Oisin's Two Bits: Private Client Resources hires bankers, but not, CEO says, for an exit; TD Ameritrade does eight account-opening deals with vendors

Private Client Resources has hired an investment bank to source fresh outside funding to fund a major upgrade of its technology, but some industry discussion aside, it's not for sale.

The Wilton, Conn. data sifter for the ultra-wealthy plans to use the fresh capital it raises to ramp up its cybersecurity and data privacy capabilities, as well as its ability to sort and gather data on alternative investments. The move is being driven by increasing demand, according to the firm.

In the past nine months, the erstwhile vendor of ultra-high-net-worth (UHNW) performance reporting software -- now better described as a data aggregation firm after an early 2018 pivot -- has added $50 billion to the value of the assets it measures and aggregates, bringing the total to $300 billion. 

In 2019, PCR forecasts a 150% bump in the number of investment accounts it serves. But to keep growing, it needs to strike while the iron is hot. Hence, the need for funds, and the reason PCR has called in the banking cavalry, says CEO Bob Miller, via email.

“PCR continues to grow in size and importance with many public announcements and new clients speaking to our success. Investment capital is important to a high-growth company with significant expansion plans such as ours," he explains.

"Like almost every firm in the space, we use professionals to assist in executing on these capital raising efforts.”

 PCR has returned to the well for extra capital more than once in the past 12 months.

Last Spring, the data firm sought between $1.5 million and $2 million from its family-office backers in a round that was fully subscribed. But that capital raise was different, Miller stated at the time. It was part of PCR's 2016 revamp. See: Seeking loan of $2 million, PCR discloses $12-million payment due in 2020 -- putting 'sale' on the table, offering memorandum shows.

A sale would make sense, says Craig Pearson, CEO of Charlotte, N.C.-based UHNW aggregation rival Private Wealth Systems, via email.

"[PCR] pivoted pretty dramatically under Bob Miller to become an aggregator and go down market (less focused on family offices) so they could look more like Quovo and hope for a similar buyout valuation," he says. See: Plaid, valued at $2.65 billion, makes $200-million snack of Quovo -- albeit defensively -- and creates Yodlee super-foe

Miller declines to reveal how much capital he hopes to raise, but sees no mergers afoot.

"[We will] stay independent and build a very big business providing a total wealth aggregation utility to families, advisors and technology providers.  Seize the opportunity created by increasing digitalization," he says. See: A higher bidder ripped WealthTouch from Craig Pearson's grasp but his startup could rip the clients, free of charge, right back -- and leave Addepar gasping.

"We are not considering a trade-sell in our process."

Balderdash

If PCR were to sell, there'd be interested parties, says Pearson. "I think the most likely buyer is InvestCloud," he adds.

InvestCloud did not respond to a request for comment.

Aside from the fact that PCR did indeed pivot, albeit "not as [Pearson] concluded to go down market," the rest of his comments are absolute balderdash, says Miller.

"As I stated, we are not considering a trade-sale ... [and] being tucked into one of the 500-plus wealth technology providers [out there] is the least likely future outcome."

"These firms are dividing up the reporting, analytic, workflow, communication, compliance and accounting space into,  for the most part, very small companies," he argues. "We, on the other hand, have a market opportunity that makes customers out of [them] as well as private banks and advisors to wealthy families."

Prior to Miller's appointment, the bulk of PCR's clients were family offices. But the firm now sells to private banks, vendors of outsourced chief investment officer services, more standard RIAs, mutual fund observers, accounting firms and technology companies.

Indeed, of late, a number of technology firms (15 to date) have been pairing up with PCR as resellers of its aggregation software, including Envestnet-owned Tamarac, FundCount, and Charles Schwab & Co.

By all accounts, this is just the beginning, and PCR is far from faced with being gobbled up by a rival -- if anything it will start selling to them, says Miller.

"In 2019 [we'll see] a 150% increase in the number of investment accounts we are aggregating."

TD Ameritrade goes on API bender to make 'fat fingers' obsolete and add eight best new friends

With, finally, an account-opening API to flaunt, TD Ameritrade is on a tear, code-swapping with reams of firms that can assists RIAs in improving their antiquated processes.

The Omaha, Neb. custodian signed off on eight such deals in late December. Exton, Penn.-based account-opening sprinter iPipeline is the latest to see its software to go live on TD's third-party marketplace, Veo One, this month.

TD's integrations extend to: Agreement Express; the CRM-vendors Advyzon, Salesforce and Wealthbox; the performance reporting firms Envestnet|Tamarac, and Orion Advisor Servies; digital signature manager Docusign; and the in-house software at FTJ FundChoice and Carson Group. See: After finally convincing TD Ameritrade and Schwab to create an account-opening API, Orion will give RIAs power to open accounts with robo-like wizardry

Each of these firms' software will connect directly into TD's revamped account opening tools to counter what is often a tedious, labor-intensive process: repetition, more often than not, leading to errors that result from "fat fingers."

An advisor has far better uses for their time than often repetitive data-entry, says Bob Mahoney, TD's director for technology product management, in a release. "[Now] advisors can spend less time pushing paper."

Advisors can spend up to an hour plodding through a distracting data-entry slog, says iPipeline CEO, Tim Wallace, in a release. "This time could be better spent managing assets and meeting clients. [That's] their real job."

After 44 years in business, TD administers north of $1.2 trillion in assets on behalf of its clients, and serves as a custodian and software vendor to more than 6,000 RIAs.

At present TD’s legacy vendor marketplace is integrated with 150 different vendors, whereas its newer system, Veo One, has just 28.

Pipeline dreams

Thanks to the custodian's recent spate of account-opening focused integrations. the sheer number of RIAs at TD that can now use the software like iPipeline's  "iGo Account Opening" is a lucrative win for the firm's involved.

For iPipeline, it represents a chance to put its latest data cruncher front-and-center before a huge number of firms right off the bat.

The company says iGo Account Opening, allows Advisors to open new accounts "in seconds" using data directly from their CRM systems. The software also works with leading electronic signature providers "for a complete paperless workflow."

But it’s not just the software firms that will benefit, so will TD. The amount of time its RIA advisors spend opening accounts will fall about 90%, says Michael Persiano, iPipeline's chief marketing officer, via email.

“[With our application it now takes] about one minute … [because] it interacts with the custodian's API in real time,” he says. “TD is the first custodian to implement this new solution, although there will be others in the near future.”

Despite just launching iGo, the software is already integrated with a number of CRMs on the market, including WealthBox, Red Tail and Salesforce, according to Persiano.  The software is too new to the market to provide metrics on adoption rates. 

 iPipeline also integrated its older account-opening software, Laser App, on TD's markeplace about nine years ago, according to Mahoney.

The latest technology, however, represent a sea-change in the time it takes to open an account, says Persiano. “[LaserApp] reduces the user’s time from 40 to 60 minutes to five to ten … [now it’s] further reduced to about one minute.”

There’s a reason TD’s offering it for free, says Mahoney. “We believe in [it].”

As well as providing speedy account opening software, iPipeline sells automated processing software for pre-sales, new business, underwriting, policy administration, sales support and sales reporting to more than 130 insurers, and 1,300 financial firms in general.