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Advent Software is squandering its market leadership by keeping focus on Axys, according to a hedge fund analyst's report

The San Francisco-based leader is slow to react with new technology, web-based solutions, pricing, and ease of upgrades and integration, the report says

Monday, December 6, 2010 – 6:10 AM by Brooke Southall
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Jonathan Heck: The Axys software might as well be an entirely separate business and it’s in run-off mode.

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December 6, 2010 — 6:04 PM

Why are you censoring legitimate commentary?

Brooke Southall

Brooke Southall

December 6, 2010 — 6:09 PM

We delete comments from non-existent email addresses. The last one was from Jerryjones@dallas.com.

If it’s legitimate, then I presume the person is willing to at least let us know who they are.


Peter P

Peter P

December 7, 2010 — 3:47 PM

I tend to completely agree with this analysis. I believe this would be a serious undoing for Advent Software.

Larry Horgu

Larry Horgu

December 10, 2010 — 9:06 PM

For full disclosure, our firm is a longtime user of Axys. We have been since before I started here 6 years ago. In my occasional scanning of your articles, I noticed much negative press about Advent Software, well, exclusively negative stories. Conversely, the articles regarding Black Diamond and Orion seem like press releases or product brochures and demos more than editorial.

Examples of recent headlines: Orion is Outshining Competitors in the Eyes of Some RIAs, A closer look at Orion Advisor Services’ software and what’s in store for its next release, Already known to be cutting edge Black Diamond shoots for the bleeding edge with total rewrite of its software, Black Diamond is winning big accounts from Advent at an impressive clip

One question for Mr. Southall, with all due respect and I ask that you respond publicly, “Do you have ANY financial interest in Black Diamond, Orion, or J Heck Investments?”



Brooke Southall

Brooke Southall

December 10, 2010 — 10:35 PM

Thanks for commenting. First of all, I have no financial interest in the companies you named.

I’d welcome more views like this in the articles I write relating to Advent and its competitors. It’s not always easy to find RIAs to comment on their technology providers. [But if the bounce of your email as I tried to respond to you directly is any indication, you, like other Advent defenders want to stay anonymous but leave me a false email and name. Why is that?]

Are there any specific points raised in our articles that you find to be inaccurate, misleading or otherwise off base? I could benefit from that information and so could the industry.

When I’m speaking with RIAs — something I do almost every day, all day long, I almost always ask them what they feel about their portfolio accounting provider.

I think the articles are a proxy of what I hear — and I do hear good things about Advent and you’ll see some of those comments, for instance, here: “Advent is moving ahead in the RIA tech market — even if most Axys users won’t budge”, http://www.riabiz.com/a/1100006 and “RIABiz takes a peek under the hood of Advent Portfolio Exchange”, http://www.riabiz.com/a/1086006

Companies like Black Diamond, Orion, Adhesion and Morningstar are growing rapidly and when I have dug into what is going right for them, I have found much of the success has been at Advent’s expense. That’s probably inevitable in an business Advent has dominated for so long.

I need to write about what I see and hear.

all the best,


Mr. Darkpool

Mr. Darkpool

December 11, 2010 — 1:00 AM

Mr. Southall,

Mr. Heck seems to have struck either a nerve or a chord. Mr. Heck’s analysis, while arguably slanted in favor of his short, is not far off the mark. Advent has relied upon data captivity for some time now. Things are changing rapidly in this market, albeit not fast enough. The cost to move off Axys can be formidable, however that is changing as well. Of course much of the conversion depends much on the quality of the data that exists within Axys’ data abyss.

Interestingly enough it’s not just Advent that will suffer the erosion of Axys’ hold on the market. There is an entire cottage industry that thrives on Axys conversions, custom reporting and a litany of other services. With SQL database systems becoming the norm, the need to hire especially skilled Axys talent will drop off significantly. Open access to one’s data using ubiquitous tools such as SSRS, Crystal Reports, etc., will reduce the hourly rates by 50% I’m sure.

Further reading of Mr. Heck’s article exposes the underbelly of Advent’s technology offerings that have potential of greater vulnerability. Advents’ Ms. DeMarcos’ statement a few weeks ago regarding “disruptive” changes is a bit of a panic statement.

“We are your technology provider forever….to the extent that you don’t have to make changes and you can rely on a provider [to continually upgrade the system] that’s what produces the greatest ROI for your firm. It’s changing out systems that’s so disruptive. You shouldn’t have to do that.”

The real question is: Is it disruptive technology or is the technology the disruption?

While everyone loves to hate Advent because of their supposed arrogance it will be interesting to see what actions they will take to circumvent the erosion of their market. Will they go back into acquisition mode? Will they wake up to the need to provide a cost-effective transition from Axys to APX? Time will tell. Not too much time though because there is a significant number of new and feisty startups out there all gunning for a piece of Advents’ pie.

Mr. Darkpool



December 20, 2010 — 12:19 AM


Seems to me either no one cares about this thread or they are too afraid to speak their minds. Everyone knows fear and greed drive markets. The same is true for technology markets. While it is undeniable fact that Advent helped build the backbone of advisor technologies, it is also true that greed will stymie advancement. Ever increasing erosion of its’ hold on the market may incite a reaction based upon fear.

As Darkpool put it, the question on everyone’s mind is just what will Advent do. To be sure the Heck article please Advent none-to-well. After all what can their shareholders be saying? Several of their acquisitions have gone sideways and at least one, Techfi, has become the poster child for killing a threatening technology – whether the death was intentional or not. The amount of press that Techfi’s former guard has been able to squeeze out of it has been amazing. I’m not convinced that the damage to Advent goes beyond ire held by the old Techfi constituency.

Fear and greed develop into either crisis or opportunity depending on your view. What will Advent do? More importantly what will Advent’s looming list of competitors do with this opportunity? There are several startup companies that have come on the scene within the past 5 years that have been chipping away and are starting to gain significant ground. Add to the Advent factor the crash of 08 and the fallout from regulators. This has caused the entire industry to rethink how their businesses operate, from custodian to broker dealer to the advisor.

I see this market as ripe for opportunity for great change and improvement IF 1) advisors educate themselves, 2) custodians stop trying to own all the technology and 3) competitors are not frightened away from entering the market or taking on a behemoth like Advent.

I hope this will spur some commentary from Advent, technology providers, advisors…



J P Morgan

J P Morgan

December 20, 2010 — 11:28 PM

While I concur with some of the comments and though it seems as though there is a real gem to be plucked from Advent’s crown, she still sits a queen. Seemingly she has lost her edge as the robber baron of advisor technologies – maybe. And while it is true, that as the dominant market player, she has produced little in the way of new and improved products in recent passing, I expect a change in the wind soon.

The message from rank and file licensee’s is that She is as arrogant as she is over priced. However, I would not nail her coffin shut yet – no, far from it. She is a company of sizable proportions and market access and provides technology to many institutions and is well-embedded. Add to that her global reach and you have formidable competitor to overrun. I would expect to see Advent become much more active globally. And if Advent talent hiring requirements are any indicator then I would say this is already well under way.

She and I are akin; we’re big, powerful and hated by many. The market power we wield commands respect and gives us authority to move about the market as we please.

I would not be so quick as to count her out. She has been reasonably quiet and I expect you will see some action soon. Keep watch in 2011-12 for an increased appetite for small, innovative technology companies that will serve to fill out her form.



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