The
independent advisor custodial services market has in recent years been
dominated by the Big Three. Now, however, the dominating companies are
a foursome.
Pershing Advisor
Solutions LLC has announced that its assets under custody have hit the
$69 billion mark, which places it on the same competitive plane as
Schwab, Fidelity and TD Ameritrade. Pershing is fighting it out for
third place with TD Ameritrade, which placed its assets at $61 billion
the latter part of 2006.
"We have been
growing in leaps and bounds and we expect to continue to grow in leaps
and bounds," said John Iachello, chief operating officer of Pershing
Advisor Solutions.
Pershing LLC has
actually been in the custodial services business for decades, but
company officials say it wasn't until two years ago, when the company
created Pershing Advisor Solutions, that it ramped up operations to
pursue the market seriously.
In that time, the
subsidiary has seen its assets under custody grow from just above $20
billion. The milestone that brought it to the upper tier of the market
was achieved at the end of last year, with the acquisition of $10.5
billion in advisor assets from Neuberger Berman Management Inc.
The purchase
enabled Pershing to increase its assets under custody by $25 billion
from a year ago, according to Iachello. The company has about 480
advisor relationships, he added, including some who are dually
registered representatives in Pershing's broker-dealer business.
Iachello says one
of Pershing's strengths in the custodial market is an experienced and
stable management corps. Members of Pershing's management committee
have an average of 20 years experience with the company, he noted. This
proved to be a boon during the formation of Pershing Advisor Solutions,
he said.
"Because we had
the stability of management, you could make long-term investments,"
Iachello said. "You could do and make the right choices for the
long-term good of serving clients... We used that luxury to invest
properly in technology and people."
Another key to
growth, he said, is the "unconflicted" environment Pershing is able to
offer independent advisors. Unlike Schwab or Fidelity, the company
doesn't have proprietary investment products or a retail operation that can sometimes overlap with the
client base independent advisors are attempting to serve.
"Everything we do and all our investments are on behalf of our clients," Iachello said.