What does Orion's relatively high fee buy you? Actually, quite a bit. Each advisor is assigned a dedicated relationship manager. You get an online portfolio management system that can be accessed any time from anywhere, through a Web browser. Orion offers a high-touch conversion process that includes sending a conversion manager out to your office, easing the transition pain. Once converted, custodial downloads will become a thing of the past, as will reconciliation; Orion will take care of all of that.
The Orion system can handle multiple fee schedules or any design, but you will have to enter the schedules through the Web interface, or have Orion do it for you. Since this is only a one-time set-up chore, it's not too onerous.
There will be no need to compute invoices, print them or mail them to clients for collection. Orion can handle that. For those accounts debited by the custodian, Orion will prepare the necessary files or faxes, and will send fee notifications to clients.
Orion currently offers 45 custodial interfaces, so most popular downloads are available. The Orion Web interface works reasonably well, but I think it could be better.
On the plus side, the interface is uncluttered; no screen overwhelms you with information. All of the reports and functionality one would expect of a good portfolio management system are here, including some trading aids, like the ability to assign accounts to a model and rebalancing reports. The reports the program generates look professional.
Client reports can be printed and mailed to the client by Orion or they can be made available to the client on a private-labeled Web site. Quarterly reports can include additional information like investment objective, risk tolerance, time horizon, target asset allocations, etc. This sort of information aids in the compliance process. Reports can also incorporate an advisor's newsletter and/or a commentary. Advisors can also add nontraditional or unmanaged assets manually to a report so that they can be tracked.
Among the negatives, navigation generally required too many mouse clicks. In addition, I found response times slow. This could be due to the fact that I was conducting my tests on a demo account, but if my experience was indicative of a live account, I'd be wary.
In effect, advisors get to piggyback on the Orion disaster recovery plan. Every 60 minutes, data is copied to a second remote location, so if the main Orion servers go down, they can switch to the backup. All data is then backed up to Iron Mountain (a reputable third-party data storage provider) daily. Orion can provide written documentation of its disaster recovery plans, which can be incorporated into advisors' written plans. If data is required on a disk, for either compliance purposes or disaster recovery purposes, Orion will overnight it to the advisor.
Much of Orion's value proposition rests upon their service claims, and it was impossible for me to draw any definitive conclusions in this area. The technology is OK, but I think it could be better. The interface is due for an overhaul soon; this may improve both navigation and performance.
Cost is another factor. If you are paying a full-time employee in excess of $40,000 solely to perform all of the tasks that Orion can do, outsourcing could be attractive, because if you add up all related costs (employee benefits, equipment, rent, etc.), the portfolio management, billing and reporting are probably costing you closer to $80,000. An added advantage of going with Orion is that you don't have to worry about your employee quitting on you.