Investment Decision-Making Technology

investments, investment advisors, portfolios

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The IDT investment decision-making technology algorithms (IDT) provides investment advisors at all levels the opportunity to manage their client investment portfolios with a high performing system using the beginning stages of artificial intelligence. Managing client assets has never been easier or more productive for an investment advisory firm or a broker-dealer using their managed account platform to produce higher returns at the lowest cost than with our Investment Decision-Making Technology.  The opportunities for you as a Broker – Dealer to use the IDT platform will be described below after you understand more about what the program looks like.

 Whether you provide portfolio management services on a platform to a new single advisory firm or you are a mega firm with billions of dollars of assets under management, IDT Software can provide you the technology to meet all of your advisors’  portfolio management needs. Whether you have advisors with little or no investment management experience or if you have a large advisory firms with an investment committees 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 advisors.

 There are many problems that investment advisory firms are being forced to face to be profitable or to just remain in business due to regulatory changes required by governmental agencies. 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.” Here are a few situations that investment advisory firms are being faced with:

  • There have been a large number of 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. 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 regulations.

  • Good advisors may reach a success level where the time they spend on performing market and investment research to manage their portfolios is so great that it forces them to spend less time building client relationships and finding new business.

  • ·There are times when advisors that 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 her family as well as clients.

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

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

  • 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.

  • Sometimes advisors in large and small advisory firms have to spend an inordinate amount of time with clients attempting to manage their investment performance expectations to 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, desire to help you eliminate any situation your advisors face that would keep them  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.

  • The investment ranking algorithm determines the best choices from highest to lowest, from the investments (mutual funds, ETFs and stocks) that you have selected and provided to the IDT as the pool of investments.

  • The next algorithm determines which asset from the ranking is the most appropriate to be purchased. Even though an asset may be highly ranked, it may not be available for purchase. Our objective is not to buy and sell low.

  • The next algorithm is the profit-taking strategy. When an investment asset starts rolling over we want to take profits rather than write it back down.

  • The fourth algorithm determines when to sell.

  • 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. Once you provide IDT with the list of symbols for the investment pool for the algorithm to build the positions for your client portfolios we will perform a three-year performance back test. If your pool of investment assets rank in the top quartile of three-year 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 runs nightly and sends you a portfolio report before the market opens that includes any sell or buy recommendations.  You then make the transactions on your platform.  We are NOT a ROBO platform.  Your clients are yours and we have no information relating to them.

Due to the savings and increased revenue by producing a performance that meets or exceeds the underlying benchmarks along with the cost savings of not having to do market research, using the investment decision-making technology algorithms is a no-cost venture. In fact, in many ways, they should come out way ahead with better client relationships, more business, more free time and more satisfied clients.

A Broker – Dealer has three basic options for using the IDT Software program:

  1. Choose a few of your advisors to try the software program at no charge until you decide the program is worthy of being made available for your other advisors to use. We can then develop an educational format to make your advisors aware of its existence and benefits.

  2. You can select some of your money management advisors using the IDT Software to manage client accounts submitted by other advisors on your managed account platform. By using multiple advisors the diversification of investment assets and style focus can be enhanced.

  3. You may want to add the IDT Software program to your managed platform and manage the accounts internally for a fee is a third party money manager.

 IDT Software is a subscription-based product. We are based in Alabama and are not required to register with the state of Alabama or with the SEC due to offering our subscription only to advisors and broker-dealers. However, there is always a chance that some state may require us to register with their securities commission. If so, we will be glad to do so in a timely manner.


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