BNY Mellon's Pershing is changing the way it works with registered investment advisers.
In the second year of a $50 million investment towards its RIA custody business, the firm is focusing on human talent and providing "adviser-led experiences." Leading the charge is Christina Townsend, an 18-year Pershing veteran who in June became the firm's head of adviser solutions platform strategy.
Ms. Townsend previously oversaw product in Pershing's managed account business. Now she'll spend her time thinking about how Pershing's enterprise products can be deployed to RIAs, and how Pershing can better partner with third-party tech vendors.
InvestmentNews sat down with Ms. Townsend at the T3 Adviser Conference in Denton, Tex., to ask about her role and vision for Pershing's RIA technology.
Ryan W. Neal:
Stepping into this role, what was your take with regards to Pershing's technology and where are you looking to change?
Christina Townsend: I thought that historically we were over invested in proprietary technology. That had begun to shift, but it needed to shift even faster in order to really be where we need to be for the RIA channel. Luckily, I'm getting support in this area — funding, people, etc. — to move the needle forward as it relates to working with providers.
The second part of it is people. Many of our competitors do a really great job in having people to work with the clients who need help figuring out what their technology is going to look like. We had some people doing technology consulting, but we didn't have it formalized, nor did we have a really big team.
The third is around flexible design, flexible technology. Advisory firms are saying they are going to have multiple custodians. It is not necessarily always going to be one. The more complex the firms get, and the more sophisticated their clients are, it's not necessarily realistic.
(More: Next generation of financial planning on display at 2019 T3 conference)
RN:
Are you working with teams at technology products like Marstone?
CT: I'm absolutely hooked into that. My role is to figure out what we need to do with those solutions to make them work for the RIA channel. Many RIAs want to not leverage
Marstone's investments, they want to have their own intellect in there. So we're figuring out the right way to scale the solution for RIAs, who of course want to brand it, have their own intellect, etc., within the solution.
(More: Marstone integrates robo-advice with Interactive Brokers' custody and clearing platform)
RN: What do you mean by "increasing Pershing's investment in adviser-led experience?"
CT: We're seeing a shift, I think others are too, from advisory firms looking less towards investments and less towards planning and more towards the actual experience they are providing. And that to me is a transformation that's going to take time.
The team I'm constructing is very thoughtful around people who have expertise in working with [advisers] to understand who is their optimal client, what is the experience they are trying to deliver and then how does technology surround it. My team is not going to take the technology-first conversation. Technology is a means to an end.
RN: Any specific areas of Pershing's tech stack you plan to focus on?
CT: We all talk about "tech forward" and yet our clients are not there yet, and they need help getting there. We've had e-signature for a while, but what we're going to be adding to that … is being able to create forms dynamically on the fly.
RN: It seems like custodians like Pershing are shifting away from developing flashy new tools to focus more on getting the basics to working better.
CT: Completely. I'm focused really on the return on investment in technology, whether its custodial technology or any other partner. At the end of the day, advisory firms are small businesses and they are spending real money. I don't believe they are getting their bang for their buck in all cases, or taking advantage of all the capabilities. How many times have I sat down and said we have e-Signature, and people are like, "oh I didn't know it could do that," or "I thought my team was using it."
There's just a lot of room to take advantage of what we have.
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More:
When evaluating technology, advisers increasingly focus on the client experience)
RN: What else are you working to change at Pershing?
CT: It's about technology and client experience, and it's a lot about bringing our brand forward. There are a lot of people who still know my mother's Pershing, so this year we're really getting out there.
Many firms have never made it past their original owners. As an industry, we're watching firms go for the first time from one generation to another generation. We're watching clients to see how they are going to evolve. What's going to happen?
We have a responsibility to continue to change and innovate but also to keep the base strong. And so we're investing a ton of money in risk and resiliency.
By us changing our thinking to being really focused on the core and keeping that engine humming along with no issues, and then choosing to partner for all the cool sexy stuff that's getting introduced every day, … we don't have to be innovating as fast. We just have to have the right pipes and connectivity to be able to connect with them.
