Advent and Black Diamond are looking like soul mates but the Axys-to-BlueSky 'Easy Button' is still on the to-do list

Brooke’s Note: I went to AdventConnect attuned to even a murmur of discord between newly merged Advent Software and Black Diamond. To cut to the chase, I didn’t find any of it — either emanating from on-the-record or anonymous sources. In general, I got the impression that Advent executives are incredibly proud and relieved to finally have an unimpeachable technology in the form of BlueSky to offer RIAs. I also got the impression that Black Diamond executives were truly excited — almost flattered — to be part of (and even featured at) the big Advent show in Boston. Still, the challenges these two companies face only three months into marriage are formidable, and there was plenty to report on. See: AdventConnect Report: Black Diamond will sell re-balancing software and better reporting on alternative investments.

The unlucky aspect of AdventConnect was that the event’s first day was Sept. 12, so most attendees found themselves flying to the event on the 10-year anniversary of 9/11. This did not keep the annual convention of Advent Software from attracting a record-large crowd of 1,238 people — including 779 clients of whom 170 were investment advisors or financial planners — from around the US. Perhaps people had an advance report on Boston weather. It was perfect. See: AdventConnect Report: Black Diamond will sell rebalancing software and better reporting on alternative investments.

Stephanie DiMarco, CEO and founder of San Francisco-based Advent, acknowledged the ominous travel date in her opening remarks on Monday and made special thanks for people’s forbearance. Otherwise she kept her comments general but acknowledged a megatrend that she is paying attention to — mobile computing. (Her company is working on an iPad app for Advent Portfolio Exchange.)

Monster of all waves

“We may be at the front end of the monster of all waves,” she said. “It’s all about mobility. We’re just on the front end.”

Advent hasn’t been known as a leader in mobile technology, but its new business unit, Black Diamond Performance Reporting, has made strides in that area.

See: Black Diamond releases BlueSky Mobile for the iPad.

One reason that Advent bought Black Diamond was because it has more than 2,000 clients, large and small, that are still using its Axys product. Eventually these advisors will need to move on to use a more modern technology. Axys has been continually upgraded but it is based on 1980s flat-file technology and exists largely on people’s desktops. See: How Advent plans to make money with purchase of 'break-even’ Black Diamond.

Advent and Black Diamond are working hard on — and have even named — the technology that will make this transition happen in a far shorter time frame than the current six to 10 weeks, according to what Reed Colley, 34, general manager and senior vice president of the Black Diamond business unit, and Peter Hess, 40, president of Advent Software, said in interviews.

The project is called “Easy Button.” Neither Colley nor Hess would put a time frame on its completion. Colley says that the vision is for a conversion to literally occur with a few clicks. See: Advent Software is moving ahead in the RIA tech market— even if most Axys users refuse to budge.

One factor blocking the realization of this vision is the degree to which long-time Axys users have customized the software on their desktops. “That makes the Easy Button harder to make easy,” Hess says. See: How one company is making money by making Advent Axys data portable.

Advent helps Black Diamond

Both Colley and Hess accentuated the degree to which the merger is already helping the companies. One technological edge that Advent maintains over its more RIA-centric ex-rival is in the area of deep accounting. Black Diamond is rapidly working to leverage this technology as a new partner. It will allow more detailed reporting at the investment level with capital gains and redistributions, for instance. It will also allow for much-improved reporting on fixed income.

“My [software engineers] would say: 'Can we call [Advent’s engineers],’” Colley says.

Hess adds: It’s so much better (collaborating) than if we’re at opposite sides of the country wondering what the other side is doing.

One of the better sessions at the event was Monday’s advisor panel. It included Black Diamond-using advisors from three very different firms: Ted Rich, principal of Vinoy Capital LLC; James Moore, vice president of DKE, a Florida-based turnkey asset management program with $1 billion in assets under management that uses Dimensional Fund Advisors funds exclusively, and Alex Gordon, a senior analyst and chief operating officer at Syntrinsic Investment Counsel of Denver. His firm manages $650 million for foundations and endowments.

Gordon praised the fact that Black Diamond has never dictated what types of investments his company can use on behalf of its sophisticated clients. One foundation uses 50% variable annuities and he says that Black Diamond provides a better view of the account than even the insurance company that supplies the VAs. He adds that many of the people who serve on the boards of endowments and foundations he serves are advisors. “We get comments back from investment committees asking about our system for [members’] own business.

Huge improvements

Moore noted the ease of bringing on new clients. As a TAMP, his company recently brought on about 600 accounts simultaneously and it went off without a hitch, unlike some past onboardings using Black Diamond. “It was perfect. There were huge, huge improvements.”

Rich says that Black Diamond integrates so well with third-party vendors that he considers it practice management software rather than performance reporting software.

Also interesting at the panel was a gentleman seated in the middle of the room who kept asking the panel penetrating questions — especially about whether Black Diamond was ever slow or halting. It turned out to be Albert Cohen, chief architect of IT for Cetera Financial Group, the name Lightyear, a private-equity fund, gave to the group of ING broker-dealers it purchased almost two years ago.

Cohen’s company recently made a big move to Advent and he says he is pleased but not entirely pleased, as sometimes things move slowly with the 100,000 accounts that are on the system. See: Cetera Financial shores up its technology as it prepares to take on LPL for big hybrid RIAs.

“We have to worry about that scale,” Cohen says. “If it’s complicated [as a data demand], it can take a little while.”

He adds: “We’ve had a very good experience with Advent … but Black Diamond is all on the web.”