Investor estimates show that human advisors add more value to the financial planning process than electronic (or “robo”) alternatives. But why is that? Both human and robo-advisors can access information about markets and securities. Both can also use technology to analyze large quantities of data. The difference is, human advisors can take the final, most important step – thinking critically about that information.
At Meld Financial, we agree that human advisors can provide investors with the best of both worlds – especially when it comes to selecting investments. That’s why our experienced team crafts each portfolio to match the client’s individual goals and risk tolerance. But, before we can do that, we need to know which investments are worthy of being included in a Meld client’s portfolio. That’s where SmartScreen™ – our internal investment screening program – comes into play.
What is SmartScreen™?
SmartScreen™ is a data-driven investment analysis system created by Meld Financial using knowledge gathered during our nearly 40 years of helping clients achieve their financial goals. With SmartScreen™, we can identify investments with a long-term track record of outperforming their benchmark. To do this, we compare thousands of funds to our internal standards and determine which investments have a track record of success.
Why was SmartScreen™ Developed?
SmartScreen™ was created for a simple reason – we have a fiduciary responsibility to act in our clients’ best interests, all the time. That includes choosing the investments we believe give you the best chance at financial success. The fact is – there are thousands of possible investments, and the majority of them underperform their benchmark. These factors led us to create SmartScreen™.
We Have Access to Thousands of Potential Investments
As an independent Registered Investment Advisor [RIA], we can offer our clients access to investments from virtually any sponsor. While this wide variety of available investments is a major benefit to our clients, the sheer number of options creates the need for an efficient screening program.
Consider the following figures: there were 7,481 mutual funds and 8,552 ETFs available for investing during 2021. That’s over 16,000 potential funds an investor could choose. Keeping tabs on that many investments using traditional methods would take an army of analysts. However, using SmartScreen™ we analyze the pool of available funds and exclude the many that don’t meet our rigorous standards.
Most Funds Underperform Their Benchmark
Typically, mutual funds seek to either replicate or exceed the performance of a particular sector of the market. Many mutual funds do not achieve their objective. In fact, more than 90% of U.S. large-cap stock mutual funds underperformed their benchmark over the last 10 years. This troubling trend persists across types of mutual funds and time periods.
As a part of our fiduciary duty, Meld seeks to find the funds with a history of delivering their intended results. To do that, we filter and exclude the underperformers using SmartScreen™.
How does SmartScreen™ work?
SmartScreen™ works by comparing the long- and short-term performance of available mutual funds and ETFs against Meld’s rigorous quality standards. In addition to a fund’s performance, SmartScreen™ considers its full cost – including fees and expenses.
After high-cost, under-performing funds have been eliminated, our advisors are left with a list of select funds that meet our quality standards. Then, we build your portfolio from that list based on your unique situation and goals.
How does SmartScreen™ Fit into the Meld Philosophy?
Our founder described the Meld philosophy best – “We will always recommend the same course of action we would choose for ourselves, given the same circumstances.” Meld was founded on this principle, and we continue to make all our decisions with your best interests at heart – including choosing appropriate investments to include in your portfolio. Our process starts with Financial Fingerprint™.
Financial Fingerprint™ and SmartScreen™ Bring It All Together
Our comprehensive financial plan, Financial Fingerprint™, was developed to help clients achieve their retirement goals. It accounts for all aspects of your financial life including your income, expenses, individual goals, and risk tolerance.
Financial Fingerprint™ produces a roadmap to your dream retirement, but your portfolio must be designed to meet that plan. SmartScreen™ aids your advisor in crafting that portfolio. Both Financial Fingerprint™ and SmartScreen™ are important tools that Meld advisors use to offer you the same advice they would recommend for themselves if they were in your position.
Enhance Your Retirement Plan with SmartScreen™ and Financial Fingerprint™
With Financial Fingerprint™, SmartScreen™, and an ongoing relationship with a fiduciary advisor, you can rest assured that you are taking the necessary steps to meet your financial goals and secure a comfortable retirement. To learn more about Meld Financial and get started with SmartScreen™ and Financial Fingerprint™, contact us today.
Past performance is not indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or strategy will be profitable or equal to the corresponding indicated performance level(s).
