A dramatic growth in RIA firms using 280 CapMarkets’s cloud-based BondNav fixed income trading and software-based price discovery platform highlights the success of the company’s new features and other enhancements, according to Gurinder Ahluwalia, the company’s CEO and co-founder.
There are now 175-200 RIA firms using BondNav, he told ThinkAdvisor, up significantly from the 80 or so firms he said were using the platform late last year. The platform has $1.5 billion worth of trading volume each month, up from $500 million a year ago. This growth has come despite declining rates, he added.
What drives growth are the updates recently made to BondNav that the company said further streamlines bond investing and portfolio management for financial advisors and their clients. Those new features include: daily email alerts highlighting bonds that match user inquiries; an easier way to sell bonds; the ability for advisors to seamlessly monitor their portfolios, view search matches and obtain trade ideas, all within BondNav’s dashboard; and access to details on thousands of direct corporate and municipal offerings, the firm stated in a release.
The enhancements were made in response to feedback from independent advisors, Ahluwalia said, adding: “With the yield curve flattening and even inverting, advisors need every possible advantage to improve fixed-income returns for clients.”
He added that ”…. When you have close to 200 of these firms working with you, you start to get real input around what features are important around portfolio management [and] around really servicing it from their perspective.” Since adding the latest enhanced features, the company is already seeing that advisors are making use of the new functionality, he said.
The BondNav marketplace added corporate bonds to its mix in November and the middle markets are “starting to come online and show interest in what we’re doing [and] to use our platform as well,” Ahluwalia said.
In April, 280 CapMarkets said it was adding an enterprise client, United Planners Financial Services, and it’s looking to attract more enterprise clients, he said. His plan is for enterprise clients to become a “meaningful” part of his company’s business.
Asked if he was concerned about potential future market volatility hurting BondNav’s growth, he said: “Fixed income isn’t going away” and there will continue to be a “need for preservation of capital.” After all, even in 2008, “it wasn’t like things stopped — it’s just that prices … [and] valuations changed significantly.”
Although there is “a lot of trepidation right now” as well as an inverted yield curve, which has traditionally been a warning sign of a coming recession, he said it’s not quite clear yet if the curve was “driven more by the things that are going on, like trade talks and trade wars,” or whether the Fed needs to lower short-term rates. He admitted that he didn’t know what was correct, but said: “We’re going to find out.”
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