From the July 2010 issue of Investment Advisor • Subscribe!

July 1, 2010

RBC Is Not Pershing

Sidebar to the Cover Story "Your Next Custodian"

If truth be told, when Michael Kavanagh of RBC Advisor Services talks about "RBC's commitment to helping third party RIAs deliver the sophisticated solutions that their high-net-worth clients expect," (as he did in the June 15 press release announcing the closing of the JP Morgan RIA business), or as he did in a separate interview, that "we're not in the online trading business, but in providing advice to the high net worth," and that the RIA custody business has the institutional backing of a solid AAA-rated bank, it sounds eerily like Pershing LLC's value proposition for its Pershing Advisor Solutions (PAS) RIA custody unit.

PAS's CEO, Mark Tibergien (disclosure: he writes a monthly practice managementfocused column for this magazine) is fond of saying that PAS is only interested in advisors who are serious about growing their businesses, and that those advisors provide "sophisticated solutions for the complex financial lives" of their clients. Pershing, too, is backed by a global, AAA-rated bank.

But Kavanagh, respectful of his competition but still combative, is happy to point out what he sees as the RBC difference.

For example, on customer service, he says that "most of the other custodians, you can't get to a person," and "you can't access an expert who doesn't cost a lot of money" to help the end client with a complex lending or trust or estate planning issue. He boasts that "we have 200 people on the 20th floor (referring to RBC's Minneapolis headquarters)--our Primary Advisor Services Group--who only work with financial consultants on insurance, estate planning, stocks, and bonds." As for Pershing itself as a competitor, Kavanagh says that "Pershing will never provide advice; it's all about the throughput" instead, and seeks to add a further differentiator by saying "We're a natural partner for advisors; we have a service culture." Perhaps unintentionally completing the Jersey City-based Pershing differentiator analogy, Craig Gordon, an RBC Correspondent and Advisor Services director and Fidelity IWS alumnus, pointedly says that "our service culture seems to be especially appreciated by people from the East Coast."

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