Advyzon takes personalized portfolios further in new TAMP partnership

After 10 years in the wealthtech space, platform provider Advyzon just staged its first conference. The event, which took place last week in Phoenix, drew a sell-out crowd ... Also making a major product announcement at the conference was Nebo Wealth, GMO’s technology-driven asset management platform. Nebo Wealth says its technology allows RIAs to streamline and automate the process of delivering personalized portfolios at scale.

Synopsis: After reading about Nebo Wealth, you’re going to think the traditional portfolio design process is at best naive, at worst a bit silly. And Nebo Wealth also, somewhat incidentally, provides advisory firms with the holy grail of portfolio management: the ability to provide portfolios that are completely customized to a client’s individual situation—at the literal touch of a button.

The wealth tech provider is teaming up with Nebo Wealth to create an automated end-to-end solution for RIAs. Advyzon, a wealth tech provider focused on independent financial advisors and RIAs, has unveiled a partnership to improve the process of building personalized investment portfolios. Compared to the typical approach of focusing on implementation – through custom indexing and tax management, for example – Nebo Wealth says it goes further with a \"multi-period, shortfall optimization engine,\" which builds portfolios that are designed around clients’ financial goals.

Advyzon Investment Management (AIM), a turnkey asset management program (TAMP) under the umbrella of comprehensive technology platform Advyzon, recently announced a partnership with Nebo Wealth, an award-winning asset allocation and portfolio design platform from global asset manager Grantham, Mayo, Van Otterloo & Co., LLC (GMO). AIM now powers and serves as a turnkey platform for Nebo Wealth, an end-to-end solution that enables Registered Investment Advisors (RIAs) to streamline and automate the process of delivering personalized portfolios for each and every client at scale.

This year T3 leaned into personalization: how advisors can overcome the tradeoffs inherent in customizing their services, while gaining scale via a variety of new technologies. A prime example of this movement was the launch at T3 of Nebo Wealth, from GMO, the investment management firm founded by Jeremy Grantham. "Nebo Wealth is a turnkey, end-to-end platform that enables RIAs to streamline and automate the process of delivering personalized portfolios for each and every client at scale," said Martin Tarlie, product lead for the needs-based optimization platform.

This week, the firm has introduced its new platform, Nebo Wealth, an end-to-end platform that its growing customer base of RIAs have been asking for, according to product lead Martin Tarlie. The new platform is meant to help advisors achieve portfolio personalization at scale, and bridge an industry gap between financial planning and asset allocation. If anything, Tarlie said the new platform could disrupt the model marketplace space; it can replace the spreadsheets that too many advisors rely on, as well as off-the-shelf models.

Nebo, the award-winning asset allocation and portfolio design platform from the global asset manager Grantham, Mayo, Van Otterloo & Co, LLC (GMO), announced today the launch of Nebo Wealth – a turnkey, end-to-end platform that enables Registered Investment Advisors (RIAs) to streamline and automate the process of delivering personalized portfolios for each and every client at scale.

Casciano also has an agreement with Grantham, Mayo, Van Otterloo & Co.’s "Nebo" platform, which the Boston-based asset manager launched last year. The platform automates portfolio construction processes associated with customized model portfolios for RIAs. "As the industry is increasingly pushing back on risk scores and model portfolios as cookie-cutter, there is a growing need for better technology and behavioral finance-based approaches to be able to truly design and deliver personalized portfolios," said Tim Welsh, president of Nexus Strategies, which counts Nebo as a client.

Industry Awards. Listen as Martin Tarlie, Director, Product Lead, GMO, discusses how their 2023 Wealthies Initiatives help financial advisors.

"We think the future of financial advising is aligning the plan with the portfolio. Today, most assets are outsourced into cookie-cutter portfolios where risk is based on volatility and untethered from the financial plan. Consequently, advisors lack confidence that their clients are in the right portfolios," Finnegan said. "In the future, we think all advisors will be building one-of-a-kind portfolios for every client, featuring a custom asset allocation designed to meet their specific goals."

The new Goals-based Investing Platforms category is a reflection of how asset managers are currently investing to provide new tools and technology for advisors to better tailor recommendations and implement financial planning themes into their investment management services. A record-breaking number of nominations were submitted this year - over 1,000 entries were received from more than 400 companies. ultimately honoring 80 companies and executives in the wealth management space.

Grantham, Mayo, Van Otterloo & Co. LLC (GMO), a global investment manager, announced today a major milestone for its Portfolio Design platform Nebo, which has surpassed $1 billion in platform assets 1 one year since its September 2022 launch. “Nebo is revolutionary for private wealth management, along the lines of Direct Indexing from a personalization perspective." Nebo (for Needs-Based Optimization) is a continuation of GMO’s history of research and innovation in areas including asset allocation, quality investing, and quantitative strategies. Nebo is not just a portfolio construction engine, it is a paradigm shift in risk assessment, redefining risk as ‘not having what you need, when you need it.' Nebo uses a proprietary multi-period shortfall optimization – built on a decade of deep research and user-led development – to generate personalized client portfolios that seek to minimize shortfall risk and align to each client's financial plan.

As more and more advisors make the transition to financial planning, new wealth technology providers have emerged to help streamline the process. One of these offerings that bears watching is Nebo, from GMO Asset Management. This offering seeks to bridge the gap between the creation of the financial plan, and the actual implementation of the plan via an investment portfolio. Cerulli believes this offering can help advisors with a traditional pain point in their business, while giving them more time to focus on building and maintaining client relationships and making sure those clients achieve their financial goals.

In this episode I speak with Martin Tarlie, a member of the Asset Allocation team at GMO and spearheading their work on Nebo, a goals-based investment platform. Martin describes Nebo as, "bridging the gap between financial planning and portfolio management," with a key innovation being the reformulation of risk from volatility to not having what you want/need when you want/need it. In other words, constraints on both wealth target and horizon.

Standard financial industry practice builds retirement portfolios using mean-variance optimization and validates them using Monte Carlo simulations that assume asset returns are a random walk. To put a finer, more brutal point on it, managers construct portfolios using technology from 1952 and then have the temerity to check the results using assumptions from 1970. We suggest a more modern portfolio construction approach that puts the key problem of having sufficient assets to support investors’ required spending in retirement front and center.

Practice Management: Building Your Business: Investment manager Grantham, Mayo, Van Otterloo & Co. (GMO) stood out with its new portfolio construction and asset management platform, Nebo, which "bridges the gap between the plan and the portfolio by redefining risk as not volatility, but rather, not having what you need when you need it," said Martin Tarlie, product lead for Nebo.

The Fintech Showcase features emerging financial technology companies in wealth, digital finance and asset management reshaping the rules of engagement in our industry. All are vying for the Best of Show Award and for the grand prize: lunch with Kunal Kapoor, CEO of Morningstar. The showcasing companies are: Alphathena | Income Lab | Income Conductor | nebo | Pebble Finance | Responsive AI |

GMO has launched a new product called Nebo, Needs-Based Optimization, and what that does is bridges the gap between the financial plan and portfolio construction. They've got some amazing analytics, algorithm approach, a little behavioral finance sprinkled on top, to make it a really compelling way to integrate what advisors do from a workflow point of view from taking the financial planning recommendations and then making that into the actual portfolio itself.

The 2023 T3 attendees were witnessing the birth of a new fintech category ... advent of portfolio design software ... a missing ingredient at the heart of the tech stack. Nebo is a portfolio design engine that fills an important gap in the fintech space: the portfolio design toolkit that sits between planning and asset management ... colonizing exactly the missing patch of ground.

I first met Martin Tarlie, the product lead of Nebo by GMO, at our own WealthStack conference in 2022. He has spent the last 10 years at work on the ideas behind the platform, which he says can be thought of "as a startup within a mature asset management firm." Advisors still building their own portfolios or those interested in following the latest philosophical and methodological underpinnings, which are bringing behavioral finance into the process, should check out the resources Tarlie has created.

Nebo (Needs-based Optimization), a 2022 startup, was another example. It sees a void created by a risk-number mentality gone too far because it relies too much on real or perceived sleep-at-night fear factor around volatility, according to Martin Tarlie, product lead for Nebo, and a T3 newcomer. "We are a startup technology venture inside of an institutional asset management firm," he said.

What are you excited about this year? There’s a relatively new company called Nebo, but it’s a technology that was developed by GMO, Jeremy Grantham’s firm. I don’t think most people have ever heard of it or have seen it. (Editor's note: Except for those who pay attention to the Wealthmanagement.com Industry Awards. Nebo won the 2022 award in the highly competitive Industry Disruptor category.)

We are excited to announce that the shortlist for the With Intelligence Private Asset Management Awards has been released! The quality of entries was of an incredibly high standard this year, and we would like to congratulate everyone who made the list! For over two decades, these Awards have provided a platform for top investment professionals, wealth advisors, legal firms, consultants, and other key service providers operating within the sector, to showcase the incredible achievements they have accomplished.

When I heard that the investment management firm GMO had created a retirement planning tool to mitigate “sequence of returns” risk I looked forward to learning about it. After setting aside a stumbling block or two in its white papers, I found it to be the best platform for financial advisors I have ever seen.

Premium placement for exhibitors was just outside the main ballroom, with a few notable newcomers, including, Jeremy Grantham’s GMO asset management firm fresh off the launch of Nebo. Nebo (for Needs-Based Optimization) bridges the gap between financial planning and asset management. Nebo is built on the idea that clients' chief investment risk is not short-term market volatility, but rather not having the financial resources needed when needed.

The advisors who are listening to this podcast will start a financial-planning process with a risk assessment for a client. That exercise will evaluate how much volatility the client can tolerate. It will serve as input to constructing a portfolio that optimizes returns given a client’s risk tolerance.My guest today is here to explain why that is the wrong approach. The problem is not to minimize volatility, he says, but to figure out how much money a client needs, when they need it, and to solve for that problem.

Most notably, Jeremy Grantham’s GMO asset management firm did so with the launch of Nebo, a technology-driven asset allocation and portfolio management platform for RIAs that streamlines and automates the process for delivering custom and personalized portfolios. (Nebo stands for needs-based optimization). Nebo and other vendors had good traffic from advisors eager to learn and sample the latest innovations — while seeking shelter from the warm California sun.

Martin Tarlie at GMO discusses the firm's research looking at how to properly deal with sequence-of-return risk, the condition many older investors are facing now as they look at retiring into a stock market that is struggling.

This year's 'Wealthies' winners were honored last Thursday at a 500-plus-attendee, black-tie awards gala in the Ziegfeld Ballroom in New York City, after roundtable discussions and networking at the InterContinental Times Square. GMO won the 'industry' disruptor award for its Nebo platform.

GMO's approach can help clients that are at risk of having insufficient funds during retirement, said Tom O'Shea, a research director at Cerulli Associates, which does not work with GMO. O'Shea, however, said Nebo is the first tool that solves for the problem of a 'sequence of return risk 'within a personalized separately managed account.' Yes, you outsource this cumbersome problem to solve, but the main benefit is it helps you allow the client's money to last longer in retirement,' he said.

Ben Inker, GMO's co-head of asset allocation, and asset allocation team members James Montier and Martin Tarlie, have just published a paper that is likely to ruffle plenty of feathers. 'Investing for Retirement III: Understanding and Dealing With Sequence Risk' argues that retirees can lower their risk of running out of money by including some market timing in their so-called 'glide path,' meaning the path by which their portfolio is expected to evolve as they move through retirement. Right now, the retirement industry's typical advice is that retirees should pretty much ignore temporary market conditions, and follow a predetermined optimal 'glide path' from risk to safety, stocks to bonds, as they age.

Sequence of return risk is different from most other forms of risk borne by investors. It is not a risk inherent in an asset class, nor can it be seen in any portfolio analysis that looks at a single period of returns. As a result, it is not much of a surprise that sequence of return risk is entirely ignored in much of academic finance. But it is a meaningful risk for the vast majority of investment portfolios and there are useful tools that can mitigate its effects. We believe a portfolio construction framework that takes into account the lifespan of the portfolio and its expected cashflows can account for sequence of return risk better than any standard single-period optimization. And by dynamically reallocating portfolios in light of the returns assets have actually delivered and the consequent impact on their expected returns, portfolio managers can substantially further improve outcomes for their clients. Adopting these tools can be difficult, as both require combating natural human behavioral tendencies. But investors and their advisors would be well-served by at least understanding the ways those tendencies lead to sub-optimal longterm outcomes and determining whether it is worth some of the emotional pain involved in taking a different path.

The eighth-annual event featured 105 awards presented to 84 companies and individuals from a pool of 225 finalists.WealthManagement.com celebrated the winners of the 2022 WealthManagement.com Industry Awards (the “Wealthies”) Thursday night during a black-tie awards gala at the Ziegfeld Ballroom in New York City.

In development for almost a decade and with three years of early-adopter feedback and input from fiduciary financial advisors, the global investment manager GMO announced today the launch of what it calls Nebo, which is short for Needs-Based Optimization platform. Nebo was also a winner in the 'Industry Disruptor' category of the WealthManagement.com Industry Awards, the winners of which were announced Thursday.

Nebo (for Needs-Based Optimization) bridges the gap between financial planning and asset management, helping advisors ensure clients have the financial resources they need to achieve their goals. Nebo is a new, technology-driven asset allocation and portfolio management platform for Registered Investment Advisors (RIAs) that streamlines and automates the process for delivering custom and personalized portfolios to their clients.

Grantham, Mayo, Van Otterloo & Co. — the investment manager led by Jeremy Grantham — on Thursday introduced asset allocation and management technology to help RIAs provide personalized portfolios to their clients. The Nebo, or 'needs-based optimization,' platform automates and streamlines client portfolio customization, according to GMO. The firm based Nebo’s approach on the idea that clients’ main investment risk, rather than short-term market volatility, is lacking the financial resources they need, when they need them.

All across America, retirees and near-retirees are reeling. They were assured by simplistic “McMoney” financial advisers that bonds were “safe,” that bond returns were steady and predictable, and that a portfolio balancing stocks and bonds would be fine in all circumstances. And in the first half of this year they have discovered to their shock that none of these things is necessarily true. So it is timely that James Montier and Martin Tarlie, strategists at white shoe money management firm GMO, have produced a paper showing why these assumptions are wrong, why they may be endangering our retirement plans, and what we can do about it.

Standard financial industry practice builds retirement portfolios using mean variance optimization and validates them using Monte Carlo simulations that assume asset returns are a random walk. To put a finer, more brutal, point on it, managers construct portfolios using anachronistic technology from 1952 and then have the temerity to check the results using assumptions from 1970. The unsurprising result of a process stuck over 50 years in the past is portfolios that burden future retirees with an unnecessarily high risk of financial ruin. As one of us points out relentlessly, risk isn't a number, rather it is a notion or a concept. In the past, we have talked about the permanent impairment of capital as being the true risk you want to avoid. We have also highlighted the three paths that can lead to this outcome: Valuation risk. Buying an asset that is expensive means that you are reliant upon

Amid a weak stretch for value strategies, the asset-allocation specialist discusses why GMO remains pessimistic in its outlook for U.S. stocks. Our guest on this week's installment of 'The Long View' podcast is James Montier. Montier is a member of the asset-allocation team at Grantham, Mayo, Van Otterloo & Co. Before joining GMO in 2009, he was co-head of global strategy at Societe Generale. A prolific and incisive writer, Montier has authored several books, including Behavioural Investing: A Practitioner's Guide to Applying Behavioural Finance; Value Investing: Tools and Techniques for Intelligent Investment; and The Little Book of Behavioral Investing. He's also a regular contributor to GMO's library of white papers and research studies on topics ranging from productivity, strategic asset allocation, contrarianism, and more. In addition to his duties at GMO, Montier is also a visiting fellow at the University of Durham and a fellow of the Royal Society of Arts.