Tamarac takes a leap by offering a single solution

Tamarac Inc., which is best known for its sophisticated portfolio re-balancing technology, is stepping out of its niche…

Tamarac Inc., which is best known for its sophisticated portfolio re-balancing technology, is stepping out of its niche and seeking to fill the broad needs of advisory firms by launching an all-in-one online platform.

The effort is a bid to expand the company’s business and address what its representatives describe as the lack of a comprehensive and truly integrated technology platform in the advisory market.

In theory, the full platform will allow an advisory firm to run its entire operation with a set of laptops and an Internet connection.

Officially launched Jan. 1, Advisor 9 is in use by eight registered investment advisory firms that have been on board throughout its development. Nine more firms are set to begin using it this month.

Officials at Tamarac declined to provide contact information for the firms that have been using the platform during its development and beta period.

Attempts to locate any advisers using the system were unsuccessful.

Still, based on the strength of the company’s re-balancing technology — a complex and challenging engineering endeavor, to be sure — industry analysts and experts consider Tamarac’s entry into the field promising.

More than 300 client firms that collectively manage more than $120 billion in assets use Tamarac’s re-balancing technology, including 50 firms that manage, on average, more than $1 billion.

“From a conceptual standpoint, this is absolutely something the industry is hungering for,” said Sean Cunniff, research director for brokerage and wealth management at The Tower Group Inc., a research and advisory services firm that covers the financial services industry. “However, it still remains to be seen how well it actually works, and pricing is going to be a key driver as to how affordable it is.”

It also remains to be seen how many firms will pick up and move all their existing functions to a different platform.

Probably the best fit for the platform are breakaway wirehouse brokers who are starting from scratch, in terms of technology, and who are already used to having access to all the tools that make up Tamarac’s offering.

“For an established RIA firm, it would be a very challenging conversion process,” Mr. Cuniff said. “They have to be extremely dissatisfied — it may be an easier sale for the breakaway.”

However, the continuing prediction among pundits and experts that there will be droves of brokers leaving the wirehouses has yet to materialize.

The platform has, at its core, the portfolio re-balancing technology developed by Tamarac over the past decade. A major component, though, is a customer relationship management program that acts as the nerve center for an adviser’s daily work flow.

Advisor CRM, as it is called, is organized around easy access to client information and should prove to be very easy to navigate for most advisers. It is a highly customized version of Microsoft Dynamics CRM which was built from the ground up to work in tandem with Microsoft Outlook — one of the most ubiquitous applications in the business world.

Advisor 9 is also integrated with other core advisory applications, including a proprietary performance-reporting module, as well as MoneyGuidePro for financial planning, ByAllAcounts for account aggregation and Schwab PortfolioCenter for portfolio management.

Tamarac itself has made a significant leap of faith in bringing the platform to market.

“To date, we’ve invested over $20 million in the development of the Advisor 9 platform,” said Tamarac chief executive Stuart DePina, who added that the company has 18 technical staff members dedicated to its continuing development.

Although Adviser 9 is designed to be used as a whole solution, some of its applications can be purchased separately as modules to allow firms to customize the technology to their specific needs.

The estimated cost for the full package with all its various modules and services is $42,500 the first year for a firm of three advisers.

This can be cut by $20,000 for advisers who don’t wish to use Tamarac’s outsourced portfolio accounting and management service, which handles daily downloads and reconciliation of an adviser’s client accounts and supports on-demand performance reports.

By providing a menu of the modules and their prices from the start, Tamarac is setting itself apart from its chief competitors: the WealthCentral platform from Fidelity Institutional Wealth Services and NetX360 from Pershing LLC.

Representatives from Fidelity Investments and Pershing said that they couldn’t provide a base price or component costs for their respective platforms.

Not having to rely on a platform provided by a single custodian is seen as another plus.

“Multicustody integration in the background allows advisory firms, many of whom are going to have multiple relationships, to have all their account information treated equally and organized it in a way that is optimal for their business,” said Doug Dannemiller, a senior analyst in the wealth management practice at Aite Group LLC. “It appears [Tamarac] has taken a more client-interaction-centric view, rather than a custody- or transaction-centric one, in the way the rep or adviser interfaces with it.”

E-mail Davis D. Janowski at [email protected].