The asset management industry's involvement in the digital advice space continues to deepen, as firms focus on providing institutional solutions for advisors.

Custodial giant Pershing broadened the scope of its B2B digital advice offerings, announcing it was bringing startups SigFig, Vanare and Invesco's Jemstep Advisor Pro onto its platform, which also includes the newly developing robo Marstone.

Additionally, a portfolio and risk modeling firm serving asset managers announced its own institutional advisor offering, one that its chief executive claims can anticipate client behavior.

The Pershing announcement comes just weeks after BlackRock made its latest deal with LPL to provide its independent broker-dealer network with its FutureAdvisor robo solution.

As such rapid digital change affects wealth management practices, an open API, multiple-solution approach allows for quick innovation and is the smartest strategy to serve different orders of adviser business, says Mark Tibergien, CEO of Pershing Advisor Solutions. He added that Pershing may add other providers to its custody platform in the future.

"We don't think a proprietary or single product-oriented approach is adequate for each of the clients we have," Tibergien says. "Each of our clients has different needs. There is no one single killer app."

The variable approach and allowing access to its application programming interface is a savvy business move, the firm's new partners said.

"What they're doing is very smart," says Richard Cancro, co-founder and CEO of New York-based Vanare. "They're offering choice to clients and letting clients having multiple options. Choice is always great.

"From a marketplace perspective, TD Ameritrade and Pershing have raised the bar in terms of working with third-party digital providers versus their competitors, for sure."


Tibergien acknowledged the varying approaches among other asset managers and custodians toward offering digital solutions for advisors, such as BlackRock's recent sweep of deals with large institutions for its robo platform, or the all-in-one, closed architecture systems coupled with in-house robo solutions created by Schwab and Fidelity.

"I think each of our competitors have proven, successful businesses, it's just our philosophies different," Tibergien says.

"The way which we view the marketplace, it's far too dynamic to hitch your wagon to one star. It's not unlike investment advisors recommending a diversified portfolio. Having a diversified approach creates flexibility and leverages the power of multiple solutions. I wouldn't say they're wrong. We're quite comfortable in our approach."

Simon Roy, president of Jemstep, added the partnership was geared toward creating efficiencies for clients and the advisors that serve them.

"Pershing is committed to providing its network of advisors with access to the services needed to grow their businesses and we believe that Jemstep Advisor Pro will help them expand their business, as well as provide objective advice to their clients," Roy said in a statement.

Having made the shift from B2C to a B2B model, the Pershing alliance provides sustenance for five-year-old SigFig, notes its Chief Executive Mike Sha. (In April SigFig partnered with Boston-based Cambridge Savings Bank to provide its customers with digital advice.)

"We're obviously excited to be working with large provider," Sha says. "We've held a deep belief that enterprise partnerships are the right way for us to touch many lives and give as many people as possible access to investment advice."

The addition of the three platforms doesn't diminish the existing Marstone offering, Tibergien notes. "It's in fact our first priority. It is the very first one, followed by the others. Ultimately it's the consumer's choice. We're not selling a product; we're making options available to them."


Dan diBartolomeo, president of Boston-based Northfield Information Services, sees a need in the market for a system that dives much deeper into a client's background and finances than what many financial planning platforms currently do.

"One of the things we consider in our questionnaires is how tied your career is to the well-being of financial markets," diBartolomeo says. "This is a level of granularity other systems don't work at."

Called Wealthbalancer, the tool relies on two proprietary approaches developed by Northfield - the discretionary wealth hypothesis and the analytic hierarchy process. The former determines how much risk a client can take, the latter characterizes an investor's preferences.

The process seeks to address what diBartolomeo says is a problem of too much generalization and simplification in the multiple question approach employed by competing platforms.

"How would you change your asset allocation based on the likelihood of a divorce? There are theories about this. If you want to go to that level, you can. So many systems out there are simplifying markets to a tremendous degree - just stocks and bonds, forget all else - but you can't simplify household problems. Disability is real, divorce is real. These are large events to a household financially."

Acknowledging that Northfield isn't a well-known name in the retail investment space, diBartolomeo says that Wealthbalancer is a solution geared for the regional, wirehouse or potentially family office client.

But 30 years of serving institutional clients has proven the firm's investment approaches, says diBartolomeo, an active scholar in quantitative finance who also serves on the Board of Directors of the Chicago Quantitative Alliance.

A validated mathematical foundation, naturally, is what diBartolomeo stresses is one of Wealthbalancer's biggest strengths.

"Pretty much every financial firm has questionnaire for clients, the difference is the math behind the scenes," he says. "There's a lot of practical concerns in making most theories work well in the real world." 

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