In today's intensely competitive wealth management market, financial advisers are challenged to service more savvy investors and their diversified, multi-asset-class portfolios while monitoring compliance requirements for every order they place on behalf of clients. At the same time, advisers must offer customization to each client, while boosting their own productivity and coping with volatile markets.
In response to these challenges, this past December Merrill Lynch completed the roll out of a new platform, Portfolio+, for financial advisers. The platform, which is hosted in Merrill's data center, went through 16 months of design work and pilots, with various teams of financial advisers providing requirements and feedback. The product provides advanced data integration, investment management and analytical tools, all on a single platform connected into a trade processing environment with compliance tools, according to Merrill Lynch.
"We're always looking for ways to serve our clients and make it efficient for financial advisers to serve them," says Lorna Sabbia, head of Merrill Lynch's managed solutions group, which manages the platform. According to Sabbia, Portfolio+ was developed for a subset of advisers that are in the firm's "rep-as-portfolio-manager" program and that have discretion (or decision-making authority) over their book of business. As of mid-January, about 4,000, or 25 percent of Merrill Lynch's 17,000 financial advisers, were using the platform, managing about $96 billion in assets for more than 250,000 accounts, she reports.
Rather than embark on such a massive project on its own, Merrill partnered with Boston-based Charles River Development, a provider of investment software for buy-side firms, which already offered a commercially available, browser-based portfolio tool. Bank of America Merrill Lynch was the first client to make use of the browser-based access, though other global wealth managers also use it, both for discretionary and non-discretionary business, according to Charles River director Tom Driscoll.
Driscoll says he began to talk with Merrill about the platform, Charles River Anywhere, more than three years ago, prior to the brokerage firm's acquisition by Bank of America. This year the technolgy provider plans to roll out the software to 1,000 non-discretionary asset managers and wealth management firms.
A Mega Software Partnership
But Merrill Lynch considers its new Portfolio+ to be a proprietary platform that leverages Charles River Anywhere as part of its trading and portfolio management components. Portfolio+ has undergone extensive customization and integration through Charles River and Merrill Lynch's technology and operations teams, including infrastructure, data, internal operations and processes, according to a Merrill Lynch spokesman
Merrill also was able to leverage Charles River's state-of-the-art architecture; the vendor has invested about $100 million in the new architecture over the past six or seven years as it worked to make its product suitable for the growing wealth management market. Calling this an "evergreen partnership," Merrill's Sabbia notes, "We'll constantly journey to add more functionality and look at ways to improve this to make it more efficient for financial advisers to serve clients."
Charles River's Driscoll points out that Portfolio+ was designed for financial advisers who have a high degree of discretion on the portfolio, and thus they often are among the most senior and skilled advisers. They also manage the largest books of business, which tend to be for the largest clients.
"These financial advisers are looking for institutional tools that are manageable that used to exist in the institutional setting," he says, explaining that the lines are now blurring between wealth management and institutional investing. "What's happening in wealth management in general is that investors are moving beyond stocks and bonds and looking for exposure to ETFs, emerging markets and mutual funds."
A key feature of Portfolio+ is the ability to customize the platform's dashboard around what the adviser cares most about, such as when portfolios drift away from their target, cash withdrawals and compliance with market movements, according to Driscoll, who adds that advisers can set alerts that provide them with workflows to support a complex allocation. For instance, "An advsier can say, 'Show me all the portfolios that show drift, and let me redo the allocation,' or, 'Show me the orders and run through pre-trade compliance," he says. "This is really a platform centered on asset allocation, portfolio construction and cash management with a wealth management twist to it."
Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio