Michael Kitces #FinTech

BlueSky takes flight, new platform from Black Diamond

Performance reporting firm launches next-generation system

Jun 21, 2010 @ 4:12 pm

By Davis D. Janowski

Black Diamond Performance Reporting announced today the availability of “BlueSky,” a new portfolio management and reporting platform. This new initiative combines creation of an entirely new technology platform with additional staffing in key areas.

“With this new platform we are opening up the walls,” said Reed Colley, chief executive of Black Diamond Performance Reporting.

His company has grown a lot in the last five years since its founding in 2003. It now has more than 200 advisory firm clients and tracks $43 billion worth of assets on the current platform. Black Diamond gets some 60,000 logins a month and amazingly 23% of those represent actual account holders.

Leading up today's announcement, 50 of the company's firms were involved in the beta testing and development of BlueSky.

I was given a demo of the new system this past Friday in advance of today's announcement.

One of the key philosophical underpinnings of BlueSky is employing web technology that allows advisory firms to better customize the platform for their own firm.

This includes simple things like labeling their own the web portal page with their firm logo to more complex tasks like building and storing customized reports.

“The landscape from a portfolio management and performance reporting point of view over the last 24 to 36 months has added a lot of additional complexities to the market place,” explained Mr. Colley during the demo.

“What we are seeing is that we are being pulled into different deals than the past and we were starting to see a bigger need for an extremely flexible web-based platform at the higher-end level of the advisory market,” he added.

He said that while breakaway brokers still represent an important portion of his client base (around 30%) the majority of the company's new clients (70%) are established firms — managing on average more than $300 million in assets — that want to leave their current portfolio management system.

BlueSky has been born out of this new need for flexibility and from the start was intended to be scalable and to better allow for a firm's growth.

Because of this the folks at Black Diamond commenced a total rebuild of their user interface. The new system is very much built around what the company's development team refers to as an extensible workflow-based model.

In terms of nuts and bolts BlueSky is built using the Microsoft .Net platform (.Net 3.5), as was the old system, but the company's developers have now gone more toward object-oriented models.

The company's 10 programmers have built BlueSky entirely in C# with SQL databases on the back end.

The chief user components on the new platform are easy to remember thanks to the ubiquitous use of “Sky” in all of them.

These include SkyViews, which are user-defined home page views where individuals can create, name, save and organize multiple pages.

SkyBoxes, on the other hand are typically small individual drag-and-drop report objects that provide quick access to additional user-configured content on the home page.

Finally, SkyPages — think of them more as full-blow web pages that provide detailed views of data and content — whether that's a firm's portfolio theory, firm-level reports, target models or holdings pages with tax-related detail.

Advisers or their staff can create their own “libraries” of these customized pages, objects and views as well.

Additional features of the platform include interactive FlyOuts which let an adviser or client view performance trend data graphically.

There is also what is referred to as Dynamic Data Drill Down which is a fancy way of describing multiple layers of data connectivity that can be many layers deep.

And as one might expect from a company building performance reporting there is On Demand Report Generation whereby advisers can generate multiple client reports simultaneously in the background without interfering with their workflow.

“Really this is build your own platform,” explained Black Diamond product manager and developer Bjorn Widerstedt, adding that the new application has been significantly streamlined and is meant to be more intuitive from the start.

“Our existing app has seven to eight tabs depending on how it is configured, this has four [Home, Reports, Sky Pages, Setup],” he said.

Black Diamond is also touting the speed increase with the new system as well. They explain this is a facet of the re-engineering of the back in whereby the platform calls up only the data most advisers were typically looking at and eliminating about 90% of the initial data download that the old platform used to pull.

“We decided to trim down the amount of what we grabbed rather doing one big data pull at one time we are breaking it up into digestible chunks from the database,” Mr. Colley said.

Black Diamond is also hiring additional staff as part of the initiative.

Specifically they are expanding their team of Client Advocates that work one-on-one with firms.

Mr. Colley said that the company will also be adding new teams of consultants in the areas of transition support, performance history and client reporting.

Pricing for BlueSky is the same as the current Black Diamond platform. Existing clients will be migrated to the new platform when they are ready but will not be charged any additional fees according to Dave Welling, Black Diamond’s chief solutions officer in a follow-up e-mail

Black Diamond’s minimum annual fee is $20,000.

Firms with less than $500 million in assets under management will pay on average two to three basis points while those with more than that come in under two basis points.

Mr. Welling wrote that the company’s average new client has between $200 million and $300 in assets under management and for them the system costs between $40,000 and $60,000 annually.

“Generally we find that advisers with over $50 million [in assets under management] find us to be a very competitive solution if they are looking to grow aggressively,” he explained.

He wrote that most breakaway brokers who are managing $50 million to $200 million in assets recognize the value in the service. Without Black Diamond’s offering those advisers would likely have to hire someone to do their reconciliation work.

For additional information visit BlueSky online.

Related stories:

Advisers opting for outsourced portfolio reporting

Advisers look for ways to squeeze money from their tech budgets

Advisers held hostage by portfolio systems

New portfolio management software emerges to take on Advent, Schwab

New re-balancing solution cost-effective for smaller firms

Morningstar adds its special sauce to PM software

A modular approach to re-balancing

Scalability is the name of the game for report generation platform

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