Canadian Portfolio Management Software Company With 7,000 Users Coming To America; Low-Cost, Feature-Packed System Hot

For CFAs, CFPs, CPA/PFSs, CIMAs, CPWAs, and other investment advice professionals, Croesus, king of the ancient empire of Lydia

from 560 to 547 BC and renowned for his wealth and notable gifts, is itself a gift to RIAs. In providing a highly sophisticated portfolio accounting, account reconciliation, and reporting for just $4,800 a year, Croesus is the lowest-priced PMS system for fiduciaries extent. It will push down the cost of technology and improve efficiency for RIAs.

Moreover, Croesus is breaking the pricing mechanism used by online PMS providers. Other online PMS systems charge based on the number of accounts an advisor put on the system. Not Croesus. It charges a flat fee per license for as many clients as you have.    

Croesus Overview

For $7800 a year,* a frugal RIA gets in Croesus an excellent PMS and performance reporting system with an iPad app for you and clients to view reports on demand. In addition, a CRM — that does not stack up against best of breed systems like Redtail but is built on a solid foundation for the future—comes with the package. 

Croesus is a Microsoft .NET program. .NET is a popular development platform for building apps for Windows and allows developers to create sophisticated apps. Croesus uses a “smart client” that runs locally on your computer but is connected to an encrypted database on the Web. Smart Clients came about because businesses developing web applications to replace desktop applications saw productivity decrease because web-based user interfaces are typically slower than locally-run desktop apps. Smart Client applications bridge the gap between web applications and desktop applications. They provide the benefits of a web application, leveraging the internet and offering remote access to data, while also providing the look and feel in desktop applications.

At $7,800 a year, for a single license, an RIA gets a sophisticated PMS system. Croesus is GIPS-compliant (Global Investment Performance Standards), capable of multicurrency management and reporting, handles all methods of tax accounting (Actual, Average, FIFO, LIFO), and comes with an iPad client view with beautiful graphics. Croesus downloads and scrubs your data daily.

For many RIAs, price is the crucial factor in selecting a PMS system. Not only does Croesus provide excellent value for RIAs, but it supports an RIA adopting best of breed solutions, which is the lowest cost way for an advisor to create an integrated desktop. Croesus is likely to quickly become a serious contender. Croesus would not be so serious a new contender if it were a startup. It already has $350 billion of Canadian assets on its system.

The RIA Challenge
The biggest challenge to Croesus is that RIAs are much smaller than Croesus’ current client base. Croesus has 7,000 users but they are spread over just 60 firms. Croesus’ average client manages about $5.8 billion (with currencies at parity). Those are much larger firms than the average RIA managing private wealth. What could go wrong?   

At $7,800, Croesus’ U.S. pricing will attract RIAs with $0 million to $5 billion AUM. RIAs at the low end of the AUM range require the most support, and Croesus could quickly acquire more low-end RIA-clients than it wants.

But—and this is a proverbial “big but”—Croesus is a 25-year old company. It’s doing the download and reconciliation for 7,000 advisors now. True, they’re not American RIAs, which indeed is a very special brand of customer to serve.

The $7,800 Question
For $7,800 a year, you get a single user license to Croesus. But an RIA can share a single license among multiple staff and professionals. Multiple users can log in with the same credential and use the app concurrently. Moreover, you can designate which advisor owns each client.

Guyaux volunteered none of this. However, knowing how incredibly cheap RIAs can be, I grilled him about how far one license could be stretched.

Guyaux said he would not recommend using one license across a firm with multiple advisors.  You can do it, he admits reluctantly. Then, in a melodious French accent, Guyaux explains that an RIA sharing one login with multiple employees would lack an audit trail of each user’s activity on the system.

For an RIA, as a fiduciary, with two or three successful professionals, the single-license could indeed be unwise. The SEC or state might even regard it as a deficiency—if regulators had the attention span and resources to examine RIA systems in such depth. It’s safe to say that any list of best practices for private wealth advisors would not include using a single PMS system license for multiple IA reps or support staff. For liability reasons and just to keep everyone honest, everything a fiduciary does for clients should be transparent and trackable in a database. Another big negative in sharing one user name and password is that an RIA owner’s portfolio cannot be hidden from your staff and other advisors. Anyone with your login credentials can look at your portfolio and your client portfolios and generate orders.

Pricing Details
In addition to the annual software and reconciliation fee of $7,800, Croesus levies a setup fee, of $2,275 for on-boarding, training, and customizing your reports to your branding. To convert your data from another PMS system, a separate fee would be levied that is determined on a case-by-case basis and can vary depending on how many accounts are being converted, the amount of historical data that must be converted, and whether your database is logically structured.

The $7,800 a year price applies to an RIAs first five users. Adding six to 49 users costs less. These prices are discounted by 5%, however, for TD Ameritrade Institutional. TDAI is the first custodian so far to integrate its brokerage system with Croesus. Guyaux says that, as advisors using other custodians seek to adopt Croesus, the company will build additional interfaces. “We’d love to integrate with Schwab,” says David Mastroberardino, a Croesus product manager.  Adding an interface will cost an advisors 10% more than their annual license fee. So if you’re paying $7800 a year, it would be an additional $780 annually for each additional interface. 

Other Notable Features
Advisors can change security prices if they see an error in a report. That’s important, since some online apps don’t allow advisors to touch their data.

A rebalancing function is included that allows as an advisor to create model portfolios and rebalance against the model.

 * Pricing of $7,800 updated as of March 24, 2015.

Editor's note: When this story was published on December 21, 2012. Croesus announced pricing of $4,800. In March 24, 2015, an A4A user who read the article, called Croesus and it honored the pricing. However, Croesus a spokeswomman asked A4A to correct the old pricing quoted in the article three years ago. The correct price as of March 24, 2015  is $7,800 a year. While a 40% price hike in three years sounds steep, RIAs who want to outsource portfolio accounting and performance reporting will find (as of March 2015) that, at $7,800 a year, Croesus is one of the lowest-cost solutions for automating download and reconciliation available to RIAs.   

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