Once upon a time, using portfolio management software (PMS) was a simple process in many ways. You had only a few options for software, the most popular of which were Portfolio Technology Consultants Inc.'s Centerpiece or Advent Software's Axys running on your local personal computer. You got a data download to your PC, you ran your reports, you sent them to clients. Sure, it was labor-intensive and the data needed to be checked and the software didn't work and play particularly well with other applications you had, but what other options did you have?
Nowadays, things are not so simple, and you do have more options. You still have those two leading players, though one is now called Schwab Portfolio Center (the former Centerpiece) and the other is part of the Advent Office suite which includes trading and CRM modules (for updates on those packages, see page 35 and 36 of this month's Gluck Report). But change has come in the software's delivery options, formats, and prices, depending on your B/D affiliation, custodian, and the amount of assets under management. You can use a Web-based version of the software, and you can pick from a bewildering array of add-ons and supporting applications that help you comprehensively manage portfolios (our annual directory of portfolio management software providers which follows lists the options).
One of those add-ons could be SavingsBonds.com, Inc., which electronically tracks the value of U.S. Savings Bonds, or StatementOne, which provides consolidated portfolio accounting and performance reporting. But then there are the providers who don't fit easily into the PMS camp. Take FinancialCircuit Inc., for instance. This startup, based in Campbell, California, will provide advisors with help in managing an often-overlooked part of a client's portfolio--his liabilities. FinancialCircuit's Web-based program, called MoneyFind, will allow an advisor to pull together all a client's liabilities--mortgages, consumer loans, and other debt--and in real time find better, cheaper alternatives for that debt from thousands of lenders across the country, and the advisor doesn't even need to be licensed. Is that traditional portfolio management? No. Is it helpful for advisor and client? You tell me. But Adrian Nazari, CEO of FinancialCircuit, argues that advisors should treat a client's liabilities "with the same attention and weight as his or her assets."
Then there are the various ways you can avail yourself of the traditional PMS systems. Take TD Waterhouse, which announced in June the integration of Axys with Veo, the Web-based platform for its 2,500 affiliated advisors. Those advisors have the option of choosing fully-outsourced data reconciliation and reporting or the traditional advisor-hosted, standalone version of Axys, either at special pricing.
Or take DATAlynx. The new head of this trust company custodian, Dean Rodewald (longtime chief Skip Schweiss has been promoted to a new position with Fiserv Trust Services) argues that DATAlynx provides "a competitive technology offering in terms of advisors' ability to execute trades through the DATAlynx platform." He notes as well that the company is also expanding its brokerage capabilities through Fiserv's broker/dealer and clearing affiliates. But speaking from the trenches, Sean Waddell, DATAlynx's manager of technology, says that his conversations with advisors and PMS providers like Advent/Techfi lead him to argue that what advisors mostly want from their PMS systems these days is sophistication, and that client demand is driving that need. "Clients want security, tax sensitivity, and as much of an edge as they can get in an unstable market," Waddell says. That's why an RIA at DATAlynx can use any one of eight different interfaces with existing PMS systems. Flexibility and sophistication are crucial in today's market, Waddell says, because the ability to create those interfaces is relatively straightforward: "You can't just build a nice little Web-based mutual fund trading program anymore."