Fiserv Inc. is trying to round out its wealth management software offerings with its acquisition of AdviceAmerica and said it might forge additional partnerships to become more competitive.
The Brookfield, Wis., bank-technology vendor announced Monday that it had bought the Fremont, Calif., developer of software for wealth advisers. It did not disclose the price.
"We are primarily a provider of middle- and back-office solutions," Cheryl Nash, senior vice president of strategic marketing and business development in Fiserv's investment services business, said in an interview. "We have a breadth of solutions that support trading and reporting. We did not have any solution that supported … the needs for advisers in the front office."
AdviceAmerica, founded in 1999, offers software that can aggregate data from investors' other accounts to provide a more complete view of their financial position — the "holy grail" that investment managers strive for, Nash said.
"There is a big need for more tools that allow our clients to" provide "advice to their clients," she said. "When the financial crisis hit 18 to 20 months ago, one of the big things our clients were asking for was better ways to communicate to their end-investor. There wasn't an easy, integrated way to do that."
Fiserv's investment services business currently has about 350 clients, a large portion of which are "broker-dealers and adviser-type clients," Nash said. It includes programs for portfolio accounting, global investment management, trading and order management and reporting capabilities.
Sean Cunniff, a research director who focuses on wealth management issues at TowerGroup, called the acquisition a smart move for Fiserv.
"I've actually used the [AdviceAmerica] platform before," he said. "It's a very intuitive, well-designed user interface."
Most of Fiserv's investment services customers are more traditional money managers. The acquisition could help the company tie some of those services to its banking-specific products, Cunniff said. AdviceAmerica has independent advisers as customers, which has not been an area of focus for Fiserv, he added.
Fiserv already has "a huge percentage of the managed account space," he said. "I think it's really healthy that they're starting to do some really strategic things" to "expand their market share."
However, marrying AdviceAmerica's front-office products with Fiserv's back-office programs could be difficult. Tying "all those platforms so they speak to each other, so they can exchange data back and forth, that's always a challenge," Cunniff said.
Doug Dannemiller, a senior analyst at Aite Group LLC, said by e-mail that the acquisition could help Fiserv's customers tie front- and back-office operations as financial advisers "seek efficiency and compliance."
"When the capabilities are provided by one vendor, such as Fiserv in this case, the front-to-back office workflow and integration can be tighter than multivendor solutions," Dannemiller said.
Fiserv will continue to focus on strengthening its position in the wealth management arena, though not necessarily through more acquisitions, Nash said. The company is looking partnerships with other program providers to create new reporting capabilities.
Fiserv is especially focused on adding capabilities that let advisers compare an investor's performance against planning goals and market indexes, she said, adding that the AdviceAmerica purchase "gets us closer to that goals-based reporting."
