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wealthtech on deck podcast - Amanda Robinson

Building Custom Model Portfolios with Amanda Robinson

In this episode, Jack talks with Amanda Robinson, VP of Portfolio Solutions at Fidelity Investments. Amanda leads a team responsible for delivering support for Fidelity’s portfolio solution capabilities.

Amanda discusses hyper-personalization and the need for customizable solutions with user-friendly interfaces. She highlights the role of technology in streamlining operations to free up time for client relationships.

Information provided in, and presentation of, this document are for informational and educational purposes only and are not a recommendation to take any particular action, or any action at all, nor an offer or solicitation to buy or sell any securities or services presented. It is not investment advice. Fidelity does not provide legal or tax advice.

Before making any investment decisions, you should consult with your own professional advisers and take into account all of the particular facts and circumstances of your individual situation. Fidelity and its representatives may have a conflict of interest in the products or services mentioned in these materials because they have a financial interest in them, and receive compensation, directly or indirectly, in connection with the management, distribution, and/or servicing of these products or services, including Fidelity funds, certain third-party funds and products, and certain investment services.

Views expressed are those of the speaker through October 10, 2023 and do not necessarily represent the views of Fidelity Investments. Views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views.

LifeYield is an independent entity and is not affiliated with Fidelity Investments. Listing them does not suggest a recommendation or endorsement by Fidelity Investments.

Fidelity Model Portfolios are provided to financial intermediaries (“Intermediary”) on a non-discretionary basis by Fidelity Institutional Wealth Adviser LLC (“FIWA”), a registered investment adviser. Information about the Models may be provided by representatives of FIWA, or its broker-dealer affiliates Fidelity Distributors Company LLC (“FDC”), Fidelity Brokerage Services LLC (“FBS”), and/or National Financial Services LLC.

Fidelity Institutional Wealth Adviser LLC (“FIWA”) is a registered investment adviser and an indirect, wholly owned subsidiary of FMR LLC. FIWA provides customized separately managed account portfolios that consider tax effects for taxable clients. FIWA has retained the services of its affiliate, Fidelity Management & Research Company LLC (“FMR”), to manage these accounts subject to FIWA’s supervision and oversight.

Fidelity Investments® provides investment products through Fidelity Distributors Company LLC; clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC; and institutional advisory services through Fidelity Institutional Wealth Adviser LLC.

What Amanda has to say

“Investors want advisors to meet them where they want to do business. And emerging generations want scale, personalizable investments, which they want it in a really easy-to-digest way. “

– Amanda Robinson, VP of Portfolio Solutions, Fidelity Investments

Read the full transcript

Jack Sharry: Hello, everyone. It’s great to have you back on this week’s edition of WealthTech on Deck. We’ve talked with more than 100 executives from across the industry over the past two and a half years. We’ve had conversations with leaders from wealth and asset management, workplace retirement, insurance and annuities, and of course, financial technology. We look at the evolving strategies emerging in the marketplace. We discuss products and platforms and the trends that surround these central themes. And all this is oriented or focused on the confluence of digital and human advice. Today, we’re talking to Amanda Robinson. Amanda is a great example of what I consider to be the next wave of leaders in our industry. Amanda is vice president of managed investment solutions at Fidelity Institutional. I should also note that Amanda and I have worked together over the past year or so as part of the MMI Leadership Pathway program. I’ve been a mentor to this program, and specifically to my friend Amanda for a while. And the Leadership Pathway program is an MMI professional development program for emerging investment advisory leaders and is designed to address the challenges that will shape our industry’s future. And Amanda, there’s no better representative that I can think of. So it’s great to have you on Amanda, welcome to WealthTech on Deck.

Amanda Robinson: Thanks for inviting me.

Jack Sharry: My pleasure. So, Amanda, let’s start with you providing us with a look on your career and how you got started and we’ll, in a moment, talk a little bit more specifically about what you’re doing now. But as I recall, you joined Fidelity pretty much right out of college and made one advance after another. So please fill us in.

Amanda Robinson: Yeah, so, I did. I started at Fidelity right out of college and I started on a sales desk as an internal wholesaler. I think it was a wonderful role. I covered the state of South Carolina, so got to really get to know some wonderful financial advisors out there. And then over time I moved on to what at the time was a new business unit in model portfolios, I was the second person hired to support that distribution team. Since then the team has grown to have 14 people counting myself on it. So certainly been rewarding to see all the growth and development that we’ve seen in models. And two years ago, I took on the responsibility of covering Fidelity’s version of direct indexing, or as we call it, custom SMAs.

Jack Sharry: That’s great. So I was at the scene of the crime or scene of the advancement. I had little to nothing to do with it other than rooting Amanda on but it’s interesting to watch someone in Amanda’s shoes. As she got started, she just kept doing a great job and kept getting elevated and continues… she oversees, in case you missed that, she oversees the 13 other folks that are part of her team, and she’s in a management role and really crushing it. So it’s, I have to say that I’m a proud papa, but I’m gonna pretend like I am one. So it’s great to see. And really congratulations on all the good work. So, why don’t you talk about your current role, and I noticed some nomenclatures creeping in, which I welcome, because I think our industry has a knack for confusing the, the end user, so the consumer. So sounds like you guys are on to something here. So talk about your role and what you’re calling it and what you do about it.

Amanda Robinson: Yeah, of course. So I lead our investment specialist group for any managed account investment product. So that could be model portfolios. That could be custom model portfolios. That could be separately managed accounts, or custom separately managed accounts, which the industry calls direct indexing. So what I always tell the team that I work with is they don’t just have to be that traditional specialist that can dive in really deep on the investment IP behind these investments. But I like to say they also have to go wide, they have to go broad, they have to truly understand, alright, what platform is a financial advisor using? What buttons do they have to click? What do their clients see? What other capabilities could this platform offer that can help them more holistically in their business? So as much as I think someone first joins my team, and they view like, alright, we’re an investment specialist, what I think each and every one of them have seen is overtime, they represent so much more than investments being on a managed account investment team. They truly represent the advisor’s tech stack and their ecosystem and how those investments ultimately work in that.

Jack Sharry: So talk a little bit about how you balance that, I’m curious as to in the modern age, with everyone having kind of their own tech stack, depending on… and you should talk also a little bit about the types of advisors, what types of firms, that kind of thing. But are these RIAs, are they independent broker dealers? I’d ike to learn a little bit more there. And then how does your team balance that product versus tech because they’re so enmeshed these days, so maybe talk about how you go about that, and I’m sure you’re, in your new role or your expanded role, you’re doing a lot of training around all this. So why don’t you talk a little bit about that if you would.

Amanda Robinson: Yeah, a huge amount of training, training of financial advisors, training even internally. The way we distribute an investment product, it looks and feels a lot different than what we probably did even five years ago. So an example as it relates to model portfolios… Fidelity, today, we have over 200, what we call turnkey model portfolios, you can find those on our website, those are available to any financial advisor that wants them. We’ve also added them to over 30 different proprietary as well as non proprietary platforms. And the reason we do that is we want to meet the advisor where they’re doing business. If they have a certain need that they have in their tech stack, for example, let’s say they have a compliance software that also offers a model rebalance tool, and they say, “Well, hey, I really enjoy using this compliance software, I also want to incorporate model portfolios in that. Well, they offer a model rebalancing software.” So with our models being available there, we can meet the advisor where their tech stack is. And it really depends on the type of clients that we’re working with, to your point, Jack, you know, we work with broker dealers, so we’ll fully understand their end to end tech stack and be able to work in their ecosystem. RIAs are certainly a client that we’ve spent a lot of time with. And as there’s been more and more optionality in the technology space, our team has really been at the forefront of explaining, alright, here’s how our models work in each of these tech stacks. And since Fidelity is also a custodian, we have the ability to tap into specialists on our technology team, just to even better understand that end to end process for a financial advisor through the role that the custodian plays, through the role that let’s say a model, rebalancer plays, and finally how our investment management, our models are delivered in that construct. So as I said, our team, they certainly like go in and represent model portfolios in this example, but they have to know so much more outside of that. And I’m so impressed by their ability to do that.

Jack Sharry: So how do you go about that? I get it. So it’s a lot more than just models, period. It’s models plus technology. One of my favorite concepts, I guess, I’ll say, and least favorite expressions, is hyper personalization. Because I’m not sure what that means anymore. But I noticed it gets used an awful lot. So individual clients, consumers, investors, what, wanted hyper personalized. Certainly advisors want to make that available and represent themselves in that way. So go a little bit deeper, if you would, how do you accommodate that? Because there’s so many different ways it can be done. And it really is, it is personalized for sure. So how do you go about that? How do you train for that? How do you prepare your advisors for that? Or is this just something they’re immersed in, and they, overtime, really pick up all the detail of what they need to do. And I’m also confident that you’re probably, each member of your team is focused on a particular firm or channel. So talk a bit about all that, if you would?

Amanda Robinson: Yeah, of course. So hyper personalization, it is the hot topic. But I’m like a firm believer, if you look towards the future, that’s going to become table stakes. But I think just as important of those hyper personalized solutions, and arguably maybe in some cases, even more important is the way in which they are delivered. Take Fidelity’s SMAs or our direct indexing product, for example. We’ve built out a user interface. And what that allows a financial advisor to do is right on the spot, go through with their client and express their preferences. They could exclude sectors, they could exclude industries, they could exclude countries, they could add different preferences through this user interface. And they can do that right in this intuitive interface that’s available to them right on Fidelity’s Wealthscape platform, which is our trading platform. So other benefits that we have there. And it’s actually funny, it’s almost like the tech behind the scenes, are all these integrations that enable it. For example, if I’m a financial advisor and I’m interested in offering 20 of my clients Fidelity’s custom SMA capabilities, I, in that same user interface, can just pull up all their accounts, I can click customize, I can go through and customize out and then I can onboard that account. The way that works with other providers and the way we’ve heard feedback from advisors that that could work is doing things like using a fillable PDF, exporting spreadsheets from you know, different platforms, sending that to email addresses and waiting, you know, days in some cases at a time for someone to respond. That’s not a very scalable or streamlined process to do that with that many clients. So, well, I think the personalized investment solution is critical, and I think there’s offerings out there. I think the way in which those are delivered is something that’s really, really becoming more and more important as we think about enabling this customization at scale.

Jack Sharry: And is this something that, I’m sure you said it but I just want to make sure I heard it right, your colleagues, your folks on your desk are working with advisors, and they’re doing it with them using Fidelity software. Is that what I’m hearing?

Amanda Robinson: Yeah. So for Fidelity’s custom SMAs, you know, actually, let me take a step back. So for direct indexing is direct ownership of an index. That is the basics. With direct ownership of an index, you get two benefits. One is the ability to customize that. You can’t necessarily do that with let’s say an index mutual fund or an index ETF. You can’t pull out certain industries, sectors, companies, other areas or preferences that you may want to express. So that is a benefit in itself as well as the benefit of tax loss harvesting, which comes with direct ownership of the index. So what we’ve done is we’ve really enabled a user interface to allow advisors to do that in a more scalable fashion. So my team, they have to be able to go in and talk to an advisor and explain to them, here’s the benefits of tax loss harvesting, here’s the benefits of in this taxable account, utilizing a custom SMA and getting the tax loss harvesting in that versus let’s say, an index mutual fund or an index ETF. So they certainly have to spend a lot of time on the investment merits there. They do also have to spend the time on the technology and showing them this user interface and showing them how to express preferences in their clients’ portfolios, and then how that’s delivered and how they can ultimately explain that to their clients.

Jack Sharry: So we’ve come a long way, as the saying goes, where do you see this going? Where does this lead? Are, or is it more of the same for a while until further advances in technology and product refinement. Tell me more about your view on where it all goes?

Amanda Robinson: Yeah. So when I think about the future, one of the things that we get most excited about is the platforms that can enable these customizable solutions. So when I think about custom separately managed accounts, I do foresee, this is going to be something that financial advisors are going to lean in towards. Because as I think we’ve seen in the news, direct indexing, while it’s been around for 10 years, it’s raising in popularity and it’s raising the buzz to be able to get more advisors interested. In the case of model portfolios, I want you to think of mutual fund or ETF models. One thing that Fidelity has done is we’ve really built out a turnkey offering, which we’ve had for over five years, we think is pretty competitive in the marketplace, we’ve built out a portfolio construction service that can work with advisors that are building their own portfolios. And really what we’re doing today is merging those two together and building out customizable model portfolios for financial advisors. And so all of those, whether it’s those customizable models, or even the custom separately managed accounts, those are delivered on these managed account platforms.

Jack Sharry: So it would seem to me that as your folks, your team is working with folks, it would seem kind of important that the advisor on the, your teammates have to have a pretty good relationship, because this doesn’t sound like you can do this on your own all that easily. Perhaps over time, they get comfortable, but sounds like a lot of partnerships are developing. That’s my guess. Tell me more about that.

Amanda Robinson: Yeah, of course. So we certainly like to meet advisors where they’re doing business. So we work with a lot of different technology companies, Fidelity’s models, we’re available on 30 different technology platforms today. So my team spends time with both the financial advisor as well as the platforms to work through what is that end to end workflow? What is that right process like for that financial advisor? I will say, I think it’s important for my team to spend time with the advisor. But what they’re ultimately trying to do is take work off an advisor’s plate. You know, Fidelity, we found that the average advisor is spending 40% of their time, think about that, in terms of days of the week, two days a week, managing money. When we asked them, how much do they want to spend? What we hear is closer to 20%, or one day a week. So ultimately, the end goal of my team is let’s take a day’s work off of their plate, and allow them to spend more time doing what they like and what their clients probably see a lot of value in. And that’s really things like financial planning and giving their end clients peace of mind and fulfillment in their lives.

Jack Sharry: So I want to get to that in a moment. But I want to go back to something you said a moment ago, which is that there are 30 or so providers around model marketplace, model conveyance, what have you, just some names for those that may not be familiar with this part of our business? Some of the firms.

Amanda Robinson: Yeah, so we work with like a lot of different platforms, both proprietary and third party. And they play a lot of different roles in advisors’ tech stacks. So some of them could be a full on managed account platform. Some of them may be doing a specific role, like just rebalancing a model portfolio, some of them may be doing tax transition, some of them could be a compliant software. So there certainly are a lot of providers and capabilities that advisors are doing there. .

Jack Sharry: Gotcha. So you mentioned a moment ago that with more time on their hands, if your team can help them in the way that it sounds like they’re already doing, that means more time for planning, that means more time for client development prospect. How does that fit into… or is your primary role for your team to really help them in terms of integrating models into their practice?

Amanda Robinson: Yeah, I mean, I think one of the biggest benefits of models is the time that an advisor has back in the day. The way that I like to think about it is 20 years ago, if an end investor walked into an advisors office and said, “How am I doing?” Typically what it meant is how am I doing compared to my benchmark? How am I doing compared to the S&P 500? But now what we’re finding more and more is when an end client walks into an advisors office and they say, “How am I doing?” What it actually means is how am I doing towards achieving my financial goal? Am I going to be able to send my kids to the best college that they get into? Am I going to be able to retire on time? If I get sick when I do retire, am I going to be able to afford to pay for that? So when I think about like my team’s responsibility, it really is truly helping advisors add scale to their business so they can spend more time doing that, which is being the financial coach to their end clients, not always just playing that role of a portfolio manager.

Jack Sharry: Gotcha. And talk about that because the… in the old days it was against the benchmark. Now, what’s it against? In other words, they have their goals, and is that well stated? Are you getting the information on their financial plan? How does that come together in terms of how they’re doing around that whole concept of personalization?

Amanda Robinson: Yeah. So I think that’s one of the biggest like shifts that we’ve seen. It’s certainly you know, we’re a model provider, and we work with financial advisors. And they choose to use Fidelity, we go through a pretty heavy due diligence process. And a lot of cases we’re presenting in front of investment committees. So we’ve seen advisors, they certainly are doing their homework, they’re certainly doing their due diligence, but the value that we’re adding in a lot of cases, is being able to give them that peace of mind so they can spend more time with their clients. So to your question around end clients and like achieving their financial goals. I think like, even like my own parents, they’re approaching retirement age. And that is like their number one target. That is what they are focused on. So when they sit down, they’re not necessarily saying like, how much did I outperform the S&P 500 this year? How much should I outperform my blended benchmark? They know the year that they want to retire and they’re like, am I on track to do that, and there may be some market volatility, the market may be up whatever that use case is. But if they can have that peace of mind, like you’re gonna retire on time, like you have been looking at this year and this date for a long time, that’s ultimately what’s more important than being able to put a fact sheet and say, like, you know, you’ve got this really high Sharpe ratio, and we’ve, you know, raised it by 10 basis points.

Jack Sharry: So clearly, because since you and I started talking about this, I think you were, I think you said, you were the second person in the team. Now, there’s a total of 14, and you’re overseeing that group. So clearly, there’s a market demand for what you’re doing. Talk a little bit, if you would about that market demand from an advisor’s perspective. And more importantly, I’m curious, how does it play out? What are you hearing from your advisors about what their clients are saying? In other words, is satisfaction up? Are they feeling more comfortable? Talk a little bit about how that is evolving as well, that client and advisor relationship. It would seem to me that this level of personalization, and this level of attention, and customization is going to be attractive, but I’d love to hear what you’re hearing with and through your advisors.

Amanda Robinson: Yeah, no, it’s a great question. So one of the things that we’re really excited to be able to roll out are these custom models, which we view as emergence between like turnkey model portfolios that are available broadly, as well as our portfolio construction service to offer advisors the ability to not say like, “Alright, I’m going to utilize this 60/40 portfolio.” It gives them the ability to customize models, and maybe in a lot of use cases continue to use products that their clients know, that their clients in a lot of cases have seen the same product, or the same ticker in a portfolio for 10-20 years, they’re able to continue to have that there. Some feedback I’ve heard from advisors, is I remember an advisor, when we first started explaining the benefit of utilizing model portfolios on a managed account platform that did pretty basic stuff, like automatically rebalance for them. They said, if I wanted to rebalance all my accounts, it would probably take around two or three weeks. So it certainly does demonstrate the time strain, that not just like managing these investments, but not using technology in the right way to manage the operations has caused a strain. So you think about that time that then goes back to an advisors day to day, you know, an extra two weeks a quarter, that ends up being a pretty influential time that they can spend in front of their clients.

Jack Sharry: So we’re gonna wrap up here in a little bit. This has been fascinating, I really enjoyed the conversation. But kind of curious, what’s your crystal ball say? None of us have a real crystal ball, truly. But where does this go? What does it start to look like over the next few years? I would imagine it’s on the same path. But I’m curious if you have any thoughts as to what the future holds in terms of this level of personalization and customization.

Amanda Robinson: Yeah, so I personally am really bullish on the opportunity and utilizing different personalizable investment solutions in a scalable way. I think one of the things if you look at is the emerging demographics. By 2040, Gen Z is going to make up half of the workforce. So really being able to meet those investors the way in which they want to do business. Fidelity, we did a study, we found two thirds of Gen X, Y, and Z working with a financial advisor be as easy as it is to, you know, let’s say call an Uber or order something on Amazon. So that delivery mechanism of how these are delivered are going to become more and more and more critical as we look at the emerging demographics. So certainly managed investment solutions, it gives advisors those customizable solutions, but the fact that advisors are using these platforms in a really scalable way are going to allow them to use those with more and more investors over time.

Jack Sharry: So, Amanda, I gotta say I’m, I’m pretty darn proud. I know it’s not my job to do that. But I’m… I am. This is a great conversation. So thrilled for you in terms of your advancement. And to our listening audience, just want to say I said in the beginning that you’re going to hear about the future, and you just heard it. So it looks an awful lot like Amanda Robinson. So thank you for your your thoughts and comments, I’d love to know if you have three key takeaways you’d like to share with our audience as we look to wrap up.

Amanda Robinson: Yeah, of course. So I think the first thing is time management. Advisors are spending 40% of their week managing money. That is, you know, two days a week, advisors want to be spending 20% of their time, or one day a week. So ultimately, like that time management, that time back in front of clients, that’s going to become more and more important. The second thing that I will highlight is customizable solutions are not going anywhere. And the way in which those are delivered are becoming more and more important. So advisors using their tech stack in conjunction with investments are going to become a really critical part to adding scale and ultimately giving you time back to spend in front of your clients. And then the final thing is just like keep an eye on these trends with these emerging demographics. Like certainly like one of the things we know from investors today is they want advisors to meet them where they want to do business while these emerging generations that are coming in, they want scale, they want personalizable investments, they want it in a really easy to digest way. And that’s one of the recurring themes that we’ve seen as we’ve spent more and more time with investors.

Jack Sharry: So, Amanda, it’s been a real pleasure to hang out with you on this podcast, remind me of our regular calls and always thrilled to watch people advance in their lives and their careers. So as we do end of each of our podcasts, my favorite question we like to ask our guests is, what do you do outside of work that you’re excited or passionate about, that people might find interesting or surprising?

Amanda Robinson: Yeah. One thing that I’ve always done is I am an avid sailor. So I grew up on the coast in Massachusetts. So I grew up starting at like seven years old doing sailing lessons. I had what I think is hands down the best summer job teaching sailing, you know, you’re sitting on a motorboat all summer. And I remember that first internship was pretty hard to swallow, going to an office every day. So it’s certainly something I still keep up with. I still really enjoy doing it. And it’s been like a fun thing. And I’m really happy I’ve been able to do that throughout my life.

Jack Sharry: That’s terrific. We have another guest that just is appearing as we do… record this in mid October. You gotta listen in on, I don’t know if you know Laura Varas, who’s from Hingham, which I think is where you’re from.

Amanda Robinson: Yeah.

Jack Sharry: You should tune into her podcast. She’s brilliant. But for another day, we’ll talk about that after our recording here, but reminiscent. She has pretty much the same response, by the way in terms of her favorite thing. So for our audience, if you’ve enjoyed our podcast, please rate, review, subscribe, and share what we’re doing here at WealthTech on Deck. We’re available wherever you get your podcasts. Again, Amanda, thank you. It’s been a real pleasure. I’m really, really pleased that we could do this.

Amanda Robinson: Thank you, Jack. I appreciate it.