Most U.S.-based advisors have probably never heard of StatPro Inc., but if Andrew Peddar, the firm's CEO of North America, has his way, that won't be the case for long. The firm, which was founded in 1994 and listed on the London Stock Exchange in 2000, is known today primarily for its portfolio analysis and asset valuation services. Today, it serves approximately 250 clients in 25 countries. Currently, the majority of these clients are asset managers, brokerage firms, banks, hedge funds, pension funds and other institutional managers.

In a recent position paper entitled, Why a Revolution in Front Office Portfolio Analytics and Reporting is Needed, StatPro calls for a revolution to make front-office portfolio analytics technologies smarter, faster and easier to use by replacing traditional, terminal-based systems with cloud-based platforms, simple reporting and always-on, user-friendly interfaces. It should come as no surprise then that StatPro has just launched a new product called StatPro Revolution, a cloud-based portfolio analytics and reporting solution.

StatPro Revolution provides in-depth portfolio analysis, including performance data, asset allocation data, attribution analysis and risk analysis. It does not replace your portfolio management and reporting software; it supplements it by tracking the performance of your models and providing the research/analytics for those models.

According to Peddar, institutional-quality analytical tools can be complicated and expensive. His firm set out to create a product that delivered quality analytics, but in a concise, consolidated manner that was less challenging to use and cost effective for the advisor. To a large extent, with Revolution, it appears that StatPro has succeeded. By using the cloud as a distribution channel, StatPro is able to offer high-end analytics at a price of $100 per portfolio per month.
The fee is not charged per user, but is instead a firmwide fee, so if a firm has five analysts, or 50, they can all view the portfolio for $100 per month. For a small firm working with a limited number of model portfolios, this pricing is very attractive. When there are a large number of portfolios, or when there are large clients, StatPro offers alternative pricing models.

Kicking The Tires
I recently signed up for a free 30-day trial so that I could try out the product for myself. The trial comes loaded with a couple of model portfolios, an equity portfolio and a fixed-income portfolio, which saves time should you want to try it out yourself.

The application is divided into six sections: Admin, Analysis, Presentation, Publish, Research and Support. All sections are fully operational except the Publish section, which is currently under construction. This section will eventually allow advisors to publish reports to "a private investment network." In other words, this will be a collaborative space or portal. Advisors will grant permission to colleagues so that they can securely connect, view and interact with reports the advisor has created. Once the reports are finished and approved, they can be shared with clients so that advisors can explain in detail how a portfolio was constructed and what factors influenced the portfolio's performance.

The Admin section is where you create your portfolios. In order to qualify for the $100 per month pricing, a portfolio can have no more than 200 assets. If your portfolio holdings exceed that amount, an additional charge applies, but this should not be an issue for the typical financial advisory firm. When you create a portfolio, you create the portfolio settings. You assign it a name and a code. From dropdown lists, you can assign additional attributes such as base currency (there's a long list to choose from), portfolio type (fixed income, balanced, equity, etc.) and a risk-free rate for comparison.

You can also assign a benchmark. You can select a standard one, or you can create a custom one. Market benchmarks are preloaded in the system. Some require a license in order to be used through Revolution. Benchmarks can be total benchmarks, meaning they do not contain the index constituents, or constituent-level benchmarks. The advantage of the latter is that you can run attribution and relative allocation statistics versus members of an index.

You can also set attribution defaults. For bonds, that might be maturity or modified duration; for equities, it might be asset class or sector. You can also set risk defaults (holding period, risk confidence level, frequency for statistics).
Market classifications come preloaded in the system as well. These include security type, asset class, country, region, GICS Sector, GICS group, fund type, fund category, modified duration and more. Custom classifications can be uploaded so that you can slice and dice the portfolios however you want to.

The Revolution platform comes with an extensive database of securities both domestic and foreign. If your portfolios contain assets that are not in the Revolution database, you can create custom securities in order to furnish a complete picture of the portfolio.

If your portfolios contain more than a few securities, you can upload them to Revolution rather than adding them manually. The application offers numerous upload choices. For example, if you just upload the holdings, the application will calculate their performance. If you've created your own security classifications, custom securities, or custom benchmarks, you can upload those as well. Once all the data is in the system, you can click on the Analysis tab to analyze the portfolio.

By default, the Analysis tab takes you to the Analysis Dashboard. It provides a summary of the details contained in the subsections of this module: Performance, Attribution, Asset Allocation and Risk. My default choice of portfolio to be displayed on the dashboard was the sample U.S. equities portfolio. It was benchmarked on a chart against the StatPro US 500.

The portfolio, benchmark and performance period can be easily changed using the dropdown menus at the top of the chart. To the right of the performance chart is the percentage value at risk indicator. Values range from 0 to 20, with values up to 4 falling in the green (safe) zone. Below the performance chart is a list of the top ten securities in the portfolio, their contribution to return, and the percentage value at risk for each. Also included: top three and bottom three sectors by weight and the contribution to return by sector. These last two can be adjusted by selecting another choice from the dropdown menu. For example, to display an analysis of a sub-asset class instead of sector, you'd simply select that option from the menu.

Much but not all of the data on the dashboard is linked to its respective subsection. If you click on the performance chart, you are transported to the performance subsection. This area is further divided into four tabbed areas. The first, Performance Overview, contains a larger version of the interactive performance chart, as well as two other charts that can be customized with the dropdown menus.

One displays contribution (at the security or segment level) or total return (at the security or segment level). The other can display various tables of statistics that the user can choose from. Other tabs allow you to drill down into portfolio details, create various charts related to the portfolio, and generate performance statistics (regression analysis, tracking indicators, etc.). Overall, the Performance section offers an impressive array of tools and statistics in an easy-to-digest format.

The Attribution tab allows you to view equity attribution and contribution to return statistics. The asset allocation section produces nice-looking graphs and charts for both absolute weightings and relative weightings.

The presentation area contains a set of report templates. These templates produce well-designed, graphically pleasing reports. These reports contain bar charts, doughnut graphs, tables and other elements. Currently, there are about ten templates to choose from. They include absolute return, absolute contribution, absolute performance, asset allocation, equity attribution, equity overview, fixed income, performance and value at risk. With the exception of the two performance reports, all the reports are generated in the landscape mode.

The Research section is currently limited to an equity market heat map by geographical area. You can see which markets are up or down over various time periods. I have been told that StatPro expects to enhance this section of the application over time.

The support section contains a number of articles on setting up the system and dealing with common issues. You can also access a StatPro Revolution Official Forum to receive support from StatPro staff, a user community forum, and a glossary. In addition, you can submit support requests here electronically and track the responses.

Initial Impressions
Given the fact that StatPro is new to the RIA marketplace, Revolution is an impressive initial effort. The application is easy to navigate and the tool set is impressive. In addition, it is multi-currency capable. If you load a set of portfolio holdings into StatPro Revolution, you can be performing meaningful analysis almost immediately.

There are, however, some areas that need work, and some additions that would greatly enhance the platform's value proposition. One work in progress is browser support. Currently, the Revolution team recommends that clients use Internet Explorer 7, 8 or 9 or Firefox 3 (or later). In order for Internet Explorer 9 to function properly with Revolution, the compatibility mode must be enabled. I doubt all users will immediately pick up on this.

Although Chrome and Safari are not officially supported at this time, StatPro says it plans to support them in the future. I did log on for a limited time using both Chrome and Safari. In some cases, they performed fine; in others, I ran into display issues or the browser froze. Given the current state of affairs, I can't recommend using Chrome or Safari; that's a shame, because generally I prefer Chrome.

I'm sure that many advisors will want to use Revolution with prospective clients to illustrate how the advisors' models have fared historically versus the prospects' current portfolios. A hypothetical tool, such as the one offered by Morningstar, or a proposal tool that incorporates a hypothetical comparison of the two portfolios would be a welcome addition to the current suite of tools.

The ten report templates currently included with Revolution are of a high caliber, but a wider variety of reports is needed. The ability to dynamically reposition the elements within a report would also be welcome, as would the ability to dynamically reposition elements on many of the screens within the program.

The support section is sparsely populated. The tutorials and instructions should be beefed up. The quantity of entries within the forums will no doubt grow over time, but early buyers are not going to be impressed with the depth of information currently available.

Ideally, advisors would like an application such as Revolution to integrate seamlessly with their portfolio management application, rebalancing application and/or their custodian/broker-dealer platform. This would eliminate the need for manual data entry. Currently, you can import data into Revolution, but a more seamless method of sharing the data between applications would be highly preferable.

Advisors who build model portfolios from individual securities need high-quality tools to analyze their portfolios, but few need all the bells and whistles that the typical institutional product offers. StatPro Revolution strikes a good balance between functionality and complexity, while keeping costs low, as long as you limit the number of models you create.

If you are in the market for a portfolio analytical tool, StatPro Revolution is definitely worth checking out. With the 30-day, risk-free trial available here (http://info.statpro.com/statpro-revolution-free-trial-account), there's nothing to lose except a bit of your time. StatPro Revolution currently has a good deal of appeal; with a few tweaks, it can be even better.