A small Pennsylvania wealth manager recently made headlines with the launch of what it touted as the first actively managed automated investment platform. The platform, known as ALTS, is a wrap program offering access to actively managed mutual funds and ETFs via an online interface. As the name suggests, the platform is heavily seeded with alternative investment managers. The wealth management industry’s scornful response to the launch of the ALTS platform has been most notable for its vehemence. Passive investing rules the day, and automated advisors in particular appear affronted that anyone would question the mantra of buy and hold. The head of one prominent firm went so far as to describe the ALTS approach (that is, offering active management on an automated platform) as “adding cyanide to a cupcake.” But active management is not dead, not even in the algorithm-driven automated investments universe. On the contrary, active management occupies a small but privileged position within this universe, one that has its roots in an investing approach pioneered by FOLIOfn 15 years back and is perpetuated by a number of innovative online firms today. I’ll discuss these firms and their significance in my next post.