Unlocking Real Value Blog

AK In The News: Sun Belt Bank Taps FolioDynamix For SMAs

I was asked to comment on Trustmark’s (a Mississippi-based bank) recent decision to offer separately managed accounts through FolioDynamix, a turnkey platform provider; the article was featured in today’s Fundfire (A Financial Times Service).

FolioDynamix has seen a large build-up in its bank business, and the question is why. I think the reasons are two-fold. First, banks are increasingly embracing the idea of open architecture (in lieu of offering only proprietary products), and second, it is easier for most of them to “buy” a third-party platform than to build one from scratch. They often don’t have the in-house expertise to build such platforms in any case. Yes, banks may be late to the game, but if other similar deals follow, it could be a boon for these turnkey firms.

To quote from the article: “Banks eager to get into the fee-based market are more likely to hire turnkey firms than try to mimic what other advisory shops have assembled from scratch, says Andy Klausner, principal of AK Advisory Partners,  a consultancy. “I think very few banks have the expertise or are willing to spend the money to build their platforms,” he says. “Especially with the proliferation of third-party offerings, buying is definitely better than building.””


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