Executives at PFPC Worldwide Inc. said they expect the pending acquisition of a New Jersey data aggregator to turn the PNC Financial Services Group Inc. unit into a more extensive resource for advisers.
"This acquisition changes our business model," Steven M. Wynne, PFPC's president, said in an interview last week. "It transforms us from a processor of investment services to an information provider."
The unit has functioned mainly as a back-office technology provider for brokerage firms. But PNC announced Thursday that it had an agreement to acquire Albridge Solutions Inc., a Lawrenceville, N.J., provider of aggregated views of clients' assets along with performance reporting and analysis. PNC would merge Albridge with PFPC.
Albridge also supplies advisers with consolidated client account information from hundreds of data sources, including mutual funds, managed accounts, and banking, brokerage, insurance, and retirement companies.
Thomas P. Sholes, senior vice president and senior managing director in PFPC's global product management group, said these services will allow PFPC to broaden its reporting capabilities, especially to advisers.
"From both an adviser level and a distributor level, we provide a lot of products to broker-dealers, but this might be the first time that advisers and distributors see that we offer more that just processing services," Mr. Sholes said. "This is a change for them to look at PFPC as a multifaceted provider."
Mr. Wynne said: "This acquisition pushes us aggressively into the distribution space with the financial advisers. We find ourselves now in a pretty unique position to cross over into both worlds and offer a broad array of services to product manufacturers and product distributors."
PFPC provides fund accounting and administration, transfer agency, custody, and subaccounting for client accounts totaling $2.4 trillion of assets. Mr. Sholes said that advisers already use its products and services — including its managed account platform and transfer agency — but the company is still generally considered "just a processor."
He said that when the Albridge acquisition is completed, PFPC would have "a much greater presence with advisers and a better chance to deliver services to them."
Mr. Wynne said the deal promises synergies with many PFPC businesses, including subaccounting, transfer agency services, and managed accounts.
Analysts said at least one other banking company has bought a data aggregation firm to improve its position with advisers. In January of last year Commerce Capital Markets, a unit of Commerce Bancorp Inc. of Cherry Hill, N.J., bought eMoney Advisor Inc., the Conshohocken, Pa., provider of a private banking system that let Commerce create a nightly financial statement about a customer.
Alois Pirker, a senior analyst with Aite Group LLC, said acquiring Albridge would add a critical wealth management capability to PFPC's offerings.
"The consolidation of data from multiple custodians and the subsequent portfolio accounting — the core capability of Albridge Solutions' platform — are amongst the most important components involved when providing holistic wealth management," he said. "Albridge has developed a large set of front-office functionality that builds on this data foundation, [including] client reporting, fee billing, interfaces to financial planning and CRM tools, and Web interfaces for a wealth manager's retail clients."
The deal is scheduled to close next quarter.
