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Pershing Democratizes Managed Accounts With NetX360 Tech Upgrade

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It’s all about democracy and the fee-based model.

That’s what AdvisorOne learned in a recent visit to the offices of Pershing Managed Account Solutions, when top PMAS executives laid out their goals for bringing what they describe as “a new world of opportunity for the broker-dealer and RIA” that involves helping advisors bring the fee-based business model to the mass market, using Pershing’s NetX360 technology platform.

Steve Dunlap, Pershing Managed Account Solutions “The bottom line is that managed accounts used to be for the wealthy. With the advance of technology, we can democratize the advantages of managed accounts in a cost-effective way,” said Steve Dunlap (left), co-president of Pershing Managed Account Solutions and a managing director for Pershing, a BNY Mellon company based in Jersey City, N.J.

The managed account space has always been something of a cottage industry for high-net-worth individuals, PMAS Managing Director Lisa Dolly elaborated. But over the course of the last 20 months, and at a cost of $40 million, NetX360 has seen a giant technology upgrade that extends PMAS’ reach from million-dollar high-end accounts to mass-market accounts as small as $25,000, she said.

“This cottage industry is on the verge of a revolution,” said Dolly, who recently joined PMAS from Pershing’s brokerage and commission side.

PMAS’ move comes a year after top executives from Lockwood Advisors, the separately managed account platform provider affiliated with Pershing, broke away to form a new company called Palladiem Partners, led by Lockwood co-founder and former CIO Donald Robinson.

Dolly dismissed the Lockwood executives’ departure as “anticlimactic,” saying their exit acted as a catalyst for Pershing to better integrate Lockwood into BNY Mellon’s culture. (For example, Pershing CEO Brian Shea said at the Insite 2012 conference in June that Lockwood is now working with BNY Mellon’s investment management unit to build separately managed accounts that invest globally.)

Lisa Dolly, Pershing Managed Account SolutionsNow, said Dolly (right), PMAS is focused on the democratization of managed accounts, integration of technology with managed account platforms, and data management solutions for multicustodial portfolios.

Dunlap added that Pershing-BNY Mellon has become the third largest provider of managed account solutions, with $250 billion in assets and more than 700,000 investor accounts. PMAS’ fastest-growing relationships are with small accounts, he said, noting that the fee-only model puts advisors and investors on the same side of the table.

“There’s no conflict of interest,” Dunlap said. “The business is seeing gangbusters growth. It’s exciting. We’re the biggest untold story in the managed account space these days.”

Read Clearing’s New Space from the September 2012 issue of Research Magazine at AdvisorOne.

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