Family Office

SEI upgrades fiduciary compliance offering to banks

FWR Staff July 17, 2008

SEI upgrades fiduciary compliance offering to banks

Firm makes part of InvestEdge's ASP an option for its bank-channel clients. SEI has selected InvestEdge -- a Bala Cynwyd, Pa.-based maker of web-based technologies that help wealth-management firms manage, monitor and report on high-net-worth portfolios -- to offer enhanced compliance-monitoring tools to banks and trust companies using SEI's trust-accounting and securities-processing platform.

"One of our key reasons for partnering with InvestEdge is to continue to help our clients to transition compliance from a reactive event to a proactive process," says David Campbell, a senior v.p. with SEI's Private Banking Solutions group. "The InvestEdge compliance system equips firms to automate Reg. 9 review processes and more closely monitor accounts via daily checks.

Title 12, Part 9

"Reg. 9" is an abbreviation of "Title 12, Part 9" of the U.S. Code of Federal Regulations. It sets down OCC rules for the "fiduciary activities" of national-chartered banks. Part 6 of Reg. 9 stipulates that an OCC-regulated bank "conduct a review of all assets of each fiduciary account for which the bank has investment discretion to evaluate whether they are appropriate, individually and collectively, for the account" -- and that's the part most people in the industry mean when they mention Reg. 9.

SEI already has a suite of compliance capabilities, but it felt that InvestEdge's Reg. 9 review processes provided a significant upgrade for its clients -- and set InvestEdge apart from its competitors.

"We conducted a due-diligence review of several firms and found InvestEdge's capabilities to be the best," says SEI spokeswoman Melanie Bayich.

Getting compliance part of its front-office technology suite in front of SEI's 125 Private Banking Solutions clients is a big opportunity for InvestEdge, which has 12 institutional clients including Merrill Lynch's Private Banking and Investment Group, Wilmington Trust, Glenmede Trust and Greycourt.

"SEI holds a dominant position in the bank and trust market," says InvestEdge's CEO and founder Bob Stewart. "To us this is a special type of partnership."

But the tie-in between the investment-processing giant and the much smaller front-office tech vendor isn't a prelude to a takeover.

"SEI has no current or future plans to purchase InvestEdge," says Bayich.

Stewart says that a merger simply "isn't part of the conversation."

Nor does the deal prevent InvestEdge from providing its system-agnostic technologies to banks using accounting platforms other than SEI's. Stewart says it works equally well any trust-, brokerage- or advisory-accounting system. -FWR

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