HOLLYWOOD, Fla. – Investors of all ages and incomes want more online services and features in order to be more informed and involved in their investment activities. And if they don’t get them from their financial advisors, they’ll find someone – if they haven’t already – who will.

But for advisors, expanding or creating the type of online presence that their increasingly sophisticated clients demand means making a significant financial and operational investment, sidestepping some regulatory land mines and doing it all in a way that provides value to the client without rendering them irrelevant to the process.

Pershing, the clearing firm for more than 1,500 institutional and retail financial organizations and independent RIAs, on Wednesday said it would invest more than $300 million this year to upgrade its technology platform to find a happy middle ground that delivers an online experience that satisfies advisors and investors alike.

“Online access is critical to your business model,” Pershing Director Michelle Gutierrez said during a breakout session at the company’s Insite 2012 Financial Solutions Conference. “For both young and older clients, advisors need to embrace it and extend their service models to become a trusted partner to their clients.”

While it should come as no surprise that investors carrying around iPads and smartphones want to check their accounts and skim market data and news on a regular basis, many advisors still aren’t buying in.

Pershing cited a recent Tower Group study that found 71% of advised clients want more online access and services from their advisors yet only 35% of advisors in the same study rated providing an online experience as “important.”

“Clients still prefer face-to-face interaction for planning and investment decisions,” Gutierrez said. But they first want to access the firm’s website to learn more about products and do their own research so they can “get smart” ahead of those meetings, she said.

To that end, Pershing is upgrading its NetExchange Client platform this year, overhauling the entire architecture to provide “a different experience in terms of flexibility, customization and personalization,” said Gregory Monseliu, Pershing’s vice president of strategic planning and initiatives.

The upgrade will simplify the log-in process to provide a secure entry – the No. 1 concern of all investors by a wide margin – consolidate three NetExchange Client sites into one full-service site, incorporate performance reporting features, research and market news and analysis and eventually allow clients and advisors to secure upload documents to the portal.

“It’s the most significant investment in our investor portal to date,” Monseliu said. “We’re talking about rebuilding the platform from the ground up to allow for more branding and customization tools to simplify the experience.”

Pershing officials said many high-net-worth clients receive investment advice and services from multiple providers and the prowess – or lack thereof – of an advisor’s website and applications is often a competitive differentiator.

With so many online financial news outlets and investment blogs vying for clients’ attention, advisors who give clients the most functionality and variety within their customer-facing websites are best positioned to retain or attract new clients, Pershing said.

“Advice is important, but it’s about how you deliver the other elements,” said Jay Lind, a director in Pershing’s relationship management group. “Customers are demanding a better online experience. They want to be empowered to do other things. They still value advice but also care about how you intermingle all these other things.”

Pershing officials said advisors will be able to access some of the new NetExchange Client features in July and the entire project should be completed and available to clients sometime in 2013.

Larry Barrett writes for Financial Planning.


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