BlackRock’s Kapito to advisers: Your B-Ds need to help more

Broker-dealer firms aren't providing financial advisers with the technology and resources that they need to manage risk in their portfolios, according to Robert S. Kapito, president of BlackRock Inc.

Broker-dealer firms aren’t providing financial advisers with the technology and resources that they need to manage risk in their portfolios, according to Robert S. Kapito, president of BlackRock Inc.

“I don’t think your firms are creating the tools you need to answer clients’ questions,” he said last week in comments before attendees of the Investment Management Consultant Association’s conference in New York.

Advisers need to be able to stress-test their clients’ portfolios to see how they would perform under various scenarios, such as if interest rates rise or the real estate market bottoms out, Mr. Kapito said.

“Wall Street spends too much money on technology to sell securities and not enough on clients,” he said. “I would like to see all of you have the tools to stress clients’ portfolios.”

Although banks provide this kind of support to advisers, most broker-dealers don’t, agreed an adviser who attended the conference.

“Broker-dealers just give advisers the systems to manage portfolios, but not to be proactive,” said the adviser, who asked not to be identified.

BlackRock sells its own risk management and trade-processing tools under the BlackRock Solutions banner, but the products are designed for institutional investors.

E-mail Jessica Toonkel Marquez at [email protected].