independent advisor custodial services market has in recent years been
dominated by the Big Three. Now, however, the dominating companies are
Pershing Advisor Solutions LLC has announced that its assets under custody have hit the $69 billion mark, which places it on the same competitive plane as Schwab, Fidelity and TD Ameritrade. Pershing is fighting it out for third place with TD Ameritrade, which placed its assets at $61 billion the latter part of 2006.
"We have been growing in leaps and bounds and we expect to continue to grow in leaps and bounds," said John Iachello, chief operating officer of Pershing Advisor Solutions.
Pershing LLC has actually been in the custodial services business for decades, but company officials say it wasn't until two years ago, when the company created Pershing Advisor Solutions, that it ramped up operations to pursue the market seriously.
In that time, the subsidiary has seen its assets under custody grow from just above $20 billion. The milestone that brought it to the upper tier of the market was achieved at the end of last year, with the acquisition of $10.5 billion in advisor assets from Neuberger Berman Management Inc.
The purchase enabled Pershing to increase its assets under custody by $25 billion from a year ago, according to Iachello. The company has about 480 advisor relationships, he added, including some who are dually registered representatives in Pershing's broker-dealer business.
Iachello says one of Pershing's strengths in the custodial market is an experienced and stable management corps. Members of Pershing's management committee have an average of 20 years experience with the company, he noted. This proved to be a boon during the formation of Pershing Advisor Solutions, he said.
"Because we had the stability of management, you could make long-term investments," Iachello said. "You could do and make the right choices for the long-term good of serving clients... We used that luxury to invest properly in technology and people."
Another key to growth, he said, is the "unconflicted" environment Pershing is able to offer independent advisors. Unlike Schwab or Fidelity, the company doesn't have proprietary investment products or a retail operation that can sometimes overlap with the client base independent advisors are attempting to serve.
"Everything we do and all our investments are on behalf of our clients," Iachello said.