When RIA firms or those looking to start an RIA firm consider potential custodians for their business, most tend to think first about the big names in the business. These include the firms we covered in previous installments of this story: Schwab, TD Ameritrade, Fidelity, Pershing, LPL and Raymond James. There are, however, other firms that provide custody for RIAs. Some of these firms may be less well-known than the others, but less well-known does not necessarily mean less capable. In fact, depending on a number of factors including size and business model, some of the firms profiled below may be uniquely qualified to service your firm.
Trade PMR
Trade PMR is an RIA custodian based in Gainesville, Fla. Although it released its first web-based advisor workstation back in 1998, it is only over the last few years that the firm has been recognized for its technology prowess. The firm’s integrated Fusion workstation, released in 2013, garnered widespread acclaim in industry circles. Fusion’s success raised Trade PMR’s industry profile a bit, particularly among small- to medium-sized breakaway brokers who seem to make up a good percentage of Trade PMR’s recruiting success, but the firm is still not as well-known as perhaps it should be.
Recent enhancements to the Fusion platform, as well as some pending technology developments in 2016 may once again thrust Trade PMR into the spotlight. This past year, the firm made several enhancements to its Fusion platform. A number of the more notable enhancements relate to its portfolio management/performance reporting capabilities and CRM capabilities.
In the portfolio management/performance reporting area, Fusion now includes “Quick Snap” summary reports. There are four different reports that an advisor can choose from. Each is a single-page summary that covers various commonly accessed data points. Advisors can navigate to an account or a household and generate the one-page color PDF report. The report can then be pinned to the Fusion desktop or printed and delivered to the client. According to Trade PMR, these one-page reports are proving to be very popular with advisors.
In the area of CRM, Fusion now allows advisors to store and track information related to a task, client and account or to a group. Advisors now have the capability to build simplified work-flow templates for the first time as well.
A Fusion calendar is now available. It is compatible with the iCal standard, so advisors can share the information in their Fusion calendar with their Outlook, Google or Yahoo calendars, as well as any other calendar compatible with iCal.
One nice, “intelligent” feature of the calendar is that it can capture information from new account applications and other documents. So, for example, when a client fills out an application to open an account, the CRM can capture the client’s birthday and add it to the CRM system, including the calendar. Fusion can also populate the CRM with other relevant data, including anniversaries, service request due dates, required minimum distributions for IRA accounts—and more.
Looking ahead to the second quarter of 2016, Trade PMR has some major technology releases planned. At its 2016 Synergy Conference, slated to be held May 4-6 in Palm Beach, Fla., the firm is expected to unveil Earnwise, its next-generation technology platform. This platform is expected to offer all the functionality of the current Fusion platform, but with a web-based responsive design so it will work with any device, anytime, anywhere. It also offers a single platform that can support the advisor workstation, a client facing portal and a robo-advisor platform.
Initially, Earnwise will only support assets custodied at Trade PMR, but future versions should allow the aggregation of assets held elsewhere on both the advisor and client sides. Once the assets are aggregated, the plan is to enable reporting on those assets via the built-in Trade PMR reporting engine. At that time, clients will be able to view all of their consolidated assets in the client portal.
Earnwise will also enable Trade PMR to provide its advisors with robo-like functionality. Here’s how it will work: Trade PMR will provide advisors with a snippet of code that they can embed within their own websites. Prospects who click on the links can then experience a seamless, digital on-boarding process. The client will go through a risk assessment powered by Riskalyze, and the resulting score will map the client to a model portfolio with the appropriate level of risk. The paperwork can then be processed digitally to open the account. Once the account has been opened, the client can view the account by accessing the Earnwise client portal using any device.
In the initial release, Trade PMR will be partnering with one money manager, which it declines to name, for portfolio construction and management. It plans to offer additional managers for advisors to choose from thereafter. In a later release, Trade PMR will allow advisors to create their own asset allocation models and investments that they can map to Riskalyze scores. No release date for this functionality is available at this time. Pricing for this offering has not been finalized yet, but Robb Baldwin, the president and CEO of Trade PMR told me the likely cost of this program will be 25 basis points all in. Coincidentally, that is exactly the same price charged by AutoPilot, a similar service from Orion, Riskalyze and CLS.
Since the release of Fusion, things have been rather subdued, technologically speaking, at Trade PMR, or at least that has been the market perception. It appears that things are about to change. We can’t wait to see Earnwise.
Shareholders Service Group (SSG)
Shareholders Service Group, established in 2002, has a well-deserved reputation for service and value. The firm’s executive ranks include industry veterans such as Peter Mangan (formerly a senior executive at both Jack White and TD Ameritrade), Dan Skiles (former vice president of advisor technology solutions at Charles Schwab & Co.) and Barry Boyte (formerly an executive at Jack White).
SSG’s technology strategy is a bit different from that of many competitors in the RIA custody business. Rather than build its own custodial platform or other capabilities, the company partners with leading firms in the industry to deliver integrated solutions that meet the needs of its advisors. For example, rather than building its own custodial platform, it leverages Pershing’s NetX360 platform for its advisors, but customizes it for its RIAs. A similar strategy applies to third-party technology providers. By leveraging its advisor base, SSG can either provide a customized version or discounted pricing to advisors on products supplied by vendors that they partner with.
“2015 was a huge year for technology at Shareholders Service Group,” says Dan Skiles, president of SSG. The firm leverages Pershing’s NetX360 platform, which went through a major upgrade in 2015. Skiles says that SSG released the new platform to SSG advisors in 2015, but the version that SSG rolled out contained significant customizations that optimized it for use by SSG RIAs. In addition to the platform rollout, SSG also provided something often overlooked by RIAs: technology training on the new platform. Training allows advisors to get up to speed rapidly on the new platform, and it allows them to more fully leverage the new capabilities.
This new release embraces the Windows 10 tile look and feel. For those advisors already familiar with Windows 10, the interface should be very comfortable. The search capabilities are much improved as well. Type in the clients’ names, and you see all information relevant to them, including their accounts, the individual investments they own, and more. Results can be filtered to narrow one’s search.
This past year, SSG established new third-party vendor relationships and enhanced existing ones. These relationships provide integrated solutions with the SSG platform. The firm added Junxure Cloud and an integration partner. SSG now offers Laser App Anywhere to its advisors. It also established a relationship with Vestorly, a content marketing solution for advisors. And it established a relationship with WealthAccess, a digital wealth reporting and investment monitoring solution for advisors. This provides mobile access, account aggregation and reporting to clients, as well as data mining capabilities and other functionality to advisors.
SSG’s relationship with MoneyGuidePro’s financial planning software continues to grow. There are now almost 200 SSG advisors subscribing to MoneyGuidePro. There are approximately 100 advisors taking advantage of SSG’s customized, discounted version of Black Diamond. The company also has a substantial number of advisors taking advantage of its partnerships with Envestnet, Morningstar, Orion TRX (now part of Morningstar) and AssetBook, according to Skiles.
For 2016, SSG has started a new partnership with ActiFi that will allow SSG advisors to leverage the latter’s Roadmap technology and monthly webinars hosted by ActiFi in which advisors can learn best practices and improve their business processes.
Scottrade
Scottrade executives responsible for advisor technology were very subdued when I spoke with them last year, but that doesn’t mean they were idle. There was an internal restructuring so the firm could better serve the needs of advisors. A new service center was opened. In addition, Scottrade released incremental upgrades to its platform for advisors at least quarterly, established some new strategic arrangements with third-party providers and strengthened existing ones. AdvisoryWorld, AssetBook, BOSS, E-Valuator, Oranj, Quovo, Sycamore and yHLsoft were among the providers added in 2015.
Other new relationships included Advicent, Advisor Websites, Everplans and PaperClip. In total, Scottrade has established 69 relationships with third-party vendors. Of those, 36 providers are focused on core functions such as CRM, financial planning, portfolio management, rebalancing and enterprise content management.
Of the 36 core software providers, there is some level of data integration, but currently only a few offer deep integration. Those include ASI, Laser App, MoneyGuidePro and Redtail. Others may share data through daily file exchanges or FTP.
2015 was also the year that Scottrade enhanced advisors’ ability to do things on the platform that formerly required the intervention of a Scottrade staff member. Improvements to the platform included a single multi-block trading page, a dashboard with widgets, an enhanced message center and proactive alerts.
While much of the work accomplished in 2015 took place behind the scenes, we expect some notable improvements this year. According to Brian Stimpfl, senior vice president of program strategy and operations at Scottrade Advisor Services, his firm will deliver significant technological advances in 2016 while maintaining the high level of service that its clients enjoy.
Perhaps the most important initiative of 2016 will be the company’s open application program interface (API) initiative. An open API will allow existing partners and future ones to more easily achieve deep, two-way integration with the Scottrade platform. As is the case with other custodians, Scottrade will vet vendors on a number of criteria, including security, before allowing an integration to go forward.
Another initiative is to streamline the account opening process with the goal of offering straight-through digital on-boarding powered by Laser App with e-signatures.
Yet another initiative is to allow Scottrade advisors to better work with third-party asset managers.
Taken in total, one can assume that Scottrade is hoping to offer its advisors a platform capable of competing with robo-advisors on price and features. Combine digital on-boarding, a risk profiling process and low-cost asset management with a good web experience for the end client and you have an answer to the digital platforms. Scottrade seems to be developing those capabilities.
Finally, Stimpfl suggested that Scottrade would offer a turnkey technology platform for advisors, much as Fidelity did initially with WealthCentral and Schwab does with OpenView Integrated Office. The goal is to provide competitive pricing, tight integration and the ease of adoption and use for those who want it. “We want to make things easy for advisors,” says Stimpfl.
Parting Thoughts
While just about every custodian we’ve covered over the last several months offers similar core functionality, there are differences in their approaches to technology. Advisors who invest the time to determine the best technology fit for their firms will be richly rewarded!