Firms

Get to Know Halo Investing & Its Outcome-Based Solutions

By  Mike Zaccardi

Disclaimer: In order to make Wealthtender free for our readers, we earn money from advertisers including financial professionals and firms that pay to be featured on our platform. This creates a natural conflict of interest when we favor promotion of our clients over other professionals and firms not featured on Wealthtender. Learn how we operate with integrity to earn your trust.

Registered Investment Advisors (RIAs) are growing. According to FINRA’s 2022 Industry Snapshot, there were 3,394 broker-dealers in 2021, down 41 from 2020, while the number of RIAs grew 7% from 2017. Free from often restrictive rules and product lists, today’s RIAs seek new offerings to serve their client niches. That’s where Halo Investing comes in.

What is Halo Investing?

Headquartered in Chicago, Halo is a rising fintech firm focused on helping advisors grow their businesses. Through the Halo platform, advisors and investors can easily access structured notes, market-linked CDs, buffered ETFs, and annuities as well as a whole suite of tools to analyze, customize, execute, and maintain the most suitable protective investment product for their portfolios.

Halo also has offices in Zurich, Dubai, and Singapore. The company was co-founded by Biju Kulathakal and Jason Barsema in 2015 with a mission to provide access to impactful investment opportunities previously unavailable to most investors. The firm’s motto is “impact before profits.” It’s all about giving advisors the tools necessary to access the right products for their clients’ portfolio objectives. Halo believes in transparent, democratized access to structured notes and other protective investing solutions—all made possible with today’s technology.

Structured Notes

Halo’s competitive structured note platform is its signature. Unlike other companies offering notes, Halo is independent—not owned by a major bank. That independence assures the most transparent market-based pricing. For years in the U.S., structured notes featured opaque costs and poor liquidity. Halo changed that. Notes are popular globally at more than $3 trillion of market value, and adoption is finally on the rise domestically. One of Halo’s goals is to help independent advisors learn about notes so they can be appropriately included in client portfolios.

A structured note is a straightforward product. It’s simply a zero-coupon bond issued by a bank with a derivatives package. It features both capital protection and upside potential. There are four components of structured notes: maturity, an underlying asset, the protection amount, and a return/payoff amount based on market conditions. Halo offers both income and growth notes based on clients’ risk and return objectives.

Amid today’s investment landscape of uncertain stock market investments and still historically-low bond yields, structured notes help add a risk-defined income stream. The notes are best used to complement a portfolio of low-cost traditional assets. Halo does not push these products to be the only investment product for clients.

Buffered ETFs

Another protective investment RIAs access through Halo are buffered ETFs. Buffered ETFs offer protection from stock market volatility. Using FLEX options that trade through an exchange, the product has four main components: a market index, an upside cap, a downside buffer, and an outcome period. The beauty of buffered ETFs is that they can help investors weather troubled markets. Often the biggest investing risk is not found on a company’s balance sheet or when a recession might strike—it’s how the client behaves during inevitable volatility. Buffered ETFs, like the other protective investments, help people sleep at night and not panic when stocks drop.

Halo recognizes that these investment solutions might not be the easiest products to know and explain to their clients. RIAs have access to Halo’s subject-matter experts and online resources to know all the ins and outs of buffered ETFs and other products. Halo also handles many of the back-end tasks so advisors can focus on building and cultivating client relationships. It’s all about making client experiences better through technology and transparency.

Annuities

The third protective investment solution offered through Halo are annuities. Halo operates as an outsourced insurance desk (OID). An RIA does not have to go through the rigamarole of acquiring and maintaining licenses—Halo’s OID is all they need.

Annuities catch a bad rap these days. Notorious for high and non-transparent fee structures, there is good reason retail investors and many financial planners have grown weary of the product type. Halo is changing that. Annuities can be effective tools for the right client—so long as the price is right. Technology and competition bring lower costs. Cost also includes time. An RIA only has so many hours in a week, and Halo’s simplified approach uncomplicates annuities and saves time. Halo also offers full-service support and review of in-force contracts.

The Rise in Alternative Investments and Platforms

Halo’s protective investment solutions are part of a growing interest away from conventional equity and fixed-income funds. Reducing volatility, increasing an income stream, and holding uncorrelated assets are all strategies that continue to gain steam. Just look at where money is going in the coming years: Research company Preqin forecasts that alternatives AUM will cross $23 trillion in the next four years, nearly doubling from 2021 levels, according to S&P Global. Moreover, according to Cerulli Associates, wealth managers are expected to increase allocations to alt allocations from 10.5% to 11.8% over the next two years. With that kind of demand growth, technology and subject-matter experts are needed to help advisors navigate a quickly evolving landscape. Halo Investing has emerged as a solution for today’s RIA.

Advisors recognize the need to monitor and aggregate their clients’ investments on something much more robust than Excel. Demand is in fact so strong that there’s now a resource, AltExchange, designed specifically to help RIAs track alternative investments. The growing fintech solution houses 50 alternative platforms. Advisors ignoring this increasingly popular niche of the investment universe might be missing out on effective solutions for their clients.

The Bottom Line

Wealth managers are busier than ever. Navigating the complexities of retirement planning, tax changes, and investments are not easy tasks. Moreover, cultivating client relationships while building a business leaves little spare time in the life of an advisor. Halo Investing eases the burden through technology, competition, and transparency, fueling RIAs to grow their business and improve client experiences. Halo’s platform of structured notes, defined-outcome ETFs, and annuities are used by independent advisors to offer clients low-cost and straightforward protective investment solutions.


Mike Zaccardi CFA

About the Author

Mike Zaccardi, CFA®

Mike is a freelance writer for financial advisors and investment firms. He’s a CFA® charterholder and Chartered Market Technician®, and has passed the coursework for the Certified Financial Planner program. 

Disclaimer: In order to make Wealthtender free for our readers, we earn money from advertisers including financial professionals and firms that pay to be featured on our platform. This creates a natural conflict of interest when we favor promotion of our clients over other professionals and firms not featured on Wealthtender. Learn how we operate with integrity to earn your trust.

Leave a Reply

Your email address will not be published.