U.S. Markets open in 9 hrs 27 mins

#Finance: Quant Research Firm Empowers Investment Advisors in Battle against Robo-advisors

Cassia Research launches industry-leading risk management, asset allocation and portfolio management technology for investment advisors

Vancouver, Canada / ACCESSWIRE / December 17, 2014 / Cassia Research announced today that it will begin offering institutional quant technology to investment advisors through CONCERT Wealth Management, Inc. a registered investment advisor. The technology automates investing and delivers a smoother ride for investors, so advisors can focus on delivering a superb customer experience and growing their business.

"What we have created is some of the most advanced risk management technology in wealth management today. We want to arm financial advisors with institutional quant technology that delivers more consistent and higher returns so that advisors can position themselves as an attractive premium option for investors," said Jesse Chen, Cassia's co-founder and COO.

The rise of robo-advisors and rock bottom interest rates have made it increasingly difficult for advisors to justify their fees. "Advisors know that unless they can deliver value above and beyond the robo-advisors, they will face an uphill battle. And we're here to help," said Henry Bee, co-founder and CEO of Cassia Research. As investors become more cost conscious, they demand their advisors to build portfolios using low-cost vehicles like ETFs. This presents a problem for advisors, who have no scalable way to measure risk across multiple assets for asset allocation. The problem goes beyond advisors. An EDHEC survey finds that even the largest institutional investment managers still use outdated technology – 97% use historical variance to measure and manage risk.

Sophisticated risk management technology has not been available to investment advisors until now. "Not only is it costly and difficult to implement, but the people who have this technology don't want to share it," said Bee. The technology is locked away by secretive hedge funds for the wealthiest clients. Most investors may need to incur two or three layers of fees to get access, thus erasing any benefits from the investment. More shockingly, not many firms use advanced technology at all.

To level the playing field, advisors can now have client portfolios subadvised by CONCERT Wealth Management and reap the benefits of advanced risk management technology right away. Client portfolios are rebalanced automatically and orders are executed through BlazePortfolio, an electronic trade management company that supports execution across multiple brokerages.

Cassia Research utilizes parallel distributed computing, high frequency, per second data, and multivariate GARCH to capture risks created by the interaction between assets, giving a smoother client experience and higher retention for advisors. The same portfolios built with Cassia's risk forecast would have experienced 50% lower drawdown compared to historical variance as used by most firms.

Further, Cassia's technology is designed to reduce an investor's geographical bias with risks monitored across more than 30 unique sources of return, each represented by an ETF, which are diversified across 100 countries and more than 20,000 securities. Hence, it is well-suited to replace balanced or target-date funds in an investor's core portfolio.

Being balanced across risks means advisors and investors can worry less about where returns will come from next, which is a very difficult task. Most investors who hold a 60/40 balanced fund don't realize it is mostly driven by the movement in stocks alone and supported by a thirty-year secular bull market in bonds. On the other hand, client portfolios invested using Cassia's technology have an extremely low correlation with stocks and other major markets, so advisors and their clients are less reactive to news events that can drive down stocks from time to time.

Ultimately, financial advisors are armed with more confidence when planning a client's retirement. A client portfolio invested in Cassia's moderate risk program can hypothetically generate an estimated $70,000 in annual income for a newly retired 65-year-old with a $1 million nest egg (after management fees, transaction costs, and inflation). This compares favourably with traditional balanced or target-date funds, which can only generate $40,000 annually with the same assumptions (widely accepted as the 4% rule).

"CONCERT advisors are excited to access the unique solutions provided by Cassia Research. Cassia's next generation risk allocation methods and volatility dampening tools are just what we expect clients will need in a post-QE world," commented Jeff Pietsch, President of CONCERT Wealth Management. "Cassia's robust investing solutions with CONCERT's complete back-office services create a one-stop shop for our advisors. It's an unbeatable combination."

To speak with a CONCERT advisor about the Cassia suite of programs, call 866-553-3951 x1240. For additional information or media inquiries, contact Henry Bee at hbee(at)cassia-investment(dot)com or 778-389-4545.

For more information about us, please visit http://www.cassia-research.com

Contact Info:
Name: Henry Bee
Organization: Cassia Research Inc.
Phone: 778-389-4545


SOURCE: Cassia Research Inc.