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Franklin Templeton Expands Its SMA Offering at Janney

By Dinah Wisenberg Brin

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Franklin Templeton is expanding its partnership with Janney Montgomery Scott LLC with a suite of eight tax-managed S&P-based index strategies offered through its custom indexing platform, Canvas.

The separately managed accounts (SMAs) will give Janney financial advisors access to the Canvas custom indexing software program, which Franklin Templeton’s O’Shaughnessy Asset Management team developed.

The SMAs’ launch at Janney over the summer marked the initial rollout of the strategies at a broker-dealer partner, but other firms can access them through the Canvas platform, a Franklin Templeton spokesperson told ThinkAdvisor on Wednesday.

Why it matters: Franklin Resources Inc., an investment manager with subsidiaries operating as Franklin Templeton, serves clients in over 155 countries and employs about 1,300 investment professionalss. The company reported more than $1.4 trillion in assets under management as of July 31. Franklin Templeton had about $116 billion in SMA assets under management as of June 30.

Janney has more than 900 financial advisors and over $130 billion in client assets under advisement, a firm spokesman confirmed.

What to know: Roger Paradiso, Franklin Templeton’s product head, said the development furthers the company’s position as a top SMA provider through differentiated tax management and customization capabilities.

With Canvas, advisors at Janney, a wealth management, capital markets and asset management firm and Penn Mutual Life Insurance Co. subsidiary, can strengthen client relationships by further personalizing investment management, Paradiso said in a statement announcing the partnership expansion Tuesday.

The strategies seek to deliver similar pretax returns as their tracked indexes while outperforming them on an after-tax basis, according to Franklin Templeton. The initial SMA product lineup comprises:

  • Franklin Templeton S&P 500 – Tax Managed
  • Franklin Templeton S&P 500 Growth – Tax Managed
  • Franklin Templeton S&P 500 Value – Tax Managed
  • Franklin Templeton Dow Jones US Select Dividend – Tax Managed
  • Franklin Templeton S&P 400 – Tax Managed
  • Franklin Templeton S&P 600 – Tax Managed
  • Franklin Templeton S&P 1500 – Tax Managed
  • Franklin Templeton S&P ADR – Tax Managed

After selecting a base index, advisors can shape portfolios according to client values using more than 50 values-based tilts and exclusions. Individual positions, sectors, industries and countries can be restricted to adjust for client risk profile, private-market exposure or additional values, the company said.

Looking deeper:  Franklin Templeton President and CEO Jenny Johnson said last year that fee-based financial advisors are being asked to provide a range of services that extend well beyond handling client portfolios, including those previously limited to ultra-high-net-worth clients. Johnson expected the firm’s custom indexing platform to evolve to take active products like mutual funds and open them up for delivery in SMAs, helping free advisors to offer other client services.

Image: Shutterstock

Dinah Wisenberg Brin

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