Over the last several years, there’s been intense competition among the major custodians to provide the most robust technology platform to financial advisors. Even non-custodial firms are now vying to become platform providers of choice—firms such as Advyzon, Black Diamond, Envestnet, Morningstar and Orion. With all the attention the big names in the industry get, it is understandable how the innovations of smaller custodians get overlooked. That’s a shame, because some are offering better tech experiences for advisors to give to clients—digital on-boarding, risk assessment tools, account aggregation and client portals. Or even robo-advisors, if clients want them.
In this article, we’ll focus on three firms doing such innovating.
RBC Advisor Services
Independent RIAs have to build a core group of integrated applications from the list of firms interacting with their custodians, and that has proved to be challenging for them. RBC, like other custodians, offers a Marketplace where advisors can tap technology firms partnering with it. The Marketplace sorts software by category, so if you are looking for financial planning software, you can click on that category and find a list of applications offered through RBC, those offered through partners, and others that can simply read RBC data. The site includes data on who a provider can integrate with, but does not give the advisor sufficient information to understand the depth of the integration among all the applications. (This is not an indictment of the RBC Marketplace so much as an industrywide challenge.)
When robo-advisors first emerged on the scene, I expected at least one custodian to use the technology to launch a true turnkey advisor platform. It took longer than I expected, but it now exists—it’s called RBC Black from RBC Advisor Services (it’s also available to independent reps through RBC Correspondent Services).
It includes all the core technologies advisors need, including CRM, client and portfolio risk management, goal-based financial planning, trading and rebalancing, custody and clearing, a unified advisor workstation and a client portal.
At the core of RBC Black sits CircleBlack, a digital wealth management platform that powers the underlying platform. It includes an advisor workstation, the client portal and account aggregation. Redtail provides the CRM, and the risk management component is powered by Riskalyze, whose score maps to very low-cost asset allocation models developed by State Street, which makes use of no-transaction-fee ETFs. The portfolio minimum is only $5,000, and the fee for the program (the clearing, custody, overlay and model management fee for any of the models) is about 15 basis points. The fees for the ETFs currently range from 14 to 27 basis points. The platform’s goals-based financial planning component is powered by PIEtech’s MoneyGuidePro. The trading and rebalancing component is provided by Vestmark, while custody and clearing is handled by RBC.
When you log in to RBC Black, you land on the advisor dashboard. This customizable page contains a wealth of useful information. At the top center of the page, an advisor sees his or her total AUM and the daily change in value. Directly below are two pie charts. One shows assets by institution, the other shows the client’s overall asset allocation. At the top left is the alert/task list. You can toggle back and forth from one to the other.
The alerts in my demo were wealth alerts generated by the platform, showing things such as households with significant rebalancing drift and households with too much risk in their portfolios or not enough. Clicking on an alert brings up the households at issue so these problems can be addressed. At the top right is the top 10 list. You can scroll through a list of a client’s top 10 holdings, households, accounts, asset classes or regions. Below, there are four more pie charts displaying key data. One of note is the rebalancing proposals chart. This helps the advisor work with the client on assets outside the platform (for example, if the advisor and client agree that the client should reallocate assets in his or her outside 401(k) plan, that change will be picked up through the account aggregation software).
Below that, there are tabs that allow you to view balances over time, performance, exposures, holdings or transactions.
When you drill down to the household or the account view, the page looks very similar except on the upper right; instead of the top 10 lists, you can now see the Riskalyze risk numbers and the MoneyGuidePro “confidence zone” (which measures the probability of a client’s success meeting goals).
The user interface offers loads of flexibility. When you view the household list, you’ll see the number of clients and accounts per household, assets, the probability of success and risk numbers, and the household status. When you view the account list, you can sort by any column. Navigation links can take you straight to the CRM, financial planning, trading and portfolio analysis components. The on-boarding status of clients and accounts is also immediately accessible.
It is impossible to give a full account of all the features and functions of the platform here, but suffice it to say that this is an impressive offering. The price for the RBC Black platform is $175. That includes all the underlying applications and features. It seems a reasonable price to pay for such a well-built system.
Trade PMR
Trade PMR recently began the phased release of its next generation advisor platform, dubbed EarnWise. Unlike many of its RIA custodian competitors, Trade PMR develops technology solutions for its advisors in house. But the firm also offers choice—if EarnWise’s CRM doesn’t meet the needs of an advisor, he or she can bring another CRM into the platform.
EarnWise has three modules that work together: an advisor workstation, a client portal and a B2B robo-advisor. The first two are a core part of the offering. The robo portion is being offered at an introductory rate of $150 per month with a $295 setup fee.
The advisor workstation is well thought out. There is an advisor dashboard that is highly customizable. It includes four required widgets (pending tasks, action items, asset allocation and new money). Advisors can also add widgets for alerts, trading, account opening, account transfers and performance. By the time you read this, integrations should also have become available with MoneyGuidePro, Riskalyze and Trade PMR performance reports (available for $100 per month or $1,000 per year). Widgets from these applications will also be available on the dashboard. We also expect integrations with Smartleaf, AdvisorEngine and FinMason to be available shortly.
The Trade PMR philosophy is to give advisors a seamless experience and single interface whether they are using a Trade PMR app or a third party’s.
Model investment portfolio creation and maintenance is getting a good deal of attention, since 85% of Trade PMR advisors create their own models. Advisors will receive portfolio metrics from FinMason as they build portfolios, and Smartleaf’s overlay and rebalancing capabilities will add powerful new tools for Trade PMR advisors.
The firm has created some excellent work flows for client on-boarding. The forms can be prepopulated with any information already in the system, which minimizes the time staff must spend on data entry. The client portal, with two-factor authentication, serves as the hub. Once new clients sign the original DocuSign signature, they do not need to go through a signing ceremony again. After that, they can go to the client portal to be authenticated.
There, they can add new accounts, initiate transfers, set up periodic deposits, etc. For example, to initiate an account transfer through the ACAT system, clients would log on to the portal, complete the request, provide the log-in credentials for the account being transferred, and that’s it!
Advisors can make a very modern, well-designed portal available whether or not they also want to offer a robo-advisor. Trade PMR has gone to great lengths to incorporate client service requests into its portal so clients can digitally initiate requests that currently require a phone call and thus speed up response times.
The robo-advisor offering uses many of the tools already discussed, including the digital on-boarding and the client portal, but it offers much more. It is really about work flows and a unique client experience. It allows the advisor to set up investment models and map them to risk scores. The advisor can then allow clients and prospects to open accounts and fund them. This can be done by sending the client or prospect a link through e-mail, or by allowing them to access a website. The advisor retains control of the work flow in the administrative portal.
Trade PMR does not set account minimums, which are at the advisor’s discretion. One unique feature of the Trade PMR robo is that it does not automatically assign a model portfolio to the client at the end of the process. Instead, it recommends one based on the mapping the advisor has set up as well as the risk score generated, but the client requests a model and the advisor must approve it. The client may request a model more or less aggressive than the recommended one, but the final decision rests with the advisor.
As part of the on-boarding process, advisor discretion and fee deductions are enabled by default, though the client can override the defaults.
For those who do not care for the EarnWise robo model, or who want a completely white labeled robo solution, Trade PMR partners with AdvisorEngine.
When FinMason is added to EarnWise, advisors using the platform will be able to check every client account or household each night to make sure it is still within the designated risk parameters, and the platform will alert the advisor when the portfolios violate their mandate. It will also provide portfolio metrics to advisors as they construct their model portfolios in near real time.
EarnWise appears to include most of the next generation tools that advisors require to take their businesses to the next level, and when you add in the partner integrations, it really takes Trade PMR’s technology offering to the next level.
Shareholders Service Group (SSG)
SSG takes an entirely different approach than Trade PMR does, but with equally pleasing results. While Trade PMR chooses to build much of its own core platform, SSG relies on third parties as much as it can. The firm uses Pershing for custody and clearing, so it makes use of the NetX360 platform for advisors and the NetXInvestor platform for end users. SSG is also using Jemstep technology to provide digital on-boarding, a client portal, reporting and more, but the firm leaves it up to the advisors to decide what, if any, Jemstep capabilities they want.
For example, an advisor can choose to use it for digital on-boarding and nothing else. They can use Jemstep for asset allocation or not, they can use the Invesco models or not, they can use Jemstep for reporting or not. So, for example, an advisor can use Tamarac for asset allocation and rebalancing, but still use Jemstep on the front end.
As with Trade PMR, if an advisor opens up an account for a client on the SSG platform, it is the same account whether it is a robo account or not. According to SSG President Dan Skiles, “So many competing solutions are a carve-out.” By this he means that the robo accounts get a different master account or are otherwise segregated. In the former case, if a robo client inherits wealth, for example, and wants to move up to a full level service, the experience will be seamless. In the latter case, moving an account from one program to another may be considerably more complicated.
By partnering with Jemstep, SSG can offer advisors and their clients a white labeled robo-advisor and a great end client experience. The product road map calls for adding the Riskalyze Autopilot robo offering to SSG advisors soon. In fact, SSG advisors can already access Autopilot through Riskalyze today, but when an official enterprise agreement is in place, SSG advisors should enjoy a deeper level of integration, and perhaps more advantageous pricing.
SSG recently inked a deal with TradeWarrior to provide another rebalancing option at a lower price point. The firm also offers TRX for trading and rebalancing. For performance reporting, Orion, Black Diamond, Morningstar and Tamarac are available. For financial planning, SSG integrates with eMoney and MoneyGuidePro. In another unique deal, Advicent is offering a free trial through September 15 to SSG advisors at no charge. This allows its advisors to use NaviPlan and Narrator Clients absolutely free throughout the summer. In the case of all these integrations, SSG works to ensure deep integration and a uniform look and feel throughout the platform.
As you can see, these three firms are each taking a different approach to providing advisors with the most modern technology tools, but in every case the results are impressive. RBC is essentially using CircleBlack as the chassis for its advisor workstation offering. Trade PMR is focusing primarily on building its own technology and strategically supplementing it with that of best-of-breed third parties, while SSG is leveraging as much third-party technology as it can and devoting its own resources to providing a seamless technology interface that allows its advisors to choose the solutions that work best for their businesses.
All three of the firms deserve more attention than they are getting.