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Advisors Test Drive PCR

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So what do advisors think about PCR? Hillview Capital Advisors of Ardmore, Pennsylvania, is an advisory firm Chris Snyder referred me to as an example of what PCR can do. While it was not one of a dozen advisory firms that were given Web demos at my request, Hillview’s experience is real and it is an advisory firm to the super-wealthy.

“We have struggled for years with reporting and technology,” says David Spungen, co-founder of Hillview, which manages $700 million for 75 clients. Spungen says clients have a median $10 million of investable assets, and numerous clients have net worths from $30 million to $100 million, he says.

To test PCR Insight, Spungen several months ago handed over one of his most complex clients to Snyder. “I said to Chris, ‘If you can do this, I’m sold,’” recalls Spungen. “He did it.”

PCR Insight, according to Spungen, electronically replicated reports that Hillview had for years created manually. “The amount of time my guys now spend on that client went from one week to a couple of hours,” says Spungen, who now has all 75 of his clients on PCR Insight and is checking data before giving clients access to it.

Tom Connelly, an advisor at Keats Connelly & Associates in Phoenix, was initially unimpressed after seeing PCR’s Web demo. “I already give my clients reports from a combination of electronically downloaded sources and manually inputting the other assets,” he says. “But when I got to thinking about how I can scale my business, I realized that PCR could be valuable.” Connelly also says that allowing clients to see their detailed balance daily would allay a great fear of the super-wealthy: that they might somehow misplace a few hundred thousand dollars or more because their affairs are so far-flung.

Still, getting advisors to the super-wealthy onto PCR is likely to be a challenge because advisors are generally cautious about adopting new data warehouses for their businesses and allowing outside vendors to maintain and reconcile all of their data. Tanager Financial Services in Waltham, Massachusetts, is an example of this.

Tanager offers a multi-family office service to 40 clients with more than $25 million in investable assets, and also serves 125 clients with below $25 million in investable assets. While Tanager puts together portfolios of mutual funds and manages them for the under-$25-million clients, its primary role with its super-wealthy families is as a consultant and financial planner. “A lot of clients who come to us at first are focused on investments and realize after a few years how much more there is to the equation,” says Stephen Bobo, chair of the investment committee at Tanager. He says super-wealthy individuals come to value advice about trusts, their investment managers, and the open architecture that lets Tanager offer them advice on best-of-breed products.

Bobo says his firm uses Centerpiece for portfolio management and reporting, but is frustrated by its limitations. For instance, Bobo says he cannot create a custom benchmark in Centerpiece that uses holdings of the large-cap managers Tanager uses. That’s because some of the holdings are classified by Centerpiece as small-caps or mid-caps. “Centerpiece is versatile and is pretty good at what it does,” but the institutional-level advice that his super-wealthy clients seek can be hard to deliver on a system geared to advisors serving the mass affluent.

Although Bobo finds PCR intriguing, he says that it could be too expensive. Plus, convincing the firm’s principals to store client data on a Web-based application would be a tough sell, and he has doubts about whether PCR can deliver pricing promptly on assets such as commodities, because while an estimated price may come daily, it can take days to get a final valuation.