Advisor Applications
TRX, Makers Of Portfolio Rebalancing Software, Acquires PowerAdvisor
Friday, November 08, 2013 15:19

Tags: advisor industry people | Portfolio Management Software | rebalancing


Total Rebalance Expert, which makes software for rebalancing investment portfolios, has acquired PowerAdvisor, a portfolio management software company. What’s going on?
Sheryl Rowling, the owner of TRX, says PowerAdvisor has about 100 RIAs using its software, covering about 300 investment advisors.
PowerAdvisor, a portfolio management app made by a company called Cornerstone Revolutions, was born about a decade ago as “PowerBroker.” It was written up by the advisor tech press in 2004 as the next big thing for RIAs and named “rookie of the year.” But the system never gained much traction. Despite several management changes and an investment from an advisory firm that thought it could turn PowerAdvisor into a success, the company never attracted a following big enough to reach critical mass and ba able to fund software development, sales, and service. But it was not for lack of trying.

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PowerAdvisor was an ambitious effort with lots of add on services and features. While TRX has already taken down PowerAdvisor’s website marketing material, an archive of the PowerAdvisor website tells us this:
  • PowerAdvisor portfolio management software allows you to manage client assets and provides a toolset for custodial data processing, performance measurement, reporting, compliance and client billing.
  • PowerOffice provides full service data management and back office services to investment advisory firms, aiming to boost productivity and reduce overhead costs for firms using PortfolioCenter, Centerpiece and Advent/Axys.
  • PowerTrade Portfolio Rebalancing and Order Management System, automates asset allocation, portfolio rebalancing, and trade execution.
  • PowerAdvisor also a client web portal system for client communication and document exchange.
Rowling, who I have praised in the past for her good work on behalf of advisors, won’t say how much she paid for the company. But I’m sure it was an attractive price. And the purchase makes sense for Rowling. Her vision, as bulleted out in an email to me yesterday:
  • customizable, flexible portfolio accounting software, scalable for any size firm.
  • unlimited models using security type, asset class, industry, sector or individual securities. 
  • client billing with full customization. 
  • portfolio data—snapshot view, tax lots, unlimited clients/accounts/groups, multiple data input and unlimited contact types
  • 18 audit-ready compliance reports
  • cost basis tracking, direct custodial interfaces.
  • intuitive user interface, full security tools and features, updated position pricing options, robust reporting options with over 60 reports including flexible formatting, firm logos and batch reporting.
“The goal is to provide leading-edge best of breed solutions to advisory firms of all sizes at reasonable costs, with streamlined implementation and user-friendly operation,” she says. “With combined technology, TRX will be able to provide robust, tax-efficient rebalancing to firms that want direct integration with their custodian as well as firms without portfolio accounting software. We will also be able to offer attractive pricing to those firms wanting to utilize multiple products and/or services. We are committed to remaining open architecture.
“As a personal believer in best-of-breed technology, our software solutions will always be available and integrated with outside solutions that individual advisors feel is best for their firm,” adds Rowling.
“We will handle everything from the data aggregation and reconciliation to client reporting, fee billing, rebalancing and trading at a fraction of the cost of full time employees or a TAMP,” says Rowling. “This gives advisors a great ‘succession plan’ as well. When they have a streamlined, well documented processes, it creates value in their business and makes for a smooth transition.”
The purchase will make sense and provide value to RIAs if Rowling can execute on that vision and deliver a portfolio management software system tightly integrated with TRX's rebalancing tool and priced at a relatively low cost when compared with similar products like Tamarac.  
TRX started out a few years ago providing rebalancing only for PortfolioCenter. It has since added other PMS apps that can utilize TRX rebalancing to manage portfolios for tax efficiency. Rowling says the purchase of PowerAdvisor will not impact those integrations.



An Excellent Retirement Income Planning System For Financial Professionals
Wednesday, November 06, 2013 19:22

Income Discovery, a software product designed by New York City-based entrepreneur, Manish Malhotra, is an excellent tool for any serious investment advice professional. If you’re not using it, you probably should be.

I’ve written highly favorable reviews of new professional software for investment advisors only twice (that I can recall) in the last four years: one was the first review of Income Discovery and the other was about inStream Solutions, which took an entirely new and original approach to advisor-client interaction leveraging the Web.

Income Discovery is a breakthrough app for a few reasons:

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ID enables a comprehensive picture of a retirement income plan based on behavioral finance research. Clients are presented results in a different, new way. Instead of showing people Monte Carlo results showing the percentage of people likely to fail, ID presents the clients with a picture how what failure might look like. This presentation is very different from showing someone the chances of success and expressing retirement in terms similar to gambling or sports betting. Instead of presenting a retirement plan results as statistics, ID tells a client how many people on the proposed plan are likely to get the full-income, the goal amount. Each client report includes information about an “unfortunate” retiree. It turns the traditional report about statistics into a story about an individual who runs out of money in retirement. People—that includes your clients and prospects—learn better when told stories than given statistical reports. ID tells that story. Because people better understand the cause-and effect-relationship of their retirement income decisions, they are likely to be more invested in the process and behave rationally.
ID is the right tool for the job. Malhotra says he knows of no other retirement planning tool that lets you see the impact of introducing a bond ladder on a portfolio or that can run “what ifs” testing all variants in Social Security claim strategies, or that can model the impact of changing the order of withdrawals from accounts with different tax treatments. I’ve spent many hours with him over the past year talking about retirement planning and advisor technology and he’s not prone to hyperbole or exaggeration. If you want to structure withdrawals across qualified and non-qualified accounts, for example, I believe you will not find another retirement income app with the same level of detailed forecasting and analysis of different strategies.
Determining a client’s optimal age to annuitize is a big deal. About 70% of A4A members do not sell variable annuities, but you do come across clients and prospects that own VAs all the time. In fact, some of you have made a career out of helping clients burned on high commission VAs. If a client already has a variable- or fixed-annuity, you can use ID to advise on when to annuitize. The dearth of professional tools for optimizing VA income streams is hard to understand, considering how fundamental this is in retirement income planning. Say you have a client with an income/benefit base that is higher than the VA’s contract value. You don’t want to kill the contract by annuitizing too soon.  Based on the guarantee in the contract, it’s wise to find the optimal time to annuitize. The decision on when to annuitize may seem like a small decision but can have significant impact on a client’s retirement plan. ID presents reports analyzing three options to present to clients. ID runs the same assumptions for future rates of return, inflation, correlation coefficients, and risk to see which one performs relatively better by isolating one variable: the age to invoke a lifetime guarantee and annuitize. ID runs 1000 simulations to tell you the optimal age to annuitize. Maybe I’m not reading the trade publications enough but I challenge any of our readers to show me a tool that tells clients when to annuitize their contract—much less in such depth and context.
ID has Manish Malhotra. Since I first wrote about Manish in March 2013, we’ve met for dinner and lunch several times and have come to know each other. I am so impressed with this guy. Malhotra came to America from India after college and post-graduate studies and earned his way up to running Citigroup’s wealth management platform. About 3 1/2 years ago, he left the corporate world to capitalize on his ideas by building his own company. As the son of immigrants to the U.S., I am always impressed by people who come to New York from other cultures and kick ass. Malhotra is a gentle soul with a brain built for quantitative analysis. On top of that, the groundbreaking behavioral finance work of Nobel prize-winning economist Daniel Kahneman shapes Malhotra’s approach to helping advisors communicate complex financial concepts to clients. I love that.
On Friday at 4 ET, Manish is going to talk about how retirement planning decisions that advisors and their clients make, that may seem trivial, can be game-changers for clients. Register here. (Requires a $60 annual fee to A4A, which gives you access to timely continuing education based on what’s happening in the profession and real world.)    


Apple's Latest iPhone Puts Focus Back On Fingerprint Security, Which Would Be Good For Advisors
Tuesday, September 10, 2013 07:10

Tags: phones | privacy; security | security

Fingerprint scanners have long been a way to avoid the need for passwords to authenticate users of computers and other devices, ut it has never caught on. With Apple expected to include a fingerprint scanner on the more expensive of two iPhones it is expected to unveil Tuesday, it could breathe new life into the use of fingerprint scanners on hardware, which would be great for advisors.

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A fingerprint scanner is a really great way for advisors to lock down passwords on their laptop or desktop. I've written before about how you can use a fingerprint scanner with a password manager program like Roboform so that you can simply scan a fingerprint instread of entering keys of long passwords.


With Apple today widely expected to add a fingerprint scanner to the high-end iPhone launching today, this technology, which never caught on in the 1990s when it first appeared on hardware, could make a comeback, which will be great for security-conscious advisors. 



Advisors Ought To Be Looking At Touchscreen Monitors Now
Monday, September 09, 2013 10:34

 Advisors ought to be looking at touchscreen monitors. They’re better for presentations, Web-browsing, and consuming video or textual content. With the latest technology and specifications in mind, here are key factors to consider when buying a touchscreen monitor.

Why Advisors Need A Touchscreen. Most advisors are using Windows machines. Windows 8, which advisors are adopting, is optimized for use with a touchscreen. I’ve previously suggested trying out a Windows 8 touchscreen on a laptop, ultrabook, or convertible. (Please let me know about your experience.) Now, a new generation ultra-high resolution monitors is about to launch with touchscreen capabilities, and they will make desktop touchscreens much more usable and valuable. Live presentations become more dramatic and online presentations better utilize the digital dimension.
Ultra-High Resolution Touchscreen Monitors. The first generation of Windows 8 has been all about touchscreens on convertibles, laptops, ultraportables and phones—not desktops. Windows 8 adoption on desktops has lagged until now, and for good reason. Windows 8 for desktops was totally bungled by Microsoft. Windows 8 is actually two separate interfaces: a “Metro” interface for touch, and a mouse-driven interface. The touch interface does you no good on a desktop without a touch monitor, and  removing the “Start” button caused massive dissatisfaction. (The disjointed launch of Windows 8 surely helped push Microsoft’s CEO Steve Ballmer to exit earlier than originally planned.)  Ultra-high resolutoin monitors, however, will help make the Windows 8 touch interface more useable on desktops, along with the release of 8.1.  Hardware manufacturers are starting to bring to market bigger touchscreens with WQHD (2560 pixels x 1440 pixels). WQHD is a must if you’re using a 27-inch or bigger monitor, measured diagonally. Multitasking and working on multiple applications at one time works much better on a WQHD monitor. The size of icons and buttons on your screen will be too large on a 1920-pixel by 1080-pixel. Picture the physical set up on your desk if you are using a touchscreen: The monitor is probably sitting two- or three-feet from your eyes because it needs to be close enough for you to touch. Since the monitor is so close, the WQHD display literally puts more information at your fingertips and is easier on the eyes. A new generation of 2560 x 1440 monitors is on the way.
Prices And Choices. You can find a good HD touchscreen for $572 but a good WQHD touchscreen monitor is $862.  Another alternative in WQHD touchscreens is an all-in-one PC, like the Dell XPS 27 with an i5 quad- core processor, or a more powerful XPS27 with a i7 quad-core processor and solid state drive for fast booting. All-in-ones comes with a central processing unit (CPU) built into a monitor; they’re desktop computers. An alternative: a powerful laptop with a quad-core processor and separate WQHD monitor. For example, the HP Envy Touchsmart costs the same as an all-in-one, has about the same processing power as an XPS27, and you can add a WQHD monitor the Acer WQHD monitor for $862, and that gives you the portability of a laptop plus a touchscreen.
Touch Enhances Digital Communication. Don’t underestimate the value of a touchscreen. I initially thought touch was unnecessary on my desktop. However, having used Windows 8 for about nine months now, I see how it can improve desktop computing. When you give live presentations, swiping to move to the next slide is very different from clicking on a mouse to move to the next slide. The physical act of swiping involves you and your audience in the presentation in a subtle but important way. If you are standing in front of a 70” screen making a presentation, your arms sweep across the screen. That’s a much more expressive way to make a presentation, and your audience is compelled to watch you. In addition, you can draw on your slides—circle what’s important, underline the most important facts and make a point more effectively. Advisors can conduct a webinar and record it for on-demand playback, and then draw on their slides. Creating your own whiteboard videos is suddenly much easier with a touchscreen.



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Present Wirelessly With Chromecast In Your Conference Room
Monday, August 26, 2013 19:53

Google's $35 Chromecast may be the simplest, least expensive way for financial advisors to make presentations in a conference room. You wirelessly stream content from your laptop browser to a screen.


In July 2013, Google launched the device for wireless screen sharing. It  plugs into an HDMI port and is powered via USB or AC adapter.


After a bit of setup, you "cast" video from the USB device on your computer using YouTube or Netflix, and Android users can also "cast" music or movies from the Google Play store.


For advisors, you can use a Chrome browser to  "cast" content from a single browser tab. You can cast a tab containing Google Docs, Sheets or Slides - or any web page, for that matter. This makes the Chromecast device useful in meeting rooms.


I covered Chromecast about a month ago. It's back-ordered and I'm still waiting for mine to arrive. TechRepublic offers this "how to" story about using Chromecast for presentations.


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