Broadridge Financial Solutions acquired Investigo two weeks ago–I’m not sure how this one slipped under my radar. This is turning into an exciting month for portfolio management acquisitions. It really highlights the risk advisors take when they select a smaller startup vendor for technology/operations outsourcing.

A few years back, Investigo was the #1 stop for outsourcing portfolio management and reporting for advisors. I think they stumbled a bit with a botched rollout of their new version, but I haven’t heard anything new about them in the press for years. From the advisor side, I’ve heard slightly displeased rumblings but no specifics.

I know some of the Investigo crew and they’re good folks. I wish them well.

Andy Gluck has an interesting post on his blog about integrating web services. In it, he promotes the concept of Web Services being the new silver bullet for financial advisor applications.

From the post:

Web Services provide significant improvement in efficiency and savings. They free advisory firms from re-keying client data into multiple applications, which saves labor and reduces errors. Service to clients is also improved because you no longer have to input all of the holdings every time you do analytics on a portfolio. If your analytics program, say Morningstar Principia, can take a Web Service from your portfolio accounting application or get it directly from your custodian, you are likely to run your analytics program more often.

I’m seeing the "Web Services is the solution" theme more and more in technology articles about our industry. I’m going to disagree with the prevailing sentiment. Not only are Web Services not the solution, they actually make the fundamental problem *worse* from a vendor perspective.

Read the rest of this entry »

Joel Bruckenstein takes a skeptical look at Adhesion’s WealthADV platform over on Morningstar Advisor. It’s an interesting offering, but isn’t a generic portfolio management system and it requires you partially buy in to their account management philosophy, which focuses on UMAs. They network into various money managers who can manage specific accounts for you.

WealthADV is not a portfolio management system like Axys or PortfolioCenter. In fact, they’re actually using PortfolioCenter behind the scenes to run the platform:

Adhesion Technologies has made some astute decisions with regard to their portfolio accounting and performance reporting. They use Schwab’s PortfolioCenter for portfolio accounting (for example tracking tax lots) but they calculate performance using their own proprietary performance engine. “This is one of their competitive advantages”, says Gardner. Why?  Well, first of all, one of the major impediments to changing portfolio accounting systems is the data conversion. If an advisor currently using PortfolioCenter in-house wants to switch to an outsource provider that uses some other application, the conversion process will require time and an additional outlay. A move from PortfolioCenter to WealthADV does not require a conversion since Wealth ADV already uses PortfolioCenter. Since PortfolioCenter is probably the most widely used portfolio management and accounting system among Adhesion prospects, compatibility with PortfolioCenter is a big plus.

Read the rest of this entry »

ByAllAccounts provides data aggregation and reconciliation services to investment advisors; they were owned by State Street but State Street recently began seeking bids to purchase the ByAllAccounts unit. After reviewing offers from larger more established companies, State Street sold the business unit back to the ByAllAccounts management team, CEO James Carney, Martin Dickau and Ellen Dickau.

The team went to Commonwealth Capital Ventures to raise money for the buyback, coming away with $5 million–enough to purchase the company, and still leave ample funds to cover operating expenses. State Street remains a ByAllAccounts client.

Congratulations to the ByAllAccounts team, with a shout out to State Street for engineering a great solution. I’m sure they could have gotten more money selling to other buyers, but they took the best deal for ByAllAccounts’ clients.

I was talking to a friend I worked with at Investment Advisory Network and he reminded me of a little tool called MF.EXE that we used to troubleshoot imports. It’s a tiny little DOS program that quickly searches huge import files for account numbers, tickers, anything else. We used it for parsing custodial data to strip all of a client’s transactions out of the daily files and stick it into an individual client file. Once we could see all of a client’s transactions in one place, troubleshooting got much easier.

Say your out of balance report showed client John Smith’s (account 3923-1212) IBM stock having a share balance of 1,000.000, and the custodian says it should be 1,123.190. Before we even opened his account, we would run:

MF -e 39231212 IBM N:\ImportFiles\*.TRN

This would give you output like this:

From ADG123107.TRN:ADG 12310739231212IBM  249382 23.190  @43.329 12320 DIV…

From ADL121507.TRN:
ADL 12150739231212IBM  249382 112.000 @43.100 12320 SEL…
ADL 12150739231212IBM  249382 98.000  @43.100 12320 SEL…
ADL 12150739231212IBM  249382 11.000  @43.100 12320 SEL…

From ADG113007.TRN:
ADG 11300739231212IBM  249382 19.123  @40.990 12320 DIV…
 etc.

Read the rest of this entry »

UPDATE: I’m hearing the deal is >$100M.

PNC just acquired StatementOne Albridge. I hope it works out better for their clients than Techfi’s acquisition did.

From the press release:

The PNC Financial Services Group, Inc. (NYSE: PNC) announced today it has signed a definitive agreement to acquire Lawrenceville, N.J.- based Albridge Solutions Inc., a provider of portfolio accounting and enterprise wealth management services. Through relationships with 150 financial institutions and more than 100,000 financial advisors with assets under management that exceed $1 trillion, Albridge delivers an aggregate, single view of clients’ assets along with robust performance reporting and analysis. Albridge will increase the offerings of PFPC Worldwide Inc., PNC’s provider of global investment services.

Read the rest of this entry »

Andy Gluck at Financial Advisor Magazine has an interesting roundup of the customer relationship management (CRM) options for investment advisors. He touches on the two traditional industry options: Junxure and ProTracker. Next, I was expecting him to talk about some of the new web-based options that Joel Bruckenstein wrote about back in January. (I haven’t heard anything recently about Redtail, Upswing, Advisor Tools or Nation Builder.) But Andy didn’t mention them at all.

Instead, the article mostly talks about an interesting new option for wealth managers, XLR8. Its a custom template written on top of Salesforce.com, the best Internet CRM out there. I *love* Salesforce.com. They have one of the best web UIs around and have been leading the way creating an extensible web-based platform; this is how XLR8 built their product.

Read the rest of this entry »

Every once in a while I will hear this term. Whoever says it is generally talking about the panacea of integration. There has been a lot of progress in this area over the years and the growth is generally coming from Broker/Dealers.

Read the rest of this entry »

The latest article by Joel Bruckenstein is pretty good. It’s covering what the major custodians are doing to help their Advisors reign in technology. It’s interesting for a couple of reasons, number one, it shows that custodians really are trying to provide value added services, number two it highlights what the major recommendations are from the custodians.

Read the rest of this entry »

I did a post at the beginning of the year where I laid out the pricing models of all the current portfolio management software. Something that struck me then, and has continued bugging me, is the high cost of Schwab and Advent’s systems. They start at $8k and $10k respectively.

Techfi started out charging $2k and reluctantly raised our price to $3k in our last year or so. At the time (if memory serves) Advent had an entry-level product for around $2k and Schwab’s starting point was about $3k. I’ve been stumped trying to figure out how the price could have jumped so dramatically in just five years. Had it only been low because of pressure from Techfi? Well apparently Schwab has seen the error of their ways and is dropping the price on Portfolio Center.

Read the rest of this entry »