A Custodian on the Rise

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1 Reprint from June 2012 A Custodian on the Rise TradePMR Continues to Impress By Joel Bruckenstein I recently returned from the Trade PMR Synergy 2012 RIA Conference more convinced than ever that Trade PMR is becoming a force to be reckoned with in the independent RIA custodial space. When I first encountered Trade PMR a few short years ago, they were serving approximately 350 advisors. Now, according to Trade PMR CEO Robb Baldwin, they serve over 1,200 advisors, and are signing up, on average, one new advisor a day. During 2011, the firm grew at an annual rate of 400%, and they are projecting growth of 500% for As someone who has observed the firm over the last several years, this success comes as no surprise, and I suspect it is only the beginning. Others are catching on as well. The representative of one technology vendor who attended the conference commented to me: These guys are going to be the next TD Ameritrade. I took that to mean that he thought Trade PMR is about to win over RIA s on the strength of their innovative technology offering, much as TD Ameritrade has done with VEO Open Access. While technology has played and will continue to play a large role in Trade PMR s success, there is more to this firm than just technology. The firm s leadership is impressive. CEO Robb Baldwin believes that the RIA channel will play an increasingly important role in U.S. financial services. He attributes much of the success RIAs have experienced to their entrepreneurial spirit, but he cautions that independent RIAs must continue to be entrepreneurial in order to succeed in the future. According to Baldwin, during recessions, assets are reallocated from the scared to the bold. It is during such tough times, he said, that companies can overtake their competition. Clearly, that is what Trade PMR attempted to do during the last recession, and they have been successful to date. Baldwin highlighted three factors that set his firm apart: Service, their new clearing arrangement with First Clearing, and their one-on-one coaching system. To that list, I would add technology, hence my particular interest in the firm. Volume X, Issue 6, June 2012 (C) Copyright Virtual Office News LLC All Rights Reserved

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3 Trade PMR believes that when an advisor calls, the phone should be answered promptly by a person, something that seems to be a relic of that past at many U.S. firms today. They ve recently doubled the staff answering calls to ensure prompt service. In addition, they are building out an Intranet that will allow advisors to digitally address most service issues securely. The move to First Clearing offers many benefits including more timely statement, confirmation and tax document delivery. In addition, according to Trade PMR CTO Dennis Suppe, First Clearing has a very sophisticated, highly automated service and workflow system that Trade PMR plans to leverage in the near future. According to Baldwin, Trade PMR offers the only free, one-on-one coaching program in the industry. So far, 70 advisors have completed the program and another 50 are currently enrolled. I m told that those who have completed the program grow assets and revenue, on average, 50% faster than their peers. That s quite impressive. Technologically, Trade PMR is in the process of a major upgrade to their ecustody platform. One hallmark of ecustody is it offers free, integrated versions of many tools such as CRM and portfolio accounting software, but it offers integration with third party providers so that advisors can chose the integrated solution that best meets their needs. While it is premature to discuss details of the next ecustody offering, the firm did announce some enhancements to the existing platform at this year s conference. One incremental change was an upgrade to the mutual fund list. Previously, this list was updated manually on an intermittent basis. If is now updated nightly to reflect all funds that can be custodied with Trade PMR as well as each fund s particulars. The list pictured in Figure 1 is in spreadsheet format. It can be searched by symbol, fund family, and name. Columns can be sorted as well. In addition, there are sophisticated filtering capabilities. Filters can be saved for future use. Figure 1

4 Another area of improvement is the centralized client portal. Here, the clients of advisors have access to electronic documents (statements, confirms, tax documents, shareholder communications), as well as access to consolidated household views, individual portfolio views, recent account activity, and more. Figure 2 illustrates the Consolidated Household View. Figure 2 Figure 3 illustrates a more detailed view of an individual portfolio. This particular view highlights gains/losses. As you can see, clients can sort by column and otherwise manipulate the data.

5 Figure 3 Of course, the advisor has control over what types of access the client has. For example, the screen pictured in Figure 4, the client status page, provides information of what clients have access to the client portal (Access Online Login), whether they can access online trading, and how they receive various forms of communications. This information can also be viewed on an individual account basis. Figure 4 Trade PMR has also been busy adding additional integration partners and deepening relationships with existing ones. As this is being written, Trade

6 PMR and Hidden Levers are finishing up an integration that will automatically pull portfolio data from the Trade PMR platform into Hidden Levers for macro analysis, alleviating the need for manual data entry. This integration should be available by the time you read this. Trade PMR is also expanding their existing relationship with Morningstar. In addition to the free Morningstar data built into the platform at no additional charge, Trade PMR offers their advisors a number of premium Morningstar services. These include Morningstar Advisor Workstation and Morningstar Office. They recently added QuoteSpeed, a customizable Web-based platform that includes live news coverage, market data, analysts earnings estimates, advanced charting, company fundamentals, security performance, fixed income coverage, customizable watch lists and much more. During the conference, I sat in on a breakout session that demonstrated the capabilities of QuoteSpeed, and I was impressed. Trade PMR has negotiated special, preferred pricing for their advisors of $35 per month, making this an almost irresistible bargain. Quotespeed News Coverage

7 Quotespeed Capita Structure View While all of these improvements to Trade PMR s technology are impressive, I get the distinct feeling that the best is yet to come. It comes as no surprise to me that Suppe and his team are already at work on Windows 8. They have purchased a number of tablets and installed Windows 8 on them so they can experience many of the new touch screen capabilities that Windows 8 offers. I was surprised to learn, however, that Baldwin, the firm s CEO, also has a Windows 8 tablet prototype. He is apparently already using it to interact with the Trade PMR IT infrastructure successfully. With the soon to be released rewrite of the ecustody platform, integrated workflows, practice analytics and Windows 8 compatibility all due soon, the future looks very bright for Trade PMR. Even if you are not a potential Trade PMR advisor, I think some of the developments taking place over there could impact you. As we have seen, RIA custodians are a competitive bunch, and I sense that very soon, Trade PMR may upset the status quo. If that does in fact happen, it will spur the other custodians to provide even better technology to their advisors as well, which is something I know all readers will welcome. As of now, there are many advisors who are not familiar with Trade PMR, but I sense that the situation is about to change dramatically. Stay tuned.