pershing robo advisor

Pershing Plans a Robo-Advisor White Label Product — Yip

The woman from the public relations had scheduled a meeting for me with Patrick Yip, Director of Advisory Market Technology Strategy at Pershing LLC. since we would both be at the Technology Tools for Today (T3) Conference in Dallas.  Yip was looking to talk about some new technology initiatives undertaken by Pershing and their parent, the Queen Mary of custodians, BNY Mellon.

But his PR person forgot about the time zone difference between New York and Texas and wound up giving me the wrong meeting time.

I was disappointed to miss my opportunity to speak with Yip since my calendar was booked for the next few weeks with a big client project and I didn’t know when we would be able to coordinate our schedules.

Imagine my surprise while I was talking to the guys from Motif Investing booth at their conference booth, which was in an excellent location in the atrium right outside the main meeting room, when none other than Mr. Yip himself walked up beside me.

Luck is sometimes the best planner.

We chatted for a few minutes along with the Motif guys, who just happen to clear through Pershing, which was probably why Yip had stopped by to see them in the first place.

Full Disclosure: In the past, I have provided consulting services to both Pershing, LLC and Bank of New York Mellon on Unified Managed Accounts strategy and other managed solutions architecture.

Pershing Robo Advisor Offeringpershing robo advisor

The biggest news from my conversation with Yip was that Pershing was following in the footsteps of their custodian competitors, Fidelity Institutional, and planning their own white label robo-advisor offering.

Clients have been expressing interest in Pershing providing them with an online wealth management service that they could brand as their own, Yip confirmed.  This is probably why Pershing partnered with Motif Investing Inc. earlier this year, to help the start-up online platform expand its services in the U.S. and support international expansion.

Motif has $126 million in funding and it seems they are prepared to spend a chunk of it to get a jump on their competitors before they migrate to overseas markets. Robo-advisors will have to keep innovating in order to avoid becoming irrelevant as established giants move into their space.  (See The Changing Face Of Robo-Advisors)

These moves are part of Pershing’s new focus digital enablement — providing advanced technology outsourced solutions to provide a better experience for advisors and investors, Yip explained.  Since they are only a technology provider, there are no plans for a investor-facing Pershing robo advisor.  Only support for RIAs to gather assets for themselves.

Motif uses Pershing as their custodian, as does Personal Capital, one of the veterans in the digital wealth management field that opened its doors way back in 2011.  Both firms control the client experience and investment models, but leverage the extensive integration infrastructure and application programming interfaces (APIs) provided by Pershing to automated the entire process.  From opening new accounts, portfolio construction, asset movements, to rebalancing, withdrawals and tax loss harvesting. (See Bill Harris Takes a Dive at MMI during His Personal Capital Promotional Tour)

While the details of Pershing’s white label offering has not been finalized, Yip expects there will be different flavors and options available for advisors to customize the solution to their requirements.  It could be a “bolt-on robo” where everything can be used out of the box, even including the models, so an advisor would not have much involvement in the process.  Or the choice could be that an advisor wants to maintain control of the investment options and manage their own models, but leverage the efficiency of online account opening and other automations, Yip stated.

Dashboards Driven by Big Datapershing robo advisor

According to Yip, Pershing is constantly striving to help advisors move their business in the right direction.  Increasing the average assets per client ratio is one of the best ways to accomplish this.

Digital Pulse is the name for the proprietary big data analytics platform built by BNYMellon, Pershing’s parent company. It sucks in data from two million investors and 100,000 financial intermediaries and sifts through it to discover actionable intelligence.  This tactical information is fed into new online dashboards they have built into their NetX360 platform.  This provides useful recommendations to advisors so they always have them at their fingertips alongside their positions and other client data, Yip pointed out.

BNY Mellon is so committed to the Digital Pulse concept that they trademarked the term! (go look it up with the link)

This big data initiative using decision science has yielded results in new products such as their new fully paid pershing robo advisorslending program. This program provides extra return to clients without extra risk by lending out securities they hold at attractive rates.

Previously, the entire process was manual.  Their team had to make a guess every day as to which securities would make a good market, then manually find clients by sifting through their holdings.  This was time-consuming and invariably missed numerous lending opportunities.

Pershing’s technology team built a rules engine that locates the best lending securities daily and matches them against every position across all of their qualified clients.  These results are visually represents that back to the FP Lending Team so they can make decisions about which opportunities to explore (b/d, advisor, investor)

The next phase is to productize this tool and push the opportunities out to advisors who indicate they are interested in FP Lending.  This kind of advanced technology improves the value proposition of advisors, Yip pointed out.

Help for HNW/UHNW Clients

Many RIAs, especially larger ones, prefer to target high net worth (HNW) and ultra-high net worth (UHNW) investors.  Increasing their assets per client allows RIAs to take advantage of scale and increase profitability.

More scale means more profits.  RIAs with over $1 billion in AUM are 21% more profitable than those in the $500 million to $1 billion range. (See 7 Questions to Help Pivot Your Practice Towards Retirement)

To help RIAs attract and retain HNW and UHNW clients, Pershing is providing more products & services geared towards these market segments, Yip confirmed. Through their Pershing Advisor Solutions (PAS) unit, RIAs can access jumbo mortgages and investment credit lines to help manage the liabilities side of the client’s balance sheet. (See The Future of Advice Delivery: What Will Solutions Look Like?)

At a tradition custodians, an RIA would have to finance those loans somewhere else, which requires extra time and effort.  Pershing offers their advisor clients a quick turnaround with less paperwork when approving these loans, since they are the custodian and already know about all of their assets, Yip noted.

Retail Platform Going Globalpershing robo advisor

RIAs are looking abroad for more HNW investors and Pershing wants to help, Yip stated.  They have been building out their retail platform to be fully globalized to support their larger wealth management clients. (See Advice for Going Global with Managed Accounts)

Pershing has always been strong in multi-currency trading, custody and reporting, Yip insisted, but some of their front-ends were not flexible enough to display all of their functionality in every currency they hold. They need to be able to report holdings in the base currency throughout the system and allow clients to choose which currency they want to display.

This needed to be consistent across the entire platform including NetX360, NetXInvestor and their mobile offerings as well, Yip reported. They are integrating bank custody and international booking centers, so in the future, clients of Pershing Securities London or Australia or other AsiaPac countries will operate under the NetX platform.

Pershing is Looking Towards the Future

Yip wanted to touch on four main themes that Pershing and BNY Mellon have been focusing on when enhancing  their platform:

  • User Experience (U/X)
  • Streamlining Workflows
  • Family Office/Wealth Management Technology
  • Adaptive Experience

As head of technology strategy for the advisory market, Yip is in a position to drive new technologies and services that will affect tens of thousands of advisors.  He realizes that most of the current technology used by the industry was designed for and to service Baby Boomers.  Client demographics are changing and Pershing is attempting to stay ahead of the curve and ahead of their competition to bring the latest in technology solutions to their RIA and other wealth management clients.

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The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at