It’s been a while since the last time somebody tried to create an all-in-one software system for financial planners, and the promising beginning at IFS back in the 1980s never panned out. It’s not hard to see why. Software that tries to be all things is competing against firms that specialize in financial planning, CRM and portfolio management. The specialized programs have a better chance of being best-of-breed, and with today’s ever-tighter integrations, advisors can cobble together a software stack that talks among itself almost as if they were one program—and, with custodial programs like Veo and NetX360, even access them all with single sign-on capabilities.
In fact, I thought it was a fool’s errand for one company to try to write the three major software categories into one program until I encountered the Advyzon booth at TDAI’s Veo Village, and then, driven by curiosity, headed back to their booth at T3. After comparing notes with several Advyzon users, I’m coming around to the idea that advisors might want to consider a single solution.
IN A NUTSHELL
Advyzon is three programs in one, with tighter integration and a more consistent user experience than you could get from three different vendors.
The program’s CRM offers amazing flexibility to relate different tasks, clients, investments and outside professionals, which can be used for compliance reporting. The client asset management component provides unusually-detailed tax and performance reporting on individual bonds.
Advyzon was created by yHLsoft, Inc. in Chicago, founded by Hailin Li. Most of you may not recognize him, but Li is well-known in the advisor software ecosystem as the former Director of Technology at Morningstar, later Morningstar’s VP of Advisor Software, which is basically the head of the division. Li hired John Mackowiak, who had managed the Morningstar Office sales team and later became product manager for Morningstar Office. “We are determined to be the whole puzzle,” says Mackowiak. “Advisors spend far too much of their time and energy trying to learn different systems, and get things to integrate. They’re becoming like part-time IT people, and that’s not their highest and best use.”
He adds that the program is brand new; 2014 was spent refining the product for a small group of users, and 2015 was spent adding features that an expanded group of users were requesting.
A QUICK INTRODUCTION
As a quick introduction, most advisors will start with the CRM system, which offers business card views of clients, and immediately allows you to tag them any way you want: hobbies, charities, affinity groups, client tier (A, B, C…) or relationships with other clients and/or outside professionals like CPAs or attorneys. You can attach notes relating to your conversations and meetings, assign projects or self-defined workflows to one client or a tagged group, and use the tags to decide which clients are going to receive which performance report in the asset management piece of the program. A document management system keeps a copy of each client’s documents: wills, trusts, powers of attorney etc.
One interesting feature: for each client, the program will automatically search the web for their LinkedIn account, and display a picture of the client.
At the firm level, you can create and track staff activities like the three steps needed to prepare for a client meeting, and group which clients will receive which emails, based on tags that relate to interest or affinity—for instance, which subset of your clients will be invited to a particular event.
The asset management program links with Quovo to pull in client account information and account aggregation for assets held away in a 401(k) plan. It will also pull in banking information to track expenses and liabilities, and you can input insurance coverages. For prospects and new clients, Advyzon displays the current asset allocation at the account and household level (both pulled from the Morningstar X-ray information based on the client’s fund allocations) and a broad target allocation that the advisor recommends.
The system shows the assets, and if there are different custodial relationships, that is reflected on the page, as is available cash. A graph shows, in one line, the aggregate contributions and withdrawals overlaid on the total portfolio amount, so clients can see the value the markets (and the advisor) have added to the total wealth picture. The advisor can call up a page that shows realized and unrealized gains and losses for each position as of the end of yesterday’s market close.
The firm has built 20 different performance reports, ranging from four pages to many more (depending on the level of detail a client would want), and a report builder tool lets you drag and drop different graphs and data charts from the program into different parts of the page to create your own format, and then drag in security-level data for clients who want that included in their report. Then, if you want, you can customize the colors.
These reports will most likely be viewed through the client portal that Advyzon creates and manages on the cloud. Check a box, and a particular report is created for a particular group of clients and sent to their portals.
Advyzon’s financial planning component is somewhat less feature-rich than many advisors are accustomed to, although it seems to function well enough for middle-market clients who don’t have complex estate and tax planning challenges. The client’s goals are segregated into “needs,” “wants” and “wishes,” and in a particularly nice touch, all of them, color-coded, are placed on a timeline that might extend over a short period (a child’s 4-year college expenses or, even shorter, a trip to Europe) or a long one (retirement).
After you get past the detailed client balance sheet, you can see current resources (investments plus pension income plus Social Security projected income) graphed as a vertical bar which is compared with a color-coded stack of goals: needs on the bottom, wants and then wishes at the top. All of these numbers are discounted back to the present value, so the client and advisor can see at a glance that, for instance, the client’s current assets are sufficient to fund the future “needs” goals, and some of the “wants” goals, but none of the “wishes.” (Fortunately, this particular client family has another 10 years of savings ahead of them.)
The system also shows a variety of model portfolios as pie charts with each portfolio’s asset allocation, which the client or advisor can select as the target. As before, we see the client’s current allocation and how (or whether) it differs from the model. The system also creates an investment policy statement for the clients who want or need one.
ADVISOR CASE STUDIES
Mitchell Keil, of Integrity Financial Advisory in Fountain Valley, CA, likes the company’s responsiveness to suggestions. “Early on, I was making recommendations and they were actually coding right while I was talking,” he says. “It was different from any company I’ve ever worked with.” Among his requests was the flexible tagging of clients, which he uses to manage his compliance-related documents.
“With a push of a button, I can get all of my RIA contract dates, and the privacy notice delivery dates, ethics code delivery dates, ADV annual update delivery date, IPS approval dates, for one client or any group,” he says. “I don’t know any other CRM that will give you exactly what the SEC auditor asks for.”
He also likes the custom project applications in the CRM. “Most CRMs don’t permit you to create one-off projects easily,” says Keil. “If a client asks me to follow up with his CPA and estate planning attorney on a particular issue, and I have five or six things I need to make sure I do, I can create the project and include the client plus the family’s CPA and attorney, using the linking capabilities, right there on the spot. I can link in four phone calls and two appointments and some notes I took and maybe link in a particular security that’s involved. Basically,” he adds, “you can link anything to anything.”
The CRM system also has very tight integration with Microsoft Office 365 and Google Apps to automatically sync email and calendar across all of your devices and Advyzon. It’s a huge benefit to be able to see all recent client communication on a single screen.
Meanwhile, if, like Keil, you charge a blend of retainer and tiered fees, the flexible billing module could be a huge plus. “You can do AUM, flat fee, hourly and anything else directly in the program,” he says. “The billing work that used to take me two hours manually is now a report that generates a file I can check for accuracy before I send it on to Veo.”
Keil added that he uses MoneyGuidePro for his client planning work, and uses the CRM and portfolio management parts of Advyzon. “But I can see the planning component would be perfect for somebody who is mostly focused on asset management, or working with middle-market clients,” he says.
Ron Alberts, at Alberts Investment Management in Brookfield, WI asked for a somewhat larger customization from Advyzon.
“One way we differ from a lot of other RIAs is we invest in a lot of individual bonds,” he says. “And it isn’t easy to get the accounting right. Most software products don’t handle individual bonds particularly well, especially when you’re talking about mortgage-backed securities with prepayments and factors and all that kind of stuff. If you buy a bond at a premium and it amortizes down, it affects the cost. If you’re just holding the bond, it affects the unrealized gain or loss. But if you didn’t amortize the bond, and then it was redeemed at par, it would show a big loss. That is not how it’s supposed to work for tax and accounting purposes.”
Alberts, a former bond manager at Northwestern Mutual Life’s fixed income department, was unhappy with how Advent’s Axys program was handling the bond-related tax reporting, and asked Li if he could provide the kind of tracking that he couldn’t find in the much less institutional world of financial advisor software. “Advyzon built it out for us,” he says. “When we first looked at them, they had the same limitations that other providers had, and we pointed them out. They worked with us, and it’s perfect now from our standpoint, as far as amortization and accretion. I don’t know of anybody else’s system that I can say that about. In that respect, it is in a class by itself, on individual bonds and amortization and accretion.”
Alberts also asked Li to create a fast, easy export protocol to Excel, so he and his staff can check the accuracy of quarterly reports using their own algorithms. “That one took months,” he says. “But most of the reports can now be exported into Excel, not just PDF. If we were working with Black Diamond and we had asked for that, it would have cost us an additional $10,000 to $20,000.”
SKEPTICISM ON THE WANE
I know a lot of readers are going to be skeptical about the idea of an all-in-one professional software program in this age of increasingly sophisticated integrations, and as I said at the top, I initially shared your skepticism. But Advyzon already looks much more comprehensive and feature-rich—and user-friendly—than the other attempts at this I’ve seen. Li’s track record at Morningstar adds to the credibility of the product, and the tight integration with Morningstar’s workstation will be attractive to some advisors.
And I should add that not everybody is as skeptical as we are. When I visited the company’s station in Veo Village, and its booth at T3, each time I had to fight my way through a crowd of advisors just to see the screen where Li and Mackowiak were showing their demos. This article won’t be the last time you’ll hear about Advyzon.