Sound Income Strategies makes SMA debut on Orion

Sound Income Strategies is widening visibility for its income-focused separately managed account models through a partnership with Orion.

As part of its strategy to expand its presence in the advisory space, the RIA overseeing more than $3 billion in assets announced Thursday that it is enhancing access to three of its SMA models for advisors using the Orion Communities and Orion Portfolio Solutions platforms.

Sound Income Strategies' new partnership with Orion puts it side by side with other major players in the SMA space including Franklin Templeton, which rolled out a wide array of its equity SMA models on the platform in August.

Orion Communities and Orion Portfolio Solutions are known for providing a wide array of investment strategies across equities, fixed income, and alternative assets.

Structured to help investors generate consistent income while navigating market fluctuations, the models from Sound Income Strategies take distinct approaches by incorporating a blend of preferred securities, high-yield stocks, and dividend-focused equities.

“Advisors utilizing Orion’s platform now have access to three of our flagship SMA strategies, providing them with a wider range of high-quality options in the fixed income and dividend equity space to better serve their clients’ investment goals,” James McConaghy, head of distribution at Sound Income Strategies West, said in a statement.

The strategies include Income Plus, which invests in preferred securities, real estate investment trusts, business development companies, and exchange-traded funds; Dividend River, which seeks excess income from high-yield equities, with a supporting focus on long-term capital appreciation; and Total Return, which targets above-market dividend income alongside long-term asset growth.

Ron Pruitt, president of Orion Wealth Management, emphasized the significance of the collaboration.

“We’re excited to bring Sound Income Strategies’ SMA models to the Orion platform, offering advisors even greater flexibility and choice when building income-focused portfolios for their clients,” Pruitt said.

While model portfolios have cemented their place in advisors' portfolio management toolbox, SMAs could be the next big thing, with at least one report suggesting an increase in advisors' SMA holdings from 18% to 26% on average in the next two years.

Still, truly broad-based adoption could be a challenge in the near term according to one FTSE Russell Survey of advisors from RIAs, broker-dealers, and asset managers in May, which found 79% do not currently use direct indexing, a major application of SMAs, in their business.