In a year marked by strong attendance at advisor and broker/dealer conferences despite a flat stock market, Pershing Insite, the show run by the big clearing and custody unit of Bank of New York, was anything but an exception to the trend. More than 600 advisors and B/D execs packed the halls of the Westin Diplomat Resort in Hollywood, Florida, to hear former Secretary of State James Baker praise the U.S. military and listen to Chief Operating Officer Brian Shea proclaim that Pershing and its clients are rushing to embrace fee-based business. Says Shea: “Pershing’s goal is to be the leading provider of fee-based solutions for broker/dealers and registered investment advisors.”
Shea noted that Pershing finished April with $703 billion in client assets, down $3 billion from the end of 2004 in a reflection of lackluster stock market performance. But the April tally is still up 14% from the $615 billion Pershing claimed at the end of 2003. Reflecting Pershing’s increased emphasis on fee-based business, however, client assets in no-load and other mutual funds increased by nearly $24 billion, to $178 billion, between April 2004 and April 2005, and assets in the firm’s Avail fee-based brokerage program grew by nearly 30%, to $11.7 billion.
He also disclosed that Pershing clients’ assets in Bank of New York’s Lockwood managed account subsidiary rose 14% over the past 12 months, to $25 billion. He noted than 40 of Pershing’s B/D customers have already done deals with Lockwood to offer managed account programs under their own brand names and are now rolling them out.
While managed accounts are growing in importance at Pershing, so is the firm’s custody business. Under the Pershing Advisor Solutions banner, Managing Director John Iachello is going after large asset managers as well as dually registered advisors who are affiliated with Pershing B/D clients but who also run their own RIA shops that custody assets with third parties. “Pershing Advisor Solutions is a subset of the Pershing RIA strategy,” explains Iachello, who adds that the firm is continuing to offer custody to affiliated B/D firms that themselves operate RIA businesses.”
Pershing Advisor Solutions is offering dually registered advisors a single platform that can handle both fee-based and commissioned business, Iachello notes. Pershing has also hooked up with Advent Software to offer discounted pricing on its Advent Back Office performance reporting and portfolio accounting application.