In an expansion of a strategy dating back to 2016, Pershing is making its connectivity and APIs more robust with the rollout of NetXServices. Launched on Wednesday at Pershing's virtual INSITE conference, the new service provides clients and third-party vendors easier access to Pershing’s data and platform. The NetXServices hub “features in-depth guidelines to alleviate the need for technical support and significantly streamline product development,” according to an accompanying press release.
The developer-friendly portal is designed to make API connectivity easier for the wide variety of vendors and wealth management firms seeking to integrate with Pershing, said Ram Nagappan, chief information officer at the firm. The firm already integrates with over 200 outside providers and signaled a shift to becoming a third-party tech provider itself, with the launch of a multicustodial managed account solution for non-Pershing advisors.
The benefits of the new hub will be indirect for advisors, he explained, because they are more about the Pershing-and-vendor ecosystem than any single tool or feature. “In many cases, what we have found is it that the third-party provider the advisor picks is the one that wants to integrate with us,” he said. “We need to make our services a lot more open and easier to integrate for all.”
Increasingly, he said, integration partners are coming from outside of the wealth management industry as the advisor ecosystem grows to incorporate new tech providers. Pershing wants to have as many integrations up and running as it can, said Nagappan, while making it easy to integrate new vendors as advisors discover new capabilities and incorporate them into their businesses.
The clearing and custodian firm’s decision to launch a new integration hub is recognition that advisors have diverse needs, as well as a signal that Pershing won’t be shying away from taking on competitors like Charles Schwab and Fidelity, said William Trout, director of wealth management at Javelin Strategy and Research. (Pershing serves both RIAs as well as broker/dealers like that of TIAA.) It’s also a sign that custodian tech development is entering a new phase.
“Historically custodians have had a ‘good enough’ attitude toward serving their advisors, in terms of tech. By ‘good enough,’ I mean providing them with the tools to keep them happy enough so that they won't go down the street to another custodian,” he said. But firms like Apex Fintech Solutions and Altruist have upended that lukewarm approach to custodian tech.
“Pershing wants to be in the middle of the big explosion in advisory services and the tools that support those advisory services. They're very savvy in that they're not trying to be a monolith and not trying to be an island and build everything themselves, but rather leverage developers,” he said. “There's a little bit of the Avis mentality here: We try harder.”
Pershing is “going to go beyond that ‘good enough’ approach,” he added, “giving advisors the tools they need to succeed in a market that's growing.”