The Future of Financial Advising is Aligning the Plan with the Portfolio
Grantham, Mayo, Van Otterloo & Co. LLC (GMO), a global investment manager, announced a major milestone for its Portfolio Design platform Nebo, which has surpassed $1 billion in platform assets1 one year since its September 2022 launch.
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“I wanted to find a more robust, systematic way of thinking that could replace my spreadsheets. Nebo has done that”
Nebo (for Needs-Based Optimization) is a continuation of GMO’s history of research and innovation in areas including asset allocation, quality investing, and quantitative strategies.
Nebo is not just a portfolio construction engine, it is a paradigm shift in risk assessment, redefining risk as ‘not having what you need, when you need it.’ Nebo uses a proprietary multi-period shortfall optimization – built on a decade of deep research and user-led development – to generate personalized client portfolios that seek to minimize shortfall risk and align to each client’s financial plan.
“We polled more than 400 advisors: do you observe a gap between financial planning and asset management? A resounding 89% said yes, telling us advisors lack confidence that their clients are in the right portfolios. Nebo’s definition of risk is the key to bridging this gap,” said Martin Tarlie, member of GMO’s Asset Allocation team and Nebo Product Lead.
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Hyper-personalized, Model Building Capabilities that Eliminate Spreadsheets
Advisors are using Nebo to construct institutional quality, dynamic, real-time model portfolios that are personalized to each client, in a fraction of the time previously required.
“I wanted to find a more robust, systematic way of thinking that could replace my spreadsheets. Nebo has done that,” said Christopher Meyer, Principal, Meritor Capital.2
Nebo is integrated with several leading rebalancers, whereby target portfolios are exported into their multi-level model structure. This allows Nebo to (i) generate custom portfolios for each client with the click of a button, and (ii) send them directly into the rebalancer for trading.
These integrations are helping Heximer Investment Management realize their vision of creating a next-generation, wealth-management practice.
“Nebo is revolutionary for private wealth management, along the lines of Direct Indexing from a personalization perspective,” said Brandon Kramer, Portfolio Manager at Heximer Investment Management.3
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