What You Need to Know
- Pershing will likely make more acquisitions as part of the build, buy, partner strategy it's using for Pershing X.
- BNY Mellon is making a multi-year investment in the new Pershing X business unit and advisor platform it's creating.
- Finding and retaining talent is the top concern of advisory firms now, according to Pershing's Ben Harrison.
Following its recent purchase of the direct indexing solutions provider Optimal Asset Management, BNY Mellon Pershing will likely make further acquisitions as part of its Pershing X strategy, according to Ben Harrison, co-head of wealth solutions and managing director at BNY Mellon Pershing.
Pershing X is the new business unit that the company announced last year. The aim of the new division is to “design and build innovative solutions for the advisory industry” and “accelerate Pershing’s delivery of consumer-grade digital experiences to its clients, as well as the broader marketplace,” it said in October.
The company is funding Pershing X as a startup, and tools and technology are being developed for the platform, which Pershing plans to “get iterative feedback from clients” on, Harrison told ThinkAdvisor on Thursday at the firm’s annual Insite conference in Grapevine, Texas.
The Pershing X platform will not be revealed publicly in “one big bang,” according to Harrison. Instead, after the Minimum Viable Product (or prototype) version of it is introduced, the company will continue to “iterate and build tools over time” for it, Harrison said.
The MVP of Pershing X is on track to be rolled out later this year, Jim Crowley, CEO of BNY Mellon Pershing, had told ThinkAdvisor.
As part of the build, buy, partner strategy that the company is using for Pershing X, “we’re going to build where we have strong capability and [can provide] meaningful differentiation,” Harrison explained.
But “we’re going to partner with others if it’s not necessarily right in our sweet spot,” he said.
“And then there’s going to be acquisitions that we make along the way, too,” Harrison told ThinkAdvisor. Optimal Asset Management’s offerings will play a key role in the prototype “around direct indexing that is going to be a core component of the Pershing X platform,” he said.
“But I envision other acquisitions along the way as well,” Harrison said. He didn’t name other companies that Pershing may have its sights on. As for the timing of other acquisitions, he said only that they would be “down the road.”
A ‘Good Opportunity’
“Technology transformation” is an area that Pershing has “been very focused on,” according to Harrison. Over the past decade, there has been a “significant increase in wealth tech and fintech coming in and providing really unique tools for advisory firms to utilize,” he said.
But “where firms are struggling [is in] knitting all of those together and getting the full power from them,” he said.
“So we think that there’s a really good opportunity for us to have more of a unified way in which to deliver an advice platform and to help those tools talk to one another,” he told ThinkAdvisor, adding, “That’s very much a part of the Pershing X story.”
A Major Investment
From a technology investment standpoint, “Pershing X is the most significant enterprise investment that we are making across all the businesses at BNY Mellon,” Harrison pointed out, echoing a comment made earlier by Robin Vince, president and CEO-elect of BNY Mellon, in an Insite keynote.