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Russell Investments selects Vestmark to power Personalized Managed Accounts with innovative tax-managed overlays

Partnership aims to propel Russell Investments as the industry’s leading provider of customized tax-managed solutions

Seattle & Boston—August 6, 2020—Russell Investments has selected Vestmark, a leading provider of portfolio management and trading software and outsourced services, to power the design, construction and management of an array of inventive Personalized Managed Accounts (PMA) that can be customized to meet a wide range of client needs. PMA will initially feature six tax-managed separately managed accounts (SMA) that leverage technology to help meet both growth and optimal after-tax outcomes. These distinctive solutions will include three actively managed equity SMAs, two direct-indexed SMAs and a core equity SMA, which combine active and lower-cost direct indexing. Each will provide financial advisors with the opportunity to customize their high-net-worth investors’ portfolios to individual preferences.

“Most tax-sensitive investors have highly specific needs, which can’t always be met with standard investment vehicles. With our own PMA engine, we’re aiming to address the evolving investment needs of advisors with scalable, custom-tailored solutions,” said Brad Jung, head of North America Advisor and Intermediary Solutions at Russell Investments. “By leveraging the award-winning VestmarkONE technology platform, we expect to seamlessly integrate and connect with intermediary program sponsors and platform providers to offer a wide array of personalized investment solutions.”

Beyond the SMAs expected to launch in the fourth quarter of 2020, the UMA capabilities of the VestmarkONE platform will allow the scale and flexibility to create diversified portfolios utilizing multiple SMA strategies with customization options available to advisors.

The PMA solutions will feature dedicated portfolio managers, quantitative research analysts and service teams; centralized trading and implementation; as well as automated year-round tax management including tax-loss harvesting, wash sale minimization, tax-smart turnover and managing holding periods. Ultimately, the three objectives to help meet desired outcomes will be to minimize the impact of taxes, maintain tracking error to the target portfolio and minimize transaction costs.

Jung said Russell Investments’ PMA aims to serve wealth management firms and their advisors with the institutional-caliber solutions that have made the firm a global leader in outsourced investment management (OCIO). He expects it will be both value-additive and complementary to the firm’s current wealth management capabilities. “PMA aims to extend our track record of producing differentiated investment and business solutions that draw from the firm’s deep consulting expertise and analytic tools to help advisors optimize their business. This latest solution will be complemented by portfolio analytics and a service team dedicated to working with advisors on customization, implementation and communication.”

Vestmark, which features a deep network of broker/dealer and asset manager clients, has experience working with a wide variety of end-client solutions as well as connecting sponsors and asset managers to deliver a broad suite of capabilities and solutions in an efficient and scalable way.

“It’s exciting to marshal our technological expertise and work with Russell Investments to power the next evolution of Personalized Managed Accounts,” said John Lunny, CEO of Vestmark. “Our collaboration will deliver investment solutions that ultimately better enable advisors to fulfill the investment needs of their clients through leveraging the scalable client personalization, streamlined and automated tax management capabilities and overall flexibility inherent in our technology.”

Russell Investments’ launch of Personalized Managed Accounts also will further establish the firm’s leadership position in the managed accounts space, which according to Cerulli Associates’ US Asset Allocation Model Portfolios 2020 report, ranks as the industry’s top provider of asset allocation model portfolios based on total assets.

“The managed account industry has seen a resurgence over the past decade as investors look to gain more control and customization of their portfolios,” said Robert Hostetter, global head of solutions at Russell Investments. “Our institutional investment solutions and OCIO heritage are highly relevant to this need, and we look forward to helping our clients and partners achieve their outcomes.”

Hostetter added that Russell Investments, in leveraging this new relationship with Vestmark, aims to expand the Personalized Managed Accounts program after the initial launch, eventually offering overlay and optimization options for the firms’ collective clients featuring both environmental, social & governance (ESG) and factor exposures.

About Russell Investments

Russell Investments is a leading global investment firm providing tailored solutions and services to institutions and individuals through financial intermediaries. Russell Investments is dedicated to improving people’s financial security, leveraging an 83-year client-centric heritage rooted in investment innovation. Since 1985, for example, with the launch of our first tax-exempt bond fund, the firm has been helping investors grow after-tax wealth. Russell Investments is the fourth-largest adviser in the world with $284.8 billion in assets under management (as of 6/30/2020) and $2.5 trillion in assets under advisement (as of 12/31/2019) for clients in 32 countries. Headquartered in Seattle, Washington, Russell Investments operates through 21 additional offices in major financial centers such as New York, London, Tokyo and Shanghai.

Media Contact
Steve Claiborne
(206) 505-1858
newsroom@russellinvestments.com

Russell Investments Personalized Managed Accounts is program of Russell Investment Management, LLC (RIM). The implementation of Personalized Managed Accounts in investors’ portfolios and related investment advice are provided through investment advisors and other financial intermediaries that are independent of RIM and its affiliates.

Separately Managed Accounts are a product of Russell Investment Management, LLC (RIM). Each Separately Managed Account represents a composite of model portfolios provided by RIM, in which each composite reflects model portfolios of RIM and third-party investment advisors selected by RIM. Because each client’s investment in a Separately Managed Account is implemented and overseen by a third-party investment advisor serving as a “centralized portfolio manager,” RIM provides no investment management services with respect to the Separately Managed Accounts. Investment in one or more Separately Managed Accounts is not a complete investment program.

Tax Management Overlay Services and Transition Management Services offered by Russell Investments Implementation Services, LLC., member FINRA, SIPC.

Russell Investment Management, LLC is not affiliated with Vestmark, Inc. or its subsidiaries.

Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.

Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.

Please note the products and services listed within this document may or may not be available at your firm. Check with your firm for availability.

CORP-11713-2020-07-16

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About Vestmark

Headquartered outside of Boston, MA and founded in 2001, Vestmark is a leading provider of portfolio management/trading solutions and outsourced services for financial institutions and their advisors, enabling them to efficiently manage and trade customized client portfolios through an innovative SaaS platform. Supporting over $1 trillion in assets and 4 million accounts, Vestmark is a trusted partner to some of the largest and most respected wealth management firms. For more information about Vestmark’s solutions, call (781) 224-3640, email inquiry@vestmark.com, or visit www.vestmark.com.

Media Contact

Siobhan Nolan
JConnelly
(862) 217-9585
snolan@jconnelly.com