Get More Intelligent with Sleeve Strategy and Trade Queues

sleeve strategy

Learn more about how you can put Orion's Sleeve Strategy and Trade Queue apps to good use for your sleeve-portfolio strategies.

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Gold, Emotions, and Poor Behavior

Content provided by Paula Wieck, CLS Portfolio Manager

Gold is up about 20% so far this year. This is about the time when investors start asking if we have gold exposure in our portfolios. Whether we do or do not isn’t the point I want to drive home (we do have exposure to gold miners and gold in some portfolios); instead, I want to discuss herding and regret biases. They go something like this…

When you see a security run up substantially, you naturally feel emotional about your portfolio. At first, you feel regret that you don’t own the hot security. Perhaps you feel you should have predicted it would go up (hindsight bias). Why didn’t you buy it at that low price several months ago? (You really should have.) You continue to think about the security as you see the price rise. Finally, you can’t take it anymore, and you buy. By now, it’s run up more than 20%. Over the next few weeks, the security continues its ascent. You’re feeling proud that you pulled the trigger. Then it happens. The security starts plummeting. Your stomach turns. Now you start to feel regret for acting so hastily on the purchase. Shouldn’t you have known after a 20% increase it couldn’t run much further? You have to believe it’s a good investment, so you hang on to it. Finally, you watch all of your gains disappear as the momentum wanes. You’re still reluctant to sell because now you don’t want to incur a realized loss; it’s painful enough to see the loss on paper (loss aversion).

That’s how it goes, and it’s easy to get sucked into this trap. It’s human nature to have these emotions, but when you act on them, it can be devastating to your portfolio.

So back to gold. At CLS, we added exposure when gold was getting beaten up a while back – around the time most people weren’t even thinking about gold – so the exposure has been beneficial to portfolios.

Do we recommend buying it now? Probably not. Even when an investment makes an excellent diversifier, has good quality characteristics, and is deemed an overall “good investment”, the price you pay makes all the difference. Although gold is a great addition to a well diversified portfolio, the time to buy is usually when nobody else wants to.


In His Counting House

Drew Pic

Andrew, with his wife Stephanie, are expecting their first child in September

Content provided by Robyn Murray, Freelance Writer

It’s Christmas morning, and brightly colored wrapping paper lies in shredded swirls as four kids sit around the tree tearing through presents. Ribbons, papers, and boxes fly around the room, while 7-year-old Andrew Reisdorff keeps a mental tally. In the lead, his eldest sister with $50 worth of toys. But close behind, his other sister, who still has one more present left to open than she does. In third place, he and his brother are neck-and-neck.

This is how Christmas works in Reisdorff’s number-crunching brain.

“I’d keep a running total of how much they got and how much I got,” Reisdorff recalled with a laugh. More exciting than any shiny new toy or gift were running the numbers, besting the competition – and of course, counting the money. “I’ve always liked money,” he said. “I just like accumulating it. I’ve always been a saver.”

At home, Reisdorff made a mini business of penny sales, selling stuff he didn’t want to his siblings and making small profits. (When your parents buy it, you don’t have to sell it for much to make a profit.) At school, he’d trade football and basketball cards, feeling exhilarated when he made a good deal.

Today, Reisdorff is still counting dollars and making trades. But the prices have gone way up.

From the Playground to the Trading Desk

Reisdorff, a 6’ tall guy with an easy laugh, grew up on 15 acres of prairie farmland outside Lincoln, NE. His father, an accountant by day, planted rows of spruces and pines and turned the land into a tree farm where families could drive up and pick out their Christmas trees for the holidays. It was a small, successful side business, and it kept the family busy. Reisdorff learned a little about managing money from the business and watching his father work as an accountant. “It brings security,” he said. “If you have money, it’s not something you have to worry about. If you don’t, it’s something you do.”

Reisdorff envisioned himself working at a bank, providing loans for homes and cars to his neighbors. He hadn’t imagined the possibilities of finance until he went to college and enrolled in his first general finance class. After he graduated, he took a job providing loans at a finance company in Omaha, and four years ago took a position with CLS. Now, he is on a team responsible for making multimillion-dollar trades. The team works with brokers to get the best trading prices, or trades directly, which Reisdorff enjoys most. “Trying to get the best price, moving it up and down, trying to get someone to come to your price,” he said. It reminds him of being back on the playground trading cards. “You’re trying to get the best value for what you have to give up. Both sides have to agree, but obviously you want to come away pleased.”

Reisdorff enjoys the team he works with and the company. “It’s growing,” he said, “which is good to be a part of. Every six months or so, there’s something new here. It’s never stagnant or stale.” Reisdorff’s personal life is growing too. He got married last summer, and he and his wife are getting ready for a baby in September, painting rooms and picking out names.

If anyone’s keeping tally, Reisdorff is doing well. He might not be living the dream, but he’s pretty close. “A dream job would probably be to run a pro football or basketball team, but that’s a pretty big dream,” he said with a laugh. “No, this is where I want to be.”




Are You Ready for Direct Access to Orion SME Teams?

We're getting ready for next week's service transition to give you direct access to Orion SME teams. Make sure you're prepared with the Weekly.

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Make Scheduling Appointments Easy and Automated

Make Scheduling Appointments Easy

With the Orion Client Portal's calendar integrations, you can make scheduling appointments easy and automated for your advisory firm.

The post Make Scheduling Appointments Easy and Automated appeared first on Orion Advisor Services.


How to Become a Data-Driven Advisor

Watch the video to get info about using Orion's multi-factor authentication, and brush up on asking for referrals and becoming a data-driven advisor.

The post How to Become a Data-Driven Advisor appeared first on Orion Advisor Services.


Story Telling

Open book

Content provided by Brian Towner, CLS Separate Account Product Manager

In the financial industry there are three key components or phases in the client/advisor relationship:

  1. Proposal: Define the client’s financial goals and how the advisor can help achieve them.
  2. Client Review: How has the advisor helped the client progress toward his or her goals?
  3. What Happened?: The end or the breakup.

In general, the financial industry does a great job with the proposal phase. Many advisors can lay out their detailed, unique process and show numbers to back it up.  There’s a wide variety of technology out there that really helps advisors bring home their recommendation and show why they believe it’s better than any other. These tools allow advisors to explain where they’re going to take the client and how they’re going to get there. For example, the advisor can show them why it’s believed that international equity is undervalued and primed to tick up, or why the client should stay away from commodities.

Once the client makes it to the portfolio review phase, there are a vast amount of opportunities for advisors to complete their story and really show progress. (I’d like to note that this stage of the story could certainly be broken out into multiple smaller stages, but for simplicity, I’m going to keep it rather broad.) When it’s time for the client’s annual review, there’s often a lack of simplistic, yet visually appealing tools at the advisor’s disposal to show the portfolio’s progress and help connect the dots. Advisors sell clients on how they’ll do their best to help achieve the client’s financial goals, yet often lack a sufficient way to show if the client has achieved those goals. Currently, advisors compare clients’ accounts against a variety of benchmarks; however, because advisors don’t propose the account to the client by stating they’ll beat a benchmark, why is that their best showcase during the “client review” phase?

Technology can help change the conversation. Imagine an advisor with 30% of a client’s assets, and during the “client review” phase, the advisor is able to actually prove his or her process and show the client where he or she stands?  With that technology, the advisor can compare the client’s portfolio to the 70% of assets that are being held elsewhere (hello aggregation!), make allocation suggestions, and hopefully make their life as an advisor that much easier. Ideally, clients will see that the advisor has a proven process that provides results and would be excited to bring all of their assets under the advisor’s management.

All advisors hope to avoid the last phase, “what happened? the end, or the breakup”. In this phase, the client most likely transfers his or her assets to a new advisor, who sold them on an alternate proposal. This stage could potentially be avoided if advisors were able to better communicate to clients, in plain terms, what’s going on with their portfolio. We all know that the average investor doesn’t have an extensive financial background or understand all aspects of how the markets work – at least not as well as advisors. As an industry, it’s our fiduciary responsibility to provide tools that will allow them to understand these topics in a simple way. In doing so, clients may have a better understanding of what’s happening with their money and a reprieve from financial tensions (often fueled by the media).

There are a variety of innovative firms out there, but none of them have been able to solve this simple, yet important issue. However, here at CLS, we feel that we are making progress in the client communication process. We believe that through better client education, the “what happened?” phase could be greatly minimized. One tool that has been an important factor in this process is CLS Autopilot. Within the Autopilot program, we utilize Riskalyze’s “Check-in” feature that shows clients how they’re progressing against their simplified financial plan that they completed in the beginning of the relationship. We’re hoping to help clients truly understand that one day of poor market performance should not detract them from their long-term goals, and staying invested is one of the best ways to achieve them.

Our clients deserve more, and it’s our duty as an industry to provide them with the knowledge, tools, and support to help reach their financial goals.





How to Ask for Referrals

how to ask for referrals

It can be intimidating to ask your existing clients to help you win business; extinguish your fears with our tips about how to ask for referrals.

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Market Volatility has Reinforced the Viability of Liquid Alts

Andrew Rogers, CEO of The Gemini Companies, contributed an opinion piece to Hedge Fund Intelligence discussing how opportunities are greater today than ever before for liquid alts.

“Investment advisors from the mutual fund, hedge fund, and wealth management realms created numerous liquid alternatives. Advisors believed that blending liquid alternatives with equities and fixed income could provide less volatile returns and retail investors could potentially be able to better tolerate the inevitable declines that all markets sustain from time to time. The initial liquid alt funds were able to raise assets based on this concept of greater diversification. After all, some liquid alternatives, such as managed futures, typically performed well during periods of significant decline.”

To read the full article click here. 




SEC Proposals Target Mutual Funds

Andrew Rogers, CEO of The Gemini Companies, recently penned the article, “SEC Proposals Target Mutual Funds”, for Investment News.

“The regulatory environment for financial services is ever-changing, and periods following market disruptions create opportunities for regulators to propose new rules to prevent further failures. For example, the financial crisis of 2008 resulted in Dodd-Frank, which set forth new rules centered on capitalization requirements to prevent similar events. Regulators are now proposing rules for advisers and investment companies that will change the mutual fund universe.”

To read the full article click here.