By now, you have probably witnessed some of the fanfare surrounding the launch of NetX360. The brouhaha does not give full credit, in my opinion, to the importance of this platform. Technological innovations under way at Pershing today could propel the firm into a technology leadership role in both the broker-dealer and RIA custody spaces. These changes, spearheaded by Pershing's managing director and chief information officer Suresh Kumar, could, if successful, create the new model for broker-dealers and RIA custodians for years to come.

While the impact of these changes will initially benefit front-line brokers and RIAs on the Pershing platform, this technology model will put pressure on competitors to try and meet or exceed what Pershing has to offer. NetX360 promises, among other things, a comprehensive, intuitive workstation that seamlessly integrates an expanding roster of quality third-party software as well as built-in, state-of-the-art compliance tools. In addition, the platform offers the ability to mine data for the benefit of all Pershing clients, as well as an opportunity to serve as an incubator for promising new technologies. What this means to you: the ability to operate more intelligently, more efficiently and less expensively, in an environment you can customize to meet your needs, while using your favorite software. You'll be able to access it via your smartphone, and Pershing is planning to release new apps for the iPhone and the BlackBerry shortly. In addition, Pershing's new technological ecosystem promises to foster further innovation through software incubation and data analytics. In a year or two, there may even be a NetX360 App Store.

ershing is not usually the first name that comes to mind when discussing broker-dealer technology. Perhaps that's because Pershing, based in Jersey City, NJ, is not your typical broker-dealer. The company's primary business has been to act as the broker-dealer's broker-dealer, providing a full operations platform to small and midsize broker-dealers.

Pershing is often overlooked when discussing RIA custodial technology as well. Although the company has long offered custodial services to RIAs, for years the RIA division labored in relative obscurity. Clearly, that is no longer the case. Pershing now aggressively markets its RIA arm, Pershing Advisor Solutions (PAS), run by industry veteran Mark Tibergien since October 2007. PAS now custodies approximately $60 billion, which puts the company in fourth place behind Schwab, Fidelity and TD Ameritrade. Overall, Pershing has approximately $715.8 billion in assets held in custody. Its parent company, The Bank of New York Mellon, has $19.5 trillion in assets under custody and administration.

MEET THE NEW WORKSTATION

Pershing's recently concluded INSITE Conference was the official debut of the new workstation, the successor to NetExchangePro, which is accessible to almost 100,000 registered reps and RIAs conducting business through Pershing. To take its workstation to the next level, Pershing surveyed and interviewed more than 700 RIAs and investment professionals, many of whom were not Pershing clients. In addition, Pershing made use of the feedback it received through the existing NetExchange system. More than 1,500 suggestions were considered.

In the end, Pershing delineated four major goals for NetX360, Kumar says:

1. 1. Provide choice and integrate best-of-breed functionality through vendor partnerships;
2. 2. Increase advisor efficiency and productivity;
3. 3. Provide advisors with insights on growing their businesses and reducing expenses; and
4. 4. Meet the compliance challenge.

Let's look at some examples of what Pershing has done specifically to address each of these goals.

CHOICE AND INTEGRATION

It is here that Pershing has an opportunity to separate itself from the pack and create the next model for broker-dealer and custodial technology. Many broker-dealers offer access to some third-party providers, and some broker-dealers even offer integration between the broker-dealer and the vendors, but such integrations are usually limited. For example, often broker-dealers offer a single software provider per software category. The advisor may have to sign on just once, but he or she won't necessarily be able to call up or enter information in multiple applications smoothly, in real time. Also, in some cases, pricing is an all-or-none proposition: If you want to use a portfolio-reporting package, for example, you must take it for all your clients. And pay accordingly.

On the RIA side, Fidelity's Wealth Central has been, to date, perhaps the most aggressive custodial attempt at integration, combining online customer relationship management (CRM) with portfolio management and accounting, financial planning software and soon, rebalancing software. The platform does offer near real-time data integration among the various programs and the Fidelity back office. But to date, advisors are limited to one software provider for each activity.