SMART Portfolio Services

SMART (Sustainability Metrics Applied to Risk Tolerance) ™

A New Paradigm for Sustainable and ESG Investing

Sorting through the Sustainable and ESG investment world can be a very costly and time-consuming process, which is why we’ve created SMART Portfolio Services. Our main interest is saving advisors the time and expense they might incur researching the rapidly growing and ever-changing ESG world on their own, so that they can remain focused on their clients.

The chart below outlines many of the potential risks associated with the current ESG research and education arena, as well as the unique benefits of our services. We deeply believe there is a way to use investor capital to help some of the world’s most pressing issues without sacrificing returns.

Click each element to learn more.

Meet With Us About SMART Portfolios

Differentiate yourself as an advisor and capture a part of the biggest transfer of wealth in history. Over the next 15 years, nearly $24 trillion in assets will be transferred to millennials,(1) and their value-conscious behavior will drive many of their investment choices. Research shows that over 83% of millennials and 70% of women are interested in Impact, ESG, and Sustainable Investing.(2)

Advisors often think that in order to offer Impact/ESG portfolios, they need to sacrifice returns. But actually, with the right screening, portfolio construction, and tools, advisors can provide competitive returns with less volatility. ESG-screened investing is another powerful layer of due diligence to protect clients.

With the convergence of the generational wealth-transfer, growing desire for Impact/ESG investing, recent improvement of analytical screens, and new products coming to market, now is the perfect time for advisors to:

  • Differentiate themselves and grow their firm’s assets
  • Respond to their clients’ desire to align their portfolios to achieve returns while also doing good for the world
  • Improve the dismal 2% capture rate of generational inheritance transfers of wealth among advisors (3)
  • Become a highly-valued steward of their clients’ wealth

For advisors who currently want to capture the Impact trend, one of their main frustrations is the time needed to screen a complex universe of funds, construct Impact/ESG portfolios, and create client education tools, as it takes too much time away from their existing business and prospecting. This is why Gitterman Wealth Management has created SMART Portfolio Solutions for financial advisors.

SMART Portfolio Solutions are one of the first turn-key portfolio construction and marketing solutions for advisors interested in Impact and ESG Investing. It gives them everything they need to market and deliver services that provide an added layer of due-diligence, respond to the rapidly growing trend of Impact/ESG Investing, and generate competitive returns.

(1) “Why incorporate Impact investing into your conversations with clients.” Trilinc Global, www.trilincglobal.com/financial-advisors/
(2) Investing with Impact: Create Economic, Social and Environmental Value. NYC, Morgan Stanley Wealth Management GIC. Client Conversations: Global Investment Committee. http://www.scl.bz/zz1s5dz-media.pdf
(3) Sisk, Michael. “How to Keep the Kids.” Barron’s, www.barrons.com/articles/SB50001424053111904210704576357873121823708.

Introducing a New Paradigm for Sustainable and ESG Investing

Key Risks

Asset Retention

Over the next fifteen years, nearly 24 trillion dollars in assets will be transferred to millennials[1] and their value-conscious behavior will drive many of their investment choices.  SMART Portfolio Services seek to improve the dismal 2% capture rate of generational inheritance transfers of wealth among advisors.[2] Research also shows that over 83% of millennials and 70% of women are interested in Sustainable, Impact, and ESG Investing.[3]

Reputational Risk

Without a clear understanding of the underlying holdings in the currently titled ESG / Impact fund universe, advisors are in jeopardy of falling victim to “green washing” and presenting their clients with options that do not meet their values and requirements.

Under Performance

Recent studies show that many individual advisors working on their own are underperforming model-based portfolios by an average of 200%[4]

Time Cost

For advisors who currently want to capture the ESG trend, one of their main frustrations is the time needed to screen a complex universe of funds, construct Impact / ESG portfolios and create client education tools, as it takes too much time away from their existing business and prospecting.

[1] Srinivas, Val, and Urval Goradia. “The future of wealth in the United States Mapping trends in generational wealth.” Deloitte University Press, Deloitte, 9 Nov. 2015, dupress.deloitte.com/dup-us-en/industry/investment-management/us-generational-wealth-trends.html.

[2] Sisk, Michael. “How to Keep the Kids.” Barron’s, www.barrons.com/articles/SB50001424053111904210704576357873121823708.

[3] Investing with Impact: Create Economic, Social and Environmental Value. NYC, Morgan Stanley Wealth Management GIC. Client Conversations: Global Investment Committee. http://www.scl.bz/zz1s5dz-media.pdf

[4] Britton, Diana. “Broker/dealer Execs Warned on Risks of Rep as PM Platforms.” WealthManagement.com, 26 Jan. 2017, www.wealthmanagement.com/industry/brokerdealer-execs-warned-risks-rep-pm-platforms

SMART Solutions

Alpha Generation

SMART Portfolio Services quantify alpha in three different ways: portfolio construction, manager selection, and new fund development.

Diligence / Compliance

We analyze the entire Sustainable / ESG fund universe and perform ongoing due diligence to ensure the investments selected are best-in-class.

Institutional Analysis

Due to our size and relationships in the industry, we receive institutional portfolio analysis from Goldman Sachs, Fidelity Investments, and third party quantitative and macro managers. We also utilize Morningstar’s Direct-Institutional Investment Analysis Platform to steer asset allocation and sector weightings and optimize portfolio construction.

Portfolio Construction

We have been constructing portfolios for over 15 years, and our seasoned team has a wealth of experience successfully managing models through numerous macroeconomic cycles. We design our portfolios across industry standard risk iterations for ESG metrics and have the ability to customize for negative screens and multiple themes (i.e. fossil fuel free, GMO free, gender lens, etc.)

Education / Implementation

SMART Portfolio Services will ensure you are up-to-date on all important news and events relevant to the portfolio so that you can stay ahead of the curve and focus on your clients. This includes webinars, phone calls, and coaching designed to fit each advisor’s unique business model and clientele.

Digital Media

As a part of SMART Portfolio Services, advisors receive whitepapers, articles, and blogs authored by industry experts, as well as relevant, award-winning film footage and video feeds to help you build client facing events and web presence. Our goal is to make you a topic expert to your client base and centers of influence.

Multiple Technologies

SMART Portfolio Services allow advisors to leverage our multiple investment analyses and risk solutions through one flat fee. The software programs we use are designed to dive deeply into the underlying holdings, sector weightings, and risk attributions of each fund in order to help advisors better understand the risk exposure to their clients.

Cost Effective

The pricing for SMART Portfolio Services is deliberately designed to be less expensive than if you were to do all of this work and research yourself. We accomplish this by eliminating the traditional basis point pricing and charging a very reasonable flat fee. We are also extremely conscious about keeping fund expenses low without sacrificing returns.

About Our Firm

We’ve been fostering meaningful relationships for over a quarter century.

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