After signing up 98 new RIA "relationships” in 2010, bringing with them an average of $180 million in AUM, Mark Tibergien says Pershing Advisor Solutions is “carrying the momentum” from last year into 2011.
Thus far, Tibergien (left) said in an interview on Wednesday with AdvisorOne just before the formal kickoff of Pershing’s annual Insite conference, PAS has added “probably 100 new relationships” this year. Of those, about half came from other custodians, with the remainder coming from new RIA firms, including those formed by breakaway brokers.
These firms are attracted by Pershing’s “new-model custodian,” he said, which he characterized as a “B-to-B platform,” not an outgrowth of a retail model. “It’s a business relationship,” he said, where Pershing “anticipates where the market is going and then invests ahead of it." While acknowledging the strength of PAS’s competitors, some of whom may have “incubated” many RIA firms’ growth, he said that some of those firms that have joined Pershing questioned whether they “have outgrown my custodian.”
Some of them, too, are disenchanted when they “see a decline in attention from the top” of their custodians, noting in response to a question about Schwab’s recent decision to build financial advice franchises that “it’s such an in-your-face statement.” Contrasting that approach with Pershing’s, Tibergien said that “the more they extend retail, the more it becomes an issue for advisors.”
Assessing his accomplishments as CEO of PAS, Tibergien said “we’re finished with the foundation” of building that new-model custodian, noting in particular advances in technology and improvements in customer service. “We still have hiring to do in practice management,” he said, summing up his feelings as “pleased, but not satisfied.” Advisory firms are understandably “wary” about joining a new entrant to the custodial ranks, he admitted, but
“when you get to the $100 billion mark, people start giving you the benefit of the doubt.” He said assets under custody at PAS now stand at $92 billion.
Being part of Bank of New York/Mellon is positive for the business, he said, noting that “you don’t last for 200 years without the ability to innovate and dominate.” That backing is one of the reasons Tibergien says he has been able “to attract so many good people to our firm.” (See March 2011 Investment Advisor cover story for more on Tibergien's human capital strategy and interviews with some of those key people.)
Pershing is certainly committed to the advisory space broadly written (a point echoed by Brian Shea, Pershing CEO, in a separate interview to be published later), with Tibergien pointing out that “35% of the $1 trillion in Pershing assets are advisory” in one way or another, be it in broker-dealer assets, RIA assets, or prime brokerage.
Touching on regulatory and compliance issues, Tibergien wondered at the wisdom of “trying to create behavior out of regulation, and wondered if said regulation is a “proportionate response to the problem,” and if it is instead “impairing an important part of the American economy,” I.e., the financial services industry.
See more on Pershing Insite 2011 here.