The Wealth Advisor

Dynamic: Mission Accomplished After Great Year for Asset Management Unit

January 01, 2023

Despite the headlines that dominated the news cycle in 2022 (Inflation and recession and politics, oh my!), Dynamic stayed the course in accelerating development of its institutionalized asset management services. That course was set in 2021 when a new position at Dynamic, Head of Investment Management Strategy, was created and filled in the fall by Kostya Etus, CFA®.

“As more advisors look to us for portfolio management, they want more complex, sophisticated strategies and we want to be positioned to serve that demand,” said Dynamic founder and CEO Jim Cannon.

Creating a much more robust platform and expanding the depth of the firm’s asset management leadership team with credentialed, experienced professionals was paramount, according to Cannon. Most advantageous for Dynamic and its advisor network, Etus brought deep portfolio management experience, working with clients as well as advisors.

“Kostya was charged with further developing the investment framework that was in place to deliver, manage and grow our asset management business,” noted Cannon. “That meant clearly articulating our core philosophy, institutionalizing the investment approach we use and evolving our strategies. We also knew we needed to realign our team and invest in the people to make it happen.”

At the core of Dynamic’s complete investment management solutions for wealth advisors and their clients is a risk-focused philosophy, guiding portfolio development and informing all asset management processes and portfolio decisions.

It’s an outsourcing model that leans into Dynamic’s 10-plus year asset management philosophy with thoughtfully designed ETF strategies that considers the life stages of a client’s investment journey.

“The ETF strategies follow Dynamic’s investment philosophy focused on risk management and were built using rules-based processes to ensure consistency across various market environments,” said Etus.

He continued, “While the strategies are robust and offer many unique components, we want our model construction process and the strategies themselves to be easy for advisors and clients to understand.”

 Enter Enhanced ETF Strategies

A collection of ETF strategies has been curated by Dynamic that meet the needs of a range of clients with situations from basic to highly complex. The portfolios are global, well-diversified and balanced, focusing on the long-term. They range from 100% to 30% equity in 10% increments. Introducing:

Total return ETF strategies to maximize long-term, risk adjusted returns:

  • Dynamic Core
  • Dynamic Smart
  • Dynamic Custom HNW

Objective-based ETF strategies to focus on specific client goals:

  • Dynamic Income
  • Dynamic Defensive
  • Dynamic Tax Aware

Unique, solution-based strategies to meet a multitude of potential investor situations:

  • Manager Specific: DFA (ETF and MF), American Funds (MF)
  • Specific Use: ESG (ETF), Direct Indexing (Stocks), SMAs (Bonds), Alternative Investments (Funds and Private)

According to Etus, the strategies were born out of an increasing number of advisors that have come to rely on Dynamic’s Portfolio Services team to solve unique and complex client situations. “Dynamic strives to be a leader in responding to client needs and identifying market trends—and making sure we’re offering cutting edge solutions for our advisors.

“This next generation of Dynamic Strategies is a perfect example of these concepts. They utilize ETFs, which offer lower costs, tax efficiency and transparency,” added Etus. “Additionally, the strategies utilize the latest enhancements within the ETF ecosystem, including multi-factor methodologies for the equity investments and active management for fixed income to take advantage of potential alpha generation.

“Advisors can rest assured that we will continue to innovate and look for new ideas as they are presented in the marketplace to help find impactful solutions for their clients.”

One such solution is for high-net-worth (HNW) clients, who often require an added level of customization and personalized service. A specialty of Dynamic’s is evaluating complex client situations and finding simple solutions for HNW clients. As well as building custom strategies which could include stocks, bonds, ETFs and alternative investments, the firm offers a variety of unique products to meet specific client situations.

In addition, the latest set of strategies offered by Dynamic are set against the current market inflationary backdrop: Treasury Bond Ladder strategies are available as an opportunity to help clients capitalize on high interest rates, according to Cannon.

A People-First Service Model

Dynamic’s service model has always put people first so that advisors can put their clients at the center of their universe. So, it’s no wonder along with the development of next-gen ETF strategies, the firm also invested in people. In 2022, Dynamic expanded the team for its asset management business by 40 percent! Additionally, Lucas Felbel was promoted to manage the Portfolio Services team and he’s been leading the effort to expand Dynamic’s capacity to meet growing demand, added Cannon.

“We are fortunate to have a large team focused on asset management and sophisticated tools to help monitor portfolios and enhance our investment offerings,” noted Etus. “The benefit to advisors is that they have more time and resources to help them support existing clients and grow their businesses.

“Just like our portfolios, our team’s greatest strength is diversification. We have team members from various backgrounds, different countries and unique views on investments. Bringing such a variety of thoughts and ideas together helps to make sound and vetted investment decisions that couldn’t be achieved from a singular perspective.”

Evolution and Innovation

Alongside investing in people, Dynamic made an investment in technology in 2022. Dynamic’s Information Technology (IT) team developed Portfolio360, an advisor portal that provides RIAs with access to its strategies. According to Cannon, Portfolio 360 substantially streamlines the service model for RIAs seeking to utilize Dynamic’s strategies and allows Dynamic to extend its asset management services beyond its core network of advisors.

According to Etus, innovation doesn’t sleep and either does Dynamic. “2023 will bring more opportunities. We will keep our advisors apprised as Dynamic continues to build out the team and resources and make enhancements to our products and processes.”

Added Cannon, “We have a great foundation and an exciting roadmap ahead. Our team’s outstanding efforts in the past couple of years gives us the framework to serve the varied needs of our current and future clients. As we look to the future, our initiatives will continue to focus on bolstering an institutional advisor and client experience.”

Disclosures: This commentary is provided for informational and educational purposes only. The information, analysis and opinions expressed herein reflect our judgment and opinions as of the date of writing and are subject to change at any time without notice. This is not intended to be used as a general guide to investing, or as a source of any specific recommendation, and it makes no implied or expressed recommendations concerning the manner in which clients’ accounts should or would be handled, as appropriate strategies depend on the client’s specific objectives.

This commentary is not intended to constitute legal, tax, securities or investment advice or a recommended course of action in any given situation. Investors should not assume that investments in any security, asset class, sector, market, or strategy discussed herein will be profitable and no representations are made that clients will be able to achieve a certain level of performance, or avoid loss.

All investments carry a certain risk and there is no assurance that an investment will provide positive performance over any period of time. Information obtained from third party resources are believed to be reliable but not guaranteed as to its accuracy or reliability. These materials do not purport to contain all the relevant information that investors may wish to consider in making investment decisions and is not intended to be a substitute for exercising independent judgment. Any statements regarding future events constitute only subjective views or beliefs, are not guarantees or projections of performance, should not be relied on, are subject to change due to a variety of factors, including fluctuating market conditions, and involve inherent risks and uncertainties, both general and specific, many of which cannot be predicted or quantified and are beyond our control. Future results could differ materially and no assurance is given that these statements or assumptions are now or will prove to be accurate or complete in any way.

Past performance is not a guarantee or a reliable indicator of future results. Investing in the markets is subject to certain risks including market, interest rate, issuer, credit and inflation risk; investments may be worth more or less than the original cost when redeemed.

Investment advisory services are offered through Dynamic Advisor Solutions, LLC, dba Dynamic Wealth Advisors, an SEC registered investment advisor.

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