The financial planning industry is constantly evolving. New strategies to grow client wealth seem to crop up with each market cycle and crafting tax plans that hit both the accumulation and distribution phases are invaluable. Managing cash flow, constructing a risk management process, and other planning tasks seem to take up more time each passing quarter, too. These activities, among others, are key value propositions for advisors, but they are also table stakes today.

Setting yourself apart from your peers can be done by honing in on a client niche and hiring the right team of experts to help meet a particular need. What’s more, Structured Notes have become increasingly popular in recent years as a protective investment strategy, but some advisors remain hesitant to add them to their offering for a variety of reasons. To address some challenges, Halo has partnered with professional asset managers who own the end-to-end Structured Note process flow, freeing up hours for advisors to spend more time with clients and less time optimizing portfolio allocations.

Through the industry’s first Structured Note SMA Marketplace, financial planners teaming with Halo can offer clients the advantages of defined outcome investing without the hassle of trade life-cycle touchpoints. We designed the Marketplace for advisors based on feedback we’ve received over the past several years. Through Halo’s partnership with three specialist management firms, advisors can have confidence in their knowledge depth and access to educational material to explain strategies to their clients.

There are three primary benefits to note-linked SMAs:

1. Professional Management

The Structured Note SMA Marketplace offers advisors access to strategies crafted by experienced asset managers. These specialists are not only experts in fixed income and derivatives trading, as well as the mechanics of bond and options pricing, but also in packaging notes together into a portfolio. 

2. Targeted Solutions

The three strategies currently available are Income, Growth, and Total Return. The goal here is to meet the needs of clients across the risk spectrum. For instance, a newly retired couple may look to reduce sequence of returns risk by investing a slice of their allocation into the Total Return strategy. This way, they can have a sense of the return outcome, allowing them to potentially increase risk exposure through other areas of their portfolio. Later-stage investors might focus on simply earning a competitive yield through the Income strategy to fund their living expenses, while more aggressive clients still in the accumulation phase may be more suited for the Growth strategy. Overall, the trio of SMAs can be used to tailor clients’ investment plans and risk profiles.

3. Complete Life-Cycle Management

Perhaps the biggest appeal of the Structured Note SMA Marketplace is that it simply saves time for today’s busy advisors. The administrative aspects of dealing with call dates, maturities, and secondary sales can be cumbersome. Our team recognized that a second avenue of accessing notes was needed. While Halo’s original platform lives on with new improvements all the time, introducing SMAs was the logical next step to democratize Structured Note investing. Advisors accessing SMAs in the Marketplace don’t have to brush up on trading mechanics or let idle cash build. 

With the benefits now well understood, let’s dig into the three SMA strategies and how they can set your advisory practice apart from your competition.

• Piton — Structured High-Yield Income

This SMA is designed for income-focused investors and may be considered the least aggressive of the three strategies. The objective is to generate consistent and high-dividend streams from leading companies across sectors through single-name or multi-underlier “worst of” customized income notes. The notes, with contingent-downside buffered protection ranging from 25% to 50%, are meant to be held to maturity or until they are called. The manager’s duty is to ensure that the SMA is diversified, and Piton is tactical in its approach to investing in notes that Halo’s team believes have high levels of implied volatility priced in. Keep in mind that with Structured Notes, the higher the implied volatility, generally the higher the yield you can capture.

• NewEdge — Structured Note Advisory Portfolio (SNAP) Total Return

This strategy combines yield-oriented and growth notes into one package, with the goal of matching or outperforming traditional equity benchmarks over a full market cycle. It offers downside protection to preserve invested capital while offering upside potential. Think of this as the mid-tier risk allocation. The NewEdge team manages more than $200 million and has created more than 100 individual Structured Notes. Their objective is to craft note portfolios across market sell-offs when volatility levels are high, thereby increasing the SMA’s overall yield and return.

• Invictus — Power Growth Strategy

This “risk-reduced” growth SMA is designed to outperform the equity market in both bullish and bearish scenarios through enhanced upside participation (such as 1.5 times the return on an underlier) and structural downside risk mitigation using hard, soft, and principal protection. This outcome-driven approach to diversification, like the other SMA strategies, can be a valuable tool for reducing an investor’s overall portfolio standard deviation. The growth approach might be considered for investors looking to take advantage of a cyclical upturn due to the enhanced participation of positive price returns.

Standing Out from the Advisory Competition

While additional strategies could come about in the future, the above lineup can differentiate an advisor’s financial planning services in several ways. First, Structured Note SMAs can be used to personalize a portfolio, which may help retail investors stick with a broader plan no matter the market condition. Furthermore, each of the three strategies can be implemented efficiently across the client-risk spectrum. This diversification at both the asset level and client level can separate an advisor from the pack. The three SMAs feature competitive annual costs generally in the 0.60% to 0.80% range, and with that access comes dedicated teams to handle security selection, cash deployment after notes are called or when they mature, and expert strategy execution.

Direct access to institutional-level asset managers also means that advisors can have top-quality independent teams on their side who handle all the operational tasks that go along with single note purchases and life-cycle management. These firms have long-standing experience with advanced Structured Note strategies — pairing that with Halo’s award-winning technology means better client outcomes. Finally, our SMA managers can manage and optimize credit diversification — something fresh on the minds of active investors following this past March. 

The Bottom Line

This new streamlined way to access defined-outcome investing saves advisors time and reduces portfolio complexity. The Structured Note SMA Marketplace solves historical challenges advisors have encountered with implementing notes into their clients’ allocations. Whether you seek to enhance returns, manage risk, or generate income, Halo’s SMA strategies offer the flexibility and professionalism that modern advisors demand.

An investment in Structured Notes may not be suitable for all investors. These investments involve substantial risks. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Please see our Halo Disclosure Page for important disclosures.