Last year, I helped one of our smaller clients get a new phone system – not because they needed one, but because the owner decided it was time for something NEW. There was nothing wrong with the old system, and I am fairly sure that this particular client will get no additional benefit due to their limited use of the phone system. I appreciate this approach when applied to the purchase of new computer equipment, which naturally obsoletes itself as new software updates are implemented. However, the NEW logic that was used to send the old phone system to the landfill was lost on me.

More recently, I experienced a similar issue with a client of ours in regard to their portfolio management system. After many years of using Axys, they decided they were ready for something NEW. They didn’t spend much time considering APX. They wanted something really NEW (i.e., not Advent). I was concerned, and not about our own meal ticket. Though we do a lot of specialty work for Advent Software users, we do our best to remain impartial and support RIAs that use other portfolio management systems. If we see a better product that makes both technological and financial sense for a specific client’s requirements, we will let them know.

There are usually pros and cons to switching from one system to another. When making a decision to move from one portfolio management system to another you are effectively betting that the benefits will justify the cost. I was concerned that my client was making a bad decision, but I also didn’t want to be the naysayer. We spent a limited amount of time discussing the potential switch: I did my best to explain what it was that made their existing system so valuable, however underappreciated it currently was. I’ll blog on the virtues of Advent Software’s portfolio management systems in the near future, but in short, my opinion is summarized below:

Advent Software is a market leader with portfolio management systems that are mature and malleable. At its most fundamental level, the portfolio management system your firm uses is a foundation that can be built upon by your firm, third-parties, and your primary software vendor. A more mature infrastructure gives your firm fewer surprises and a wider variety of solutions to choose from. By selecting a leading portfolio management system your firm benefits from the logical motivation of third-party vendors to make their products available on that platform first ensuring that your firm has the ability to embrace emerging technology at a competitive pace.

At some point, we all want something NEW. It is an opportunity to get rid of the problems with which we have been dealing and get a new lease on life. And while getting a new whatchamacallit is a good thing when we are talking about your ten-year old car, it is not necessarily the right solution for problems with your spouse, or your ten-year old portfolio management system. Our client is now in the process of converting to INDATA, but we probably won’t know how happy they are with their decision until next year.

Unfortunately, the decision to replace your existing portfolio system with another less mature but newer-looking system is likely to result in disappointment. Conversions typically leave some of your data behind in order to get you into the new system in a timely and cost-effective manner. Firms that adopt new systems without sufficient research frequently find out that they have traded one set of problems for another. Those who champion the switch to a new portfolio management system want a successful outcome that validates their decision. As such, those who are most apt to recognize shortcomings early on may opt to sweep the inadequacies under the rug and stick to their guns rather than question their initial decision.

About the Author:
Kevin Shea is President of InfoSystems Integrated, Inc. (ISI); ISI provides a wide variety of outsourced IT solutions to investment advisors nationwide. For details, please visit or contact Kevin Shea via phone at 617-720-3400 x202 or e-mail at