Fi360, provider of fiduciary-related education and technology services, this week announced enhancements to its Fiduciary Focus Toolkit, including two new reports known as The Model Portfolio Report and the Cost & Services Report.

According to John Faustino, chief product and strategy officer at Fi360, these additions deepen the existing monitoring and reporting capabilities for users. While offering an overview of the new reports, Faustino emphasized that monitoring and reporting together are “essential ongoing processes for fiduciary-minded financial professionals.”

To this end, the Model Portfolio Report helps advisers benchmark their investment models using an independent, client-friendly report. Model Factsheets can be produced, which include performance, risk and expense comparisons along with the Fi360 Fiduciary Score at the underlying investment and model levels. Advisers can generate a hypothetical report using a model’s current allocation or upload past allocations for a more precise historical analysis, Faustino explained.

The second reporting expansion, Costs & Services, zooms in on the fees a client is paying for the services received.

“The report provides clear documentation of the plan’s compensation structure, identifying who is receiving compensation, as well as what and how compensation is received,” Faustino said. “Information can be easily updated, which simplifies on-going reporting and compliance processes.”

Faustino explained that the new reports will fit into the holistic Prudent Practices fiduciary process that Fi360 has developed. The new reports “streamline these processes, resulting in a final product that is both adviser- and client-friendly.”

Reflections on industry trends 

Speaking broadly about the new reports and Fi360’s solution set, Faustino agreed that there has been something of a surge in research reports on the topic of model portfolios—most finding clear evidence that the popularity of model portfolios is set to increase. Faustino explained that Fi360 feels it has an important role to play as this trend unfolds.

“We don’t manage any money and we are never going to manage money—we are not a registered firm,” he said. “We have a role to play as an independent third party that an adviser and their clients can use to validate the information they are getting from an asset manager or some other source. You can look into the allocations and the capital market assumptions and do your proper due diligence.”

Faustino said it is important that the Fi360 reporting uses consensus capital market assumptions.

“We are putting our thumb in the air and asking broadly, where does everyone in aggregate say the different equity and bond markets are going? These are the numbers that we feel comfortable letting everyone use,” he observed. “Of course, if your numbers or assumptions differ from our consensus, that’s not necessarily bad. It allows you to have an independent lens to see what everyone is doing in the aggregate and how you stack up.”

Another point of emphasis from Faustino was that Fi360 is generally speaking seeing more and more interest in its services from non-retirement plan focused firms, i.e., wealth management advisers. “Related to this, many advisers that reached out to us initially because of the plan side of their business are now finding ways to use our capabilities on the wealth side, at a greater rate than they did in the past,” he said.  

The enhancements come as Fi360 recently acquired the Center for Fiduciary Management (CFFM), an investment management technology provider for retirement plan advisers, adding such capabilities as a Stable Value Navigator and an RFP Director solution. Offering his take on the acquisition, Faustino said he is excited to work with CFFM’s technology and data capabilities.

“We are very focused on data aggregation right now,” he observed. “When I started we had eight or nine data or custodial integrations. Today we are over 50 and it is growing every week. We are focused on better using data integrations to make the operational aspects of serving as a fiduciary simpler for advisers. In fact, right now we are talking to several more broker/dealers about data aggregation services, because we believe this is going to be table stakes in the future for serving large institutions with fiduciary software solutions.”