New Portfolio Management Software For Advisors; AdvisorEdge Looks Good

AdvisorEdge is a new portfolio management software (PMS) app that is being launched as a result of a partnership between Mike Kelly of Back Office Support Service, and Matt Abar of FinFolio


Abar is best known for founding Techfi Corp in 1999, which made Portfolio 2000. The company experienced a meteoric rise because it was the first SQL-based PMS system for advisors. It was purchased in June 2002 by Advent Software for $23 million. While Abar walked away with about half that amount, Advent shut down Techfi's systems, ceased further development on its software, and eventually stopped supporting the system, much to the chagrin of the hundreds of RIAs who were using it.


Abar had a five year non-compete agreement that expired several years ago and has funded another PMS venture that, like Techfi, started from his home. Vowing to finish his mission to create a great PMS system, Abar has spent the last several years working on FinFolio, aiming it at larger advisory firms. 



Abar did not want a repeat of the bugs and service problems that plagued Techfi and has been launching the software very slowly. While it's had an extended beta testing period, I've been told that it is finally ready to be marketed.


But FinFolio may, to some degree, be upstaged by AdvisorEdge, a no-frills version of FinFolio that Abar is offering in partnership with Kelly.


Kelly is the founder and CEO of San Diego-based BOSS, which is a service bureau for Schwab PortfolioCenter. Kelly's company downloads and scrubs data for PortfolioCenter users. By the time its 135 advisory-firm clients come in every morning, BOSS has downloaded their data from brokerage accounts, reconciled it, and readied it to be run in reports using PortfolioCenter. 


Now, in addition to providing portfolio data services to PortfoliOCenter users, BOSS will provide it to users of a streamlined, budget priced version of FinFolio.


Kelly has run BOSS for years and knows as much about portfolio reporting data as anyone in the industry. His experience, combined with Abar's programming prowess, make me believe that AdvisorEdge is going to gain traction.


Kelly says the program does not provide some of the advanced features of FinFolio but provides the features and reports needed by 75% of RIAs serving high-net-worth individuals. For example, AdvisorEdge can't be used to create a composite portfolio that can be used to build a track record that can be advertised, and it also will not handle cross-currency transactions. These and other advanced features are not needed by most advisors, however, and that's the target market for AdvisorEdge.


Firms with less than $250 million, I'd estimate, would be in its sweet spot, while most advisors managing more than that amount are a lot more likely to be willing to spring for the additional cost of FinFolio or another high-end program that has all the bells and whistles.


AdvisorEdge costs $350 a month plus $2.25 per account. Adding additional users costs another $50 a month.


Software targeted to investment advisors has become a hot area for entrepreneurial programmers. Application programming interfaces that enable one app to pull and use data from another app is spawning a bevy of new apps, and PMS systems are among them. Advisors can expect this trend to continue and it will create more competition among PMS and other advisor apps. The investment advisor market is still a small one--despite growth in the number of breakaway brokers--and it will be fragmented to a greater degree for the foreseeable future, as more small companies launch PMS apps.


Take a look at the video of the tour Kelly gave me and let us know what you think. Will AdvisorEdge make it?


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