Technology is meant to simplify things, make the financial advisory business more efficient and save advisors time. When Mike Damas set up his independent RIA firm Maryland Capital Advisors in 2005, he found that the technology system he’d invested in was doing the opposite.
If anything, Damas and his colleague were spending more time than they should have been on tasks that technology should have taken care of. That meant they were able to spend less time on reaching out to clients to properly establish and grow the business.
In the decade prior to setting up Maryland Capital Advisors, Damas had gained significant expertise in the institutional bond market and he’d managed a hedge fund.
“I didn’t realize,” he said, “that the performance reporting system I’d invested in looked nice, but lacked in proper data management. Fixed income has some complexities that straight equities and mutual funds don’t, and early on, I realized that our performance reporting system just couldn’t get those, which meant I needed to be hands-on to get the data right.”
Damas moved on to another system that got the data right, but there, too, was a lacuna since the new platform was not up to the mark in terms of daily reconciliations with Maryland Capital Advisors’ custodians.
“Every morning, we needed to download the transaction and price files from our custodians and make sure all the transactions were accurately booked from the day before, so it usually wasn’t until around 10:30 or 11:00 a.m. on an average day that we had everything reconciled and we knew we could close the previous day’s business and start the new day,” Damas said. “If some days there were special situations that required extra time to reconcile, we hit a snag and often wouldn’t be done till 1:00 p.m.”
As his business grew, Damas – whose firm is now responsible for $180 million in assets under management – became more aware of what he needed his software systems to do in order to allow him to better perform his duties as a financial advisor, communicate with his clients, and reach out to and cultivate prospective clients.
He needed, he said, a comprehensive, all-in-one system that provided air-tight data precision, reconciliation, and a good client portal and electronic delivery system. His firm classifies fixed income in a different way than most others, he said, which tend to put it in a low risk asset category. He needed a system that could encompass a more nuanced definition of bonds, taking into account the fact that, for Maryland Capital Advisors, assets like high-yield and emerging market bonds are not low-risk assets.
“I also wanted a rebalancing tool that would help me with tax loss harvesting inaccuracies,” Damas said.
Once he hit upon Envestnet Tamarac’s Advisor Xi Suite, Damas did not need to look any further. And he believes he won’t be looking anywhere else for the foreseeable future.
The robust offering takes care of everything Damas and Maryland Capital Advisors require to make the business more efficient and improve outcomes for clients. Tamarac has, in his view, “a technological expertise that is far better than any other I’ve come across along the way.” The Tamarac team is also open to discussion and innovates their product based on the feedback that comes in from stakeholders like Damas.
“One of the biggest areas of improvement for me [is], since Tamarac is in data aggregation, the financial information from accounts that are not held at major custodial firms for clients with 401(k)s at third-party institutions,” he said. “We need to aggregate this data on a daily basis and include it in our daily reporting. Tamarac has shown me that they are leading the charge here, and I am pretty certain they’ll continue to do so.”
Tamarac’s integration with MoneyGuidePro, which Maryland Capital Advisors was already using prior to its investment in Advisor Xi, has also helped the firm’s business. It’s helped Damas and his colleagues communicate with the children of their clients, most of whom are millennials, and establish a dialogue with them through its trust accounting reporting function.
“We’re able to create an account that shows them the percentage of a particular trust account that they’re eligible for,” he said, “and set them up in the client portal to communicate with them as they move on in life and accumulate wealth and their investment picture changes. This is a two-way conversation, and having a tool that helps millennials understand where they are in their financial lives makes our job more efficient, and the conversation more enjoyable and productive.”
--- Read How to Determine Clients’ True Risk Tolerance on ThinkAdvisor.