Several months after its buyout in July of CoreLink Resources, BISYS Group is introducing its first mutual fund wrap program. BISYS's brokerage services unit, created in the acquisition of CoreLink this summer, has teamed up with Standard & Poor's to create Portfolio Strategists. The new product is aimed primarily at banks, which BISYS officials say have been requesting such a wrap product to offer their customers.
Although BISYS was an original investor in CoreLink, it did not take a 100 percent stake until July. But informal discussions that eventually led to the deal with S&P began about nine months ago, according to BISYS Brokerage Services President Roger Loar.
S&P is providing sub-advisory services to BISYS for the wrap program in its first sub-advisory role for such a program. S&P will research each of the funds for the program and shape the model portfolios. Seven fund families are being used to create 12 model portfolios based on asset allocation and tax considerations. The funds that comprise the portfolios are offered as no-loads, although the banks will charge a wrap fee based on assets.
Brokerage Services, which until now has provided processing, clearing and reporting services for other wrap programs, plans to initially offer the product mainly through the 100 banks through which it currently sells its other brokerage services. Those banks have been looking for a wrap product to compete with similar programs offered at other banks, Loar said.
"It came out of a demand from our banks and our sales representatives," Loar said.
BISYS will be introducing the new product to banks over the next six months, educating sales people on how the product works. The product will also be sold to brokerages and registered investment advisers.
While S&P currently manages more than $6.2 billion in assets through various investment portfolios, company officials hope that S&P's role as sub-adviser to the wrap program will further enhance its reputation for research.
"We're trying to get more and more into this type of business," said Thomas Gizicki, vice president and general manager of Standard & Poor's Investment Advisory Services.
Gizicki says wrap programs are an important part of the market, especially as more and more people seek out advice to help them invest.
"There's a certain segment of the population that is looking for direction in their investment decisions," he said.