dvisors seeking ways to entice clients back into the stock market are getting a new tool for their kit. EnvestnetPMC
is announcing a new feature for its managed account program that enables investors to gradually increase their allocation to equities on a prearranged basis on Monday. It will also be showing the Dollar Cost Averaging
(DCA) account at the Waterhouse Institutional conference next week in Los Angeles.
"This is something that we developed to respond to the investor who had pulled out of the market and is looking for a cautious and prudent way to reenter the market," explained Bill Crager
, executive vice president. "It is really a tool to help advisors bring those clients back into the market."
EnvestnetPMC created the product with Rittenhouse Financial Services, a subsidiary of Nuveen Investments. This is the first time that the Chicago platform creator has partnered with a manager on its platform to create a new product.
Rittenhouse will, at least initially, manage all of the assets in the program. The DCA starts individuals with a 10 percent weighting to a large cap equity portfolio managed by Rittenhouse. Another 30 percent of the portfolio is invested a short- and intermediate-bond portfolio and the remaining 60 percent is invested in cash and equivalents.
Then, every two months, 10 percent of the non-equity portfolio will be reallocated to stocks until the accounts target allocation of 70 percent equities is reached. The entire process of getting individuals back to full exposure to stocks takes one year.
Crager added that individuals can elect to speed or slow the reallocation at any time through their advisor.
Down the road, Crager also expects EnvestnetPMC to add additional equity styles to the DCA program. "We have gotten positive response from advisors and will continue to look at other asset classes," he noted. Next up will most likely be a large cap value offering and a core small cap mandate. "Eventually, I expect we will have an option across each of the style boxes."
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