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Schwab and Advent Software forge historic agreement -- mostly for the good of Black Diamond users for now

Aided perhaps by the ex-Schwab employees moving to Jacksonville, the two giant RIA forces, both San Francisco-based, are looking happily engaged

Author Brooke Southall October 31, 2012 at 6:54 PM
no description available
Neesha Hathi: This is where the attorneys go to the side and the project managers take over.

Peter Giza

Peter Giza

October 31, 2012 — 6:26 AM


With profit margins and money market spreads reduced near 90% since 2008, it appears as the race to innovate, enhance and leverage technology is starting to cook with gas. While I’ve been chided for my “boil the ocean” or “altruistic socialist” views of open platforms and data distribution, I do believe that it is becoming reality.

Schwab’s preemptive strike against TD with Project “C” forced TD’s hand and they have elegantly delivered leaving Schwab in the dust publicly. The TD API is disruptive and is challenging all custodians to belly up to the bar. Schwab is now in catch-up mode. It is not that Schwab doesn’t have the infrastructure; they just need to unleash the beast. Schwab’s move to put PortfolioCenter in the cloud is two years behind schedule in my opinion. A cloud enabled PortfolioCenter is a natural stepping stone for any ISV to bring its’ products under an SOA or SaaS environment.

Many in this industry fail to realize that the big four custodians have the ability to serve up some advanced processing. Some have chosen not to do so for risk issues. TD navigated significant hurdles by enabling service providers and ISV’s alike to connect to their reporting and BD systems. Legally and compliance risk wise this was no minor feat. The technology is “the easy part”, the legal and compliance is the heavy lifting.

The race I spoke of in the opening involves both custodians and their vendor partners. The issue of margin compression in the foreseeable market conditions must be addressed via advanced use of technology. Efficiencies of scale, stickiness of one’s platform and the attraction of servicing multiple custodians under a single banner are very compelling reasons for an RIA to jump aboard. Serving up the appropriate operational components under a platform that presents itself as “open” is attractive to the independent-minded RIA.

Examples Worth Noting:

Black Diamond is busy leveraging internal technology now available being under the Advent banner. Technology such as ACD and real-time pricing are now a walk down the hallway. Recent announcements by Black Diamond with regard to multi-custodian rebalancing is a natural product progression but more importantly it is a clear signal that leveraging other Advent technologies at their disposal are key to their strategy to move up the value chain.

Orion Advisor Services continues to innovate and bolster its’ platform in unique ways. Over the past year Orion has seen significant growth and is working diligently to keep the independent flavor in their platform thereby whetting the RIA appetite. Using this approach Orion remains highly attractive and relevant to RIAs who demand independence of choice. Orion’s CEO Eric Clarke is a big believer in the building blocks of services oriented architecture which has become a key to it’s’ success.

Pershing Advisor Solutions has been very quiet since Suresh’ move from NetX360 and onto bigger responsibilities at BNY. Pershing is a sleeping giant in that it has enormous capabilities and resources as does Fidelity. As the largest BD servicing clearinghouse, Pershing has significant depth in systems and technology in place just waiting to be leveraged. With the right plan and empowered product team, Pershing could become a very disruptive force in the RIA market.

Fidelity has inferred that its’ WealthCentral platform is complete which in Fidelity terms means the next thing is on the development white board. Fidelity too also has extensive resources and capabilities that could allow it to become a very disruptive force if the right product team is empowered to make it happen.

Perhaps my “socialist” views will never be realized in total; however I believe we are seeing portions of it unfold within technology and in the form of organizations like Advizent. Expect to see further advancement along these lines and more over the next 24 months.

What to Watch For:

The movement of iPads from expensive digital paper, browser and novelty platforms to an advanced platform for intelligent apps that leverage the native power of the IOS. These apps will be high performing and will leverage the native compute and display power of IOS combined with cloud-based computing and storage. iPads and other tablet devices will be the vehicles that deliver the next generation of high-function applications.

Kind regards,

Pete Giza
Managing Partner
Spitbrook LLC

Brooke Southall

Brooke Southall

October 31, 2012 — 6:46 AM

Nice comment, Peter, but watch out because I may have to (only half kidding) promote this piece to a column.


Peter Giza

Peter Giza

October 31, 2012 — 6:57 AM


Thank you for the compliment.


Pete Giza
Managing Partner
Spitbrook LLC

Bill Winterberg

Bill Winterberg

October 31, 2012 — 1:07 PM

+1 to Pete. (Can you get Nevin to add thumbs up/thumbs down buttons to comments?)

He would make an excellent guest columnist or even a regular contributor.

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AppCrown, LLC
Outsourcer, CRM Software, Tech: Other
Top Executive: Ted Tsung

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