The data is in — we look back at the year’s most popular posts.
We launched our blog a little over a year ago, and the reception has been great. As we approach year end, we thought we’d share our three most popular posts, as well as few other favorites. So — drumroll please — the top three blog posts for the year were:
#3 Blog Post: Direct Indexes: Cheaper than ETFs?
It’s widely appreciated that direct indexes outperform ETFs on an expected after-tax basis (we wrote about this in our post Direct Indexes are Better than ETFs). But Direct Indexes also have the potential to be less expensive than ETFs.
We break down the costs of Direct Indexes versus ETFs. While Direct Indexes are cheaper than ETFs to launch and manage, there are still three barriers to wider adoption: account opening, per ticket commissions, and the requirement to buy whole shares. But technology already exists to address all three issues, laying the foundation for making Direct Indexes better than ETFs in every dimension.
#2 Blog Post: The Three Types of Wealth Management Firms
There are three kinds of wealth management firms: Product Vendors, Customized Traders and Planner/Coaches. Some firms are hybrids of one sort or another, but in our experience, this taxonomy goes a long way in explaining how firms are organized, how they compete, how they present themselves to clients, and the true nature of their business.
We explain the differences — and show how to tell from the outside what any given firm is. While there isn’t a single best type of firm, we see a trend of Product Vendors and Customized Traders moving in the direction of becoming Planner/Coaches.
#1 Blog Post: The Ultimate Guide to Sleeves, Part I and Part II
It’s not the stuff of cocktail party chatter, but it goes to the heart of how you manage wealth. The answer you give to the “sleeves” vs. “no sleeves” question will shape your entire program.
In our guide we describe three types of sleeves—sleeve level accounting, sleeve-level rebalancing and sleeve-level reporting—and the pros and cons of using each.
In Part II, we share four drivers that are leading firms to adopt holistic (sleeveless) approaches, and we discuss four strategies for avoiding sleeves while still meeting client expectations.
And a few more that have elicited (positive, I'm glad to say) feedback:
Guides to understanding rebalancing systems:
A Guide to Choosing a Rebalancing System: A decision maker’s guide to choosing a rebalancing system. We look at two key architectural differences that fundamentally set rebalancing systems apart: sleeve vs. sleeveless, and rules vs. optimization.
Don’t be afraid of the Black Box: Sophisticated rebalancing analytics can be too complicated for advisors to understand. That’s a problem. The solution: optimization within your guidelines.
Stop. It’s Time to Rethink Rebalancing: A comparison of traditional event-driven rebalancing and automated rebalancing using cost-benefit analytics.
On how rebalancing technology changes roles and responsibilities:
Can Compliance be Automated?: How automated rebalancing enables wealth management firms to “build in” compliance, with a double win of both lower costs and superior compliance.
Are CIOs in Trouble?: The CIO job isn’t going anywhere, but rebalancing technology is changing the role of the CIO.
The Art of Centralized Rebalancing: A guide to creating a central rebalancing group.
On the state of the industry and Industry trends:
ESGs: An Ugly Duckling No More: ESG takes its place as a standard form of customization.
Are Your Portfolios Noisy?: Most drift is not the result of customization or tax management. It’s just noise, and it’s avoidable.
Don’t Treat Individual Investors like Institutions: Why the institutional model of asset management doesn’t serve the needs of individual investors.
We want to thank our readers for their interest in our blog posts. If there are any topics that you’d like us to cover in this next year, let us know (Contact Us). Best wishes for a great holiday!
For more on this topic, check out An Index to Smartleaf's Top Blog Posts.