When it comes to investment vehicles, advisors want everything, they want it cheap, and they want it carefully vetted before they decide to use it for their clients. So how does Pershing Advisor Solutions attempt to meet those often conflicting needs? Natalie Wolfsen, who became head of product management and development for PAS in July 2009 after holding a similar position at Schwab, says her team uses a four-point process to determine what products to include on the platform that considers the market size, growth rate, client need and competitive position of the vehicles. Then, using input from Jim Dario’s relationship management team and an advisor advisory board and questionnaires to clients to help it determine not just “what” but “how” it is delivered; is it integrated with tools and research, for instance?
Since, says Wolfsen, (left), PAS serves sophisticated advisors serving clients with complex needs, their focus is not on finding the cheapest ETF or producing proprietary products, but providing access to an open architecture platform with a wide range of products, especially global products and multi-currency trading. “We can best serve our advisors,” states Wolfsen, “by providing access to low-cost ETFs manufactured by everyone.”
Sandra Motusesky, director of investment solutions in the product management and development group at Pershing, uses the example of alternative investments as the “best example of where our product development is going right now.” The alternative investments on the Pershing platform, she says, “are designed around what the advisors need right now.”
That commitment to meeting advisor clients’ needs led Pershing, says Wolfsen, to be a beta participant “with DTCC and AIP to solve the issues industry-wide.” Now that the beta testing with DTCC and AIP are complete, Wolfsen says Pershing continues work “so alternative invests can be custodied on our platform.” Motusesky says one of the differentiators at Pershing is that “we didn’t say ‘Alternatives could be a problem,’ but rather ‘How can we make this work?’” Wolfsen puts it another way: “We understand that our clients need investment solutions to serve the needs of their clients. Alternatives perform an important role in portfolios, and we needed to find a solution.”
On ETFs, in addition to providing access to nonproprietary funds, Wolfsen says “We provide plenty of research—What are the ETFs’ track records? How wide is the bid-ask spread?—and provide a managed account platform in which ETFs are used.” On ETFs, Motusesky says “our value is in direct contradiction to the price wars going on right now. We’re not interested in going down that path.” And as for commission-free ETF trading, she wonders “What great value is that if you’re not an active trader?”
In comparison, Wolfsen says that one feature of Pershing that distinguishes it from the competition is its “natural evolution of understanding bank brokerage and trust custody. If you have a family office, bank custody may be more appropriate [rather than brokerage custody].” The next “logical solution” of Pershing’s NetX360 “single advisory tech platform,” she suggests, is for brokerage and the advisor; the next is making it global; and the final is determining, “How do we take this platform and make it a single portal into all aspects of your clients’ business? We can serve trust companies for irrevocable trusts, and bank custody that advisors need for cash purposes.”