SEI upgrades fiduciary compliance offering to banks

FWR Staff

17 July 2008

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

Purchase reproduction rights to this article.