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.)    


Good Deal: Vizio 65" E650i-A2 Smart LED HD TV 1080p HDMI Built-in WiFi Internet Apps
Wednesday, October 30, 2013 23:33

This is a good deal if you are looking for a TV for the office for client presentations or a video studio.


It is a refurb but the seller has high ratings and it's low priced for a "smart" 65 inch TV. You's generally pay $1200 to $1400 for a new 65" 120Hz TV.


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CryptoLocker - What You Need To Know
Wednesday, October 30, 2013 11:47

Tags: CryptoLocker | malware | ransomware | security threat

One of the biggest threats to the security of any business network is malware. There are many different forms of malware out there that can infect systems in a nearly unlimited number of ways.

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In the past few weeks there have been numerous stories about CryptoLocker - a new form of ransomware that is proving to be a problem for many companies.


Knowledge is power so finding out more about CryptoLocker is recommended, as well as how you can take steps to protect your systems.


What is CryptoLocker?
Ransomware is a virus that locks important files or systems and requests that users pay a ransom to unlock them. This is not a new form of malware, but there has been a recent resurgence and CryptoLocker is leading the way.


Read more about CryptoLocker and how you can protect your systems from it:

If A Stranger With An Indian Accent Calls From Microsoft Tech Support Saying Your Computer Has Been Compromised And Is At Great Risk, It’s A Scam
Monday, October 28, 2013 15:55

Tags: privacy; security


A man with an Indian accent called my home -office number this past weekend claiming to work for Microsoft. My wife handed the phone to me because she could not tell if the guy was selling something, trying to con us, or really was from Microsoft tech support.
He asked me if I had access to my computer and told me to run a Windows diagnostic report from Control Panel. He asked how many errors it showed. Since I bought this computer in February 2013, the report had logged 18,000 errors, I told him. “Ooh,” he said, sounding genuinely concerned, “that’s a lot he said. Your computer is at great risk.”

He asked me to write down a long license code and I did. He told me to run a command-line prompt to get a license code from my computer. (A command line can be executed from a DOS prompt and displays a pre-Windows operating system interface for the Microsoft operating system.) I ran that command and saw the license code he referenced. "I would not have that license code unless I was from Microsoft tech support," he said.


My wife and were supposed to be at my niece’s wedding in 20 minutes. So I did not have time to learn exactly what kind of racket this felonious dirtball was running, but he was definitely criminally malicious. And he was slick.

He gave me an 800 number to call him back on and his extension, along with his first name. This really is a great twist but obviously is easy to pull off in an era when email addresses and phone numbers are  fungible.
I went along with him and know enough to not trust him, but I have to admit that I was not absolutely, positively certain he was a running a scam. Only later, after I googled, “phony tech support phone calls from Microsoft,” did I learn definitively that it was indeed a scam.
Point is, if a stranger with an Indian accent calls from Microsoft tech support saying your computer has been compromised and is at great risk, it’s a scam.




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