Ron DeCicco, the CEO of Pershing, provided some state-of-the-company remarks that shed some light on the state of the advisor industry during the opening session at the Discover 2014 conference for Pershing’s broker-dealer clearing clients in New York on Monday.
First, DeCicco noted that Pershing’s parent, Bank of New York Mellon (BK), now has $1.65 trillion in assets under management, a 7% increase from 2013, and $38.3 trillion in assets under custody or administration, up 3% from last year. Pershing itself, which is celebrating its 75th anniversary in 2014, has $1.5 trillion in global client assets and $41.3 million individual U.S. securities positions. Through September 2014, DeCicco told attendees, equities account for a higher allocation this year, and ETFs account for 6% of all securities. “You’re moving toward lower expense fee products,” he told the primarily independent broker-dealer attendees, while investor confidence is “inching back up.”
Those investors, notably the high-net-worth and ultra-HNW, are increasingly interested in alternative investments, he said, driven by both advisor and end client demand; since September 2013, alternatives in Pershing client accounts have increased 33%, DeCicco reported. The mass affluent are embracing alternatives as well, he said, and for the same reasons: a desire to achieve true diversification and receive steady income.
Reacting to that interest in alts, in June Pershing introduced the Alternative Investment Center, accessible by advisors through the NetX360 platform. The Center provides research on alternatives from Morningstar and Blue Vault Partners, comparison and screening tools and white papers and other commentary, allowing advisors to research up to 2,300 alt products, including hundreds on Pershing’s Alternative Investment Network and no-transaction-fee platform.
However, the aging of the advisor workforce is a serious problem, with DeCicco saying that while the need for advice is increasing, there is an anticipated shortfall of 237,000 advisors to meet that growing need. Pershing stands ready to “help you recruit younger and more diverse” advisors to fill that need, he told the audience.
DeCicco also announced upgrades for NetX360, including the ability for advisors to “personalize” their interaction with the platform, and enhancements for its end client platform, NetXInvestor, where “advisor-client collaboration has been strengthened.”
Finally, DeCicco spoke of the importance of retirement planning to its broker-dealers, advisors and Pershing itself, noting that more than half of the 5.6 million accounts on the Pershing platform are retirement accounts, he said.
Early next year, DeCicco said Pershing will roll out the Retirement Plan Network, which advisors can reach through NetX360 and will allow users to research and select recordkeepers and asset managers for retirement plans in an effort to acquire new retirement plans and improve service to existing plan sponsors.