portfolio analytics Archives

What’s New in the New Portfolios Experience

The portfolio screen is the hub of the work you do in Nitrogen. Whether you’re reviewing a client’s portfolio, preparing for an upcoming prospect meeting, or building a new proposal — this is where you start. We’ve been making huge strides in our development of the all-new portfolios experience.

Most of the features we build and release, we build from scratch and then we iterate over time. But our new portfolios experience is about taking all the innovation we’ve poured into the most complex part of our platform over the course of a decade, and bringing it all into the modern era.

That brings us to today—because we’ve reached some major milestones not just in performance and functionality, but in how intuitive the whole design is.

Take it from our Chief Product Officer, Justin Boatman.

As you can see, we’ve released a ton of powerful updates over the last year, but I’d like to highlight a few features that will change the way you use portfolios.

Tax Drag

Last year at Fearless, we announced Tax Drag, which we first applied to securities. This year, we’ve applied Tax Drag calculations at the account and portfolio level as well.

You know of Tax Drag as the reduction of a portfolio’s annualized return due to taxes, or you might say it’s tax liability triggered by distributions and capital gains. Putting it at the heart of portfolios lets you tell that story about non-qualified accounts to clients, so you can win and keep business.

Stress Tests

We’ve completely redesigned Stress Tests this year. When a client asks why the market is beating their portfolio, you know exactly how to answer. We’ve made the Risk Number even more prominent—it’s front and center.

We’ve also added a new Stress Test to the mix. While you’ve always been able to model what happens to bonds in a high-interest rate environment, or to equities when times get tough, now you’ve got a multi-comparator stress test to illustrate the effects of the 2022 Inflation Crash on both stocks and bonds.

Heatmaps

With Heatmaps, you can pinpoint which individual holdings have the greatest relative impact on the portfolio. The Risk/Reward Heatmap shows the weighted potential upside reward and downside risk of each security, so you can visually show clients how you want to rebalance holdings or propose anticorrelated assets to diversify away risk.

It’s the most powerful way to illustrate the effects of diversification to clients in a way they can see and understand.

It can also lead to additional conversations around held-away assets. When you can pull in outside accounts with Asset Sync, you can get a truer understanding of how much risk or diversification a client actually has in their whole portfolio.

Annuities

Annuities are also available in the new experience. And now, when you apply an income rider, it’ll show up as a timeline event with income in a client’s Retirement Map.

Navigating Portfolios

We’ve made working accounts just as intuitive as it should be. If you haven’t tried the new portfolios experience lately, now’s the time to play around with it. You’re going to find a lot of delightful little ways you can interact with accounts you may not have known about.

You can add holdings from your Discovery favorites, assign Account Groups, sort by Risk Number, name, and value, expand and collapse accounts, and even drill into accounts and models. And you can do it all in a new view as well. With Fullscreen Holdings View, you can expand your screen enabling you to put the focus right where you want it.

So, that’s what’s new in the All-New Portfolios Experience. We think you are going to love all of the updates and delightful touches that the team has been working on.

Next Up

The team is hard at work making sure there will be no reason you’ll need to go back and use the old, slower experience. Soon, custom securities will get new settings, you’ll be able to create a portfolio by importing a file or using model templates, you’ll be able to launch Scenarios, access the client actions menu, and adjust advisory fees at the account level. And that’s it! Give it a shot — we’d love your feedback.

Not seeing the new experience in your account? Head to Settings > Early Access, and toggle on “All New Portfolios.” Need a hand? The industry’s best Customer Care team would be glad to help at [email protected].

If you’d like to get a demo of the All-New Portfolios Experience and all of the other powerful features in the platform, sign up for a demo here. We’d love to show you around.

ETFs & Mutual Funds: How Tax Drag Highlights Stark Differences

By: Mark Bivens, Product Manager at Nitrogen

Earlier this year, our team rolled out Tax Drag, an entirely new way to win new business and prove your portfolios, models, and proposals are built in the most tax-efficient manner.

Tax Drag is defined as the reduction of a portfolio’s annualized return due to taxes. It’s the tax liability triggered by distributions and capital gains in a non-qualified account.

With the addition of Tax Drag to the portfolio screen, Individual Security Analysis, and Detailed Portfolio Stats, advisors now have an easy-to-understand metric to explain the taxable implications of owning a specific security to clients.

Now, advisors can easily show the tax implications—and erosion of gains—through a security’s distributions and dividends.

We wanted to learn more about how Tax Drag is affecting client portfolios, so we challenged our Risk & Analytics Team to look into the data from 2023.

After crunching the numbers, our team found a stark difference between mutual funds and ETFs. With the recent market turbulence, ETF fund managers have generally been able to maintain lower tax drag across their funds by a wide margin compared to their mutual fund counterparts.

Take a look at the data:

Average Tax Drag as of Nov 1, 2023
Top 10 Growth ETFs	.39%
Top 10 Growth Mutual Funds	6.69%

September top 10 funds lists from Yahoo finance and Morningstar for top growth funds. Mutual funds – BCSIX, CIPMX, CIPSX, FDGRX, LSGRX, MPEGX, MSEQX, NWSAX, POAGX, POGRX. ETFs – IWP, IVW, SPYG, IWF, VUG, SCHG, ARKK, MGK, QQQ, QQQM*. *No coverage

The data is clear—we’re seeing a large reduction in tax liability for clients holding ETFs rather than their equivalent mutual funds.

This stark difference in Tax Drag is due to the ETF’s ability to absorb capital gains distributions through in-kind distribution. When an authorized participant wants to create or redeem shares, the ETF issuer can deliver them through actual shares of the underlying investments in the ETF. This passes the capital gains distribution to the authorized participant and shields the end investor from the taxable burden.

On the other hand, when an authorized participant wants to create or redeem shares in a mutual fund, the issuer must sell those shares prior to delivering cash, directly passing the taxable implication to the investor who holds the shares of the mutual fund. This takes away most of the compounding effect of holding the investment.

In a volatile market, like we’ve seen this year, many mutual fund issuers will take profits from their larger positions to hedge against further downside. While this protects fund managers, investors lose due to the additional market volatility and larger than usual tax bills due to capital gains distributions.

Unfortunately, the investor doesn’t even have to participate in the gains of holding the shares! If you are purchasing shares of a mutual fund today, and the issuer redeems shares or takes a capital gain distribution tomorrow, the client is on the hook for that distribution of gains that may have culminated long before their ownership in the fund.

While there are tax advantages to choosing ETFs over mutual funds, they are not always the right choice for every client. There may be reasons when clients need active management through mutual funds.

Regardless of which type of holdings you put into your client portfolios and proposals, the Nitrogen Growth Platform can help you articulate how clients should be investing.

If you’d like to get a demo of Tax Drag and all of the other powerful features in the platform, sign up for a demo here. We’d love to show you around.

Thanks as always for empowering the world to invest fearlessly.

How Modern Data Management Changes the Game for Wealth Management Firms

Data lays the foundation for your client experience – that’s why data collection, storage, and protection are so important. One recent study found that by 2022, 90% of corporate strategies will explicitly mention information as a critical enterprise asset.

With client expectations, SEC requirements, and company integrity all on the line, it’s crucial to have a strong data management system built around your company’s goals.

Embracing modern data management can revolutionize your firm’s data systems and create higher efficiency and flexibility every step of the way.

Continue reading “How Modern Data Management Changes the Game for Wealth Management Firms” →

Account Groups: An Upgrade Designed for Your Firm’s Efficiency

What is the All-New Portfolios Experience in Nitrogen?

At the 2021 Fearless Investing Summit, Nitrogen launched the All-New Portfolios Experience which has enhanced the way advisors navigate and interact with complex portfolios and accounts, driving efficiency in the day-to-day workflow for advisors across the platform.

The portfolio’s Risk Number, 95% Historical Range, and adaptive analytics are front and center, making it easy to set the right expectations with clients and prospects. Any time you select an account, you’ll see analytics for the Risk Number, 95% Historical Range, GPA, and more — all updated in real-time.

Introducing Account Groups

Now as fantastic as this portfolio page is, we knew we needed to make it even easier to organize and categorize your accounts in more useful ways.

Today, we’re announcing a big upgrade to the way you categorize your client accounts! The All-New Portfolios Experience now has Account Groups which helps financial advisors easily categorize all their accounts. This new feature will help you increase efficiency when working with complex portfolios and will make it even easier to find the information you need. We’re confident that Account Groups will optimize your workflow so that you have more time to spend where it matters most–with your clients.

That’s why we launched Account Groups to help you organize your client accounts. This powerful new feature will help you increase efficiency when working with complex portfolios and will make it even easier to find the information you need when meeting with clients. We’re confident that Account Groups will optimize your workflow so that you have more time to spend where it matters most–with your clients.

Perhaps you want to organize your client accounts within multi-client households — you can now easily do that.

Maybe you want to organize every account based on particular financial goals like saving for college, buying an RV, or planning for retirement. The answer is one click away.

Perhaps you want to separate each account by time horizon, like 0-3 years, 3-10 years, and 10+ years. Easy!

We’re working to better aligned this feature with our integration partners. For example, the Orion platform has the concept of Portfolio Groups. We’re currently updating the integration so that your Orion Portfolio Groups automatically become Account Groups for you in Nitrogen.

No matter how you want to slice up your client accounts, we’re giving you the power to do it in the way that’s most effective for your workflow.

Account Groups is available today for all Nitrogen users on all plans.

Meet Your Support Team

If you have any questions or feedback, our team would love to hear from you at [email protected]. Interested in seeing how you can grow your business? We’d love to meet with you to see how we can support your goals.

Book a Demo

Tax Drag: The New Competitive Advantage in Investment Management

Advisory firms are constantly looking for ways to differentiate themselves in the market to clients. If you lead a wealth management firm, or are trying to grow your book of business as a single advisor, you know the challenge of distinguishing your investment process and brand.

At Nitrogen, we’re proud to be a key differentiator for many advisory firms. For advisors using Nitrogen, there’s a solid chance that prospects that come into their office (in-person or virtually) have more risk in their current portfolio than they want or need. This happens about 88% of the time. When advisors can show them that their current advisor isn’t paying attention or doesn’t have the tools to really understand how to align them with their portfolio, that’s a powerful recipe for growth — which often leads to the ACAT form moment.

But what happens when a prospect’s portfolio already aligns with their risk tolerance?

Over the last few years, advisors have been using GPA to answer that question. GPA is an easy-to-understand metric that illustrates how much return a portfolio is typically delivering in exchange for its risk.

GPA is a relative metric, and we like to say that you can be proud of any portfolio with a GPA of 3.5 or higher. There can be good reasons to put low-GPA funds into a portfolio, particularly if you think something about the future — in an asset class, a sector, or a geo — is going to be different than it has performed in the past.

Many advisors leverage GPA to say “hey, your current portfolio may have a Risk Number close to yours, but you are in a 2.9 GPA portfolio when the typical solution I’ve constructed for clients is a 3.6. That’s going to give us a better chance for upside, and maximize the return you get in exchange for the risk you need to take.” The GPA is a concept clients can easily connect with, and understand that at a baseline level, the higher the GPA, the better performance the portfolio.

But let’s say that the prospect’s risk is in line, and their GPA isn’t too shabby either. Do we give up? Is this just not a client we should expect to win?

Wouldn’t it be great if we had a third lever to drive a good comparison and create the opportunity for a win?

Underneath the hood of many ETFs, mutual funds, SMAs and other investment solutions lies a massive factor that can create a very meaningful difference in an investor’s actual return, particularly when you consider the impact of compounding.

Leveraging this factor as a competitive advantage creates a massive opportunity for you to stand out, and deliver superior returns compared to your competition.

What is Tax Drag?

Tax drag is defined as the reduction of return in a portfolio due to taxes. Now we’re not talking about the basic concept of “buy something in a taxable account and the client will owe capital gains when it gets sold.” That one is pretty obvious.

With tax drag, we’re looking at the relative efficiency of how the investment solutions you use in your portfolio are managed by the asset manager. Just like high internal expense ratios drag down returns, inefficient tax management of fund holdings can have a massive impact on the ultimate returns your client realizes. Tax drag illustrates this beautifully.

But, we didn’t just put tax drag on the portfolio screen. We designed a brand new Portfolio Snapshot report, which advisors can print on a standalone basis, or as a part of the proposal or IPS that Nitrogen generates.

Advisors can quickly access a side-by-side comparison of the advisory fee, internal expense ratios, and tax drag inherent in these portfolios. In this case, we’ve even modeled that the advisory fee is higher than the prospect’s current advisor, but it pays for itself by reducing tax drag!

There’s just something magical that happens when you can save clients money on taxes. It’s one of the most powerful things you can do as a financial advisor.

Where can I find Tax Drag?

Tax Drag is coming later this year! We’ll first add it to Individual Security Analysis, Detailed Portfolio Stats, the Portfolios screen, and finally the new Snapshot report.

Subscribe to Nitrogen updates to get the latest announcements on tax drag and other product features. Join Nitrogen Labs to get an insider’s view of how you can turn fearful investors into fearless investors with our proprietary growth platform.

The Top 5 Most Common Pitfalls when Onboarding New Tech

While the finance industry has historically been slow to integrate new tech, the advances in technology (including remote work) have changed the client experience and how advisors work – forever.

Now that work forces are more distributed, advisor tech is a more essential component than ever to running an efficient business, providing top-notch service to clients and attracting prospects.

But while new technology can be a huge time-saver, the whole team must be on board with implementing it and adapting to these changes. Otherwise, your firm’s tech stack becomes more of a hurdle than a help. As a result, firms can actually become less organized and spend more time on menial tasks.

To avoid this, it’s helpful to understand the biggest pitfalls of onboarding new technology. Here’s your guide to recognizing and avoiding these common problems.

Continue reading “The Top 5 Most Common Pitfalls when Onboarding New Tech” →

CEO Aaron Klein’s Product Keynote from the 2022 Fearless Investing Summit

New Product Announcements from Summit 2022

Last week at the Fearless Investing Summit stage in Salt Lake City, we were thrilled to announce a brand-new suite of features and tools to the Nitrogen Platform that we know you’re going to love. Read on to learn more about all the exciting, new resources now at your fingertips!

Watch the Annual Keynote Address from CEO Aaron Klein

Unable to join us live in Salt Lake City or virtually? We’ve got you covered! Catch up on all the action from this year’s highly anticipated keynote address by Aaron Klein and watch it in its entirety for free below.

You’ll learn what’s new and what’s next for the Fearless Investing Movement, hear our exciting partnership news, and see all of our new product features and enhancements in action!

Watch the Keynote

Check Out What’s New
With Check-ins

Your favorite feature has gotten an upgrade! We’ve completely rebuilt how you engage with Check-ins, so you can see responses across your entire client base and sort them by status so you can see which clients might need your attention first. Check-ins are the most powerful way to keep your finger on the pulsebeat of client psychology, and now, they’re more accessible and actionable than ever before.

See what's New

Welcome Tax Drag!

Tax Drag is defined as the reduction of a portfolio’s annualized return due to taxes. Very simply, it’s the tax liability incurred due to distributions and capital gains in a non-qualified account.

Pretty much every investment manager talks about running a tax-efficient strategy, but very few provide metrics that are easily understood and can demonstrate the tax savings to clients. With Tax Drag, we’re measuring the tax efficiency of how securities in your portfolio are managed by the investment manager.

Introducing Account Groups

The All-New Portfolios Experience now has Account Groups which helps financial advisors easily categorize all their accounts. This new feature will help you increase efficiency when working with complex portfolios and will make it even easier to find the information you need.

We’re confident that Account Groups will optimize your workflow so that you have more time to spend where it matters most — with your clients.

Learn More about account groups

Meet Nitrogen Ultimate

We’re thrilled to introduce Nitrogen Ultimate — the firmwide growth platform to drive a consistent client experience across your advisors and alignment with compliance for every account.

Ultimate integrates into your CRM, asset platform, and financial planning workflows to get the growth flywheel spinning, drive a consistent client experience, deliver the insights to accelerate your progress, and protect your business value.

Experience Ultimate

The Power of Numbers: How Data Can Improve Your Client Relationships

Data is everywhere. It influences the ads we see, the shows we binge watch (hello, Yellowstone), the people we interact with on social media and even how we’re treated by medical professionals. The right data can be massively influential in how we experience and receive information.

In fact, 2.5 quintillion bytes of data are created each day. When we organize groups of that information into usable and insightful pieces, we’re given “big data” – which can unveil trends and patterns that aren’t obvious on the surface.

Big data changes our lives in both big and small ways. For advisory firms, big data is essential to not only knowing your clients, but interacting with them in a positive and fruitful capacity.

Continue reading “The Power of Numbers: How Data Can Improve Your Client Relationships” →

The Difference Between the Buyers and Users of Your Tech—and Why It Matters

When you’re a one-person RIA, it’s easy to understand why you’ve bought your tech and how you intend to use it. After all, the same person is making both of those decisions: you.

If you’re in charge of an enterprise firm, though, deciding on the right pieces for your tech stack becomes exponentially more difficult. As a large financial institution, you have separate departments, often with layers of approvals and owners—and they can both have very different ideas about what “good tech” is all about. And while your technology team is making decisions on what applications to employ, your advisors are the ones actually using the software.

The buyers and users of tech are often in totally different arenas within your firm, so how do you get them on the same page? It starts with identifying the needs and wants of both groups to find common ground and grow connections.

Continue reading “The Difference Between the Buyers and Users of Your Tech—and Why It Matters” →

Searching for Fixed Income Investments in Discovery

Since we launched Discovery, we’ve been on a mission to make it the world’s fastest fund screener and investment research tool for advisors. Thousands of advisors have adopted Discovery as their primary method to search, sort, filter, and favorite their top stocks, ETFs, mutual funds, and SMAs for clients.

And with the All-New Portfolios Experience, you can easily add those favorites directly into a portfolio or proposal making your workflow even faster, but we aren’t finished innovating with Discovery!

Today, we’re announcing the biggest update to Discovery to date. Fixed Income is now available for screening.

We are excited to announce that users on Nitrogen Select and Nitrogen Elite can now search for fixed income products using four new filters inside of Discovery.

Breaking Down The Filters

In order to find the right fixed income investments for your clients, you need the right filters. We’ve made it easy to find exactly what you are looking for with the four new filters.

Bond Sector – This filter allows you to choose between four main sectors including government, corporate, municipal, and asset backed bonds.
Average Credit Quality – Filtering by the credit quality will narrow your results based on the Standard & Poor’s and Fitch Ratings credit ratings (ex. AAA, AA, A, BBB, etc.)
Maturity – Narrow down your results based on how long it takes for the investment to return the original principal back to the holder.
Duration – Narrow down your results based on their sensitivity to interest rate changes.

Armed with these new filters, Discovery continues to grow into an advisor favorite. Just look at what others have been saying the past few months.

“I love all of this!”
– Andy, advisor in Ohio

“I am looking to move off [my outdated
systems] because Discovery is awesome.”
– Jay, Advisor in Texas

Not sure where to start with Discovery?

If you are not familiar with Discovery, you’re going to love quickly diving into research based on your most important search criteria including the Risk Number, GPA, expense ratios, and more.

And it doesn’t end there — Discovery has 19 different filters that allow you to sort, search, and filter to your heart’s content. Finding the perfect stock, mutual fund, ETF, SMA, and now fixed income product for your clients has never been easier.
And, if you are on Nitrogen Elite, you can hop from Discovery straight into Individual Security Analysis and start generating powerful reports making Nitrogen your one-stop-shop for all your analytics and research.

Want to check out Nitrogen for the first time? Request a demo here and a specialist would love to show you around.

The Nitrogen Platform

Tag: portfolio analytics