Custodian looks to help investment advisories make more of their businesses. Pershing's Advisor Solutions (PAS) unit has capped a two-year restructuring initiative by rolling out Ideas Without Limits, a practice-management program for registered investment advisors (RIAs). By helping RIAs run their businesses better, PAS hopes to deepen its relationship with advisor firms and increase its assets under administration.

"Our commitment is to ensure that our customers have access to the resources they need to implement their solutions effectively," says PAS' COO John Iachello. "We believe Ideas Without Limits positions us as a pre-eminent provider of strategic business and practice management solutions in the RIA market."

New priority

PAS is the number four RIA-custody marketplace, trailing Schwab Institutional, which had about $500 billion in client assets at the end of 2006, Fidelity Registered Investment Advisor Group ($247 billion) and TD Ameritrade Institutional -- with which it runs a close race. PAS' now has about $70 billion in assets under administration -- roughly what TDAI had at the end of 2006.

Though PAS owes at least $10 billion of that to its acquisition last year of Neuberger Berman 's RIA custody business, its nearly 70% growth in client assets since the end of 2005 seems to put it on a sharper growth trajectory than its bigger rivals. Over the past two years Schwab's and Fidelity's RIA assets are up by about 40%.

PAS also has fatter custodial relationships than other big RIA custodians. On average Schwab custodies about $100 million for each of its RIA customers. Fidelity custodies about $72 million per RIA. At PAS the average custodial relationship runs to about $163 million.

Jersey City, N.J.-based Pershing has been providing outsourced services to RIAs for about 15 years, but the channel wasn't much of a priority until 2005, says Iachello. In June of that year the clearing firm rolled out the "Pershing Advisor Solutions" moniker -- it had been known as "Investment Manager Solutions" -- to reflect what it then described as a "broadened strategic focus" on RIAs. It also went on a hiring spree, adding about 20 new PAS staffers, mostly "relationship consultants," by the end of 2005.

Real improvement

John Guarino, a principal of Chester, N.J.-based Covenant Asset Management, says the effort is paying off. Covenant picked PAS as its primary custodian about eight years ago, but the relationship hit a "bump in the road" a few years back and Covenant started working with other custodians, according to Guarino. "But in the last year or two there's been a real improvement in the offering and the people, and we're migrating back to them."

Last summer Covenant called on PAS for help with client communications and marketing. Again, Guarino was impressed. "They've been very gracious with their time and in following up," he says. "It's not at all like someone trying to position himself as a consultant who comes in, makes some recommendations and moves on."

PAS' client-acquisition and retention support ranges includes customized marketing, capability brochures, turnkey newsletters, best-practice guidebooks, performance benchmarking, direct-mail and referral programs.

Besides a team of 30 relationship consultants, PAS has seven associates who provide marketing support to its RIA customers. PAS also calls on outside experts, at its own expense, to help clients meet other practice-management objectives including merger, acquisition and transition planning.

PAS is also attempting to carve out a place for itself as a "thought leader" in the RIA space by publishing white papers by business consultancy Moss Adams. PAS recently represented a series of intimate-setting workshops on mergers and acquisitions in the independent-RIA space conducted by Moss Adams consultants Mark Tibergien and Philip Palaveev.

"There aren't that many people who have a chance to spend several hours with industry-leading experts such as [Palaveev and Tibergien]," says PAS spokesman Michael Geller. "The feedback we're getting from the advisors has been fantastic."

Pershing is a subsidiary of the Bank of New York. -FWR

.