PowerBroker 1.0 is a new product best suited for young firms.

Why would anybody name a portfolio management and reporting package targeted at independent reps and RIAs PowerBroker? I have no idea. But thankfully, the company is much more adept at writing software then they are at naming it.

Like the soon-to-be-released Schwab PortfolioCenter, PowerBroker http://www.powerbrokertools.com/, from Cornerstone Revolutions Inc., is an open architecture, desktop-based portfolio management and reporting package. It ships with Microsoft SQL Server 2000 Desktop Engine (MSDE 2000), the free, redistributable version of SQL Server for client applications requiring an embedded database. According to Cornerstone, the MSDE database can store up to 2 GB of information. Firms that require more than 2 GB of information storage will need to purchase an SQL database license. Firms already running an SQL server can elect to deploy PowerBroker through their existing database architecture.

PowerBroker's minimum system requirements are relatively modest. Cornerstone recommends at least an Intel Pentium III 733 MHz processor, 256 MB RAM, 300 MB of hard drive space, Internet Explorer 5.01 SP2 or higher, and a DVD or CD. It should be emphasized, however, that these are the minimum requirements, and they are appropriate only for a small installation. Larger, multi-user installations, and all firms requiring peak performance, will need a faster processor and additional RAM.

Installation. Installing PowerBroker is a straightforward process. The installation guide provides clear instructions and graphics. When I slipped the program disk into my CD drive, the installation wizard examined my system, detecting the computer's current configuration. In my case, I already had a copy of an MSDE database installed from a previous product test, so the wizard identified it and only installed the PowerBroker application and utilities. Unfortunately, the previous installation of MSDE did not immediately recognize and communicate with PowerBroker, probably due to my security settings. Rather than try to reconfigure the existing MSDE installation, which I no longer needed, I simply deleted it, and reinstalled PowerBroker along with the supplied MSDE database. This time, everything went smoothly.

Getting Started. Novice firms can benefit from a Cornerstone service called JumpStart. For a small fee, in the neighborhood of $500, Cornerstone will capture basic information from an electronic custodial file, and then create a new file which includes client information, positions and a security list. The data will be mapped to the appropriate fields in PowerBroker. Upon completion, a CD is shipped to the client, who then installs the JumpStart file in PowerBroker, thereby avoiding manual entry of the data. As an alternative, new advisors can use QuickEntry, described below.

For firms moving from a competing system, Cornerstone offers a data conversion service. Pricing for data conversions varies depending on the size of the data file and the format of the data being converted; expect to pay $2,000 for 100 client accounts with 5 years of transactional history.

QuickEntry. QuickEntry allows advisors to take a client statement, summarize it, and report upon it. QuickEntry can be used in two ways. It can be used to give prospects or existing clients some sense of how their held away assets have performed. Obviously, there are some limitations to the performance reporting capabilities, since individual transactions are not recorded, but the reports do offer some measure of performance where none otherwise exists.

Second, it can be used to populate the program manually with client data. With QuickEntry, advisors can get up and running with the system, enter a minimal amount of historic data and retain the ability to run eleven different reports. At a later date, if desired, account information can be supplemented with all of the individual transactional data. QuickEntry accounts are readily identifiable by the little green triangle which appears in the upper right hand corner of the "account type" field.

Navigating The Program. The intuitive user interface is one of PowerBroker's strong suits. The eight sections of the program (Clients, Securities, Prices, Groups, Transactions, Month End/Bills, Reports, Downloads) can be reached from the "Action Button Bar" that runs along the top of the screen. The layout of the individual sections is, wherever possible, uniform. In most cases, the screen is divided vertically into two sections. A selection grid resides on the left; an edit screen is displayed on the right. So, for example, on the client screen, the list of clients would be displayed on the left; clicking on a client would bring up the data entry/edit form for that client on the right. The current selection, in this case the client, is outlined in red so it is easy to determine where you are in the program at any given time.

Double clicking on a column will sort it alphabetically. A second double click reverses the sort order. Lists can be filtered for greater granularity. On many list views, a filter checkbox resides at the top of the screen. When the box is checked, a yellow shaded line appears at the top of a list. When an entry is typed into the yellow line, that column is filtered by the selected criteria. For example, if a user types "Roth IRA" in the "Account Type" list on the client screen, only Roth IRA accounts will be displayed.

The program contains fields capable of storing sufficient client data. In addition to the usual contact information, there are fields for income tax rates and goals. There are also numerous fields that can serve both a compliance and a business purpose, such as Last Review Date, Advisor Agreement Date, Holding Review Date, signed IPS Date, ADV Date, Last Privacy Statement Date, etc. For the odd client who decides to terminate the relationship (or vice versa), the termination date and reason can be entered. "We've talked to a lot of compliance people, and we've tried to provide fields for the required compliance information so that a firm can produce the necessary reports quickly," says Ralph Wells, Cornerstone's chief operations officer. A separate tab is available to house third-party contact information, such as the client's attorney, CPA and banker. At the account level, information such as account type, goal, risk, discretion, etc., can be entered, as can billing information and proxy authority.

PowerBroker allows users to create client groups. An advisor might create a group to view or report on all the accounts held by a household, or to view all of the accounts in a small business retirement plan. It is also possible to create groups of groups for additional flexibility. This initial release does not have the ability to run consolidated reports on multiple accounts; Wells tells me that consolidated reporting will be available in the next release.

Security Types. The system offers eleven default security types: Alternative Investments, Bonds, Cash & Equivalents, CDs, Commercial Paper, Indexes, Mortgage Backed, Mutual Funds, Options, Stocks, and T-Bills. Each of these default types can be cloned to create additional security types. For example, if you offered a risk arbitrage strategy through a mutual fund such as the Merger Fund, you could create a security type called Risk Arb by cloning the mutual fund security type. If you offered a risk arb strategy through a hedge fund, you could create a clone using the alternative investment type.

In addition to CUSIP, description and dividend information, fields are available for asset class, industry group, and industry sector, to name a few. All of the fields are customizable, and they can be reported on.

Security Pricing. The pricing module is well thought out. Advisors can view a monthly, color-coded calendar that indicates dates for which the system has complete or partial pricing. Dates with no pricing information are readily identifiable as well. The calendar interface allows users to know at a glance if a date that is missing prices falls on a weekend. This feature could be enhanced by color coding weekends and holidays as well.

While prices will generally be entered via custodial download, prices can be adjusted manually to account for errors and corporate actions. In the edit mode, advisors can view a price history for a selected security. Currently, custodial interfaces are available for Schwab, AmeriTrade, Fidelity, Pershing and DST; more are on the way. Prices can also be downloaded from Yahoo. Wells expects to add further enhancements to this module over time. "In the future we will be able to link to Web services. Advisors will be able to obtain missing price information by going out to the Web, grabbing prices, and bringing them into the system."

Transactions. Like prices, transactions will generally be downloaded, but manual entry and adjustments are simple and intuitive. The program has some unique features that help to easily reconcile transactions. One field on the transaction edit screen shows the source of the data entry, so that manually entered transactions are readily identifiable. Transactions can be posted individually or in groups, and they can be sorted by various criteria. Checking a box filters for the current day's transactions.

Billing. The billing module is well designed. With a few mouse clicks, users can calculate, view, print and post the necessary information. Advisors can enter a limitless number of billing schemes. Fee schedules can be flat fees or tiered. Billing can be done in advance or in arrears at any desired frequency. Project billing, either per project or hourly, is available. The only thing missing is the ability to bill at the asset level, as opposed to the account level. Right now, it is not possible to bill one rate for equities and another rate for bonds. It is also impossible to exclude assets from the billing process. These shortcomings will be addressed in the next release, currently scheduled for the forth quarter of 2004.

Reports. Reports fall into five broad categories: Holdings, Transactions, Performance, Compliance and Other. Currently, the program offers about 50 reports in total. Cornerstone has indicated that they will be adding additional reports based on requests from users.

Administration. PowerBroker offers security and permissioning controls. Staff members are assigned a user name and password. By simply checking or unchecking a number of boxes, the administrator can customize the level of permission granted to each user. The system can be set to automatically lock down after a designated period of inactivity.

Cost. PowerBroker currently sells for an initial fee of $1,500. Maintenance is $750 for an individual user. Total cost: $2,250 the first year, $750 each subsequent year. Additional users cost $400 each per year. PowerBroker does not impose charges for custodial interfaces or graphical reports.

By contrast, Schwab's Centerpiece charges $3,495 for the program and $750 per year annually. (Pricing for Schwab's Portfolio Center, which will replace Centerpiece, is not yet available). Additional custodial interfaces generally run in the neighborhood of $500 per year (no initial fee), and an optional enhanced reporting package costs $995 initially and $500 per year maintenance. Extra users pay $545 initially and $450 per year maintenance.

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