Libretto LLC (“Libretto” or the “Firm”) is a software as a service (“SAAS”) company focused
on delivering digital advice systems and resources to aid other third-party advisors (each
an “Advisor,” and collectively, “Advisors”) in managing complex wealth. Libretto does not
provide services directly to retail clients. Rather, it provides a suite of services including
planning, investment advice and wealth management, among other services, directly to
Advisors, who in turn utilize Libretto’s platform to service their clients.
Libretto provides its investment advice exclusively through its proprietary interactive
website.
Libretto is currently registered with the U.S. Securities and Exchange Commission as an
internet investment adviser with its principal place of business located in Los Angeles,
California. Libretto began conducting its business in 2015 and became a registered
investment advisor in 2018. Libretto is controlled by its majority owner and Chief Executive
Officer, Jeffery Coyle. Trevor Coyle serves as Chief Compliance Officer of the firm.
Financial Strategy System
Libretto system
Libretto provides advice tools via its website. The scope of these software tools includes
financial planning, portfolio construction and wealth management.
Financial Planning
The Libretto Financial Planning system employs a priorities-driven planning methodology
that informs both portfolio construction and wealth management directives. Given a set of
client priorities (annual spending, travel budget, second home, college funding for
children, etc.) and financial resources (social security & pensions, liquid assets, semi-
liquid assets, illiquid assets, etc.), the Financial Planning system provides illustrative
calculations comparing estimated needs with resources. On this basis, the Financial
Planning system provides context to the Advisor that can be used to evaluate the
sufficiency of financial resources in meeting stated client priorities and objectives.
The financial plans are presented by the Advisors to their end clients. Financial Planning
recommendations from Libretto’s Financial Planning system are not limited to any specific
product or service offered by a registered investment adviser, broker-dealer or insurance
company.
Portfolio Construction
Libretto’s portfolio construction process is comprised of a household-level Asset Allocation
system and account-level Trading tools.
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The Libretto Asset Allocation system is a liabilities-driven methodology that maps priorities
to asset allocation targets. Advisors may customize asset allocation targets to tailor
recommendations to clients.
The Libretto Trading system provides Advisors with tools that enable them to set account-
level asset allocation targets, which ultimately may be used to inform potential trades. The
Libretto Trading system does not offer any recommendations with respect to the buying
and selling of specific financial products; rather, it provides tools that allow Advisors to
fully customize targets to reflect the needs of their clients. As detailed in Item 5 Fees and
Compensation, the Trading system is available under certain packages but not others.
Wealth Management
Libretto’s Financial Planning system establishes an initial draft set of wealth management
directives that may be suitable to enhance the client’s overall financial strategy. These
directives may include estate, tax, insurance and other non-financial products or services
such as health care advocacy or trustee services. The directives serve as an initial draft
to enable Advisors to tailor a final set of wealth management products and services to the
unique needs and circumstances of each end client.
Complementary systems
Certain technology solutions are outside of the scope of Libretto’s tools but relate to the
ultimate implementation of Libretto solutions. Systems that provide such services are
complementary to Libretto’s delivery. They include, but are not limited to, data
aggregation, portfolio accounting and portfolio rebalancing.
Data Aggregation and Portfolio Accounting
Advisor firms manage client data within their respective systems and may input data into
the Libretto system manually or through established feeds with third party providers.
Libretto’s system imports client-level portfolio data from Advisors’ data systems and/or
custodial feeds. Advisors are responsible for the integrity and reconciliation of client data.
This data is captured and organized within Libretto’s system to inform planning, portfolio
construction, reporting and support trading.
Portfolio Rebalancing
Advisor firms may choose to use systems that assist in performing portfolio monitoring,
rebalancing and trade execution. While Libretto does not provide portfolio rebalancing
services, Libretto’s portfolio construction outputs may be used to inform solutions that are
ultimately implemented in external portfolio rebalancing systems. Advisors are
responsible for operating and maintaining their respective portfolio rebalancing systems.
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Delivery Augmentation
In addition to software tools, Libretto provides delivery augmentation services that are
intended to enhance Advisors’ client deliveries. Libretto’s delivery augmentation
includes webinar series, white label materials and other value-add
resources, such as
templates and diagnostics. These materials cover topics related to financial structure,
portfolio methods and wealth management. The depth of materials available will differ
across the various delivery packages referenced under Item 5 Fees and Compensation.
Professional Development
To streamline adoption, Libretto provides professional training resources intended to
expand the sophistication of a firm’s full advisory team. These resources include:
Training sessions – Libretto hosts training sessions on core Libretto methodology
and system use. These sessions are delivered periodically, and they accelerate
the learning process for new users while refreshing knowledge for more
experienced users.
Online training resources – Libretto delivers online training resources to promote
ongoing learning and enable quick access to detailed answers on methodology
and system implementation. These resources include videos, an on-demand
encyclopedia and intuitive guides, among others.
Implementation Support
To complement its software delivery, Libretto provides system implementation support.
During a new firm’s onboarding process, Libretto helps refine Libretto-related data
management processes, which typically includes instruction on configuring an integration
or defining best practices for uploads. Libretto also assists a new firm’s advisory team in
creating a few initial client case studies. Libretto’s client service team is available on an
ongoing basis to answer questions related to Libretto’s software tools.
Change Management Consulting
Libretto may be engaged, as part of existing SAAS agreement or on a standalone basis,
to provide consulting on business processes, wealth strategy design and implementation
of Libretto’s methodology and software platform. This service is designed to help Advisors
ensure a smooth implementation process, and it includes business planning, discovery
and research. We work together with the client to outline an implementation plan that
covers all business and client delivery goals.
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These change management consulting services extend beyond Libretto’s standard
Delivery Augmentation, Implementation Support and Professional Development
deliverables in that they are tailored to a firm’s specific needs. Consulting areas may
include:
Firm augmentation – Sessions and materials delivered to a firm’s leaders
focused on enhancing business value.
CIO augmentation – Sessions and materials delivered to a firm’s CIO and
investment team focused on enhancing the firm’s investment delivery.
Team augmentation – Training sessions tailored to the needs of a firm’s advisory
team.
Operational Projects – Projects related to a firm’s technology, data management
and operational workflows.
Additional System Perspectives
Libretto does not provide regular and continuous management of assets, and all advice
is generated using software-based models or applications on a non-discretionary basis.
Portfolios are based on the inputs of the Advisors in the application of planning, asset
allocation, asset location, product fulfillment and investment policy. Libretto’s systems will
assist Advisors in managing portfolios based on the end client’s individual objectives, time
horizons, risk tolerance and liquidity needs. As appropriate, Advisors may also review and
discuss their client’s prior investment history, as well as family composition and
background.
Libretto enables management of the Advisor’s advisory accounts on a non-discretionary
basis. Account supervision is guided by the client's stated objectives and liquidity needs,
as well as tax considerations.
Advisors may impose reasonable restrictions on investing in certain securities, types of
securities or industry sectors through the Libretto system.
Once the Advisor’s client's portfolios have been established, the Advisor may conduct
periodic portfolio and financial plan reviews with the client and rebalance the portfolio as
conditions warrant based on the client's individual needs.
Libretto will make initial illustrative investment suggestions which are not limited to any
specific product or service offered by an asset manager, broker-dealer or insurance
company. However, the Advisor may override or select its own investment
recommendations.
All investments involve some risk, and some types of investments involve certain
additional degrees of risk. Implementation of recommendations generated by Libretto’s
system should only be implemented by Advisors when consistent with the Advisor’s end
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client's stated investment objectives, tolerance for risk, liquidity and suitability, all as
determined by the Advisor.
Libretto’s system supports Advisors’ efforts to continuously iterate the financial plan and
portfolio to reflect changes in their end clients’ objectives, assets, suitability and
preferences. The system enhances the ability of Advisors to successfully communicate
with their own clients and reflect their wishes in their strategy.
Wrap Fee Programs
Libretto does not sponsor or participate in any wrap fee programs.
Assets Under Management
Libretto does not manage client assets directly, but rather supports the efforts of Advisors.
Therefore, it has no regulatory assets under management.