Product Spotlight: Get X-Ray Vision with Detailed Holdings Analysis

If you’re like most advisors today, you likely see a lot of client portfolios composed primarily of mutual funds or ETFs. You probably even manage portfolios like those yourself.

Creating a portfolio built on these types of pooled investment vehicles is an efficient way for investors to invest, gain sector exposure, and diversify their investments.

But there’s also a hidden risk of investing in these types of funds. They can make a portfolio appear to be more diverse than it actually is if the same asset is hidden in multiple positions.

Today we’re taking a look at the all-new Holdings tab in Kwanti, which you can find under the Allocation menu. This new feature gives you X-ray vision into your mutual funds and ETFs so you can quickly and easily see where a portfolio may hold the same asset in multiple positions. 

Here’s how to access it and why it’s useful.

Getting Started with the New Holdings Feature

After you select a portfolio and click the Allocation tab, you’ll now see a new sub-menu called Holdings.

The top holdings in a portfolio are listed by weighting by default, but you can adjust the sorting behavior by simply clicking on a column header.

The amount of times an asset is held in a portfolio is shown in the Overlap column. Right away, you’ll know if an asset is being held in multiple positions or not. 

When you see an asset with a number higher than one, click on it to see the detailed breakdown on the right.

Holdings Analysis

In our example, we can see that Apple (AAPL) is held three times in this particular sample portfolio. It’s been purchased directly, and also has small positions in the Vanguard Total Stock Market ETF (VTI), and the DFA Core Equity Fund (DFEOX).

For even more detailed analysis of each position, click on a line item on the right-side to see more detailed analysis. This is a quick way to see a position’s price and return history, and risk and expense information.

Asset Profile

By clicking on Describe at the top of the screen, you can also get a quick view into the position’s top holdings as a whole.

Asset Profile Describe

In addition to searching holdings within a selected portfolio, you can also search holdings across your entire database and also edit holding information from within PDF reports.

Search Full Holdings

Navigate to the Allocation tab, then select Holdings to access a search bar on the right side of your screen. From here, you can search holdings across portfolios.

Search Holdings

Search Holdings Detail

Holdings Overlap in a PDF

When viewing a PDF report in Kwanti, click on the Holdings page to choose to show holdings overlap and include additional detailed information on your client reports.

How to Use the Holdings Feature in Your Portfolio Analysis

To provide the best financial advice to your clients, you need to know the level of diversification and amount of risk they carry.

But performing a top-line analysis of a portfolio’s holding doesn’t always give you the full picture.

By digging deeper and identifying where an asset is held in multiple positions, you can better determine when a client may be carrying additional risk they didn’t even know about. A seemingly diverse portfolio can quickly become anything but.

The new Holdings analysis gives you a quick way to know that you have your clients invested in the right way, and you can provide better recommendations as a result.

If you’re a Kwanti subscriber, you can log into the platform right now to try it out.

 

Not a subscriber yet? Sign up for your free 14-day trial to get started and get access to all of our portfolio analysis features immediately.

 


How Kwanti Ranked in the 2020 T3 Advisor Software Survey

Every year, the wealthtech industry waits with anticipation for the updated version of the T3 & Inside Information Advisor Software Survey

Researched, compiled, and written by industry titans Joel Bruckenstein and Bob Veres, the Software Survey gives a look at how the technology companies who serve financial advisors rank based solely on advisor input.

This year, Kwanti again placed well in two categories: Investment Data & Analytics, and Economic Analysis & Stress Testing.

2020 T3 Advisor Software Survey Results

No matter the ranking, it’s an honor to be included as one of the most-used analytics platforms among financial advisors in the Software Survey. 

This year’s survey, though, demonstrated exactly why we put such a commitment to listening to the advisors who subscribe to Kwanti and taking their feedback seriously when building the system.

In Investment Data & Analytics, Kwanti came in as the fourth-most used tool, and our user rating was second only to Bloomberg Terminal—beating out all three investment analytics tools with higher market share. In the top four by market share, Kwanti is the only tool that increased its market share since 2019.

Likewise, we again received the second-highest user rating in Economic Analysis & Stress Testing tools, coming in just behind Bloomberg Terminal. 

In both categories, Kwanti was one of the highest-ranking tools named by advisors who are considering adding an analytics solution to their firm over the next year. 

Top 5 Reasons Advisors Are Choosing Kwanti

Our user ratings and market share placement in both categories confirmed what we hear from the advisors who subscribe to our system every day. 

We believe there are 5 main takeaways that explain why more and more advisors are choosing Kwanti for their investment analytics. 

We’re focused

While other systems may be like a Swiss Army knife, providing a lot of tools and only doing each adequately, Kwanti is built with one purpose in mind. We specifically designed our software to help advisors make better investing decisions with strong quantitative analysis.  

We listen

It’s pretty simple, really; we listen to our advisors. When they send in recommendations for how to make our platform better, we take those into consideration and often make their suggestions a reality. At Kwanti, providing excellence in client service is always our number one priority.

We’re easy to use

Complex analysis shouldn’t require a complex operating system. The heart of Kwanti is a fast-to-learn and easy-to-use interface. Some analytics solutions require weeks of training, but advisors can get set up and use Kwanti in minutes after signing up for a free trial.

We’re comprehensive

Our simple-to-use user interface sits on top of a battle-tested analysis engine. We let advisors run thousands of variables to analyze risk, expenses, performance, sector concentration and much more so they can provide actionable and informed recommendations to their clients.

We care about data quality

Investment analysis is only as good as the data it’s based on, and we’ve built Kwanti from the ground up to take advantage of the highest quality data. Advisors can connect data feeds directly from major custodians or import data from our partners so they know they’re always working with up-to-date information.

 

We are thrilled to see how advisors rated us in this year’s T3 Advisor Software Survey, and every day we are putting in more robust features and tools to make the Kwanti platform even better by the time the 2021 survey comes out.

Want to see how fast you can start providing better recommendations with high-quality investment analysis? Sign up for your free Kwanti trial now.


How to Win More Business with Kwanti Analytics

What techniques do you use in your sales process to prove to a prospective client that you’re the right advisor for them?

You may walk them through your financial planning process, your investment philosophy, and show them your model portfolios if you have them.

All of those are effective and important considerations to discuss before you bring on a new client, but there’s another process you should implement, especially if you’re talking to someone who already works with an advisor.

Using portfolio analysis to compare your proposed portfolio against the portfolio a client is currently invested in can put you over the top and demonstrate with clarity how you’ll manage their assets better than their current setup.

Here’s how to use Kwanti to compare portfolio analytics and easily demonstrate your value as an advisor.

Portfolio to Portfolio Analysis

There is much more to advisor value than portfolio performance. Giving advice about how to approach large purchases, manage an everyday budget, and plan for future financial needs are all intrinsic to the services advisors offer.

But there’s perhaps no more straightforward way to show clients that they should be invested differently than to show them a side-by-side comparison of their current portfolio with one you would be managing instead.

In Kwanti, you do these comparisons easily. Simply enter a prospective client’s portfolio manually, or import it via spreadsheet.

You can then select the proposed/model portfolio you would invest them in if they become a client. You’ll find a Compare button on each tab so you can easily look at differences in performance, allocation, expenses, income, asset correlation, and risk.

When you’re competing with another advisor for business, it can be a persuasive argument to show a client how much money you can save them by placing them in a portfolio with lower fund fees, or a higher income-generating portfolio. Kwanti’s PDF generator can quickly create and present a comprehensive and beautifully formatted proposal. 

And when you put the comparison into a simple visual, your argument becomes that much stronger. 

Portfolio Stress Testing

How much risk a client can handle is an important factor in any portfolio construction conversation, and you can make those hypothetical conversations grounded in reality by using stress tests.

A stress test is a comparison that shows how a portfolio, as it is currently constructed, would have performed during historical periods of high volatility.

You can access a list of pre-created stress tests in Kwanti on the Risk tab. Our list of ready-to-go stress tests includes:

  • Asian crisis (1997)
  • Russia/LTCM (1998)
  • Tech bubble (2000-2001)
  • China slowdown (2015)
  • World Trade Center attack
  • Subprime crisis
  • Debt ceiling crisis
  • 2018 Q4 selloff
  • CoronaVirus (as this is ongoing, we are constantly updating this stress test with live data)

You can also add your own scenarios.

Stress testing goes beyond a portfolio-to-portfolio comparison by putting each into historical context. The conversation with your prospect then becomes not simply about their current situation, but how they may have been in a better position today if they had been working with you in the past, as well.

While nothing about the future is guaranteed, that can be a powerfully persuasive and emotional argument to make for the value you’ll bring to them over time.

The Importance of Portfolio Analysis in Your Sales Process

Financial advice can often be seen as a subjective process or a soft skill. 

Incorporating more objective portfolio analysis into your sales process not only grounds your prospect’s experience in real events, it also demonstrates your true expertise and shows, in real dollars, the benefits you can bring to the relationship.

When you’ve got Kwanti by your side, rich visuals and detailed portfolio comparisons are always only a click away.

Ready to try Kwanti? Click here to start a free trial and see how our integrations can make your days more productive.


Kwanti and Addepar Integration

We’re always looking for ways to improve and enhance the Kwanti platform. One of the ways is through integrations with other best-in-class advisor technology platforms.

One of our most powerful integrations is coming to you in the april 2020 product update. We’re adding an integration with Addepar so you can more seamlessly do a deep dive into your client’s portfolios.

Who is Addepar?

Addepar is a wealth management technology platform for registered investment advisors, family offices, and private banks. Since 2009, the company has provided firms with data aggregation, portfolio management services, and goals-based analysis.

You can learn more about Addepar here.

What You Can Do with the Kwanti / Addepar Integration ?

Our integration with Addepar allows advisors who use the Addepar system to automatically sync client households and associated accounts to the Kwanti platform.

Through this one-way sync from Addepar to Kwanti, you can get advanced portfolio analytics on any client portfolio in minutes. Once you link your client portfolios, the full power of the Kwanti platform is available for client reporting, allocation and risk analysis as well as Kwanti’s model portfolio management, so you can make more informed investment decisions and communicate them to the clients through an elegant interface.

After linking portfolios for the first time, Kwanti will automatically sync position data every day so you can perform analysis without worrying about taking time to check for updates. There’s no need to manually transfer or import data between systems ever again, eliminating the potential for errors.

How to the Integration Works

To set up the integration with Addepar, please contact support@kwanti.com for instructions. This one-time step is quick.

Once activated, your Addepar clients/account list is available within Kwanti.

Click Import->Addepar to access and search the client list as shown below. In a matter of minutes you’ll be performing deep analytical reviews of all the clients you serve and keep in Addepar!

Addepar

You can always find the portfolios syncing from Addepar on your main Kwanti Analytics screen. Each account will be represented by an Addepar logo in the “Type” column.

addepar

If you’re a Kwanti user already and also use Addepar, sign in here to get started and add this integration right away. There’s no additional cost to you.

Not a Kwanti user? Click here to start a free trial and see how our integrations can make your days more productive.


How to Talk to Your Clients About Fund Fees

Comparing prices is as American as homemade apple pie. 

When people go to a physical store, they don’t just buy what they see on the shelves; they pull out a smartphone and compare the store’s price against what Amazon or a number of other online-only retailers offer.

But comparing prices of household products and comparing fees of investment products are two different realms, and most consumers are out of their element when they try to look at the fees of any of the funds they might have in their retirement portfolio.

They know they’re there…they just don’t know how to compare them and make a meaningful decision about what’s in the best interest of their long-term financial goals.

Helping your clients understand the fees they pay is an important conversation to have, but it can also easily get confusing. 

Here’s what you can do to make conversations about fund fees simple.

How to Engage Clients in a Conversation About Fees

Portfolio expenses have come into clear focus as passive investing advocates have made their case for low fee funds as the best option for most investors.  

The internal fees of investment funds such as mutual funds and ETFs are important to investors because these fees, which are made up of operating and management costs, can have extremely large impacts on the eventual performance of those investments. 

Put simply, high fees cause a drag on portfolio return. This isn’t to say there is no place for higher fee funds in an investment strategy, but it is definitely something that needs to be understood before any fund is placed in a client’s portfolio.

As a financial advisor, you already understand this. What’s more important is understanding how to engage both prospective and current clients so they understand it as well as you do. 

For many advisors who focus on passive investing, this topic is an excellent way to start the analysis of a prospect’s portfolio, because it is easily explained. 

If a prospect’s portfolio contains funds with high fees, they are exposed in a fee expense chart like the one below. 

The funds with high fees are prime candidates for conversation starters. You can weigh the pros and cons and discuss potential replacements as you show the prospect how you can save them money by moving them to lower fee alternatives.

Fee by Position

The key part of your conversation needs to be visual. With so many tools available to advisors, it’s easy to demonstrate in an easy-to-understand way how much of an impact these fees can have on a portfolio’s return.

As you create proposals for prospects, including a visual that shows the effect of just a 1% difference in a portfolio’s expense ratio, in an otherwise identical portfolio, can be the difference between an investor choosing you or another advisor. 

The chart below is an illustration of the difference between expense ratios in a portfolio. 

Expense drag

As simple as it may sound, these are great ways to demonstrate the value you add as an advisor. 

Understand What Expenses You’re Reporting

While it’s good that advisors have multiple tools at their disposal to view portfolio and fund expenses, that also makes it necessary to make sure you fully understand where the information you’re given comes from, and what it means.

There is not only one type of expense ratio that can be reported. For example, some tools may report the expense ratio listed on a fund’s annual report. Others may use the one listed on the fund’s prospectus. 

In addition to understanding where the information you’re viewing comes from, you also need to know the answer to questions such as “Does the expense ratio for this mutual fund include expenses of the underlying funds, or is this just the reported management expense of the mutual fund I am viewing?”

Fund level detail like the expense information is important, but you should also look for a tool that shows you the high-level details as well.

For example, many tools will show you the portfolio-level expense ratio, which is a weighted average of the fund’s expenses. Another great metric you might find useful is the overall portfolio’s expenses estimate in dollars. 

Often, making conversations focus on real dollars with clients can help those expenses resonate much more strongly than by simply looking at percentages. You can arrive at the dollar amount by calculating the portfolio expense ratio multiplied by the portfolio’s value. This data will go a long way in helping your clients comprehend the long-term effects of various fees.

Understanding where the information you receive comes from—regardless of what tool you are using—will help you be prepared for any questions a prospective or current client may ask you about their portfolio’s fund fees. 

There is no perfect way to build a portfolio and every client’s needs are different, but it is vital that you have all the information necessary to make the best decisions possible at your disposal. Portfolio expenses are always part of the information you, and your clients, should understand when discussing their investing goals and expectations.

Already using Kwanti? Log in now to access these charts and many more to assist you in keeping your clients calm and confident.

Not a Kwanti user? Click here to start your free trial immediately—no credit card required.