posted by institutions or organizations independent of CLS. CLS does not endorse, approve, certify or control these websites and does not assume responsibility for the accuracy, completeness or timeliness of the information located there. Visitors to these websites should not use or rely on the information contained therein until consulting with their finance professional. CLS does not necessarily endorse or recommend any product or service described at these websites. 



Orion Integrates Gemini Alt’s Galaxy Plus Managed Account Platform into Orion Connect

Orion Advisor Services, LLC (“Orion”) today announced it has created an integration with Gemini Alternative Funds, LLC (“Gemini Alt”), which is part of The Gemini Companies. Gemini Alt will launch its new Galaxy Plus Managed Account Platform (MAP) app in the Orion Connect portfolio accounting software platform, delivering one-click, single-sign-on access to the Galaxy Plus MAP from within Orion Connect.

To read the full press release click here.


Technology’s Role in the Department of Labor Fiduciary Rule Changes

In today's Orion Weekly, we tackle new app updates, new integrations, and how your advisor technology fits in amidst the Department of Labor fiduciary rule changes.

The post Technology’s Role in the Department of Labor Fiduciary Rule Changes appeared first on Orion Advisor Services.


Baum named Executive Chairman of NorthStar Financial

Big news from our parent company NorthStar Financial Services:

NorthStar Financial Services Group LLC named Jon Baum as its Executive Chairman. Baum was previously Chairman and CEO of The Dreyfus Corp, a subsidiary of BNY Mellon. Northstar is a portfolio company of TA Associates.

To read the full press coverage click here.


Get Insightful with New App Updates

We've got new app updates ready after our March release, including today's look at the new Insights app, fresh out of beta.

The post Get Insightful with New App Updates appeared first on Orion Advisor Services.


Aggressive Tactics Required For ETF Success

Distribution must be backed up by a strong brand push, Alma Piscitello, Senior VP and head of Strategic Relationships and Northern Lights Distributors, told FA. She added smaller shops in particular lacking brand awareness, need to focus on advertising and marketing. “For ETF players, if they don’t have a very large name, they have to create that blitz,” she said.

Piscitello added many advisers still think of ETFs as passive vehicles. Therefore even established mutual fund players need to make a brand push as advisers may not associate their ETFs with mutual fund brands, she said. To overcome this, asset managers must distinguish their ETF strategies from their existing mutual funds. “[Active] managers have to be specific about the rationale behind why they’re getting into this space and why this strategy is different,” according to Piscitello. “They can help manage their image based on the diversity of the product—it’s not a carbon copy, it’s doing something more.”


To read the full article click here.