New portfolio management and reporting platform capable yet inexpensive.

    Do financial advisors need another portfolio management and reporting software solution? Intuit, the company that brought us products such as Quicken, QuickBooks, TurboTax, Lacerte Tax Software and ProSeries Tax Software, apparently thinks we do.
    The firm conducted extensive market research before embarking on the development of PortfolioMinder. During development, which is still ongoing, Intuit consulted with independent financial advisors to get a better understanding of their needs and their work flows. They also hired Interactive Advisory Software LLC (IAS), a firm with experience in the advisor marketplace, to help develop the product.
    Intuit concluded that most of the portfolio management and reporting solutions currently being sold to financial professionals provide too much functionality at too high a price. They believe that there is a largely untapped market for a simple, efficient and affordable portfolio management solution, and they believe that PortfolioMinder can fill the void. 
    Before we get into the details of the program, remember that PortfolioMinder is currently in the second phase of a three-phase pilot program; hence, the program continues to evolve daily.  As a result, some of my current criticisms will be corrected before release, and other new problems may appear. Nevertheless, even at this early stage, there is much to be optimistic about, and that is why I'm uncharacteristically providing such in-depth coverage of PortfolioMinder prior to its release date.

PortfolioMinder: An Overview
    PortfolioMinder is an ASP (application service provider) portfolio management and reporting solution. This means that all data is stored on Intuit's Web servers. In addition, PortfolioMinder provides a "client portal" at no extra charge. Advisors can enable it if they wish to provide online access and document storage for their clients.   
    When advisors log on to the system, they are transported to the home page. This page contains two views: Clients and Investments. I won't spend a lot of time talking about the "Investments" view today, but it is worth noting that Intuit gives advisors an intuitive method of accessing either a client-centric or an investment-centric view of all pertinent data.
    The default client view contains headings for Last Name (or household name, as I would think of it), Client Names (for example Jack and Jill Jones), Security Value, Cash Value and Total Value. The list can be sorted by any of the column headings, in either ascending or descending order. There is a second view called contact information, which contains the identical first two columns, followed by e-mail, phone and status (active or inactive). In both views, the Last Name (household) is a hotlink which takes you directly to the family unit's home page.
    At the family household page, there are three tabs: Information, Documents and Notes. The first contains the names of the household members (the individual account holders), a list of "portfolios" and a list of accounts.
    If all of this sounds a bit confusing, it is. Intuit is still toying around with the structure here, and the nomenclature they use is a bit confusing, particularly since it was changed during the course of our discussions. The way I understand it, right now there are three levels of views. The bottom level is the account level, which is what it sounds like. The next step up is the "portfolio level," which is used to link one or more accounts to a goal, such as education or retirement. The top level is the household, although, as I said, these labels are fluid at the moment. 
    Anyway, the point is that you can view all of the household's assets as one entity (household), by portfolio (group of accounts that could be linked to a goal), and at the account level. At the portfolio level, you can see gain/loss in percentage and dollar terms. The portfolios are nested, so you can view the portfolio as a single unit or you can click on the plus sign to reveal the accounts nested within the portfolio. When you drill down to the account level, more security-specific information (symbol, date acquired, shares, cost per share, etc.) is supplied. 
    The default view at the account level is called Information. Here, you can view a summary of the account holdings, along with the information you are most likely to want about those holdings.  You can also assign characteristics to an account quickly from drop down list on this page. These include account name, portfolio, type (IRA, 401(k), etc.), financial institution and accounting method (FIFO, LIFO, average cost, etc.). You can also designate here whether the account is to be included or excluded from billing. If you click on a holding within the account, you are taken to a page that displays all open lots, with the appropriate details for each. The other view at this level is the transaction view, which lists every transaction with all the details. By default transactions are sorted by date, but can be sorted by any of the column headings.
    The other section of interest on the information page is "Reports and Tools." Here, hotlinks are provided to some common tasks. These include four popular portfolio reports (performance recap, asset allocation, capital gains and investment value) as well as the "create an invoice link" and the "Export to Morningstar" link.
    Moving back up to the household level, the next tab is the "documents" tab. This is the area where shared documents are displayed. It can be thought of as the advisor's interface with the client's portal, which is discussed below. The third tab "Notes" is of limited use, since it can contain a maximum of only 2,000 characters, enough to literally make a few account-specific notations but not much more.

Client Portal
    The client portal includes an asset summary (market value of assets, cash and total portfolio value), an asset class distribution (provided the advisor has assigned an asset class to each holding) and a more detailed account list with account numbers, holdings, number of shares and current values of the holdings. The portal does not offer clients the ability to generate their own portfolio reports. Many will perceive this as an advantage, because most advisors want control over the reporting process. PortfolioMinder does provide a "document safe" where advisors can upload and store performance reports, as well as other documents.
    The document safe is wonderful. As a client moves the cursor over the safe icon, the door swings open. Clicking the mouse brings up a menu listing the contents of the safe. If a client requests a performance report, the advisor can upload the report as a PDF file. The client can then log on to the portal and download the report.
    The document safe is not limited to performance reports, however. Any file on the advisor's hard drive can be uploaded to the portal. If you wanted to keep digital correspondence between yourself and a client secure, you could post a letter, invoice, or report to the safe, and then alert the client to pick it up. But that's not all-clients can upload files to the safe for retrieval by the advisor.  So, clients could upload estate planning documents here for retrieval by the advisor and/or emergency access.
    Since it is anticipated advisors will occasionally be receiving multiple documents from clients, advisors have the option of clicking a "download all" button. This button causes all of the files in the safe to be compressed and downloaded to the advisor's computer as a zip file. The idea is to speed up the download process, particularly for those who don't have blazing-fast broadband connections. As an added benefit, this same feature can be used to periodically archive the contents of the safe.

Platform Strengths
    Overall, I found the software design, from a navigational perspective, to be excellent. PortfolioMinder is the only portfolio management system I've ever come across that could potentially be mastered without the aid of a manual or training class, although I would not recommend that. Navigation is highly intuitive, and navigation tools make it easy to see exactly where you are and to get back to where you were.
    The price is very reasonable. There is a one-time set-up fee of $995; however, until the end of the year, this fee is discounted to $495. The monthly service charge, including the PMS system, the client portal and the custodial interfaces, is just $150 per month; no minimum commitment required
    For the price, PortfolioMinder provides a great deal of functionality. You get a portfolio management system, nice reports capable of including standard or custom benchmarks, the ability to manually enter data, flexible invoicing, a client portal and secure anywhere/anytime access for yourself.  You also get the ability to create model portfolios, link the portfolios to goals and assign the models to client accounts.
    Currently, communication between Intuit and users is excellent too. All new users can participate in an introductory training Webinar. I sat in on one of these sessions, and I found it to be highly informative. The home page contains communications and tips, which should help minimize trouble. Intuit appears to be intently focused on the user's needs; one hopes this will continue after the full product launch.
    For many advisors, Intuit's sheer size and financial strength are a huge plus. Numerous advisors have told me that they are hesitant to change portfolio management systems because most providers are small, untested firms. Relative to most technology companies that serve independent RIA's, Intuit is a giant. The firm had annual revenue of $2.04 billion in its 2005 fiscal year; operating income was $524.1 and net income was $381.6 million. To put those numbers in perspective, Advent Software showed a loss in their 2004 fiscal year, on revenues of about $150 million. Clearly, this is not an apple-to-apples comparison, but it does give you some idea of Intuit's financial footprint. Indeed, the relevant question with Intuit may be whether PortfolioMinder can ever reach the critical mass to capture the attention and resources of the giant software concerns senior management.

Stumbling Blocks
    PortfolioMinder is not perfect; however it is still a work in progress. Currently, with the exception of Schwab data, I'm told that advisors must first download a number of files from the custodian each day, save them to a local hard drive, and then upload the data to the PortfolioMinder servers. Next, the servers process the data, which can take a few minutes or more. Once the data has been processed, the advisor can reconcile. Finally a reconciliation report is generated. The whole process of getting data into the system looks OK, but I didn't have an opportunity to test it.
    It would be nice to see this process automated. Ideally, advisors should select a custodian or custodians, click a button, and everything should be transmitted from the custodian(s) to the PortfolioMinder servers. I have no doubt that this is what will happen in time; the question is when?
    Another annoyance regarding downloads is the system's current inability to process all forms of custodial data. PortfolioMinder can bring in all asset-related information, but it cannot capture all types of additional client information stored by the custodian. If this information could be captured, it would save advisors a great deal of manual data entry.
    Conversions appear to be a work in progress. Intuit recognizes a need to provide help in this area, but it isn't apparent at this time exactly how data conversions will work.
    There are a number of useful controls available at the account level, but they need to be made more granular. For example, you can currently exclude an account from billing, but not an individual asset. You can set a tax-accounting method at the account level, but not at the individual security level.
    I'd like to see the asset class modeling become a little more flexible. You can create and name your asset classes, but you can't create a hierarchy, so, for example, you could create a large-cap growth and a large-cap value asset class, but you cannot create a large-cap asset class with subclasses (growth and value) beneath it.
    The ability to offer clients a Web portal is great; administration is not. The advisor must enable each household's account individually, and assign each a password. In my version, the user name could not be customized; it was generated by the software. Some clients or their advisors will surely object to this.
    The Web interface has a few quirks. Like many Web-based programs, pop-up blockers will likely interfere with the program, so users must remember to turn them off. Users also must remember to save changes on most pages, or they will be lost. As I indicated earlier, Intuit needs to work a bit on nomenclature, but I feel confident that they will before the final release.
    Perhaps the most startling omission is the lack of a Quicken import/export facility. If would be very nice to be able to selectively upload information from a client's (or prospect's) Quicken file. I suspect that this capability will be added at some point, but it isn't there yet.

Who Will Buy It?
    Based upon what I've seen so far, it appears that PortfolioMinder has what it takes to become a commercial success. If Intuit can make downloading custodial data into PortfolioMinder a one-button process and do a better job with labels, this platform will represent an outstanding value for small RIA firms, and possibly larger firms that invest primarily in mutual funds, ETF's and individual stocks. It should also appeal to many independent-minded B/D reps who either do not currently offer performance reporting, or offer it through their B/D.
    I'd be willing to bet that Intuit will add many additional features over time, although not necessarily at this price. Based on the firm's past history, a more likely scenario is that they will "close" this version's feature set at some point, and then add additional functionality to an "enhanced" version at a premium price, much as they have done with Quicken, QuickBooks, etc.
    In any event, Intuit's entry in the market will almost certainly benefit advisors. If they get the final release right, PortfolioMinder will offer more bang for the buck than anything on the market today. Even those who choose not to buy it should benefit indirectly, because PortfolioMinder will ultimately force the competition to do more in order to retain their market share.
    Intuit has the resources to significantly impact this industry's software development for years to come. It will be interesting to see how the competition responds.

Joel P. Bruckenstein, publisher of Virtual Office News ( and an expert in applied technology for financial services professionals, can be contacted at [email protected].