Portfolio management software isn't as scary as it used to be.

Gone are the days when advisors worried about being trapped by a program. The dominant apps, Schwab PortfolioCenter and Advent Axys, have held on to their dominant positions. However, a few apps have risen up to challenge that dominance, and it's now easier to move away. This report covers two fast-growing PMS solutions, Orion Advisor Services and Black Diamond Reporting, as well as a brand new entrant, FinFolio.

The challengers are very different from the established leaders. They have not been burdened by legacy technology. Nor have they had thousands of firms using their systems in the past, which can hamper change and stymie improvement. Not only are they different from their elder competitors, they're also different from each other.

Black Diamond Reporting. This software is growing the fastest of the newer PMS providers. CEO and founder Reed Colley says BDR now has 170 clients, double the number 18 months ago. The system is now used to manage $35 billion in assets, and BDR has 44 employees.

Unlike traditional desktop PMS systems, BDR bundles service with a Web app for advisors to manage portfolios and report on performance. So you're not just buying software, you're buying a service bureau that will download all your transactions, reconcile your positions against custodial systems and scrub the data in case there are any errors.

About 40 of the advisory firms using BDR's platform are managing individual securities, Colley says, while 24% are primarily outsourcing to separate account managers. The remainder are predominantly managing money in mutual funds and ETFs. BDR's ideal advisory firm client manages $300 million on average, and $80 million at the least.

Colley says a new version of the program will go into beta at the end of December and the beta period will probably last about six months. It is a significant overhaul of the BDR interface and will promote usability. The new version of BDR is called "Blue Sky" because it's like a blank canvas on which you create your own way of looking at your portfolios. "It's like iGoogle meets iPhone and Salesforce," says Colley.

While Colley was not prepared to show the new interface yet when I interviewed him in mid-November, he says it features the now-familiar drill-down capabilities of more modern interfaces in the main body of the screen, allowing you to drill down from a portfolio to an account and then to individual transactions. This is a big improvement over the desktop apps, which require you to run a report to see data at different levels.

The big new improvement to the interface is in little content windows called "Sky Boxes" and pre-customized report pages, called "Sky Pages." Sky Boxes are small snippets of data and report parts. "We will launch with about 20 Sky Boxes and hope to have a library of 100 Sky Boxes by the end of 2010," Colley says. Each user in a firm can choose from the library of Sky Boxes which ones they want to display on their dashboards. The boxes appear on the sides and bottom of your page.

Depending on your role in a firm, your Sky Boxes could include your last five transactions, a pie chart graphing target versus actual asset allocations, a snapshot view of the last portfolio you looked at or live prices on stocks you want to watch. Later next year, Colley says a Sky Box will display alerts about positions out of balance with their target allocations.

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