As a firm grows, economies of scale become critical to the firm’s efficiency and profits. Managing at the strategy level, as opposed to managing at the individual account level, can provide the scale a firm needs to grow effectively.
High-efficiency trading allows you to add accounts without adding to the effort involved in managing them. And when times are tough, implementing high-efficiency trading can help reduce costs by maintaining effective operations with minimum staffing.
Multiple Models, Single Account
On the Trust trading platform, an account can hold an unlimited number of investment models. With multiple models, you can fine-tune allocations at the account level to meet individual client needs, while maintaining the operational efficiencies of model-based trading.
Establishing and maintaining a blend of investment models for a client is made easy. Multiple models in a single account also simplifies rebalancing at the account-level, tracking client-level performance, and generating consolidated reports.
With fewer accounts to track, fewer accounts to open for new clients, and fewer errors to make by reducing or even eliminating manual calculations, multiple models in a single account streamlines operations and reduces the effort to maintain client accounts.
And at the client level, your client receives a consolidated statement and online access, which helps them stay focused on the big picture.
Consequence-based trading is designed to give you the power to efficiently meet client objectives. Instead of pre-defining rules to apply to accounts, consequence-based trading presents key information at critical decision points throughout the trading process. It allows you to make informed trading decisions to meet client objectives in the most efficient manner – all while maintaining your ability to apply judgment calls.
Consequence-based trading includes the ability to better manage Short-term Redemptions Fees, long-term gains and losses, short-term gains and losses, dividends, and taxable distributions in your client accounts.
Note: Through a series of projects, the enhanced consequence-based trading capabilities will be released in 2010. Recently released functionality includes the ability to reduce or remove trade lots subject to STRFs and the ability to select accounts to trade based on gain/loss information.
Composite models allow you to build a blended strategy made up of a combination of individual standard models.
Composite models can simplify strategy management. One typical use is to define standard models to represent a group of assets that meet a tactical objective, such as Small Cap Growth, Large Cap Value, or International. Then you can create composite models by combining one or more tactical models to represent each investment strategy, such as Aggressive, Moderate, or Conservative. Finally, you can associate each client account to one or more composite models.
Composite models make it easy to adjust a strategy within a group of client accounts. You merely change the percentages in the composite model and the allocations automatically adjust in each client account when you rebalance.
A Model Tactic is a variation of a model. Each variation has a unique definition – either different securities or different allocations – to meet a specific client need. The tactic can then be assigned to an account in an investment model, allowing the model to be tailored to that client’s unique need.
Two types of Model Tactics ensure the flexibility you need to reach your investment goal. At the account level, you may use tactics to hold different cash positions for different clients based on their distribution needs or to have single stock exclusions for select clients.
As a template, you can use Model Tactics to apply different allocation variations for different market conditions or to build possible tactic changes for consideration and then easily implement one across all accounts in the model based on a market event.
The applications for Model Tactics are as vast as there are types of investment advisors. A summary of Model Tactics benefits include:
• Keep people in the same model strategy while allowing for flexibility to handle small variances based on client needs.
• Easily switch between pre-defined variations of a strategy.
• Apply different tactics to different accounts within the same model.
• Effortlessly segment accounts for trading purposes, since rebalancing occurs at the tactic level.
• Maintain model-level performance since it includes the accounts in all tactics within the model.
Cash Flow Management
Investing new money or raising cash is made easy with Trust’s trading platform. Regardless of how you set up your accounts – using standard models, composite models, model tactics, or none of these – you can process all of your accounts to invest all available cash or raise money for distributions or fees in seconds.
You can choose to invest or divest proportionally across all models or investments within the account or in relative amounts to your investment allocation goals – whichever provides you with the results you are looking for.
And since the Trust platform recognizes deposits immediately for trading and can automatically post systematic cash demands and calculate your management fees, these traditionally burdensome tasks become effortless.
Legacy or Out-of-Strategy Holdings
The Trust platform has a special holding area within each account for holdings that are not part of an account investment model – typically legacy or non-managed investments. The system ensures these assets aren’t mistakenly traded by allowing them only to be traded manually. There is no risk of trading these assets during any automatic processing action.