Portfolio management systems are pricy, however, and RIA In A Box even wrote in 2015 that almost half of emerging firms didn’t use the systems at all (not until they reached a certain asset level of $30 million or so in assets). Orion, Envestnet Tamarac, Addepar and Advent Black Diamond are popular portfolio management systems for larger RIAs, but smaller players have emerged to keep things functional without forcing advisors to shell out for systems with too many bells and whistles, things that require consultants to run.

Legacy systems and brand loyalty are also important things to software users. Adkins had been a user of software dbCams since 1990 (it was absorbed into Morningstar in 2008). One of the most important tools he uses now is AssetBook, a portfolio management software that started out as a smaller player in 2008. Adkins had years of data in dbCams. Rob Major, AssetBook’s founder, worked with him to convert all the dbCams data that Arkansas Financial Partners was still using. Major won Adkins over to the new system, converting one longtime client over to the new software in 48 hours, Adkins says.

Adkins knew his software costs were going to go up, however. AssetBook costs him about $3,500 a month, he says (it’s based on the number of accounts he has) whereas dbCams was only $300. But he did a cost benefit analysis. “We have one staff member that was literally having to spend most of her day doing a reconciliation and corrections on the downloads, and the more I looked at all this, I realized that the true cost of Cams was not the fee that we paid. If you really looked at the entire cost, it was way more than that. Once I realized that even though AssetBook looked more expensive, we would actually see an immediate savings costwise between the two. Now, we ended up letting an employee go, but I can’t imagine she liked what she was doing anyway.”

Rebalancing Software Saves Time, Money

Rob Siegmann, the principal and COO of Total Wealth Planning in Cincinnati, says that his firm has also scaled up, running $500 million for 375 families with a staff of eight to 10 people. The firm uses Calendly for scheduling; Junxure for CRM; and Orion’s portfolio management, reporting and billing software to become much more efficient with firm operations. He says rebalancing software Trade Warrior has made the biggest dent since it replaced a highly manual process. “That’s the easy ROI investment, the rebalancer.” His firm uses Schwab’s white-labeled Intelligent Portfolios robo-advisor platform, with the idea that it’s for the kids of clients and new prospects who may not yet have the $250,000 minimum in assets. Those systems change the type of staff you have, says Siegmann, since employees with tech savvy replace those without it.

Bill Winterberg, a software consultant to RIAs and vendors with FPPad in Atlanta, says there are advisory firms he’s worked with over the past five years that have moved to Orion or Envestnet/Tamarac or Addepar but have not had to increase their portfolio management staff or investment management staff. (He has consulting relationships with Tamarac and Orion.) “In some cases, they’ve actually repurposed staff,” he says, “and put them on a more full-time planning role and removed their back office operation duties because they are able to trade efficiently, they are able to open accounts and close accounts and maintain accounts much more efficiently.”

Orion and Tamarac also have outsource services available where Tamarac will add the accounts to their system and reconcile trades from the prior day to make sure the databases are accurate and they match the holdings and positions in the custodial record-keeping file. “Those are services that advisors used to do internally,” Winterberg says, “now they pay on an account-based fee for, maybe assets under management, 10 basis points or 15 basis points. They pay these providers to do what it used to take a full-time employee who was at $75,000 or $60,000. Now the firm pays less and they’re getting twice as many or three times as many accounts and holdings processed with the outsourced solutions.”

Ayasha Jones is the director of operations at BlueSky Wealth Advisors in New Bern, N.C., an almost 20-year-old firm that manages $406 million with 11 staffers. Besides her, there are two client service specialists and everyone else at the firm is an advisor. She says founder David Blain has tried to leverage technology since launching in 1999. “We are using Orion for our portfolio accounting software … so that handles all of our portfolio reporting, that has our client portal, we do all of our trading and rebalancing in there. All of our account aggregations in there.”

Quarterly reporting especially was a very manual process before the firm started using Orion two and a half years ago. The firm also uses Junxure Cloud for its CRM for correspondence and work flows. The firm was using the desktop version before that; it was kind of clunky, she says, and all they could use it for was to share documents. “We try to be as automated as possible so we can invest in our advisors,” says Jones. “So all of our back office stuff is our technology. I think that’s helped.”

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