OBS and Smartleaf set to distribute DFA strategies

FWR Staff

13 October 2008

TAMP and overlay tech firm to offer index funds to mid-market institutions. Investment-platform provider OBS Financial Services and overlay technology ASP Smartleaf have teamed up to offer fee-based advisors and bank-trust officers streamlined access to Dimensional Fund Advisors' index funds to fill passive-strategy allocations within Smartleaf's Model Distribution Service .

This gives the 50 or so banks, broker-dealers and RIAs that use Smartleaf's overlay technology the opportunity to build unified managed accounts for their clients that include "DFA and OBS's innovative market-leading research," says Smartleaf's CEO Jerry Michael.

Middle market

OBS will offer 18 of its Efficient Frontier Series portfolios made up of 15 DFA asset classes. The portfolios are intended to maximize the long-term average returns in relation to risk.

Whitehouse, Ohio-based OBS co-president John Henry says the tie-in with Smartleaf "will open new markets for our organization."

Practically speaking, the partnership with Cambridge, Mass.-based Smartleaf gives OBS an opportunity to respond to demand from middle-market banks for DFA small-cap value funds as a UMA component.

UMAs are single-account investment products that typically feature combinations of manager-model separately managed accounts, mutual funds and ETFs. SMAs are customizable portfolios made up of individual securities. Overlay management is the process of aligning trading activity, managing cash flow and enhancing the overall tax efficiency of multiple-sleeve investment portfolios.

Santa Monica, Calif.-based DFA has approximately $150 billion in assets under management.

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