Software maker Tamarac says big RIAs are scrambling to unlock efficiencies. There's a growing need for back-office efficiency as recent market erosion weighs on revenues for fees-based investment advisories -- and little relief expected from a sustained recovery as recession-battered clients demand more customization and higher levels of service.

"While many RIAs have experienced a decrease in revenue due to lower AUM, there has been an increase in many aspects of their back office operations," says Stuart DePina, CEO of Tamarac, a Seattle-based rebalancing- and trading-software provider to RIAs. "This increase is derived from a need to remain more active in performing research and to more closely monitor client portfolios -- both the results of a volatile market."

Strong adoption

In addition, an expected wave of new regulatory requirements is seen putting more pressure on margins and staff time.

As a result, more RIAs are looking for ways to automate manual portfolio-management tasks. Over the past year or so, says Tamarac, rebalancing and trading software has gone from being a "nice-to-have" to a "must-have" technology.

Though it saw a bit of a slowdown in the thick of the crisis late last year and early this year, Tamarac says it has added more than 120 firms to its total of about 280 since the end of 2007 -- and some of them are pretty big.

"We have over 20 RIAs on our system that manage over $1B in AUM and more than 50 firms that manage over $500MM," says Tamarc's presient and founder Matt Springer. "The company has seen strong adoption amongst RIAs during a very challenging economic climate thanks to the value our software delivers in the form of back-office efficiencies and improved profitability."

Nine-year-old Tamarac's web-based software applications that helps RIAs automate rebalancing, trading, tax management, cash management and reconciliation "across thousands of accounts with minimal staff and minimal errors," according to a Tamarac press release. Among its clients are San Francisco-based Bingham, Osborne & Scarborough, Bellvue, Wash.-based Coldstream Capital Management, Minneapolis-based LarsonAllen, Providence, R.I.-based NAMEStrategic Point Investment Advisors, Newport Beach, Calif.-based United Capital Financial Advisers, and Boston-based Windward Investment Management. -FWR

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