Investment Decision-Making Technology

broker dealer, advisor, money management

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The IDT investment decision-making technology algorithms (IDT) provide investment advisors, at all levels, the opportunity to manage their client investment portfolios with a highly efficient, effective and dependable system using the beginning stages of artificial intelligence.  Managing client assets has never been easier or more productive for an investment advisory firm to produce higher returns at the lowest cost than with our subscription-based Investment Decision-Making Technology.

Whether you are a single advisory firm with $10 million of assets and up under management or a mega firm with $10 billion of assets under management, IDT Software can provide you the technology to meet all your client portfolio management needs.  IDT provides you the capability to produce any number of portfolios using all risk levels, different investment styles, and any investment focus.

Even if you have little investment management experience or if you have a large investment committee and staff with decades of experience designing and managing portfolios, the technology provided by IDT Software can set you apart from your competition by helping you produce above benchmark performance for your clients.  The cost and time you would save using IDT will way more than pay for the IDT subscription.

 There are many problems that investment advisory firms are facing in today’s regulatory environment to remain profitable or even to remain in business. At an investment advisor conference, a question was asked “What if I don’t want to make these changes?”. The answer given was “You either change or get out of the business.”  Although several regulations have been discarded, the industry is expecting them to resurface in some form or another. 

Industry changes can be considered tragedies at some firms and also become be great opportunities at others.  Here are a few tragedies or opportunities that investment advisory firms are being faced with:

  • There have been numerous advisors who have chosen to get out of the business and have sold their practice to younger advisors who do not have the investment management experience needed to manage client portfolios. Therefore, they have outsourced the management of investments to third-party money management companies at a high fee for the client which will now or later force the advisor to cut their fee in order to meet governmental regulations or agency expectations.

  • Good advisors may reach a success level where the time they must spend performing market and investment research managing their client portfolios is so great that they have less time to build or nurture client relationships.

  • There are times when advisors, who love to do market research and manage money, realize that their firm is not growing because they are not spending time developing new business.

  • Due to their own human emotions, investment advisors often miss prime opportunities to buy and sell investments. This often results in frustrations and stress that causes health issues and sometimes relationship issues with their family as well as clients.

  • The larger advisory firms usually develop investment advisory committees to perform research and manage client portfolios. Often times these firms have more staff performing research and managing client portfolios than there are advisors, resulting in low profitability.

  • Many advisors often spend more money on market research firms and publications in an attempt to free up their time and increase their portfolio performance with little results.

  • Some larger firms may hire a professional money manager to manage client portfolios. However, when they choose to leave the firm, the skills needed to carry on their functions are lacking and often results in lost clients and staff frustrations with client expectations for the firm.

  • Sometimes advisors in large and small advisory firms spend an inordinate amount of time with clients attempting to manage their investment performance expectations and accept portfolio returns that do not meet or exceed the underlying benchmarks.

  • Most investment advisors would love to produce portfolio returns for their clients that will exceed the underlying portfolio benchmarks but do not have the time, emotional control or tools to do so.

At IDT Software, we desire to help you eliminate any situation you face that would keep your firm from being the most productive, profitable, producing long-term benchmark meeting or exceeding investment returns and being the most enjoyable place to work. The investment decision-making technology (IDT) can deliver this by using five algorithms to assist you in managing your client investment portfolios. They are:

  • The investment ranking algorithm – It determines the best investment asset choices, from highest to lowest, using the investments (mutual funds, ETFs and stocks) you selected and provided to the IDT team as the pool of investments for the algorithm to use

  • The next algorithm determines which asset from the ranking is the most appropriate to be purchased in each portfolio. Even though an asset may be highly ranked, it may not be available for purchase due to, for example, being already at an overbought level. Our objective is not to buy high and sell low.

  • The next algorithm is the profit-taking strategy. When an investment asset start rolling over we want to take profits rather than ride it back down. There are several indicators that determine when this occurs.

  • The fourth algorithm determines when to sell. Other than the profit-taking algorithm, there are several other indicators that this algorithm uses to produce a sell signal like a change in the moving average or just stops.

  • Lastly there is a replacement algorithm. Sometimes an investment asset lags in its performance while other investments are producing better returns. This algorithm will determine if an investment needs to be replaced and which investment needs to be the replacement.

The IDT program calculates the correlated standard deviation each of your portfolios every night so that you can be assured that the risk levels are appropriate for meeting your client expectations and risk tolerance.

Once you provide IDT with the list of symbols for the investment pool, the algorithm will build the positions for your client portfolios. The algorithms will perform an actual three-year performance back-test using the real data for each market day. If the assets included in your pool of investment assets rank in the top quartile of the three-year peer-performance and is diversified among the Morningstar asset categories, your long-term performance should beat the benchmarks. 

Once you determine that IDT meets your needs, you can activate the program.  The algorithms run nightly and sends you a portfolio report before the market opens the next morning which includes any sell or buy recommendations.  You then make the transactions on your brokerage trading platform.  We are NOT a ROBO platform.  Your clients are yours and we have no information relating to them.

Due to increased revenue created by producing long-term portfolio returns that meet or exceed the underlying benchmarks the investment decision-making technology is a no-cost venture.

We challenge you to calculate your monthly hours spent performing market and investment research.  Multiply the number of hours by your hourly rate.  Then add the cost of other instruments used for research.  Once you have the monthly total, subtract the $500.00 monthly fee for the base IDT Software.  It’s a no brainer.


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