The Wilton, Conn. white-shoe software firm wants to underscore its ultra-coddling that won private banks

March 3, 2014 — 9:21 PM UTC by Brooke Southall


Private Client Resources, a niche player catering to family offices and private banks, is going after Advent Software, including Black Diamond’s BlueSky software, by offering 50% off its standard implementation fees to users of who switch over. The offer stands until June 30.

The Wilton, Conn.-based maker of portfolio-reporting software is making the brand-invoking pricing move — viewed as either gutsy or desperate by observers who declined to comment for the record — as part of a continuing effort break into the RIA business by underscoring its success coddling the prima donna private banks. PCR was founded in 2000 and used by, for instance, Morgan Stanley’s family wealth management unit.

“When it comes to data aggregation and private-wealth reporting, we believe PCR offers a superior option to Advent. Therefore, we decided to reduce the costs of switching for a limited time,” said Robert Fiore, chief executive and president of Private Client Resources, which has 50 employees, about 100 clients and serves more than 1,000 high-net-worth families, in a prepared statement. See: Private Client Resources is a software darling of private banks but can it conquer RIAs?.

Not just a software maker

The RIA market has been lately showing that it believes Advent Software’s Black Diamond enjoys a certain brand of superiority as the San Francisco-based company experienced growth exceeding 60% for the year ended Dec. 31. See: Black Diamond blows the lid off asset growth in Dave Welling’s first year in charge.

One reason that Black Diamond has succeeded (and why Advent was so eager to buy the Jacksonville, Fla.-based software maker in the first place) is that it has established itself as an outsourcer as much as a software maker. Not only does it deliver technology online but also it reconciles data. See: How I picked technology — from Black Diamond-in-SSG to Dudamobile — to use in my startup RIA.

Attractive target

But Fiore believes that his company can bring the even deeper levels of outsourcing demanded by family offices and private banks to the RIA business. In other words, it provides people features above and beyond the usual robo-elements associated with software companies.

PCR has people to supply data that “requires research and additional validation,” Fiore said in the statement. PCR’s brand statement is: We do the work. Fiore declined to name RIA clients but New York-based Offit Capital, which manages about $7 billion of AUM, has principals quoted in PCR endorsements.

But Black Diamond is not concerned or surprised by the efforts of PCR to single it out for competitive pricing, according to the Black Diamond unit’s chief, David Welling.

“When you’re the market leader with 3,000 clients, you become a target,” he says. See: Addepar hits $50 billion of assets and turns its eyes to Advent-Black Diamond’s plump RIA market.

Fewer assets to go around

David Welling: We do 100% the same day unless extra work is needed.
David Welling: We do 100% the
same day unless extra work is

Welling adds that his company, too, provides deep outsourcing that involves deep human interaction.

“Our report consulting team is not doing just implementations but doing the lifetime of the relationship,” he says. “We do 100% the same day unless extra work is needed.”

Fiore counters that RIAs are catching on to PCR as a distinct alternative because of a dramatic market shift: The average new investor with clients has dropped dramatically to $5 million of assets.

“Four years ago, it was a $40-million clients size average. We have seen a dramatic shift.”

Julien Mordecai, managing principal of Raleigh, N.C.-based AllBackoffice, experienced a 46% net growth rate in RIA firms, from 41 to 64, with outsourced billing and reporting platform and 38% revenue growth for 2013. AllBackoffice Consulting uses Schwab PortfolioCenter as its “engine” software. See: Where RIA technology stands heading into 2013 after 2012 lost some steam.

Wary of costs

David Spungen, chief executive of Hillview Capital Advisors, said in an earlier interview that PCR was the most viable Advent alternative back in the early 2000s.

Hillview is a multifamily office based in New York and Philadelphia that has about 80 clients with an average of $15 to $20 million in assets.

“We managed to get by before we used PCR without going the Advent route, and PCR has been an alternative to going that way,” he says. “From our perspective, it’s much more of an outsourced solution. We’ve always been wary of Advent because of the proprietary nature of the software and the cost involved.” See: How Black Diamond is working out — or not — as Advent’s agent of deliberate cannibalization.

PCR’s outsourcing services, including the use of its Palette Platform, cost between one and three basis points on the assets that are aggregated, with a minimum annual fee of $25,000. The cost is generally based on asset levels and accounts get charged .01% to .03%, depending on complexity.

Mentioned in this article:

Private Client Resources (PCR)
Outsourcer, Account Aggregator, Performance Reporting
Top Executive: Bob Miller, CEO

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