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Pete Hess will be the asset management czar and David Welling will rule all things RIA in the new framework
July 23, 2015 — 6:32 PM UTC by Brooke Southall
Brooke’s Note: It’s now been about four years since the 2011 purchase of Black Diamond by Advent Software. What is disappointing is that Black Diamond’s attunement to RIAs never rubbed off on Advent enough for it to simply put Black Diamond’s best RIA executive, David Welling, in charge of RIAs — across brands. The 2,000-plus RIAs in legacy AXYS land were still stuck with not only a company in Advent oriented primarily toward asset managers but even, often, sales and service people whose primary experience was with asset managers. Advent is a giant company relative to Black Diamond. People expected some post Reed Colley inertia after the merger. They got it. Yes, Advent is way past its days of being all but despised by advisors for misunderstanding them. But it still has work to do to be in the same category as Tamarac, Orion and … Black Diamond on that score. Finally giving Dave Welling a seat behind the wheel rather than expecting him to awkwardly reach over to the wheel from the passenger’s seat can help. It’s just ironic that Advent’s big company inertia was only broken up by an even bigger company in SS&C that is a fancy way of saying Bill Stone’s company. He isn’t quoted in this article but I spoke with him a couple weeks ago and he was excited about RIAs and Dave Welling — who he is arming with a big M&A budget — in a way that perhaps I never heard anyone at Advent. Stone took SS&C public in 1996 and and acquired 23 software firms since 1995. Let the new era of SS&C begin. Hopefully, too much time hasn’t passed.
In a move that could have a profound impact on 2,500 RIAs — mostly of the large variety — Advent Software has placed the fate of the wealth managers using Advent Axys into the hands of Black Diamond — or at least of its top manager.
Dave Welling, senior vice president and general manager of Jacksonville, Fla.-based Black Diamond, will add the 2,000 Axys users and a handful of APX and Advent OnDemand users to the 650 users of BlueSky, the core Black Diamond product. See: Black Diamond divulges 'unbelievable’ data about how Advent is doing, two years after its $73-million buy.
In the divvying up of Advent duchies in the wake of its absorption by Windsor, Conn.-based SS&C Technologies Holdings Inc. on July 8, Peter Hess will oversee the asset managers served by the same products and other San-Francisco-based Advent products like Geneva. Although Axys is moving under Black Diamond management it will not be under Black Diamond as a business unit. See: SS&C buys Advent for the Geneva crown jewels so what happens to Black Diamond and Advent Axys?.
The redrawing of the organization chart offers a new opportunity to solve the thorny problem of moving hundreds of billions of dollars of RIA assets off the old Axys desktop software and onto the more state-of-the-art BlueSky. See: Peter Hess throws a Black Diamond lifeline to stubborn Advent Axys users, but will the price be right?.
Avoiding tech trauma
The move makes sense to Mike Golazewski, who was formerly chief overseer of Black Diamond’s technology.
“Most of the remaining Axys installations are in advisory anyway, and there is nobody at SS&C that’s going to know the RIA space better than Welling. Dave’s a smart guy and my guess is that he’ll be both aggressive and creative in finding ways to move advisors to SS&C’s more profitable Black Diamond platform.”
Welling declined to say what the new structure will allow him to do for Axys users but at its annual conference in June the company did reveal that it continues to work on Advent Direct, a means of giving AXYS users the benefits of the cloud without actually moving off of Axys. See: Pete Hess will shop for software firms to build in-house Black Diamond bundle.
But Welling did mention that a number of RIAs are now running both Axys and BlueSky, seemingly a hint about how RIAs can convert without experiencing blunt- force trauma of moving from 1980s technology to 2015.
Making the move
One RIA principal, whose firm manages $500 million from New England and has used Axys since its inception, says that if there is a path to Black Diamond, the company hasn’t told him about it. The last he heard from Advent on the issue was last summer and the value proposition and ability to see how it would all work smoothly was not there.
“Would we switch to Black Diamond if it just involved pushing a button? Probably. It just seems daunting and we don’t really have any complaints about Axys.”
Still, the RIA principal’s firm recognizes that Black Diamond has superior reports and that its more-modern architecture would allow his firm to add other applications with less hassle — particularly CRM. He also mentions that the firm has to send updates right now, something that would happen automatically with web-based software. See: What one big RIA has to say about its switch from Advent Axys to Advent Portfolio Exchange.
Joel Bruckenstein, producer of the Technology Tools for Today conferences, also see the logic in the move. But he’s not sure how it will translate into addressing complicated problems like those the RIA principal is describing.
“Could it make a big difference?” he asks. “I don’t know. It might improve the odds of retaining Axys users who want to move to another application.”
Bruckenstein adds: “Black Diamond probably understands the needs of RIAs best. Also, if an Axys user is contemplating leaving Axys, their natural migration in most cases, assuming they want to stay with the firm, would be to Black Diamond.” See: How I picked technology — from Black Diamond-in-SSG to Dudamobile — to use in my startup RIA.
Indeed, the move is also intended to streamline sales. Though Black Diamond and Advent have long since pooled efforts, some procedural issues still need solving, according to Welling.
“You’d have somebody call on a hedge fund at one stop and a small RIA at the next,” he said.
Advent has more than 4,300 customers including asset managers, hedge funds, fund administrators, prime brokers, family offices and wealth management advisory firms, located across more than 50 countries worldwide.
BlueSky has the edge over Axys in that it provides superior client reports and is web-based and therefore more readily upgraded and more easily integrated with other applications. See: Advent and Black Diamond are looking like soul mates but the Axys-to-BlueSky 'Easy Button’ is still on the to-do list.
And, at least from Advent’s standpoint, it has the added advantage of producing greater revenues and making retention far more likely for RIAs looking for more scalable solutions and a general modernization of their software.
The move should also put to rest the question of whether or not SS&C, known as a purveyor largely to hedge funds, simply bought Advent for Geneva or whether it wanted to take a run at wealth managers.
“This is a clear sign they are doubling down on the advisor business,” Welling says.
RIAs should also take heart from the news that Black Diamond is in the midst of moving to a 70,000 square foot space in Jacksonville, Fla. from one that was 29,000 square feet.
Mentioned in this article:
Portfolio Management System
Top Executive: Pete Hess
Black Diamond (An independent business group of Advent)
Top Executive: Dave Welling (SVP & GM, Black Diamond)
Technology Tools for Today
Top Executive: David J. Drucker
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