Last month, in Part 1 of our coverage of RIA custodian technology we discussed how technology expectations on the part of both advisors and their clients are on the rise, and how custodians are an often overlooked technology resource for RIA firms. This month, we’ll examine how Pershing, Schwab and Raymond James are addressing the technology needs of their advisors.


Recently, Pershing’s investment in technology has been tilted more in the direction of the advisory business. According to Patrick Yip, director of advisory market technology strategy at the firm, factors such as the Department of Labor’s proposed fiduciary regulations and the growth in the advisory channel suggest that the advisory channel is where the future growth will be. 

In order to put Pershing’s technology strategy in perspective, it is important to understand who its ideal RIA client is. It is a professionally managed, growth-oriented firm that services high-net-worth and ultra-high-net-worth clients. These firms tend to be midsize to large RIAs with some sophisticated needs. Much of the work undertaken by Pershing in 2015, which will continue into 2016, was being made with this ideal advisor profile in mind.

Perhaps the most interesting initiative, which is already under way, is the merging of the bank custody platform and the brokerage custody platform into a single unit. Yip estimates that 15% of advisory assets are currently custodied on banking platforms, but those assets are not equally distributed across all advisory clients. Typically, the higher a client’s net worth, the more likely that some or all of his assets will be custodied on a banking platform. 

Pershing has already integrated the service model and the business development model of the banking and brokerage businesses so that an RIA firm doing business with Pershing Advisor Solutions (PAS) has a single team that supports both the banking and brokerage businesses. In 2016, the company will be rolling out an integrated technology platform. This will be accomplished by its integrating all of the functionality of the BNY Mellon bank custody platform into the existing PAS platform. 

Upon rollout, advisors will be able to view and manage all of their business through a single unified platform rather than the two they must now deal with. Furthermore, Pershing will extend this functionality to the NetXClient portal so that clients can access the same consolidated view as well as the other functionality that the client portal enables across all accounts. 

Other enhancements to the client portal are in the works. Eventually, these will include access to financial planning applications, account aggregation and secure document sharing.

The allure of a unified system should be obvious. Currently, advisors who have some client assets on each system must deal with two separate interfaces, two different work flows, etc. It is also more difficult than it should be to obtain an aggregated view of all of a client’s assets across the two platforms. For the same reason, clients need to log into two systems for access to their various accounts.

In 2016, advisors will deal with one system and one set of work flows. For example, if an advisor wants to open a new account (for either banking or brokerage), move money or perform any other common task, it will all take place within the same system. Furthermore, Pershing plans to build trust accounting capabilities right into the NetX360 platform so that advisors have the functionality they need to manage trust accounts from within the platform. 

The other big Pershing initiative is the Global Wealth Management platform. As the advisory business becomes increasingly complex, more and more advisors are doing business overseas. The global initiative will bring the functionality of the London and Australia offices into the NetX360 platform. This will include features such as overseas trading, multi-currency capabilities and multi-currency reporting. 

Pershing’s first foray into the digital platform space in conjunction with Marstone is slated for beta in early 2016. According to Yip, advisors have shown significant interest in the Marstone platform. Assuming the beta goes well, a more general rollout could come as early as the second quarter of 2016. Pershing has made it clear that Marstone will not be the only digital platform provider available through Pershing. The company plans on initiating additional relationships soon.

Pershing is also pushing ahead on the mobile front. Like many of its competitors, the company offers native apps for both iOS and Android. Unlike most competitors, it has also created a native mobile app for Windows. 

Finally, Pershing is moving forward with true digital client on-boarding, including e-signature capabilities and the digital funding of accounts, to help advisors better compete with digital platform offerings.