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Orion to PortfolioCenter Users: Try Us for Free!

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Orion Advisor Services is moving fast to take advantage of Charles Schwab’s recent decision to sell its PortfolioCenter platform to Envestnet Tamarac.

On Tuesday, it said RIAs seeking alternatives could use its portfolio-accounting technology for free for nine months. PortfolioCenter is used by about 3,000 RIA firms.

“More and more, we’re hearing from advisors that they simply aren’t receiving the level of support they expect from their tech provider, but how could they when in some cases they are one of 100,000 and working with a company trying to integrate over a dozen acquisitions?” according to Orion CEO Eric Clarke.

Vendors always need to take advantage of change in the marketplace, says technology consultant Craig Iskowitz of Ezra Group. “But you need to shock them and say, ‘Here’s a great reason to try us!’”

Saying that potential clients can spend nine months kicking the tires of Orion’s platform is “a great idea,” according to Iskowitz. “It means they can get some clients … who after staying on the platform for nine months [are] likely to stay forever.”

The PortfolioCenter rival’s plan, he adds, is a smart way to “gain some traction and get the message out to advisors.”

Feeding Frenzy?

When the Envestnet-Schwab deal was announced last week, industry consultant Tim Welsh of Nexus Strategy predicted that a feeding frenzy for PortfolioCenter clients could occur.

“The cloud is the future, and Schwab is definitely throwing in the towel on their advisor technology plans,” said Welsh, a former Schwab executive. “It creates tremendous opportunity for the other portfolio-accounting systems to pick off the thousands of [potentially] unhappy advisors who may feel betrayed and abandoned by their custodian.”

In addition to nine months of free use, Orion says it will give advisors dropping PortfolioCenter other tools, like free conversion and access to educational events.

“We invite anyone using PortfolioCenter to see how Orion can quickly and seamlessly replace their legacy tech,” Clarke said.

According to a poll of about 1,500 RIAs done last year by RIA In a Box, the largest portfolio management tech firms by market share were Morningstar, 28%; Orion, 15%; PortfolioCenter, 12%; and Black Diamond, 11%.

The RIA compliance software maker says Orion has been gaining market share with larger RIA firms. In this market segment specifically, it goes head to head with Black Diamond, Envestnet Tamarac and Addepar.

For the moment, it’s hard to say what the exact impact of Orion’s latest move is, Iskowtiz explains.

Inertia is a very powerful force,” he said. “I think most [PortfolioCenter] users may stay and see what happens. But [rivals] have gotta push.”

And Orion’s push is pretty aggressive, says Gavin Spitzner, head of Wealth Consulting Partners.

“With its reference to advisors being one out of 100,000 and integrating multiple acquisitions, Orion is clearly making a barely veiled reference to PortfolioCenter-buyer Envestnet,”  Spitzner said.

Plus, “Orion’s offer of nine months free for PortfolioCenter users is a bold shot-across-the-bow at Envestnet,” he explained, “and raises the stakes for Envestnet to execute on the transition smoothly and add incremental value.”

Envestnet’s Approach

For its part, the new owner of PortfolioCenter says it is up to the job, having maintained a 97%-plus renewal rate with Tamarac’s RIA clients since it launched the wealth management platform via training and other measures.

“We have been supporting RIAs using PortfolioCenter for over a decade, and are looking forward to welcoming any PortfolioCenter clients into our community of growing RIAs,” according to Andina Anderson, executive managing director of  Envestnet | Tamarac.

The firm also has a competitive plan of its own to keep rivals at bay.

“Additionally, we are providing some compelling promotions for PortfolioCenter users, including up to two years free for our award-winning portfolio management platform, for those firms that would like to consider upgrading,” Anderson explained.