Wealth-platform provider increases customization capabilities for its UMAs. Adhesion Wealth Advisor Solutions is using Vestmark's web-based Managed Accounts Platform (VMAP) as the overlay engine of its WealthADV unified managed account (UMA) program. Adhesion had been using optimization technology that CheckFree (now part of Fiserv) acquired when it bought Upstream Technologies in 2007.

UMAs are single-account investment products that feature combinations of separately managed accounts (SMAs), mutual funds and ETFs. Overlay management has to do with account-level rebalancing, restrictions, cash flows, and, where relevant, tax-liability management.

"Vestmark provides much more specificity for control at the sleeve level," says Adhesion's president and CEO Michael Stier. "It's the kind of service that combines great high-level oversight and the ability to adjust programs and portfolios to meet the client's specific needs."

Multi-custodian

Barrett Ayers, Adhesion's head of overlay management goes further. "Other technology options paled in comparison with Vestmark's sophisticated tax-aware, multi-sleeve rebalancing capabilities coupled with advanced trading, cash handling, and dynamic rule-based workflow capabilities," he says.

In addition to manager due diligence and access and overlay management, Charlotte, N.C.-based Adhesion provides back-office functionalities and performance reporting.

"Adhesion's WealthADV UMA program offers comprehensive multi-manager [and] multi-strategy managed accounts with sophisticated overlay portfolio management services, independent of and portable across the custodians an investment advisor utilizes," says Rob Klapprodt head of Wakefield, Mass.-based Vestmark's software division. "This flexibility is critical, and VMAP is unique in the marketplace in providing this multi-custodian support combined with a breadth of overlay portfolio-management functionality."

There were about $125 billion in manager-models-based portfolios at the end of 2006, according to one industry estimate. These accounts -- UMAs along with multiple-discipline accounts, which blend of different styles within a single asset class -- are expected to cross the $500-billion threshold by 2011 -- or so some thought before the recent market reversals.

GlobalBridge

In other UMA news, Minneapolis-based third-party investment platform provider GlobalBridge has selected FolioDynamix as its overlay technology provider and as an integrator of manager due-diligence services.

New York-based FolioDynamix, a middle-office service provider to SMA managers and sponsors, added overlay expertise last summer when it acquired SunGard's SMA provider Advisor Technologies.

GlobalBridge's founder and CEO Kelly Thomas Coughlin says his firm spent more than a year vetting overlay technology providers. FolioDynamix got the nod because its "standard-setting technology -- including a new desk-top proposal system along with our other technology enhancements -- position [us] as the leader in the middle market trust bank, broker and advisor segments."

Mike Winkel, president of FolioDynamix' FDx Advisors SMA platform business -- and formerly president of SunGard Advisor Technologies -- says the ability to integrate due diligence capabilities with manager rosters is a "great example of the benefits of functional synergies." -FWR

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