As educational editor of the 2013 TechLeaders Conference held on March 13-15 in Irving, Texas, Beacon Strategies LLC contributed to the conference’s goal of developing thought leadership for broker-dealers of all sizes.

The firm sent a questionnaire to senior executives at a majority of U.S. broker-dealers with 25 or more investment professionals with questions on technology preferences and vendors, social media usage and trends, completed or planned technology initiatives and technology budget and staff. More than 80% of the major independent and insurance broker-dealers in the United States responded. Click here to read about the rise of cloud/SaaS solutions, the importance of high-quality data and how the way broker-dealers use social media has changed over the past year.

To evaluate which third-party providers are winning broker-dealers’ loyalty, we divided this year’s survey into three groups: advisor-centric, operational support infrastructure and management oversight/risk control. In each group and by category, we asked survey participants which solution they have adopted. (Answers may exceed 100% due to multiple providers.)

Figure 1: Tech Solution Providers: Advisor-Centric Group

Provider Category

Leaders by Market Share

Social media outlets

LinkedIn (68%), Twitter (47%), Facebook (26%)

Client relationship management

Redtail Technology (33%), (28%), Ebix SmartOffice (21%)

Financial planning

NaviPlan/Financial Profiles (50%), Money Guide Pro (47%), eMoney (44%), Finance Logix (13%)

Annuity due diligence

Morningstar Annuity Intelligence (38%)

Forms management

Laser App (71%), Quik! (38%)

Pure-play data aggregation

CashEdge (30%), By-All-Accounts (17%)

Data aggregation and performance

Albridge (58%), Broadridge Investigo (38%), Morningstar Enterprise (21%), DST Vision Professional (17%)

As the only pure-business outlet among leading social media, LinkedIn has posed fewer compliance challenges than Twitter and Facebook, so it has been the first adopted (given permission) by many firms. However, Twitter has gained ground, moving solidly into second place. Since last year, Twitter’s approved media rate has increased from 7% to 47% while Facebook stayed relatively flat (25% versus 26%).

In other advisor-centric categories, the major share-gainers this year were Quik! (from 9% to 38%), Broadridge Investigo (from 19% last year to 38%), eMoney (from 33% to 44%) and By-All-Accounts (from 11% to 17%). We believe this is a function both of firms offering advisors greater choice in solutions as well as the implementation of several enterprise level projects amongst larger firms

Annuity due diligence is a relatively new category currently dominated by one vendor, Morningstar Annuity Intelligence. However, there is room for growth because 33% of firms say they currently support annuity due diligence reviews manually, while 29% have no solution.

This means that almost two-thirds of our survey universe has no automated solution for what is considered to be one of the most labor intensive compliance processes. 

Figure 2: Tech Solution Providers: Operational Support Infrastructure Group

Provider Category

Leaders by Market Share

Account opening

Pershing NetX360 (38%), Docupace ePACS (21%), SunGard Onboard (13%), Laserfiche (13%), National Financial (13%)

Document management

Docupace (24%), Laserfiche (13%), Albridge Document Management (8%)

Operational books and records

DST Brokerage Services (8%)

The account-opening category is relatively mature, and established vendors are holding share. In document management, Docupace has surged into the lead due to its integration of document management and account opening workflow. There is room for growth and competition, particularly by other innovative vendors. No vendor has yet staked a strong claim in operational books and records, a segment where 38% use proprietary solutions and 67% use a variety of smaller niche software providers.

Figure 3: Tech Solution Providers: Management Oversight and Risk Control Group

Provider Category

Leaders by Market Share

Compliance surveillance

SunGard Protegent (30%), Actimize (13%), DST Subserveo (4%)

Social media oversight

Smarsh (32%), RegEd Arkovi (23%), SocialWare (14%), Global Relay (14%)

Business intelligence reporting

IBM Cognos (13%)

Compensation management

Xtiva Solutions (14%), Techmate C5 (14%), M&O Systems (11%)

Thirty-nine percent of firms say they use proprietary solutions for compliance surveillance, but third-party vendor adoption has increased modestly since last year. Leader SunGard Protegent’s share increased from 25% to 30% and Actimize (a combination of Nice and Albridge) from 12% to 13%. A contributing factor for the slower adoption of third-party solutions is the intensive and extended implementation periods required. As data management becomes more standardized within firms, we believe that there will be an acceleration in moving to third-party compliance solutions.

In social media, Smarsh retained its leadership position with a 32% share (no change from last year). This year’s big gainer in the category was RegEd powered by Arkovi, which moved into second place with a 23% share.

Business intelligence reporting and compensation management remain wide-open categories, without clear share leaders. Forty-two percent of survey participants do not have a business intelligence vendor, and 18% of firms use proprietary compensation management solutions. In the business intelligence space, we believe that the market will grow based upon the consistently increasing traction of data warehouse/data mart solutions. The fact that 18% of firms still use a proprietary compensation management system despite the plethora of third-party vendors is an indication of the degree of legacy data management issues still faced by many firms.


Click here to read “Three is NOT a Crowd in the Cloud: The 2013 TechLeaders Survey,” or browse all of our TechLeaders coverage.