Data & Research March 22, 2011

Nearly Half of Advisers Don’t Focus on Rollovers

In its “Advisor Assets in Motion” report, Cogent Research found nearly 50% of advisers are not winning as many rollover assets as they could be.  
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From its findings, Cogent divided advisers into three tiers of achievement in capturing the rollover market. “Low” rollover advisers have up to $3 million in rollover assets, “mid” rollover advisers have between $3 and $5 million, and “high” rollover advisers have more than $5 million in rollover assets.  About one-third of advisers would fall into the highest tier, Cogent found.

Moreover, the highly successful rollover advisers convert more retirement accounts and the size of those accounts is 2.4 times larger, averaging $344,000, than advisers who fall into the second tier in terms of rollover success. 

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The study highlights a significant opportunity for both asset managers and advisory firms to focus on winning both individual retirement accounts (IRAs) and employer-sponsored retirement plan conversions, Cogent said. “These assets are available to be won and those who work hardest succeed at winning them,” said David Feltman, Managing Director for Syndicated Research. “Given the propensity of retirees to move their employer-sponsored account at retirement, these funds are a ripe opportunity.” 

Products March 22, 2011

Brinker Unveils Crystal Strategy to Institutional Investors

Brinker Capital created the Crystal Strategy 1, which focuses on bringing diversification, transparency, and liquidity to alternative investments.
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The Brinker Capital Crystal Strategy is a proprietary product designed to help institutional investors preserve their capital in down markets, while capturing appreciation in up markets, according to a news release.

Brinker Capital is eyeing smaller foundations, endowments, and pension plans in the $10 million-$100 million asset range looking to increase their global macro allocations in a format that doesn’t have traditional hedge fund constraints, the company said.

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Crystal Strategy has been available to financial advisers since September 2010. Brinker Capital, however, has been running the portfolio for the past two years to test its performance under a variety of market conditions.

Using tactical and strategic processes, Brinker Capital broadly allocates the Brinker Capital Crystal Strategy to invest across six major asset classes, including domestic and foreign equity, fixed income, absolute return, real assets, private equity, and cash. Within these asset classes, Brinker Capital employs an array of investment vehicles, including individual stocks, exchange-traded funds, closed-end funds, open-end funds, and Master Limited Partnerships, among others.

The company said the Crystal Strategy performs much like other absolute return strategies, but has lower fees compared to many vehicles, and daily liquidity. Furthermore, institutional investors will have daily transparency into their account holdings. The strategy is constructed by merging top-down macroeconomic trends with a bottom-up strategy and stock selection. The target minimum is $1 million.

In determining the portfolio’s major asset allocation, Brinker Capital starts with a “null hypothesis,” meaning that no individual major asset class deserves a higher weight than any other. From there, based on factors such as valuation, technical trends, sentiment and risks, Brinker Capital strategically overweights the areas they believe will generate the best risk-adjusted return.

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