Pershing Advisor Solutions is beta testing a new digital onboarding and repapering tool. The technology combines account aggregation, with digital onboarding and digital repapering, is designed for moving clients from other custodians onto Pershing’s platform. Ben Harrison, head of advisor solutions at Pershing, described the new technology offering in an interview exclusive to WealthManagement.com. The new tech is meant to bolster the firm’s yearlong push to bring on a new tranche of advisors, those with asset levels between $100 million and $250 million.
While some details are still under wraps, the new tool, being developed in-house, will originate from the NetX360 platform when an advisor sends a request to his or her clients to begin a “collaboration experience,” said Harrison. The workflow then directs the client to input credentials from his or her non-Pershing brokerage account, after which the tool “scrapes” the client's information from there and triggers a new Pershing account opening with a click—and “without any paper friction,” said Harrison.
Select RIAs using Pershing are beta testing the tool right now, with additional advisors getting access to the platform “within a matter of several weeks,” said Harrison. The firm aims to have the tool available to all advisors using Pershing in the next few months, with a second quarter delivery deadline.
The pandemic has accelerated the need for a digital solution like the one under development, said Harrison. “Our digital account opening [rate] is four times what it was before the pandemic,” he said.
Digital account openings weren’t the firm’s only area of growth. “If we look back at 2020, we had a really strong year from a business development and a growth perspective,” he said, noting that the firm grew its assets 20% year over year. Pershing had over $900 billion in RIA assets under custody at the end of the last quarter of 2020. About a quarter of that growth came from targeting the lower minimum asset group of advisors, which Pershing calls “emerging firms,” who manage between $100 million and $250 million.
“There’s about 2,200 to 2,300 of those RIAs in the marketplace that now become a part of our expanded addressable market,” he added, pointing out that the new minimum gives greater flexibility in scooping up the breakaway firms that would most benefit from a new tool like the one being developed at Pershing.
To be sure, Pershing isn’t the only firm trying to make it easier to repaper. Software developer Skience wants to license its platform to broker/dealers and custodians, providing advisors with a digital repapering tool called Advisor Transitions Solution. Startup Benjamin is focused on automating advisor workflows, including repapering bottlenecks. Then there’s Pershing competitor Charles Schwab, which has been working to replace paper-driven processes with digital solutions since at least 2018.
For custodians, getting their technology right—and rolled out quickly—is becoming increasingly important. Advisors took Charles Schwab, TD Ameritrade Institutional and others to task earlier this year, as client service suffered. With scale becoming increasingly important, custodians will need to rely even more heavily on technology to service advisors using their platforms.