SunGard says rising interest in unified managed accounts is helping it initiate relationships with midsize banks, and the president of its adviser technologies unit expects to continue to move down market.
The Wayne, Pa., provider of software and platforms for financial services companies has established 51 relationships with banks in the past few months. It expects to add a couple hundred more within the next three to four years, because more and more banks want to add unified accounts to their wealth management platform.
“The last few years, well really the last few months, UMAs have started to take off,” Mike Winkel, the president of SunGard Advisor Technologies, said in an interview last week. “We are starting to see trust banks and wirehouses adopt” the accounts, and they are “helping us to get more and more penetration with banks.”
Unified managed accounts allow an adviser to assemble multiple products — including managed accounts, mutual funds, and exchange-traded funds — on a single platform. They have been hyped for the past three years as the future of fee-based investing and caught fire last year as demand grew among banks for an advice-based, open-architecture model.
Only 10% of the banks Dover Financial Research surveyed from August to October said they were offering unified managed accounts, but 60% said they were developing or planned to develop a platform within 12 months.
Assets held in unified managed accounts jumped 36.8% industrywide in the first six months of last year, to $26 billion, according to Dover’s research.
SunGard launched its WealthStation platform, which added the accounts, in 2002 and WealthStation 2.0 in November. Both include SunGard’s PlanningStation and AllocationMaster, enabling the company to offer advisers allocation, product selection, and back-office services in a single platform, Mr. Winkel said.
Aite Group LLC named WealthStation the Best-in-Class Complete Advisor Platform for high-net-worth and ultra-high-net-worth individuals in its report, “Evaluating Wealth Management Advisor Platforms: Integrating the Front Office.”
Alois Pirker, a senior analyst at Aite, wrote that WealthStation is strong in risk analytics capabilities and support for investment product selection, while financial planning and investment planning remain its core strengths.
Mr. Winkel said SunGard has historically had strong relationships with banks, because of the trust accounting services it provides. But with the growth of its WealthStation platform, he said, the company has been able to develop new relationships and cross-sell wealth management services to its bank customers.
“Our foray into separately managed accounts and unified managed account platforms, and more so the overlay management that we do, has really helped us develop tight relationships with a lot of banks,” Mr. Winkel said.
Unified managed accounts allow banks to provide holistic, flexible, tax-efficient, customizable investment advice without building their own platforms, he said.
SunGard started by targeting banks with $30 billion to $40 billion of trust assets under management and now is beginning to target smaller banks, Mr. Winkel said.
Analysts said SunGard is competing in a crowded market of third-party providers that want to offer banks a platform for unified managed accounts. According to Dover, third-party providers — such as Placemark Investments Inc., Parametric, LFG Inc.’s Lockwood Advisors Inc., and Brinker Capital Inc. — are quickly creating platforms that are outsourced to other financial services companies.
Placemark, an investment manager that outsources unified managed account platforms, doubled its assets under management from April through November, the latest period for which figures were available, to $4 billion.
Mr. Winkel said SunGard can stand out in a crowded field because, unlike competitors such as Placemark and Parametric, it can offer a complete platform on which banks can put their own brand.
“We don’t have the same visibility that some other firms do,” he said. “They get more press because they have their name attached, and we tend to come in the backside.”
Mr. Winkel said he expects SunGard to gather a large share of business from big regional banks, because other competitors are more product driven.
“I think we offer the best value proposition to the banks,” he said. “We bring them technology that will enable them to offer a UMA platform or whatever platform they need.”
