Portfolio Pathways is a relatively new entrant into the portfolio management and accounting software space. Although the firm launched its platform in April 2007, it has done almost no marketing, so it is not well-known in the advisor or B-D community. Most of the company's business has thus come through word-of-mouth or through its Web site (www.portfoliopathway.com).

The company's core offering is a Web-based portfolio management and reporting application with a customizable client portal. As part of the offering, Portfolio Pathway downloads and reconciles data from your custodian daily.

The firm also offers optional services at an additional cost. For example, if you want to give clients monthly consolidated statements with data from multiple custodians, Portfolio Pathways offers it. The firm can also act as a service bureau-running, printing and mailing quarterly performance reports to clients for a fee. The company will also create client bills and mail them out.

Portfolio Pathways' management understands the needs of RIAs, independent B-Ds, and turnkey asset management programs. CEO Dave Miller formerly led many of the technology initiatives at Pershing Advisor Solutions. Before joining Pershing, he worked for an RIA firm in Chicago. Anthony Valente, the vice president of relationship management, is also a veteran of Pershing as well as Merrill Lynch. Kirk Greenberg, the company's chief technology officer, formerly served as the vice president of IT at Clark Capital Management Group.

I recently had a chance to take a brief tour of Portfolio Pathway's offering. While certain things need refining, the service looks promising overall.

Getting To Know Portfolio Pathway
The user interface is well designed-clean and easy to navigate. When you log on, you are taken to the "Ops Center," which functions as an advisor dashboard of sorts. The content is a bit sparse at the moment.

It contains two windows or widgets. On the left, there is a list that includes the advisor's messages, unassigned accounts and new accounts. There is also a heading for accounts missing household address information (necessary for the advisor to send clients paper statements and performance reports). For each listing, there is an "as of" date, so you know when the line item was last updated, and a column denoting the number of items in each category.

Each of the headings is a hyperlink, allowing you to click through and reveal the entire list. (If you click on the "messages" link, all the messages will be listed on the right. If you click on the "unassigned account" link, the messages on the right will be replaced with a list of unassigned accounts.) The information displayed in the list includes account numbers, account names, the custodian and the date opened.

At the top of the screen, users have access to a navigation bar that allows for easy navigation to the other main sections of the program. These are the "My Account," "Account Details" and "Admin Center" sections.

When you enter the My Accounts area, you default to the first of three tabbed pages: "Assets Under Management." At the top left is the valuation "as of" date, defaulting to the most recent valuation, usually on the previous business day. If you click on the drop-down menu, it will offer you access to the month-end data for previous periods. To the right is a summary box containing your total households and the total assets under management at the date specified.

In the main part of the screen, all households are listed, along with their value and the valuation date. If you want to see the details of an individual household, you click on the plus sign next to the household name and all of the accounts grouped under that household will be displayed. You can then drill down on any individual account to see all of the holdings. Should you want to see a detailed listing of all accounts and holdings, you can click the plus sign next to the Accounts heading at the top of the page and all the details will be revealed.

The next tab, "Performance," operates in a similar fashion. By default, households are displayed along with market value, month-to-date, quarter-to-date, year-to-date and since-inception performance numbers. If you want to view performance at the end of last month, at the end of the last quarter, at the end of the last year, etc., you select the date from the drop-down menu on the upper left hand side. If you want to see performance for an individual account or an individual holding, you drill down by clicking the plus signs.

The final tab, "Statement History," is self-explanatory. Consolidated statements are grouped here by household, within households by year, and within the year by quarter. All data in the My Accounts section can be printed to PDF files or exported to Microsoft Excel.

The "Accounts Detail" section is where you can sort and filter portfolio data in various ways. With the transaction tab, you can filter for a default period (ten days, 30 days, 90 days, etc.) or you can set your own custom range. You can further filter by activity type (buy, sell, dividend, etc.) or by asset type.

Under the "Holding" tab, you can run a holding report for any day you select, sorted by asset class. With the click of a button, you can view a consolidated report for all household accounts or look at an account breakdown. Included in this view is the cost, value and gain/loss information.

The "Report Center" tab is where you can run various miscellaneous reports for realized gains and losses, unrealized gains and losses, income and dividends, and fees.

The "Performance" tab is similar to the others. You select a period ending date, and the program displays data at the household level, the account level or the holding level, according to the selections the advisor makes. The advisor has the option of displaying a chart showing account values and comparing that with net contribution.

The "Documents" tab serves two purposes. One tool lets the advisor create a real-time statement on demand. The other allows the advisor to upload documents to the document vault.

The final tab in the "Accounts Detail" section is "Profile." Here, you can search or sort accounts by name, account number or Social Security or tax ID number, and from here click to get things like household information.

What's Hot
An installable version of the software is available. It is most appropriate for broker-dealers, turnkey asset management firms or a group of RIAs. When configured for an enterprise installation, it gives you additional features, such as the ability to set up work flows. For example, you can set up queues and work baskets for check requests and new accounts. You can then generate management reports on these going by user ID. You can also incorporate payout features for advisors as part of the billing system.

Other enterprise features include:
An imaging application that allows you to receive faxes or add documents as needed to a queue. These documents can be tied into work-flow items for approval.
An ID management feature that allows you to administer user IDs and manage roles and entitlements.
A composite reporting feature that allows you to create portfolio groups and manage insert/removal logs for composite group reporting.
The ability to create an in-house system. The application can be installed locally, giving the firm greater control over features and customizations when it is dealing with larger customers. (These features include file posting, reconciliation, and the management of securities and accounts, etc.)
A message center that can be used to post the status of cashiering and new account paperwork to advisors for their particular book of business or to the client portal if needed. It can also coordinate alert e-mails whenever new information comes in.

Although it's not readily apparent from the demo, Portfolio Pathway offers a decent library of reports that advisors can link to individual user IDs (attractive for individual advisors, who like to create custom on-demand reports). The company has expressed a willingness to create additional reports as requested by its clients. The document vault is another plus, as is the robust, configurable client portal.

Portfolio Pathway seems to have a good ongoing relationship with Pershing, so the firm can offer some particularly attractive integration options for those on the NetX360 platform.

What's Not So Hot
The Portfolio Pathway application has a lot of features that can't be directly accessed by most users. This can be an advantage or disadvantage, depending on your level of sophistication. The advantage is that it allows Portfolio Pathway to keep the user interface clean and simple. But on the downside, a job that you might want to do yourself might require intervention from the Portfolio Pathway staff. For example, Portfolio Pathway runs batch custom statements at regular intervals. You don't need to do anything; they do it for you.

The performance reports are a different story. Advisors can run as many individual reports as they want from the Web site, but there is no way to run the reports for all clients as a batch. Whenever you require a batch report, you must e-mail the company, which runs the reports and posts them securely to your Web site. Miller tells me that clients are satisfied with the status quo, so giving advisors self-service batch reporting is not a high priority for the company at the moment.

It's the same for transaction reports. You can run a report for a client or household, but not for all clients. Though the system can do it, the advisors can't. If you require a full global transaction report for a date range, you must e-mail Portfolio Pathway and they will generate it for you.

The company does not currently offer as broad a selection of reports as its competitors do, and the graphics are not as visually pleasing, even if they are competitive with those of other systems priced for value. The same can be said for some of the online reports. They are completely serviceable, but they overwhelm you.

Pricing
The price for Portfolio Pathway is attractive. For a typical small RIA or start-up, the package is $300 per month. This includes one of three statement templates, which can be customized for an additional setup fee. The package also includes the client portal with unlimited log-ins, the advisor-facing Web site with all the functions we've described, and the service bureau to handle data management. If the advisor needs non-standard requirements or a high number of custodial feeds, the company may apply a surcharge.

For larger firms, Portfolio Pathway usually offers a blended rate based on both the number of accounts and the advisor's assets under management. To give you a rough idea about the cost, an advisor with $200 million and 800 accounts on the system would pay $1,000 to $1,100 per month. Miller says his pricing for broker/dealers and turnkey asset management programs is competitive with Albridge and Investigo. He says that the price per advisor per month generally falls in the $150-$200 range, depending on the volume.

Portfolio Pathway also offers data conversions from other systems. The base price is $0.10 per account per month with a $1,000 minimum. The company can convert from most competing systems, including Albridge's.

Portfolio Pathway is still a work in progress, but it does have its attractions. Because some of its features do not show up in the advisor interface, the application is uncluttered and relatively easy to master for a system of this type. The small firm/start-up pricing is very attractive for those advisories that don't need all the sophisticated features offered by Advent APX or Black Diamond's BlueSky. Portfolio Pathway also looks attractive for some broker-dealers and turnkey asset management programs, particularly those that do business with Pershing.

If you have a sophisticated RIA firm accustomed to a high-end Web package, Portfolio Pathway will not interest you quite yet, but many advisors will find the combination of functionality and value appealing.