Realized® Launches ‘Turn-Key’ Investment Property Wealth Management® Service for Wealth Advisors to Offer Clients
Provides advisors with fiduciary solutions to manage clients’ investment property wealth and integrate customized CRE investment portfolios to diversify financial planning, generate passive income.
AUSTIN, TEXAS, May 2, 2023 – As more wealth advisors seek new ways to expand their practices and better serve clients’ evolving needs, including the integration of real estate investments with tax-optimized strategies, Realized today announced that it will launch an end-to-end platform for wealth advisors (and fiduciaries) to better manage investment property wealth. This platform can help advisors incorporate curated portfolios of commercial real estate (CRE) investments as part of their long-term financial planning for clients.
The Realized platform delivers enhanced portfolio construction capabilities, including the use of stable, cash-flowing properties such as DSTs. This enables an advisor to offer clients a CRE portfolio that can bring diversification and tax management to a broader investment strategy and complement traditional wealth management portfolios like stocks, bonds, or ETFs that may already be in place. This represents approximately $6.4 trillion in new potential AUM for advisors.
DSTs, or Delaware Statutory Trusts, offer fractional investments in large commercial properties that are professionally managed and are 1031 Exchange-eligible. DSTs offer investors access to high-quality, stabilized assets that feature the tax sheltering advantages typically only accessible via direct real estate ownership. By virtue of Realized’s ability to customize DST portfolios based on an investor’s specific needs and risk tolerance, with an investment as little as $25,000, Realized is enabling advisors to offer their clients alternative investment vehicles that generate passive risk-adjusted returns.
David Wieland, CEO and co-founder of Realized, said, “These innovations align directly with advisors’ desire to grow their practices and augment the services they offer clients through the addition of an asset class they previously didn’t have the tools to effectively manage. At the same time, these innovations also help advisors meet the increasing client demands for more impactful ways to maintain passive income, manage risk, and preserve wealth across generations. Through our proprietary wealth management technology and access to institutional-grade real estate data and insights, we are leading the charge to demystify this vibrant asset class that we believe was previously only accessible to large institutions.”
Adding Commercial Real Estate to Advisor Practices
Wieland noted that Realized designed its platform to be user-centric and intuitive. Through a simplified investment process, Realized is expanding the variety and utility of the CRE portfolios it constructs for wealth advisors on behalf of their clients. These enhancements allow an advisor to potentially manage a greater portion of a client’s household balance sheet. This, in turn, can enable advisors to grow AUM while offering more comprehensive wealth management in a construct similar to many of the investment portfolios that have become popularized by more traditional asset classes, such as equities.
- Goals-Based Portfolios bring the same simplified investment strategy made mainstream by 401k target date funds to CRE. These portfolios aim to align with specific investment strategies, including capital preservation, income generation, or growth. These portfolios seek to have predefined allocations (e.g., 20% in student housing, 30% in apartments, etc.) with simplified asset options based on the inventory of offerings available.
- Optimized Portfolios allow for further personalization while removing human bias from the investment selection process. The Realized algorithm provides a 90% confidence interval for the ten-year income potential for commercial real estate portfolio options. Advisors can build portfolios aligned with income needs, plus diversify with different deals based on property type, geographic preferences, or risk tolerance.
- Performance Tracking Tools such as advisor portals and integration into wealth management reporting systems allow advisors to easily review each client’s positions, distributions, and variance against projections.
- Valuation and Billing via the DST industry’s only source of quarterly Net Asset Values (NAVs) are prepared in partnership with a nationally recognized “Big 4” accounting firm.
- Secondary Market to provide potential liquidity options to navigate life events or make portfolio adjustments. To date, the platform has completed transactions with 16 unique DST sponsors at an average trade value of over 93% of par value. Realized plans to further enhance this capability by launching its SEC- and FINRA-reviewed alternative trading system for fractional CRE investments.
Additionally, investment portfolios constructed by Realized all feature a quantitative measure of diversification in a client’s CRE portfolio based on characteristics such as Sponsors, property types, market rent, and tenant type.
In February 2023, Realized announced platform enhancements that included fee-based accounts, Confidence Scores, and white-label investment plans and portals for advisors.
Stephanie Elliott, president at Realized Financial, added, "We are always aiming to strike a balance between technical advancement and user experience. It is essential to elicit feedback from our industry partners and those who will most benefit from our offerings to ensure that they find value and utility in the offering as they think about incorporating alternative asset classes into long-term financial planning.”
About Realized Holdings
Through Realized Financial, Inc. (Realized Financial), Realized Holdings (Realized) provides real estate wealth solutions to individuals and families that own legacy investment properties and other appreciated financial and capital assets. Investors and their advisors use the Realized platform to transfer wealth from legacy properties and assets into passive commercial real estate investment portfolios — comprised of DST and Qualified Opportunity Zone (QOZ) investments and customized to their specific needs. To learn more, visit www.realized1031.com.
No public market currently exists, and one may never exist. DST/QOZ programs are speculative and suitable only for Accredited Investors who do not anticipate a need for liquidity or can afford to lose their entire investment.
These investments are sold by PPM that discloses all risks, fees, and expenses. An investor should consult with his/her tax advisor prior to investing.