New efforts are highlighted at Pershing's annual INSITE conference.
Pershing LLC is aggressively pursuing opportunities
in the registered investment advisor (RIA) market segment, and has
renamed its key advisor support group as part this new push, company
officials said during Pershing's annual INSITE 2005 financial products
and service conference in June.
Pershing personnel interviewed during and after the
conference spoke in more detail about the company's plans and said the
firm is targeting two segments of the advisor market: dually registered
RIAs and fully independent RIAs. Within those segments, they said,
Pershing is primarily focusing on firms with more than $100 million is
statement equity.
"Our expertise, our core business, is providing
services to firms that in turn provide services to retail investors,"
said Paul K. Wichman, managing director of Pershing Advisor Solutions.
"Our business model is radically different from some of the other RIA
custodians. We don't compete for retail clients, and we don't try to
force advisors into a cookie-cutter system. We work very hard to
provide solutions that meet our clients' needs."
Pershing Advisor Solutions was formerly know as
Pershing Investment Manager Services, through which Pershing, a
subsidiary of the Bank of New York, has offered custodial services to
registered investment advisors for years. But they did not promote the
unit, which one industry observer characterized as the firm's best-kept
secret. It accounts for only about $40 billion of the more than $700
billion of assets held at Pershing, most through 900 broker-dealer
clients.
Pershing hosted the annual conference, INSITE 2005,
from June 15 through 17 at the Westin Diplomat Resort & Spa in
Hollywood, Fla. It drew more than 500 attendees (up 30% from 2004) and
89 exhibitors (up 23% from 2004).
Pershing representatives made it clear that they were committed to serving the needs of RIAs in the future.
Wichman said servicing dually registered RIAs is a
natural extension of his firm's expertise in catering to introducing
broker-dealers. By using Pershing services, dually registered RIAs can
consolidate all of their assets on one platform.
Trent Witthoeft, vice president of technology for
the group, cited an instance where Pershing created customized XML
feeds for a large institutional client as an example of Pershing's
ability to adapt its services to the client, as opposed to forcing the
client to adapt to them.
The centerpiece of Pershing's technology offering to
advisors is NetExchange Pro, the firm's online brokerage platform that
is currently used by more than 76,000 investment professionals. The
platform offers advisors access to client accounts (individually or in
groups), quotes, investment research, news, sales tools, online forms
and a wide array of third-party content.
Pershing has continued to upgrade third-party
content on a regular basis. Within the last year, they have announced
agreements to add analytics from Morningstar (a customized package that
includes research, hypotheticals and articles), Dow Jones NewsPlus,
annuity processing software from Blue Frog solutions Inc., and BNY
Jaywalk Consensus Metrics. The latter is an independent equity research
consultancy, which represents more than 150 independent research
providers covering a universe of more than 4,900 equities. BNY Jaywalk
aggregates the recommendations of all their providers into a single
consolidated rating, which will be available through NetExchange Pro.
In the area of portfolio management and reporting,
Pershing recently inked a deal with Advent Inc. to make Advent Back
Office Service available to their clients. According to Wichman, this
service will allow advisors to avail themselves of Advent's proven
portfolio management tools, while outsourcing data management and
information delivery to Pershing.
For financial planning software, Pershing has teamed
up with EISI to make both NaviPlan Standard, a goal-based financial
planning package; and NaviPlan Extended, EISI's sophisticated cash-flow
based financial planning program available to Pershing customers.
NaviPlan Standard is integrated into the NetExchange Pro platform,
while Extended is a standalone offering.
Pershing offers a mortgage origination program in
conjunction with Everbank from within the NetExchange Pro platform.
Once an application is submitted, the advisor can track the
application's progress from within the NetExchange platform.
Turnkey separate account services from a number of
providers are available through Pershing, including Lockwood, another
BNY affiliate, AssetMark and EnvestNet. Within the next three months,
the firm will begin offering unbundled separately managed accounts as
well.
Wichman cited Pershing's execution capabilities as
another strength. "We regularly deal with institutional brokers, and
they hold us to a high standard. Our execution and our pricing are very
competitive."
Looking forward, both Wichman and Witthoeft said
they foresee leveraging the abilities of Pershing and its parent Bank
of New York in order to deliver additional value to clients. For
example one BNY division, BNY SmartSource, currently provides
investment operations outsourcing to large firms. As part of this
service, BNY SmartSource can run and maintain software applications on
behalf of client firms. Wichman and Witthoeft believe there is an
opportunity in the future for Pershing to deliver these types of
services to RIA firms. "Many of the RIA firms we deal with would like
to focus more of their energy on acquiring new clients and growing
their bottom line." said Wichman. "We, as a business partner, would
like to support these goals, and SmartSource may be one way that we can
help our clients succeed."
Through its relationship with Bank of New York,
Pershing is able to provide directed trust services. Pershing currently
offers ProCash Plus, a comprehensive asset management account which
combines all brokerage, checking writing, money market accounts and a
debit card on one consolidated statement. An optional bill-payment and
presentation service is also available. During one of the sessions, a
Pershing spokesperson announced that credit cards were "coming soon."