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By Andrew Gogerty | 06-13-2013 08:00 AM

Bringing High-Level ETF Strategies to a Lower Price Point

Wela Strategies' Mitch Reiner details the reasons behind starting new firm to roll out ETF strategies with simplified investment philosophies and fewer layers of costs for investors with smaller accounts.

Andrew Gogerty: Hi, I’m Andrew Gogerty, and we’re here at the 25th anniversary of the Morningstar Investment Conference. 

Technology has definitely changed the landscape of involved investment options over the last quarter century, and one of those has been the ETF. The technology has really democratized investing and given access to far-flung and niche areas of the market that historically have only been available to institutions. Joining me today for a discussion on how this impacts smaller dollar account investors is Mitch Reiner, managing partner of the Wela Strategies.

Mitch, thank you for joining me.

Mitch Reiner: Thanks, Andy.

Gogerty: You’ve borne well out of a larger investment advisor, Capital Investment Advisors in Atlanta. Why start a new firm to roll out the ETF strategies?

Reiner: Ultimately because all investors don't need a super high-touch wealth management approach. Many investors just need a simple investment philosophy and strategy to implement with their assets. Why make it so difficult and add layers and layers of costs on to make something more comprehensive than it actually needs to be? Therefore, we developed a separate institution, with a separate brand, that leveraged the resources of our larger RIA firm.

Gogerty: Let's talk about that leverage of resourcing. Your Wela Strategies have an own-your-age or almost target-date lineup type of investment options. Then you also have a multiasset income and an aggregate growth strategy. How do those portfolios, or that investment process, differ from the larger RIA? How are those portfolios the same and/or different?

Reiner: It's the same investment committee. There are nine members of the investment committee that make the investment decisions for the $1.2 billion wealth management firm. Why not take those exact same decisions that have worked for a long time--strategic decisions, large-cap versus small-cap, international versus domestic--and funnel them into just much more consolidated all-ETF portfolios, using low-cost tools with ETFs and making the same strategic decisions?

Ultimately they are just children of the same decisions of the investment committee. We’re making strategic decisions in the investment committee, funneling them down and creating basically nine to 15 model ETF portfolios. It's simple, it's low-cost, and it’s automatic. The way it's different is that it's just not as in-depth. You’re not dealing with as much tax-loss harvesting or individual security selection.

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