Advisor Group — the independent-broker-dealer business of American International Group Inc. — tomorrow is unveiling a re-engineered second generation of its technology platform, now to be called Vision 2020 Wealth Management.
Despite the financial woes of its parent over the past few years, Advisor Group has continued to invest in and drive its competitive approach to technology.
A dollar amount in the “healthy seven digits” is about as close as Randy Epright, the group's executive vice president in charge of technology, would come to estimating development costs for the two-stage rollout.
The revised platform is web-based and built on open architecture.
It provides many new portfolio management tools, and features a custom-built trading engine and a variety of investment options. It also offers all the account administration features developed for the first generation and subsequently improved for this one.
Most likely to resonate with tech-savvy advisers using the platform will be its integrated managed-account area called adviser-managed portfolios.
AMP was developed in partnership with turnkey platform provider Envestnet Inc. and could propel financial advisers who are timid about adopting managed accounts and model portfolios to do so — that is one goal, anyway.
Mr. Epright wanted to make it clear that he wasn't simply using the Envestnet platform. Advisor Group — the umbrella for FSC Securities Corp., Royal Alliance Associates Inc. and SagePoint Financial Inc. — had integrated its adviser-managed portfolio piece into Envestnet's standard platform.
“We brought over a number of custom features, including our performance-reporting system, and our global re-balancing and trading features,” he said, adding that Envestnet will be rolling out some of those features to its own clients over time as part of the partnership.
Integration with customer relationship management provider Redtail Technology Inc. has been completed and a pilot is under way with another provider, SmartOffice. Advisor Group also will be offering its own white-label version of Sales force.com Inc. in coming months.
One hiccup has been the integration with CRM Software Inc.'s Junxure program. Advisor Group, however, said that it will be fully integrated with the company's cloud-based version later in the year.
The many popular back-end integrations around document management, which were in development last year, are part of the new platform, as well.
This includes everything developed for Advisor Group's Client Central system. For example, it will have the e-forms library from Laser App Software (which fills in information on documents automatically) and a great deal of customized development specific to the broker-dealer network, as well as Docupace Technologies Inc. for compliance and retention.
One thing that has been dropped is access to Pershing LLC's NetX360 brokerage account platform, thanks to the in-house development of the entirely new trading system.
There are now 500 advisers using AMP and 2,200 of Advisor Group's 4,800 advisers now have access, according to Bruce Levitus, the group's senior vice president of investment advisory services.
For advisers who want to em-brace the market as a hybrid, doing both commission and fee-based work, and crave flexibility when it comes to adopting a registered investment advisory model at a competitive price, the Vision 2020 Wealth Management platform is going to be compelling.
“We are wide open. If you want to operate under our corporate RIA, you can, or [do it] on your own,” Mr. Epright said.
As for the cost to advisers, Mr. Levitus said: “Simply put, 25 basis points has been cut to 15 basis points on the entry-level account — that's a 40% cut in costs. We are bettering the competition because our entry-level account size is $50,000; for many other broker-dealers it's $100,000.”
Matt Montgomery, the sole proprietor of Montgomery Financial Designs, works through Royal Alliance Associates Inc. and has been on the platform for three months.
He is a state-registered adviser in Texas with $35 million in assets ($22 million of it on AMP) and 80 clients. He runs his own book of business and has been running his own model portfolios since 1997.
“The neat thing is that the platform allows me the freedom to create my own models,” Mr. Montgomery said. “But if you don't want to manage your own, this platform has pre-prepared models that you can use. Very simple, very explanatory to the client and very easy to run.”
Mr. Montgomery maintains what he calls growth, balanced and conservative portfolios on the system. A third of his clients are retired and looking for income, something the platform helps him accomplish.
“I started out way back by using Excel spreadsheets, but the most interesting thing is that Royal Alliance provides this to me, and now I no longer need the two folks that I had working for me until last year,” Mr. Montgomery said.
While he expressed guilt at having had to shrink his staff, the new offering has made him much more efficient.
E-mail Davis D. Janowski at firstname.lastname@example.org.