Every great advisor knows that a well-tuned engine drives better results—and that’s exactly what RPAG’s scorecard delivers. In this session, we’ll take a deep dive under the hood of our scorecard, showcasing its unique design, the data it analyzes, and the strategy behind its implementation. Discover how this tool evaluates plan performance with precision, helping you identify key areas for improvement and providing you with the insights needed to guide clients toward better outcomes. Shift into high gear and make this scorecard a cornerstone of your advisory services.
Summary:
Brooke Visagie, an Advisor Service Associate here at RPAG took the time to explain what the scorecard is, how it works, the benefits of the scorecard, and reports you can run that go with it.
Scorecard Objectives and Benefits (0:26)
The Scorecard System was created to score funds based on multiple criteria that is commonly used by institutional and money managers. The Scorecard is a clear, 10-point numerical scoring system that can be used to monitor funds and managers. The two main benefits of the RPAG Scorecard is that it is very straightforward and is integrated into our Investment Policy Statement. Fiduciaries can evaluate investments in a more comprehensive manner through a single, easy to understand score. It gives clear indications of suspect areas, allowing users to pinpoint specific metrics.
How Does the Scorecard Work? (3:34)
Funds are categorized into one of three categories: active, passive, or asset allocation. Sorting these funds into specific categories allows for a better "apples to apples" comparison and creates a better analysis. All scores are built with pass/fail analytics on a scale of 0 to 10. 80% of a fund's score is quantitative and made up of 8 unique factors. This incorporates modern portfolio theory statistics, quadratic optimization analysis, and peer group rankings. 20% of the fund's score is qualitative. This helps account for factors like manager tenure, the expense ratio, and the fund's statistical significance.
Comparison Between Active, Passive and Asset Allocation (5:06)
Brooke goes in depth with each type of Scorecard and explains the strategy behind each. Active Funds require 5 years of monthly returns, omits passive funds from their peer groups, and an ideal active manager that has a long track record, style purity, and outperformance. Asset Allocation Funds needs a manager that provides outperformance, a long track record, and high peer group rankings. This fund uses new style analytics to better evaluate diversification by the manager. In a passive fund, they only need 3 years of monthly returns to score. The main reason for this is that we are no longer looking for outperformance. The idea Passive manager provides very consistent style purity, tight benchmark tracking, and low cost. Custom peer groups for passive funds omit active funds. RPAG uses industry standard benchmarks for each asset class.
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Brooke joined RPAG in October 2023 and brings a strong analytical background to the team. A UCLA graduate with a BS in Mathematics, she has expertise in both pure and applied mathematics and a passion for leveraging data to improve financial planning. With advanced knowledge of data programs and a knack for building predictive models, she’s dedicated to helping advisors and plan sponsors navigate trends and make informed decisions. |
