Commonwealth's revamp of technology includes subtracting Advent

Commonwealth Financial Network has cut its ties with Advent Software on behalf of its financial advisors and released a new technological platform, Client360, that its advisors say is a leap forward.

The San Diego- and Waltham, Mass.-based broker-dealer made the move away from Advent Axys in order to offer better performance reports and to achieve tighter integration for its 1,400 advisors.

Advent will be more competitive in winning customized enterprise-level contracts once it completes its pending merger with Black Diamond Performance Reporting of Jacksonville, Fla., according to Anthony Sperling, general manager for Advent’s Investment Management Group. See: Why Advent and Black Diamond are merging and how advisors look at the deal

Purpose-built

“Advent understands the benefits of purpose-built platforms, which is why, with Black Diamond, we will be the only firm with the depth of resources and breadth of experience to continuously invest in innovation to meet the unique needs of advisors and asset managers. Our solutions can go toe to toe with any in the industry, and our clients benefit from the collective knowledge of our thousands-strong network of firms using Advent products to help the grow their practices.”

In any case, Advent Software of San Francisco needn’t take the loss too personally. Commonwealth Financial Network looked at 12 to 15 alternative technology vendors and rejected them all, according to Darren Tedesco, managing principal of innovation and business systems for Commonwealth.

“We evaluated all the players out there, First Eagle, Thomson’s Portia and Advent APX, and saw what our money would get us. We would get a lot of stuff we wouldn’t need. We said: 'Let’s pay a little more and get exactly what we want and control our own destiny.”

Paying for more technology than you need is something advisors are zeroing in on. See: Purchasing too much technology has its own dangers for RIAs

Commonwealth maintained its long-standing relationships with Morningstar Advisor WorkstationSM and MoneyGuidePro and data now exports to both with a silent log-in and a single click.

One umbrella

One big advancement of Client360 from Tedesco’s standpoint is that the new system brings all $60 billion of assets under advisement by Commonwealth advisors under the reporting umbrella. Formerly, only the $25 billion of fee-based assets were reported on. Now an additional $35 billion of assets that are managed on a transaction basis can be counted and reported on.

The new system makes dealing with clients a much more efficient process, according to Matthew Somberg, a principal who personally manages $140 million of assets for Glastonbury, Conn.-based Levine, Gottfried & Somberg, LLC, an affiliate of Commonwealth.

“Before you were going back and forth between Advent and Commonwealth,” he says. “So often you had to say to a client: 'I’ll have to get back to you.’”

Matt Somberg: Before you were going
back and forth between Advent and
Commonwealth.

Another feature of the new system is that it saves money when preparing data. Somberg was paying an employee $40 or $50 an hour to do this task. “Now you turn it on and you don’t have to do anything,” Somberg says.

Expanded vision

With Client360’s ability to report on advised assets, Somberg also likes that he can view American Funds that a client has in a Roth IRA or other assets in a 529 plan that weren’t previously viewable as part of a report.

Commonwealth’s new tech package has been long in the making. First, there was beta testing for 15 months. It’s been easing out of this pilot phase for the last three to six months, Tedesco adds.

I asked Tedesco about a handful of Commonwealth advisors in New England who transitioned to full independence as RIAs under TD Ameritrade. These advisors each mentioned that they were excited about the ability to choose a new world of software as part of the transition. See: TD Ameritrade makes a clean sweep of five IBD reps in New England with about $1 billion of combined AUM

Tedesco responded with skepticism said that that these advisors left primarily for reasons related to technology and that there are disadvantages to their decision.

“You can pay $40,000 to $45,000 to use Orion,” he says.

Eric Clarke, CEO of Orion Advisor Services LLC, says that his company’s prices start at $15,000. There are other reasons why advisors choose his company’s software, he adds.

“(Advisors) don’t conform to a one-size-fits-all technology T-shirt. Each of them want to work with the technology that is a fit for their business model, not the other way around. That is not to say that what Commonwealth is building won’t be a hit for many firms, but it has been my experience that the platforms that allow integrated choices seem to resonate the best in the marketplace with advisors.”

Some advisors using Orion are also getting reimbursements from TD Ameritrade Institutional. See: TD Ameritrade uses greater financial incentives to attract custody clients

Here are highlights of Commonwealth’s new technology platform:

· More than 50 new customizable reports, including user-defined templates that can be shared across an office

· 1-click bundles, allowing users to bundle together report templates for client reviews

· A user-selectable 20+ column holdings page

· Improved variable annuity sub-account mapping to Morningstar Advisor Workstation

· Five levels of household/account grouping

· 11 distinct ways to dissect a client’s asset allocation