Giving advisors an edge


National Post

“Advisors today demand access to accurate client information. An advisor who knows that a dividend was received or a deposit was made in real-time can immediately invest or allocate funds to meet the clients objectives.”

Brokers of all sizes are looking more closely at their core securities processing systems to identify opportunities to improve services and increase productivity for their advisor and investor clients. This includes bringing greater efficiency to the “back-office” administration and record keeping as well as delivering better quality and more timely information and tools.

Two solutions are offered by Broadridge Financial Solutions to self-clearing brokers; Brokerage Processing Services (BPS), which is primarily used by large, bank-owned and multinational firms; and Dataphile, which is better suited for boutiques and independent brokers. Both systems are designed to serve institutional, retail full-service and online brokerage firm requirements.

“We are offering two distinct solutions in Canada because there are different needs in the market,” says Paul Strijckers, vice-president of strategic initiatives with Broadridge. “Bank-owned and multi-national firms have large technical infrastructures and a variety of in-house and third-party systems they have to integrate. So they look for a core books-and-records system that can be integrated with the other systems they already have, while independent brokers and boutique firms typically look for fully integrated ‘turn-key’ solutions.”

To deliver more value beyond the core securities processing to the bank-owned segment of the market, Broadridge has introduced a number of innovative solutions over the past few years that can replace aging in-house systems and provide more streamlined processing. The Acendis platform, for example, automates a variety of complex processes through configurable business rules that identify exceptions while letting allowable transactions to flow through the process without delay or manual intervention.

Broadridge has also recently released the latest version of its retail advisor workstation, Aspire. The Aspire platform was first implemented in Canada in 2008 and this latest version includes a complete redesign of the interface to current web standards as well as increased functionality and tighter integration with other advisor tools. According to Mr. Strijckers, “the goal of Aspire is not to deliver everything the advisor could use but to consolidate a number of core functions in one easy-to-use, integrated solution. By leveraging our experience and an existing product Broadridge had in the U.S., we were able to deliver Aspire to Canada quickly and in a cost-effective way for our clients.”

Although the large bank-owned firms tend to prefer to differentiate themselves at the client-facing “front end,” by building and integrating different solutions in-house, Michael Dignam, president of the securities processing solutions division of Broadridge in Canada, believes that “because the Aspire solution is modular, existing clients will have the option of deploying just those parts that add the most value to them without large and costly development and implementation commitments.”

In the case of boutique and independent brokerage firms, their ideal solution could be described as “brokerage in a box,” Mr. Strijckers says. “A firm like this wants to focus on building their business, not building and maintaining systems.” For these independents, “brokerage in a box” can’t come with limitations. The brokerage business is competitive and independent firms need to have a cost-effective way to provide products and services that are the comparable to their competitors’. Broadridge’s Dataphile solution, designed and first implemented in Canada in the mid-’90s, has a full toolset required to support institutional, retail and boutique wealth management businesses. Beyond the core securities processing services, the Broadridge Dataphile platform provides order management, advisor workstation, performance reporting, portfolio management, client statements and confirmations and even web services for the advisor and clients to view their holdings online in real time.

In Canada, Broadridge has over 30 self-clearing clients using their solutions and having a large and diverse client base creates the additional advantage of scale. “Broadridge is committed to ensuring our services stay current with regulatory and industry requirements,” says Mr. Dignam. “Broadridge brings great efficiency to the market by developing and modifying systems to support industry changes once, rather than having each firm in the industry make the changes on their own,” he says.

In addition to meeting the changing industry and regulatory requirements, individual advisors and investors are demanding changes and improvements in the way they do business and interact with each other. One of the most significant evolutions in the past 10 years has been the demand for real-time information. People are used to having instantaneous access to the most current information, be it restaurant reviews, news or stock market data over the Internet and on their smart-phones. In the context of an interaction between an investor and their advisor, this could be a simple as knowing that a change of address has been made correctly, or more complex transactions like using the specific proceeds of a dividend or interest payment to invest in other securities.

Any time there is a lag or latency, even a few hours, can create confusion, or worse, bad decisions based on this information. “Wherever possible, Broadridge eliminates this lag and ensures that the investor, advisor and even head-office operations people all have access to the same information at the same time. Functions that can be carried out and viewed on-screen as they happen can include buying and selling securities, conducting foreign currency exchanges, and even making non-financial account updates,” Mr. Dignam explains.

“In the case of the independent brokers, it is our own front-end [computer system], and we show information from a single source in real-time throughout the system,” Mr. Strijckers says. “If a customer phones and wants to move on a security, that can be done and they can see the results on the Internet all in real-time.”

For the larger firms that deploy other solutions around Broadridge, the opportunity exists to leverage data integration services that allow real-time transaction data and information to flow between systems.

Competing platforms, or multi-platform environments, are often able to perform many of these functions in “near-realtime” at best. In some cases there could be delays that range from hours to even the next business day in showing that a transaction has occurred.

Real-time access to client and account information is not just a key point of difference for brokerages; it ends an age-old frustration for the brokers they employ, notes Scott MacKenzie, vice-president of business development for Broadridge in Canada. Advisors with realtime tightly integrated solutions have the opportunity for value-added interactions with their investor clients, he notes. “Advisors today demand access to accurate client information. An advisor who knows that a dividend was received or a deposit was made in real-time can immediately invest or allocate funds to meet the clients objectives.”

The converse is also true, waiting 24 hours to know that a client transaction or account update wasn’t successful can have serious financial and reputational consequences, Mr. MacKenzie says.

Beside delivering better and faster information to brokers and investors electronically, Broadridge also works in the print realm in the production of old-fashioned paper account statements to brokerage customers. Here, the innovation is not speed but information that is easier to understand than what is typically produced by investment firms.

“What that means for the end customers is they can have a more readable, plain-language statement,” says Mr. Strijckers, who received firsthand feedback on this issue from his mother-in-law, whose firm converted to a Broadridge platform. “It’s much easier to read. She understands the statement now.”