Open Finance Model

We believe that premise behind the Open Finance Model, first introduced by Forrester Research in 1996, is that consumers can best meet their financial goals by integrating a portfolio of best-of-breed services from a broad array of options.Open Finance delivers this benefit by helping consumers answer three important questions and then execute their strategy. The the Role of our ETF Custody Engine is to aid in the “Do It” step.  The other components of the ETF Engine: ETF Advice Engine, ETF Portfolio Engine and ETF Action Engine along with our tools used in  provide the answers to questions, ‘what do I own and how am I doing’, plus allows a seamless interface to entities that provide recommendations on ‘What Should I Do?’.

Reducing Costs to Deliver ETF Portfolio Advice to Investors

Problem:  How do investors get “Investment Services Delivered Simply and Inexpensively?”

Exchange Traded Funds (ETF) offer exceptional low cost investing and enormous value for investing in a broad range of investments classes.  A properly constructed EFT portfolio of different asset classes that is sensitive to the investor’s risk tolerance creates an important benefit by providing broad diversification or Asset Allocation.  Asset Allocation is a vitally important component to executing a successful long-term investment strategy.

         Investment Advisors continue to charge substantial fees to provide model portfolios containing ETF assets using Wrap Accounts. Advisors generally require large minimum account sizes. Even if the investor qualifies for the minimum size account, the wrap portfolio’s fee charged by the advisor can dramatically reduce investment returns over long periods of time. Based on our recent survey current investment advisors using exchange trades funds portfolios have fees ranging from 35 basis (.35%) points to over 200 (2%) basis points for their model portfolios (1).  

        Other financial newsletters and suppliers of advice provide recommendations for ETF Portfolios at far lower cost than registered investment advisors but do not provide a solution for the investor to easily implement that recommendation tax efficiently, with low cost trading fees and reporting services typically contained in a “Wrap” account.

Solution: ETF Engine

ETF Engine has been developed as solution to bring EFT Portfolios to investors at a fraction of the cost of those offered through traditional investment channels thereby improving-long term returns. 

Generally a Wrap account is an  all in one account service covering advice, custodial fees, trading fees and

administrative costs. It is now possible to avoid ETF trade commissions as several on-line brokerage firms including Schwab, Fidelity and Ameritrade that offer commission free Trades on certain ETFs .

         ETF Engine integrated with financial advice recommendations using the internet will provide a complete service for an investor comparable to those obtained in a much more expensive traditional Wrap Portfolio products.

(1) These costs did not include the underlying management fees of the actual EFT product.