This news is a bit dated, but it means that we hit our portfolio management acquisition trifecta. B-Ready joins the recently acquired list along with dbCAMS and Investigo.

B-Ready is an outsourcing solution that uses Schwab PortfolioCenter as the back-end. It was founded by Linda Bready (oh, I get it) in 1998.

From the press release:

The Open Finance Network is a leading provider of front and back office technology and service solutions for family offices and fee-only advisors. OFN’s end-to-end solutions empower trusted advisors to fulfill and amplify their vision by eliminating the administrative and financial friction involved in delivering best of class approaches across their business, wealth and portfolio management processes. OFN is based in Charlotte, N.C., one of the nation’s leading financial technology and services centers. The company has a full-time staff of approximately 100 people and has over $14 billion in assets under administration.

Davis Janowski at Investment News talks about Lab49, a new company that is developing financial services software for the iPhone. The company seems to be in direct competition with Pyxis Mobile, who is also delivering financial data to mobile devices.

Lab49 isn’t targeting the individual investor, opting to target hedge funds initially.

From the article:

“[We think] fund managers, trade operations, groups and institutions that are a little less hamstrung by deployments of enterprise wide applications and issues … will gravitate to the application and the iPhone’s abilities,” Mr. Jacobs said.

“I also see demand from clearing and custodian companies which do a lot of processing and need better ways to manage work flow remotely, and are looking to monitor the status and performance of their systems,” he said.

It’s fun watching a new financial software market being created. I’m not too sure I can picture my hedge fund manager making trades from his cell phone, but it will be interesting seeing whether either of these companies get any serious penetration.

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.

Morningstar bought dbCAMS+ maker Financial Computer Support (FCSI) yesterday, with the intention of integrating it into their Principia product line. This is an unexpected move that has me scratching my head a bit. dbCAMS is a low-end legacy product that usually isn’t even included in reviews of portfolio management systems. To be blunt, nobody took them seriously. I’ve always thought that was unfair and I’m glad to see somebody else agreed.

From Morningstar’s letter to their clients:

We have seen strong demand for integrated portfolio management solutions like this in our Web- based investment planning platform, Advisor Workstation Office Edition, and felt that offering a similar capability in our Principia suite would be a valuable enhancement.

We plan to incorporate dbCAMS+ into the Principia product line and rebrand it within the next year. By bringing these two software applications together in a single product suite, advisors will have powerful options for integrating investment data and analytics with client performance reports.

…The addition of dbCAMS+ will allow us to offer portfolio management systems, integrated with traditional Morningstar research and analytic capabilities, in both a web-based and CD-ROM software-based solution.

They’re coming out with an integrated desktop suite that they can sell in parallel to their Advisor Workstation product. I’ll bet Morningstar thinks they can clean up the dbCAMS front-end, and turn it into a viable contender in the desktop portfolio management space–a third option that people will eventually consider alongside Advent Axys/APX and Schwab Portfolio Center. I wonder if Morningstar is planning any more acquisitions to round out their desktop suite. Legacy technology aside, they may be able to buy up a low-end desktop suite on the cheap.

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I got an e-mail from Chris Willis at Pyxis Mobile today, announcing the launch of their company blog. I’d never heard of their company and checked it out. Pyxis makes a mobile portfolio/contact management application tailored toward the financial services industry.

Pyxis takes your financial data and delivers it to you on your mobile phone. I’m not sure how much demand there is for this; I can’t remember anybody asking for it five years ago at Techfi. I know that IAS is playing with mobile PMS on the iPhone, but it feels more like a developer boondoggle than a serious product effort.

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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.

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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.

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I haven’t seen this in print anywhere, but I’ve heard that Albridge sold for around $350 million. Advent’s current market cap is $1,150 million.

Wow.

Davis Janowski jumps on the all-in-one-software-is-dead bandwagon with a recent article in Investment News. The article largely documents the conversation flow of a vendor roundtable at the Chicago FPA conference. It’s peppered with depressing quotes from both advisors and vendors talking about how hard it is to make their software applications talk to each other.

Janowski says:

Problems come and problems go, but linking adviser tools so that data entered once can populate several software programs — that’s a problem that seems eternal.

I think that all the industry pundits have now thrown in the towel on integrated software except, possibly, for Joel Bruckenstein, who said nice things recently about both the Your Silver Bullet initiative and Interactive Advisory Software’s integrated solution.

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Investment News has a great article on Morningstar’s performance since their IPO in 2005. Amazing is the only word for it. Check out their performance against the Nasdaq and S&P over the last few years. Keep in mind that’s a logarithmic scale.

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