To explore best practices, we spoke with Eric Gerster, CIO and Johann Lee, Director of Research at AlphaCore Wealth Advisory, an RIA that has deeply integrated Architect into their practice. Here’s an in-depth look at how they utilize Architect’s advanced analytics to effectively serve their clients.
Blending Traditional and Alternative Investments
AlphaCore’s investment approach combines traditional assets like stocks, ETFs, and mutual funds with alternative investments such as private equity, private credit, hedge funds, and registered funds. Gerster states, “At AlphaCore, our innovative approach to investment management is designed to grow our clients’ assets through traditional and alternative investments with a keen understanding of market risks. Architect is a technology solution that aims to help us to blend public and private market strategies seamlessly, delivering comprehensive, tailored solutions aligned with our clients’ specific investment goals and risk profiles.”
Leveraging Advanced Analytics for Fund Selection
Architect’s sophisticated analytics capabilities drive AlphaCore’s fund screening process. Specifically, the platform offers:
- Growth of $10K Analysis: Illustrates clearly how an initial investment grows over time under different market regimes, enabling clear visualization of long- term value and the impact specific alternative funds can have to a portfolio.
- Historical Stress Testing: Provides scenario simulations based on historical market events, helping assess how funds and portfolios might perform under extreme market conditions.
- Risk Factor Analysis: Delivers deep insights into specific risk exposures—such as sensitivity to equity markets, interest rates, credit spreads, and commodities—which guide more precise fund selection and allocation decisions.
- Trade-off Analytics: Enables advisors to balance performance targets against liquidity metrics, ensuring optimal client alignment.
Lee emphasizes, “Architect’s detailed risk and performance analytics give us exceptional clarity. For instance, we use Architect’s historical stress testing to curate a set of fund offerings that may insulate portfolios from extreme market drawdowns, such as those witnessed in 2008 and 2020.”
Outcome-Driven Portfolio Construction
AlphaCore uses Architect’s analytics to construct personalized, outcome-driven, multi-asset investment models. These models effectively integrate public and private market assets into coherent strategies designed around client objectives, from growth to income generation to comprehensive risk management.
“Architect is central to our model portfolio construction process,” Lee notes, “Leveraging Architect, we are able to monitor and implement specific alternative funds into our model portfolios, balancing risk and return with the help of rich analytics.”
— Johann Lee, Director of Research at AlphaCore Wealth Advisory
Facilitating Client-Centric Conversations
Advisors at AlphaCore leverage Architect extensively to deliver personalized, insightful client engagements. They start by inputting the client’s existing portfolio into Architect, enabling them to directly compare current holdings with AlphaCore’s differentiated portfolio models. Using Architect’s powerful analytics, advisors carefully analyze the gaps and opportunities, adjusting recommended portfolios as needed to better align with each client’s specific financial objectives and risk tolerance.
These refined comparisons are presented to clients through compelling, easy-to-understand visuals generated by Architect. Advisors can demonstrate, for instance, how integrating private equity could enhance potential returns, or how incorporating private credit may offer attractive income streams that traditional bonds may not. In other cases, advisors might use Architect’s analytics to illustrate how hedge funds may provide uncorrelated returns, effectively mitigating downside risk during volatile markets.
Gerster explains, “Architect has transformed the way our advisors discuss portfolio strategy with clients. Recently, one client who was unfamiliar with private equity gained a deeper understanding after Architect visually demonstrated how an allocation historically improved portfolio performance in a simulation. Similarly, Architect helped another client, seeking reliable income to visually appreciate the income-generation benefits of integrating private credit into their fixed income mix.”
“By allowing advisors to dynamically model scenarios and visually represent complex investment concepts,” Gerster continues, “Architect has the capability to significantly improve client comprehension and trust, empowering clients to make informed, confident investment decisions.”
Optimizing Efficiency and Consistency
AlphaCore also leverages Architect to streamline its internal processes, aiming to ensure consistency across advisory teams. By using standardized analytics and reporting templates, AlphaCore strives to reduce operational complexity, enhance advisor productivity, and deliver uniformly excellent client experiences.
“By allowing advisors to dynamically model scenarios and visually represent complex investment concepts,” Gerster continues, “Architect has the capability to significantly improve client comprehension and trust, empowering clients to make informed, confident investment decisions.”
— Eric Gerster, CIO at AlphaCore Wealth Advisory
Best Practices Summary
AlphaCore’s utilization of Architect represents a set of best practices for RIAs:
1. Comprehensive Fund Screening: Leverage Architect’s advanced analytics including historical stress tests, growth visualization, and risk factor breakdowns to inform manager selection.
2. Outcome-Focused Portfolio Construction: Utilize Architect’s optimization features to build model portfolios strategically designed to meet specific client goals.
3. Enhanced Advisor-Client Interactions: Employ Architect’s analytics to create personalized client proposals and elevate client discussions with compelling visuals.
4. Consistent and Transparent Analytics: Standardize your analytics and reporting to provide consistency
and streamline advisor operations, facilitating scalable growth.
Through Architect, AlphaCore has enhanced its capacity to deliver sophisticated, outcome-oriented investment solutions, effectively setting a benchmark for RIAs looking to differentiate their practices.
Architect sets the standard by empowering advisors with the tools and analytics necessary to deliver exceptional, personalized client portfolios that effectively blend traditional and alternative assets to meet evolving investment needs.
IMPORTANT INFORMATION
AlphaCore is a current user of Architect. AlphaCore did not receive any compensation from iCapital, Inc. (together with its affiliates, “iCapital”) or from any of iCapital’s affiliates for the testimonial provided herein. However, iCapital acquired underlying technology used by Architect from AlphaCore, and iCapital does not receive compensation from AlphaCore for AlphaCore’s use of Architect. iCapital also sponsors and manages access funds, one or more of which is, or is expected to, invest in investment funds sponsored by AlphaCore. Any such access fund will be included in the universe of investment products Architect draws upon. The business relationships between iCapital and Alphacore create potential conflicts of interests, including an incentive for Alphacore to make positive statements about iCapital and/or Architect in order to increase the likelihood of directing investors to AlphaCore funds and/or AlphaCore Access Funds.
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