Envestnet and other TAMPs keep the asset train rolling in the first quarter
Genworth had a rare deceleration in net flows but it'll be short-lived after a new product launch, according to Gurinder Ahluwalia
5 min read- Envestnet-PMC led TAMP growth with $605 million in net new assets during Q1.
- Genworth's Q1 asset growth slowed, but expects a rebound with new GPS portfolios.
- SEI Advisor Network saw positive asset flows and gained 115 new advisors.
- Loring Ward's assets jumped 71%, driven by passive investing and 401(k) growth.
- Adhesion's AUM surged over 50%, boosted by a major client addition.
Genworth, Envestnet, Loring Ward, SEI, Adhesion and Fortigent all had healthy quarters of growth but Envestnet-PMC led the pack of turnkey asset management programs.
Chicago-based Envestnet-PMC added $605 million in net new assets as it rode the wave of last year’s momentum.
“Overall, business is very good; we had a large number of new advisors,” says Bill Crager, president of Envestnet. “There’s often a rush to invest at the end of the year. [The flow of new assets] picked up in about the same spot in the first quarter.” For information about the previous quarter, See: TAMP assets came easily to Genworth, Envestnet and Loring Ward in 2010 and the fourth quarter sizzled
Crager declined to say how many advisors the company added. Envestnet-PMC’s assets under management ended the quarter at $15.6 billion, up from $14.5 billion at the end of 2010.
No personal best
Perennial asset-gathering dynamo Genworth Financial Wealth Management added $355 million in net new assets and its total AUM climbed to $25.5 billion. This growth spurt was among the strongest in its group but it was no personal best: The amount was still 38% lower than the $576 million the Pleasant Hill, Calif.-based firm gathered in the first quarter and 26% lower than it earned in the same first three months of 2010.
But the slow-down will not last long, according to Gurinder Ahluwalia, CEO of Genworth Financial, because of a major product the firm launched on May 2.
SEI turns a big corner but Genworth is still the big asset gatherer
“I think you’ll see the number go up next quarter and you can hold me to that,” says Ahluwalia. “I’ll attribute [the expected new assets to] Genworth Portfolio Strategies.”
Gurinder: You can hold me to
that.
The new model GPS portfolios have a $25,000 minimum investment and are designed to meet what Genworth believes to be increased advisor demand for a turnkey diversified portfolio.
Cooking lessons
“GPS is [celebrity chef] Wolfgang Puck of the ingredients on the platform,” Ahluwalia says. He adds that, Genworth is, in effect, looking to create a de facto masterfully planned soup-to-nuts meal.
SEI Advisor Network made a good first-quarter showing as it added $40 million of net new assets and saw 115 advisors use its services for the first time – a welcome advance on the $151 million of negative asset flows for the quarter ended Dec. 31 and the $57 million in outflows it experienced the first quarter of 2010.
Story Timeline
“Investors continued to gain in confidence,” says Wayne Withrow executive vice president and head of the advisory business for the Oaks, Pa.-based company.
Smaller TAMPs also demonstrated impressive growth in the first quarter.
Loring Ward of San Jose, Calif. brought in net new assets of $279 million, a 71% jump from the $81 million of net new assets gathered during the first three months of 2010.
TAMP assets came easily to Genworth, Envestnet and Loring Ward in 2010 and the fourth quarter sizzled
Aside from benefiting from the tailwind of improved overall market performance, two other factors help account for accelerating growth, according to Alex Potts, CEO of Loring Ward, which is a TAMP of Dimensional Fund Advisors’ mutual funds that are based on a passive investing approach.
Alex Potts says that advisors are
seeing the beauty in passive investing
and a fiduciary approach.
“As a firm, we are seeing more advisors than ever adopting the 'asset class approach’ (that uses passive investing),” he says. “We are also seeing strong new growth in the 401(k) business. We’ve been in the fiduciary space for 21 years and the advisors are [just now] now capturing the opportunity.”
50% jump
Adhesion Wealth Advisor Solutions Inc. of Charlotte, N.C. had a rewarding quarter, racking up additions of $569 million to finish at $1.5 billion of assets under management – a more than 50% jump.
CEO Michael Stier acknowledges that the lion’s share of Adhesion’s first-quarter surge can be attributed to one major client – but he believes this is indicative of a positive trend. See: Unravelling why a big, loyal SEI advisor moved its assets to Schwab
“We are seeing assets coming from both breakaway firms needing a full function ‘landing zone’ as well as veteran firms re-engineering themselves for greater growth of clients and assets. The common thread is the value placed on our end-to-end solution and the flexibility in constructing investment management solutions for their clients.”
Michael Stier: We are seeing assets
coming from both breakaway firms needing
a full function ‘landing zone’.
Fortigent, LLC also had good first-quarter tidings to report: The Rockville, Md. firm forged four new relationships who managed more than a combined $1.5 billion of assets for a total of $52 billion of assets at the end of March, up from $45 billion of assets at the end of 2010. See: Fortigent and Adhesion staff up to haul in bigger fish in the outsourcing market
Buy-or-build
Gary Carrai, senior managing director of the company, says that the rest of the year looks good as more advisors choose to buy – as opposed to build – a solution when faced with decisions regarding investment management.
“This year we have a deeper pipeline into the summer,” he says.
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