To Market! To Market!

Some people define genius as having original, unique thoughts. I think of geniuses as people who look at the same information as everyone else, but do so with a different perspective that allows them to draw unique conclusions from that data. By that definition, Ron Fiske, a Pershing managing director responsible for product management and distribution, should be a member of Mensa. At the 2006 Insite conference, I heard Fiske define the behemoth Merrill Lynch not with the expected descriptions as a great marketing engine or as the home of an elite corps of brokers, but as a loan machine. A very significant part of Merrill’s business, Fiske said in June 2006, was lending money to investors so they could purchase securities. Maybe, he suggested, Pershing and its customers should be in that business, too.

Pershing is the largest clearing firm in the business, but the range of products and services it offers to all its customers goes far beyond the quotidian routine of settling trades.

At this year’s Insite conference, Fiske rattled off no fewer than 13 new products and services introduced by Pershing over the prior 12 months–including a major effort in response to the court decision voiding the Merrill Lynch rule to help its correspondent B/Ds switch their fee-based brokerage accounts to managed accounts. Then Fiske energetically recited the list of enhancements scheduled for this year, including a new technology outsourcing firm called iNautix (see sidebar). Fiske, Pershing CIO Suresh Kumar, and Managing Director Marc Butler spoke to IA at the conference in early June.

You’ve got such a long list of products you’ve introduced or plan to. How do you determine which to offer?

We try to run it–to as great an extent as possible–as a customer-centric organization and let our customers vote. You have to be careful when you’re running a democracy, though, that it’s not the loudest voice at the right time [that gets listened to]. You can’t preclude that from happening, but you’ll see products and capabilities where a consensus builds among customers and across market segments. You keep the feedback loop tight, and we assiduously seek feedback, feedback, feedback. We conduct a series of 24 professional seminars around the world, and we get thousands of questionnaires back from investment professionals about what type of products we offer, what they’re interested in, and where we should go.

In addition to our senior executive retreats and meeting senior executives so you get a top-down view, you get a bottom-up view from investment professionals, and you get an overall market view–all of that is brought into the calculus of defining what we do.

We also try to be good partners. For example: HSAs–build versus buy? You have to ask what the upfront investment is in remediating our system to do it. Can we get to market faster through a partnership? I’m a big fan of speed to market and being nimble. We often think of partnerships as great ways to get into a market quickly.

You refer to your customers as investment professionals–who are they?

Pure RIAs, the dually registered who practice in both ends of the pool, and Series 7 investment professionals–the traditional broker. You’ve got to find a product set and suite that resonates across that entire spectrum. That’s easy to say and hard to do. Not everyone works that way, but I’ll give you a product that does: donor advised funds.