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Broker-Dealer Picks Portfolio Accounting as Finalists

Broker-Dealer Picks Three Portfolio Accounting Systems as Finalists To Integrate with Morningstar Advisor Workstation.

ProEquities--an independent broker-dealer based in Birmingham, Ala. --is wrapping up its search for a new third-party portfolio-accounting system and has narrowed the list to three top contenders.

According to Jeff Ball, assistant vice president of technology at ProEquities, the finalists are: Statement One, TechFi Financial's Portfolio2001 and Investigo.

When the decision is made, the new system--slated to replace a proprietary-portfolio-accounting system-- will be offered to a network of 1,000 independent-financial advisers operating in 48 states. ProEquities, a subsidiary of Protective Life Corporation, sent an RFP out to eight or nine vendors. It has conducted interviews with the software companies but has not ranked them yet, says Ball. "We've been looking at this for quite some time," says Ball, who expects to make a decision this quarter and start the implementation by the second quarter. A key requirement is integration with the Morningstar Advisor Workstation--a customizable set of online investment-planning tools that ProEquities implemented about nine months ago as a core wealth-management platform. "None of the finalists has a module for that now, but each one of them is committed to doing that for us," says Ball in response to integrating the two systems.

According to Geoff Balzano, senior product manager for Morningstar Workstation, the software firm has a standard interface with six portfolio-accounting systems, namely: Client Marketing Systems Inc.'s Advisors Assistant, Captools Company's Captool Professional Investor, Performance Technologies' Centerpiece, E-Z Data, Inc.'s Client Data Systems, Financial Support Systems' dbCAMS+ and TechFi. Of the six, only TechFi is on ProEquities' finalist list. Ball notes that TechFi had an interface with Morningstar Workstation prior to its recent acquisition by Advent Software, and Morningstar had a stake in TechFi. Advent makes a competing wealth-management platform to Morningstar called WealthLine. In the meantime, ProEquities was able to link the current portfolio-accounting system to Morningstar. "They can click a button and it transfers all their information to Morningstar, then they can begin to look at the portfolio report card."

ProEquities implemented the Morningstar Advisor Workstation last March and April. "We're achieving our goal of trying to provide one platform for all of our advisers to go to, with Morningstar being a core part of that," says Ball. Advisor Workstation not only provides research on mutual funds, stocks, and variable annuities, but also integrates an online client-questionnaire with the ability to track a client's portfolio against hypothetical scenarios and monitor their asset allocation against objectives. In addition, there's a separate financial-planning module used by the majority of financial advisers, says Ball.

Rather than build its own portfolio-accounting system internally, ProEquities is looking to integrate a third-party system that's already available. Why? "To add some functionality that quite honestly,... internally, we would never be able to build ourselves, primarily on the performance reporting side," adds Ball. The current-portfolio-accounting system lacks performance reporting but some advisers get that from using the clearing firm's (Pershing's) system, NetExchangePro while, others use Advent and Centerpiece.

Going forward, ProEquities would like to migrate all of its advisers onto one system. "It mainly helps with compliance because we know what's happening a lot better," says Ball, who adds "that way everything is standardized and the firm doesn't have to approve different types of reports." Another goal is to adopt standard reporting that's been approved by regulatory bodies, such as AMIR-compliant reporting. It also wants to use the performance system to standardize billing for all of its registered-investment advisers to manage their bills sent to clients. In terms of other priorities, the firm's attention is directed toward complying with all the regulatory changes published in the past year and a half, such as 17-A enacted May 2nd of last year, related to the know-your-customer rule, along with other rules such as the Patriot Act for anti-money laundering.

Price is another reason. "If all the advisers are on a central system, the broker-dealer gets a better price from the software company." Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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