The Boston turnkey managed account provider FundQuest Inc. is hoping a new partnership with Charles Schwab Corp. will help it get a foot in the door at more banks, trusts, and registered investment advisers.
FundQuest, which is a unit of BNP Paribas SA, introduced a broad managed account platform late last month for independent registered investment advisers, trust companies, and banks that currently work with Schwab Institutional.
The Institutional Spectrum platform is notable because it offers customers access to eight different managed account options, all of which clear through Schwab's institutional arm.
Maryanne Morrow, vice president of national accounts at FundQuest, said the numerous options reflect the rapid proliferation of investment choices for advisers in recent years.
"We wanted build a platform that would really span the level of choices advisers seek," Ms. Morrow said in an interview last week. "We don't want to leave money on the table."
The platform provides everything from mutual fund wrap accounts for mass affluent clients to unified managed accounts to customized separate account portfolios for the most affluent customers.
It also provides tools for tasks such as proposal preparation, account maintenance, and investment due diligence, to free advisers to focus on client relationships.
Alois Pirker, a senior analyst with the Boston research firm Aite Group LLC, said that such flexibility is being driven by demand from advisers.
"Times are getting such that you rarely get away with offering a 'take it or leave it' platform," he said. "This is making turnkey asset management providers a lot more complex than they were before."
Within the last couple of years advisers have come to expect not only multiple investment options, but also tax management and fee billing services, he said.
Advisers with $1 billion to $10 billion of assets under management are the hardest to serve, because they are most aware of the options available and "don't want a platform off the shelf," Mr. Pirker said.
The largest advisers tend to implement platforms in-house, he said.
The 15-year-old FundQuest said that it works with 215 bank trust clients and had $36 billion of assets under management at the end of last year.
Its array of bank customers include First Hawaiian Bank, a Honolulu subsidiary of BNP Paribas, and First Citizens Bank and Trust Co. Inc. of Columbia, S.C.
Ms. Morrow said that FundQuest's collaboration with Schwab Institutional gives her company its largest custodial partner to date.
Analysts said that trust departments have been gradually shifting asset management duties to third party providers in an effort to focus on the investing styles in which they have developed strong track records, such as large-cap value or stable equity.
Ms. Morrow said that she hopes the new platform will benefit from that trend.
Mr. Pirker said bankers' use of outside asset managers mirrors what has happened with registered investment advisers.
"RIAs had traditionally managed portfolios themselves and were never interested in turnkey asset management providers," he said, and for years fiduciary concerns made both registered investment advisers and trust departments hesitant to use separately managed accounts.
However, investment advisers have warmed up to unified managed accounts, which allow them to use outside investment models while retaining control of investment portfolio management, Mr. Pirker said.
Managed account providers have little room to grow though the more mature wire house market, he said, so they have been focusing on other channels, including registered investment advisers and bank trust companies.
FundQuest has plenty of company among firms trying to satisfy the growing appetite of banks and others for outside investment options.
Its rivals include SEI Investments Co. of Oaks, Pa.; SunGard, of Wayne, Pa.; Envestnet Asset Management Inc. of Chicago, and Placemark Investments Inc. of Wellesley, Mass.
Schwab itself offers platforms from Envestnet and from its Morningstar Investment Services. The San Francisco brokerage announced the addition of those partners, as well as FundQuest, last month. Advisers working with Schwab Institutional have access to each company's line of funds and their back-office support.
Envestnet's offerings includes unified managed accounts, multimanager accounts, mutual fund and exchange-traded fund wrap products, and separately managed accounts.
Morningstar is providing Schwab with actively managed mutual funds, stocks, and exchange-traded fund portfolios.
