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Opto Invest on Advisor Speed Demos from FinancialAdvisor.TV

Updated: Sep 29, 2023

This installment of Advisor Speed Demos from FinancialAdvisor.TV features Jacob Miller, co-founder of Opto. This platform empowers Financial Advisors to differentiate their practice by offering customized private fund offerings.

Learn more about Opto:

*Make sure you pay attention to the unique solution Opto offers, where firms can create their OWN private labeled funds!

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Presenter: Jacob Miller, Opto Invest Host: Jay Coulter, FinancialAdvisor.TV



Jay Coulter 00:05

On this installment of Advisor Speed Demos Opto co-founder Jacob Miller will show you how his firm can help advisors improve investment outcomes and differentiate their practice through customized private market offerings. Make sure you pay attention to the unique solution Opto offers where firms can create their own private labeled funds. You can learn more about Advisor Speed Demos by visiting Here's Jacob Miller.

Jacob Miller 00:46

We often start with just some examples of how top family offices and other IRAs use private market asset classes to accomplish goals. And so as you can see here, we can pick from a simple menu, are we tilting to drive further diversification of the portfolio, to balance growth and income needs, or to solely focus on growth or income on a standalone basis. Of course, these are just high level examples, but it gives you a sense of how you can start to use these building blocks to build better outcomes. We can hop in and build a custom plan, we integrate with most of the major recording platforms, CRMs, and custodians, such that often many clients will be available, right from this drop down list that we are in a demo instance.

So right now we're going to add a client. We will name this client speed demo. Their parents chose a very interesting name for them. And then we just have to fill out a couple of quick questions about this client. And these map pretty cleanly to a lot of planning software outputs, but gives you a chance to really think about where private should fit for this client. So I'd say Speed Demo's focused on increasing long term returns, targeting an 8% Return on a $20 million portfolio. Now because we integrate into reporting providers, if it's an integrated client, you'd have full security level of detail here, ability to see the whole portfolio and how privates will fit. But for the purposes of showing the functionality, we'll just choose a simple 70/30.

Now, we asked a couple private specific questions. How comfortable are they with illiquidity, which we think about as what's the maximum amount of time they might not be comfortable not exiting about 10% of their portfolio? Let's assume speed demo is 55. Still learning and comfortable from a cash perspective. So it's comfortable with a relatively high amount of illiquidity, but is only somewhat comfortable with risk. And, you know, if we have a set allocation mind, we can answer that. But we can also click "I'm not sure" and let the tool show what the optimal allocation is to get us to this client's goals, given their constraints, we'll get a quick summary of what we've told the tool. And then we click submit. So once we give it this information we'll land on a client overview page, which over time will grow to encapsulate all the information needed to view, add to, grow, and manage this client's alternative allocation, but right now it's empty.

So let's get started. We can click right here on create a client proposal. And this will take what we know about this client and drop us back in that sandbox experience. But now it's been customized for these goals. And so you can see here, rather than those growth and income assets, we're really centered around private equity, real estate growth, and venture capital to provide a consistent outperformance high return and help that client meet their goals given their liquidity and risk constraints. And we can see here, that liquidity number gets back to the desired amount within a handful of years. And they get consistent cash flows really starting in year three or four, all the way out through the end of these fun lives. And we can see demonstrated here on the risk side that the opportunity for upside has increased massively, well, the downside has actually gone up, we've reduced the max drawdown and reduce the volatility, we can dial this up and it'll dynamically change the mix of asset classes at a higher percentage, I may need less venture capital in order to meet my goals. So you can see we can well outperform where we were trying to go at a 15% shift.

Similar to before we have the funds that are available to invest to make this actionable today. And assuming we looked at these and we're comfortable with allocation, we can just click use this recommendation. From here we get a chance to amend the amounts. And so if we want to be overweight, venture capital, underweight, real estate, maybe they already have significant real estate holdings or change where this is being funded from off of where the dynamic model started, we can do that here. Assuming that all looks good, we'll review the selected funds. This is an opportunity to edit individual amounts, again, down to about 100k minimum and to dig back into diligence. From there we'll roll up all the fees and terms so that the advice either end client can understand what they're going to be investing in, view PPMs and any relevant materials and get comfortable with adding to net performance with this portfolio.

Lastly, that all rolls into a client ready proposal. And so this has been branded with Noble Advisors, our example advisor here with the advisor name, and this would be the client name, and it makes it very easy to show. Here's what we're going to do. Here's why we're going to do it. And here are the tools we're going to use to get it done. Now, right from here, you can click Share proposal, which will generate a one time link that a client can view for 31 days, or you can download a PDF, print that out and bring it to a client meeting. All you have to do then is click Start investment process, click reserve those funds, what that'll do is tell our ops team to hold these for 25 days. So you have an opportunity to go work with your client, understand them and make sure that they are excited about a private market shift.

Now we're not going to check out here because it'd be quite boring to make y'all watch me fill out a sub doc. But luckily, we have Richard Feynman here who has already indicated which investments he wants and is ready to start checking out. Now what we've done is through integrations into CRM, reporting, and custody, been able to pre fill almost all of the sub dock without the advisor having to enter information. And so we can see right here we have the Richard Feynman a revocable trust, all we do is click Next. And then you can see here, everything we need to know to generate the sub doc has been prefilled. We make it very easy to update this information, let's say Richard moved, we can jump in and quickly change address, phone number, stat, tax status, etc. And then all feed right back into this automated sub doc process. When that's done, all you do is click generate documents. That sends a DocuSign link to your inbox you review, send to the client for signature you countersign and you're subscribed.

So we've reduced the subscription process from days or even weeks to mere minutes. And this will be a single sub doc across all of those seven or eight investments that they were making. So scalable access to private markets made as close to as simple as public market transaction as we think is appropriate. We also try and make investing in private markets scalable in a much more robust way, by allowing advisors to create what we call custom funds. And what we mean by this is for many investors, especially getting started in their private markets journey, it might not make sense to go fund by fund and build out an allocation. And so we give the CIO or investment team the tools to build a commingled vehicle of multiple strategies, multiple funds, and even Co invests into a single structure such that they can offer diversified allocations at 100k to all of their clients.

And here we can see what a sample growth might look like, sample balanced portfolio or income. And now this is just a starting place, we can edit any of these waits at the target allocation, the number of years that we're going to build that allocation out over and the size of that portfolio and where it's coming from. And we can see here what's going to happen in terms of performance liquidity, the distributions by asset class, and really think about this shift in context in terms of effective exposure and privates and net cash flow. From there we help our clients create these custom funds that can be branded, white labeled, as this entire site is, to really bring the RIAs value add and knowing their clients and what they need to life.

So you can see here the noble advisors 2023 Opportunities Fund includes six investments, and a client could enter this for as little as 100k. And so we can just click Continue. Again, it can be 100k, it can be a million, we select that client, and we'll use the speed demo that we use before. And then we just click Create proposal, and we're right back to where we were before. But now it's about investing in noble advisors custom proprietary fund, that's a mix of asset classes and showing what that does to the portfolio over time. And starting the investment process is as simple as before with just a single object, a single sub doc and a single k one at the end of the year.

With this toolkit, we make it easy and hopefully joyful for advisors to learn about and make actionable private markets allocations for their clients. We want to offer this in a way where it does not take hours away from spending time with clients existing, making existing relationships more robust and winning new business, but really augments that with tools that are exciting to clients and help you tailor our private markets allocations to their interests.


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