Two years ago, RBC Correspondent Services and RBC Advisor Services, wealth management units of Minneapolis-based RBC Capital Markets, faced a strategic dilemma.

The divisions support advice-giving financial consultants, brokers and registered investment advisers (RIAs). Technology is critical to these advisers, whose success depends on charting and executing a course of action for their clients, explaining it simply and effectively, and tracking its progress.

"At the end of the day, [the advisers] need to understand the client," says Craig Gordon, director of RBC Correspondent Services and RBC Advisor Services. "Our strategic view of how technology can support that [is that] we think about technology as making investment advisers work more effectively."

Key to that effectiveness is managing records on client accounts as well as contact information, tracking current assets and investments, planning the allocation of available funds to different types of assets, analyzing client holdings and executing on a total plan for that client. This includes placing trades, the buying and selling of securities and tracking completion of transactions.

"Historically, all of those components were accomplished with different pieces of software," Gordon explains, "with different bells and whistles."

Therein lay the dilemma, he said: "Do we continue to commit to lots of different vendors in all of these siloed technologies? We needed to get this information back to advisers to populate their systems. To reconcile and connect these systems was a monumental technology task."

Strategic Retreat


To address the issue, RBC held a strategic retreat in the summer of 2007 in Minnesota, inviting senior executives representing a variety of RBC's business units. The purpose: To discuss how its use of technology could be improved. Participants listed the features they needed in a system, enumerated the benefits for a number of categories, and asked, "Which among these is most important?"

The key, participants agreed, was to make it "simple and short and sweet for clients."

Unfortunately, there wasn't a one-size-fits-all solution in each category. As a result, the group decided to look for a system with tight integration of features and ease of use. "Would that trump the nuances of any individual feature?" they asked.

While the group failed to reach any consensus, they did agree on one thing: integration -interlinking previously disparate computer systems, applications and services - trumped all. "We called it The Big I," says Gordon. "The Big I was unanimous."

Says Gordon, "The lesson we learned from years of other system integrations is: When financial services firms - especially large firms - find a technology partner and try to customize it, at the end of the day it becomes less efficient and almost unusable in some cases."

What the advisers needed was an integrated system, Gordon says. This led RBC to a search for best-of-breed solutions. RBC found that SunGard Data Systems had done a good job of acquiring various pieces of software and integrating them into a single platform. One example is bringing together SunGard's Planning Station and Allocation Manager. "It was that integration that made the most sense," he says.

In June, the firm announced their implementation of SunGard's WealthStation Platform for the 4,000 advisers and financial consultants that use RBC's services. Private-labeled as RBC WealthStation, the flexible platform can be deployed with as many or as few modules as desired, which easily integrate with core systems. Capabilities include client management, financial planning, asset allocation, trading and rebalancing, investment management, data aggregation, reporting, client access and compliance.

The dashboard delivers a holistic picture of accounts, clients, personalized alerts and communication tools. Drilling down, advisers can access and manage client information, financial plans, investment management data and account information, along with trading tools that enable real time buy and sell requests and allow a user to automatically rebalance an account using a pre-defined schedule. The business workflow allows an adviser to move sequentially through key tasks and reminders, and they can also view an aggregation of client holdings and real assets.

"We have been rolling this [platform] out steadily," says Gordon, adding that RBC decided to start with the trading system, and has invested millions in integrating it into its back office. "It gave us a tremendous advantage," he says. The firm has just implemented the financial planning module, and will be adding data aggregation next, which will aggregate information on assets held outside of RBC.

Training for the various new modules will be the next big task. "We think it is very intuitive, but we are taking it as a challenge," he says. "The task for advisers is to make the change from what they are using today."

RBC Correspondent Services supports 170 independent broker-dealers and RBC Adviser Services supports independent RIAs. The technology is used for both groups. In all, over 4,000 advisers or financial consultants use RBC's services, part of RBC Capital Markets Corp., a wholly owned subsidiary of the Royal Bank of Canada and one of the largest full- service securities firms.

The Royal Bank of Canada, traded as RY on the NYSE, has $ 6.76 billion in revenue, with $991 million--about 14 percent of the total--coming from its wealth management division. Net income for the second quarter was $950 million, up from $928 million in the 2008 quarter. Some $126 million of that came from wealth management.

Solving an Industry Problem


A few years before RBC came together around "The Big I," SunGard was independently reaching a similar conclusion. "We concluded that customers would want fewer partners rather than more," says Blaine Maxfield, COO of SunGard's wealth management business, based in Salt Lake City. Maxfield, who has been with SunGard for 11 years and worked as a broker before that, helped create WealthStation.

"It was rare that products were speaking to each other," he says. "About 70 percent of all IT spend was being used to integrate disparate systems. So we concluded that operational efficiencies are important, that advisers are spending way too much time on technology, and that we had best-of-breed solutions in each of these areas."

"We saw an industry problem," Maxfield says. "In the ongoing race for advisers to gather assets, siloed approaches are finished. Advisers are offering more and more services to you. The relationship is more holistic. The key differentiator is really superior service, [achieved via] flexible technology that allows advisers to prioritize and service accounts."

In 2004, SunGard implemented WealthStation, a platform with end-to-end management capabilities, designed to integrate wealth management with trading, state-of-the-art graphic elements, text and a focus on workflow. The platform offers both client and account-centric perspectives of information, as well as robust reporting tools and sharing of data between modules and back office systems.

Over time the platform has added features and functionality, such as automatic rebalancing and more in-depth financial planning concepts, and it continues to evolve. There are now over 120 institutional customers and 100,000 individual users. "Customers tell us that they are jazzed up about how SunGard has combined all these solutions," Maxfield says.

Alois Pirker, research director at Boston-based Aite Group, says such platforms are relatively recent. "Typically, the firm has shopped for single solutions, and added one solution at a time, and what they ended up with was a mess," he says. "Firms like SunGard have started to make it easier with a fully integrated desktop. Tight integration is a unique feature."

Other firms and products in the space include the Thomson Reuters' Thomson ONE platform, AdviceAmerica in banking, Finantix in Europe, and Odyssey Financial Technologies, serving the high net-worth client.

"SunGard's advantage is the tight integration of tools," Pirker says. "It is really a fully built-out platform, and that is a rare thing. [It has] front-to-back functionality."

Meanwhile, RBC's Gordon is convinced that his firm's decision to opt for integration is the wave of the future. "Without question firms large and small are moving in this direction - Thomson and Broadridge, for example," he says. "If they are smart, firms will execute in a way that prioritizes integration over the customization of any particular component."

At a Glance


RBC Correspondent Services & RBC Advisor Services

Headquarters: Minneapolis, MN

DIRECTOR: Craig Gordon

Description of business: Custody, clearing and execution services for broker-dealers and registered-investment advisers that serve high net-worth clients.

FINANCIAL: These are units of Royal Bank of Canada, which earned $126 million on revenue of $991 million in the second quarter from wealth management.

Objectives:

* Provide the best platform for advisors that serve high net-worth customers

* Leverage the global resources of RBC

* Partner with clients to grow their businesses

Results:

* 2005: First clearing firm to introduce unified managed account

* 2008: Introduced global private banking and trust services to independent advisors

* 2009: Integrated financial planning into advisor desktop 

This article can also be found at SecuritiesIndustry.com


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