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At Pershing Insite, CEO Shea Reveals Support Strategy, Upgrade Plans

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“Our business model is one of shared economies of scale,” says Brian Shea, referring to Pershing, the company of which he is CEO. Speaking of Pershing’s broker-dealer and RIA clients, he said “we leverage each other’s respective strengths.”

He believes the independent broker-dealer model is doing well, noting that in 2010, broker-dealers that clear through Pershing attracted more new accounts, and more assets, from the eight biggest Wall Street firms than accounts and assets that “went the other way.”

In an interview with AdvisorOne on Wednesday, Shea said bluntly that “the biggest pain point for broker-dealers is regulatory change.” To help its correspondent BDs deal with the pain, Shea mentioned the multiple sessions on compliance during the 13th annual Pershing Insite conference that is under way from June 8 to 10, a new minisite on called Industry Watch that delivers news and analysis on regulatory change, and a series of compliance calls that Pershing sponsors for its clients. Formerly quarterly, those calls now take place every six weeks, he said.

The other big pain point for BDs is their margin squeeze, which Pershing attempts to ameliorate by providing increased operational efficiency, particularly through use of the ever-expanding services on its NetX360 technology program. He notes that NetX360 now integrates four major CRM systems, and that more than 50 RIA firms that custody with Pershing Advisor Solutions have used its Business HealthCheck program.

In a speech on Thursday morning, Shea listed a number of initiatives the company had accomplished since last year’s Insite conference and what it planned to do in the remainder of the year, including spending $350 million on technology.

Among those updates:

  • Closed the acquisition of PNC Global Investment Servicing Inc., which included the account aggregation firm Albridge and Coates Analytics
  • Acquired Jefferies Group’s BD clearing and custody operations
  • Made a large investment in HedgeMark Solutions, a hedge fund managed accounts company
  • Had success with its Advisors in Transition program, which has been used by 6,000 reps, with 1,700 referrals made to BDs that clear through Pershing
  • Has received 8,000 requests for changes on NetX360, incorporating 4,000

As for enhancements this year and next, Shea said during the Thursday speech that a new-client preparation meeting tool will soon roll out, this summer will see a new client onboarding process, and over the next two years, all performance reporting will be done through Albridge on NetX360. By the end of 2011, NetX360 will see principle and income reporting for trusts and that by the first quarter of 2012, Pershing users will be able to fund and report on 529 plans.


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