Aug 14

Written by: Matt Abar
8/14/2008 8:43 AM

Software purchasing in most other industries is a much different process. At Techfi, we hit a point where we needed a professional CRM system. We looked at all the big players at the time, and also talked to some local CRM consulting shops. We ended up selecting Siebel, mainly because we found a consultant that we liked and that was his recommendation.

Before we bought the software, we sat down with the Siebel consultant and a whiteboard and started mapping out what we wanted the software to do for us. There were extra fields and screens we needed to track advisor-specific prospect information. We had a custom sales pipeline report that broke out advisory firms and broker/dealers, and we needed a custom interface to our billing system. The consultant didn't even blink--Siebel is built from the ground up so that clients can add functionality. It wasn't a matter of whether it was *possible* to meet our needs, just whether the custom development costs fit into our budget.

Our industry doesn't have anything like that--in fact, vendors in our industry seem to go out of their way to close off their systems and prevent extensibility. I've never understood why, although I suspect it's a short-sighted attempt to lock advisors in to their systems.

With most portfolio management systems (PMS), it's a struggle just to add a custom report. Adding custom screens, interfaces, or calculations is next to impossible. The few third party consultants in our industry are extremely limited in what they can do for advisors, and often have antagonistic relationships with the software vendors. I know of at least one case where a software vendor sues third-party consultants... consultants who refer them business and fill in the missing functionality gaps in their software.

This closed approach ignores the fact that every advisor has different needs, and many of these needs fall close to, but outside the functionality provided by PMS software. Let me give you some examples:

1.  Advisor A gets most of their business through a network of CPA partner firms. They're looking for a PMS package with a report for each CPA that shows them high-level information about their clients. They need to import account data from three CPA systems, and want a separate screen that lists all CPA partner firms and the clients/accounts that belong to the CPA. They need some new transaction codes to differentiate different types of Additions and Withdrawals, and a new tax strategy, working within a specific lot framework, that intelligently sells lots to match the CPA's tax goals.
    
2. Advisor B specalizes in aggressive, high-risk management and gets most of their business from separate account programs. They need a report that lists their accounts by separate account program, and want to modify our modeling/rebalancing module to better match their trading and review process. They also need to convert transaction data from their current custom PMS system.
    
3. Advisor C has a side business where they manage other advisors' data. They need a custom billing report so they can eliminate the messy spreadsheet they currently use to bill their advisor clients. They also want to add numerous reports for their operations team that let them track the status of their advisors' data (like number of out of balance positions, missing import files, etc.) They want to add a simple two-screen support tracking system to the software so they can keep track of their advisors. They also want the ability to add their own custodian interfaces when their advisors request them.

Could any of the existing PMS systems handle customization requests like these? No. Some systems have decent custom report writers, but the rest of the requests involving custom interfaces, new screens, customized trading/rebalancing, etc. are virtually impossible. If you can find a consultant to do it, they'll have to work outside the framework of the PMS, building a custom application that imports the PMS data.

FinFolio can handle all of those requests within our framework. Advisors can use our professional services group, or (eventually) one of our third-party consultants who enjoy FinFolio's full support and training. The advisor could even extend the system themselves using Microsoft Visual Studio, documented FinFolio APIs, and extensive customization examples.

A high-level list of things we can customize:

• User Interface/Menus
• Data Model
• Object Events (Save, Load, Changes)
• Modeling
• Rebalancing
• Billing
• Reports
• Interfaces (Imports/Exports)
• Conversions
• Transaction Codes
• Security Types
• Calculations
• Data Integrity Checks
• Real-time Alerts
• Tax Laws
• Cost allocation methodologies
• Security/login
• Data Storage (Microsoft SQL, Oracle, DB2, MySQL, etc.)

Extensibility is one of our strongest selling points. We're the only vendor that will let you sit down with a whiteboard and create a PMS system that perfectly matches your firm's processes. Your customization options are limited by budget, not capability.

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