R.I. trust company enhances customization with web-based overlay technology. Washington Trust has selected Smartleaf to provide overlay technology to its private-client businesses. The Westerly, R.I.-based company says the move makes a more formidable competitor to big-name firms now under pressure from falling stock prices and waning consumer confidence.

Overlay management is the process of aligning trading activity, managing cash flow and enhancing the overall tax efficiency of investment portfolios. Smartleaf's technology enables customization around such things as tax-management and investment-policies.

"We're seeing that clients are looking for personalized service these days," says Washington Trust Wealth Management head Galan Daukas. "And one of the reasons a firm like ours is able to excel is technology -- technology has leveled the playing field."

Both worlds

In the past, Wall Street firms and the big fund companies had a distinct advantage in their ability to access a wide variety of investment products and managers, says Galan. But with the advent of turnkey investment-platform providers and sophisticated portfolio-management technologies "we can access and offer the same breadth of investment solutions as the big firms -- only they can't provide personalized and customized service like we can."

Washington Trust found Smartleaf more or less by accident. In assessing separately managed account (SMA) providers with a view to augmenting an investment platform then consisting of in-house fixed income, large-cap equity and outside ETFs and mutual funds, it short-listed and ultimately selected Matawan, N.J.-based investment-platform provider Concord -- which uses Smartleaf's overlay technology.

Galan says he and his colleagues were so taken with Smartleaf they decided to make it available to Washington Trust Wealth Management's three divisions -- Weston Financial Group, Washington Trust Investors and 1800 Asset Management -- in a unit-spanning overlay program combining proprietary models, SMAs and other vehicles.

"It's hybrid architecture," says Daukas. "It combines our strengths with the strengths of [other investment professionals] and lets us personalize it for our clients."

According to Smartleaf's CEO Jerry Michaels, using his firm's technology also lets the separate parts of Washington Trust Wealth Management forge ties with each other -- through, for example, cross-selling proprietary products -- while maintaining their distinct and individual cultures, and allowing for "central command" oversight.

Washington Trust Wealth Management had about $4 billion in assets under management as of 30 September 2008.

Cambridge, Mass.-based Smartleaf has more than 50 institutional clients. -FWR

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