The days of batch downloads may be numbered

February 3, 2011 — 1:52 PM UTC by Brooke Southall


Brooke’s Note: This was a strong technology session. Most such pointy-headed discussions are held in dimly lit back rooms but this one was held for the whole crowd. One interesting moment came when Kevin Hughes of MoneyGuidePro asked for a show of hands about how many people had iPads. Almost a third of the hands went up. He then asked how many people had plans to buy one. An even bigger group raised their hands and a light murmur went through the room. Apparently Tom Bradley may repeat the iPad poll for the bigger morning crowd today during his speech.

Three third party vendors sat on a panel at the first general session of TD Ameritrade’s 2011 national conference at the Manchester Grand Hyatt in San Diego and explained why they’re buying into the custodians’ approach to creating a big ecosystem of technology in the RIA business. The company is making its data readily available to all legitimate comers (see more on this below).

Kevin Hughes, accounts and integrations executive for MoneyGuidePro, Eric Clarke, CEO of Orion Advisor Services, and Chris Roberts, Redtail Technology broker-dealer and institutional relationship manager, enthused about how the most noticeable difference of connecting more directly with TD’s platform, Veo, will be real-time data. Currently data only flows in once a day.

Less batches, more data

“Five years from now, you’ll see a lot less batches and more data delivered real-time,” Clarke said. This can be good for performance reporting though his company’s software.

Hughes adds that the real-time data moves the conversation about the advantages of integration beyond just reducing the necessity of eliminating the need to re-key data entry to better performance.

“The real-time data really helps the financial planning environment. It allows clients to see up-to-date data—huge.”

Still, one attending advisor, Jeff Geygan, principal of Milwaukee Private Wealth Management, which manages $100 million of AUM, says that he, for now, is strictly interested in reducing the keystrokes of data entry.

The problem with real-time data is that it encourages clients to be checking stock prices daily or even on multiple occasions in a day – something that planners are supposed to preach against. “It’s very addictive behavior,” he says.

App store-like

What is allowing the advancements is that the Jersey City, N.J.-based TD Ameritrade is taking a different tack from its custodial competitors. It’s known as API, which stands for Application Program Interface. Some technologists say that it’s quite similar to Apple’s App store that encourages developers to build applications around a core set of code. See: Joining the industry-wide trend, TD Ameritrade announces its upcoming project for 'open architecture’ technology integration

Jon Patullo, director of technology platform management for TD Ameritrade moderated the discussion that also ranged to topics such as security, use of the cloud and mobile devices. He described API in this way:

“We put data out there for vendors to talk to us instead of you having to create a file and download it into your system,” he says.

Accessing it mostly just requires that a third-party technology maker pass certain security screens, Patullo adds.

TD Ameritrade has worked closely with about 10 vendors in getting its API off the ground including another CRM provider, Ebix (Nasdaq symbol: EBIX) of Pasadena, Calif.

That company’s director of enterprise sales, Steve Ambuul, says that he like the decentralized control encompassed in API.

Decisions on high

“I like their approach; rather than making technology decisions on high, they went to the vendors and said: you’ve been doing this for years; how do we make it easier?”

Fidelity Institutional Wealth Services, Schwab Advisor Services and Pershing are all in the midst of creating big integrated system for advisors, too, with WealthCentral, Schwab Intelligent Integration”: and NetX360 respectively. Each has chosen certain vendors to wire tightly with select third-party vendors. Still, each one also promises an openness to a wide variety of vendors on a less formal basis.

The advisors in the crowd asked questions – mostly reflecting bad experiences they had in trying to move data from one vendor to another. They asked whether any of these difficulties would be alleviated.

Roberts of Redtail explained that his company only has so much control over that because both vendors need to take steps (ones that his company takes on its end) to make it a smooth transition. He recalls calling other vendors and getting an unenthusiastic response or even: “What’s integration” in past years, he says,

Clarke of Orion Financial Group suggests that TD is at least taking the industry in the right direction on that score.

“We’ve struggled with the lack of a standard but with TD we’re taking a step forward,” he says.

Brooke’s post-notes: There was little sign at the Manchester Grand Hyatt of the storms across the U.S. subduing the TD Ameritrade conference. The official word was that there were 40 cancellations. More notable were the horror stories of 14-hour trips. I sat next to one attendee on my flight down here from San Diego. Her flight out of New York was canceled so she hopscotched by way of San Francisco. As my Southwest flight landed in San Diego, a big gust of wind hit and we bounced one big bounce before taxiing in safely. There’s a reason the America’s Cup was held here.

Mentioned in this article:

TD Ameritrade
Asset Custodian
Top Executive: Tom Nally

Financial Planning Software
Top Executive: Bob Curtis

Redtail Technology
CRM Software
Top Executive: Brian McLaughlin

CRM Software
Top Executive: Chris Aitkens

Share your thoughts and opinions with the author or other readers.


Michael Wilson said:

February 3, 2011 — 6:08 PM UTC

I have to concur with the vendor sentiments above.

We are still in the testing phase, but so far we believe that the API that’s been released could be a real game-changer for the hundreds of independent advisors that custody assets with TDAI & use Morningstar Office.

Importing and reconciling client data is a pretty simple task with Morningstar Office—because we have comprehensive security and index data included—but having real-time access to client data could dramatically improve a firm’s ability to focus on clients, instead of the back-office.

The ability to log into Morningstar Office and have instant access to clients accounts at TDAI, plus all of Morningstar’s research, data and reports—like the Portfolio Snapshot Report and the Client Return Summary, etc should be a huge win for advisors.

Michael Wilson
Morningstar Advisor Solutions
<a href="" rel="nofollow">Morningstar Office</a>


Bill Winterberg said:

February 3, 2011 — 7:24 PM UTC

I share the same sentiment of Jeff Geygan. Real-time data access looks great on a feature list, but for the <a href="" rel="nofollow">secret society of REAL financial planners</a> it’s just not necessary. Clients benefit the most from life-long engagements with advisors who align financial strategies with client goals. Access to intra-day pricing does little to advance that type of relationship.

Advisors seek strong and clean integrations between software programs they feel best server their clients. That’s echoed in the desire to reduce manual entry, particularly for the same pieces of information.

If TD AMERITRADE Institutional already has a client’s name, address, phone number, account numbers, and beneficiary designations, then just get all of it via the proposed API and populate CRM, FP software, and portfolio management software with it. There should be no need to manually enter this data into 3rd party applications.

Lastly, I wouldn’t compare Veo’s API to the Apple App Store. The API is much like the <a href="" rel="nofollow">SDK Apple provides</a> to 3rd party developers. The SDK standardizes all the function calls apps make to retrieve and process data, much like what vendors like Orion and MoneyGuidePro will do with data stored in Veo.

So Orion and MoneyGuidePro are the developers working directly with the API, and their products and services represent the “apps” available to make advisors’ lives easier.

Bill @ <a href="" rel="nofollow"></a>


Craig Moringstar said:

February 3, 2011 — 7:27 PM UTC

For the advisors looking for the comprehensive technology package that is already built and working, at a price that can’t be beat, in addition to the choice of custodians (Fidelity, TDAmeritrade and Schwab) and exceptional services solutions, take a look at and give them a call.

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