Category: APX


As a provider of technology solutions for financial services firms small and large nationwide, I frequently come in contact with investment firms of diverse dynamics and decision-making processes.  I am, of course, familiar with the process and discipline of getting

three separate quotes for goods and services, but even after decades of bidding on projects, it is still unclear to me what investment firms actually do with this information.

In some cases, it seems like the decision has already been made and prospects are just going through the motions to fulfill the expectation to follow a procedure and process established by their firm.  Gut decisions sometimes overrule common sense.

One of my clients actually adheres to this discipline for everything and, if the rumors are true, even gets three prices for paper clips.  In my own experience with them, they did, in fact, get three quotes for a single piece of computer equipment that cost about $75.  Considering current wage and consulting rates this arguably may not be a good use of time or money.  Perhaps it’s a more altruistic goal of keeping our economy competitive that drives their policy.

 

Opportunity                          

Recently, I was contacted by a firm looking for assistance with some Axys report modifications.  One of our competitors provided them with a quote for the work they needed.  The prospect felt that the price was too high and they solicited my opinion.  I never saw the quote from my competitor, but heard from the prospect that they wanted 3-4k up front and expected it would cost 7-8k.  In another conversation, I was told that there was also a local company bidding on the work.  That made sense to me – three bids.

I was provided with a detailed specification of what needed to be done and asked to provide them with a quote.  The firm was looking to make some modifications to the Axys report that generates Advent’s performance history data and stores it as Net of Fees (PRF) and Gross of Fees (PBF) data.  Though the requirements seemed complicated initially, it eventually became clear to me that the job simply required filtering of a couple REPLANG routines, and some minor additions.

I shared my impression with the prospect and ball-parked our bid at 3k (a 12 hour block of time) less than half of our known competitor’s bid.   I explained that the actual work was likely to take three to four hours, and rest of the time would be spent on testing, support and maintenance.  My expectation was that we would get the work done in a half day to a day at most and the remainder of our time could be used for any required maintenance or modification later in the year.

 

Follow-Up

After about a week, I called to follow up and found out that the firm was strongly considering having the work done by their local vendor, who told them it could be done for seven to ten days.  “Excuse me,” I said.  “Don’t you mean seven to ten hours?”

“No,” he replied.  He further explained that they really like using the local vendor and would probably use them for the job, which I fully understand.  I have, no doubt, benefited from this sentiment in Boston for years.  At that point in the call, I was thinking that it was more like seven to ten lines of code, but thankfully I didn’t start laughing.  I waited until the call ended.

 

No Risk, No Reward

In the end, your firm’s decision to select one bid over another is a personal one, similar in some respects to the one that dictates an investment adviser’s success attracting new clients and retaining them.  It’s about trust, performance, and the ability to continually communicate that you are worthy of one and capable of the other.  To succeed long-term in the financial services business, you need both.  Through good performance, we gain a measure of trust.  However, without a measure of initial trust or risk, there is no opportunity to perform.

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 isitc.com or contact Kevin Shea via phone at 617-720-3400 x202 or e-mail at kshea@isitc.com.

In 2005, Advent released the first version of Advent Portfolio Exchange (APX). This paved the way for enterprise users to take Advent more seriously, while reassuring rapidly growing firms that APX would service their future needs and provide support for legacy requirements. Initially, this change was fine with many of the Axys users that have historically comprised Advent’s established userbase, but after years of baseline Axys updates and Advent’s predominant emphasis on APX, the patience of some Axys users has worn thin.

Today Axys users likely fit into one of four camps:

  1. They are planning to move to APX in the near future.
  2. They understand their options well enough, but don’t think the benefits of moving to APX outweigh the costs.
  3. They simply don’t care about APX or competing products – just as long as Axys keeps doing what they need, everything is fine.
  4. They are frustrated by Advent’s perceived abandonment of their business segment and are either actively seeking a replacement to Axys or in the process of converting to a new system.

I have repeatedly been told that owning a self-hosted version of APX is 2-3 times more expensive than Axys, but don’t take my word for it.  Advent’s pricing changes regularly.  Call Advent and get a quote.   Early on, APX conversions were very expensive, and some firms were quoted six-figure conversion costs.  Although these costs have been reduced substantially, APX is still significantly more expensive than Axys.

In the past, conversions were much more complex and time-consuming.  The primary issue seemed to be the normalization of a wide variety of Axys data.  As APX has evolved, Advent and the conversion utility within APX have created efficiencies in the conversion process.  In a recent conversation with a client, who is now considering the move from Axys to APX, I learned that Advent took copies of their Axys files and was able to demo APX 4.x with representative data from their firm in about a week.

In addition to the difference in the software cost, Advent recommends that APX users host the app in a traditional database server and application server configuration.  Some users may opt to host IIS on a separate server as well.  Currently, many small and medium businesses (SMBs) simply host Axys on their primary file server.

Why would a firm running Axys want to pay the premium for APX?

The answer is improved security, infrastructure, and functionality that meets the expectations of those with higher technological standards – historically enterprise users, not SMBs.  APX promised this from day one, but APX v1 was, well, version 1.  I sat in on a couple dog and pony shows for APX when it was first introduced.  In one, the presenter abruptly but politely disconnected a conference call with one of their early “testimonial” users when the conversation went in an unexpected direction.  At Advent’s conference in Orlando, more time than Advent would have liked was spent on the topic of APX latency, but these types of issues can be experienced with any v1 product covering as much ground as APX.

One of the most valuable benefits of Advent’s portfolio accounting systems is the maturity of their products.  This maturity is the primary reason why so many things in Axys and APX work the way they should.  Though much has changed at the core of Axys and APX, both of these systems can potentially run a report created on The Professional Portfolio (the precursor to Axys and APX) 25 years ago.  Due to the continuity of Advent’s portfolio management systems, users of The Professional Portfolio and Axys have been able to jump into APX without a lot of training.

Last year, when I attended the Advent conference in Boston, a panelist from the Advent Users Group touched upon the issue of APX owners using APX like Axys.  Her point was that you should use the newer features of APX v3, but as she mentioned it, I couldn’t help thinking how much the earlier versions of APX were like Axys.  Aside from the SQL backend and other related platform benefits, it felt like you were still using Axys, only it was more complicated and clunky.

Even now, we see that the heart of Axys continues to beat inside APX, playing a critical role with respect to backward compatibility and legacy reporting.  Over the course of its first five years, APX has matured significantly.  That initial awkward period is behind Advent APX.

In the past 18 months, Advent has made significant strides towards fulfilling the promise of APX, introducing additional SSRS reports in APX 3.x and the ability to create dashboards in APX 4.x.  I have finally heard mention of an API.  Yes, APX is more complex than Axys, but now that more of the infrastructure has been built out, you can feel better about it.  With these improvements, APX should make sense for a larger number of investment firms.

APX is a logical upgrade for Axys clients who:

  1. Want to minimize the need to retrain staff on a new portfolio accounting system.
  2. Understand that additional features, such as SSRS reporting and dashboards, come hand in hand with incremental complexity and the costs of an enterprise solution.

Those that don’t want to take on as much overhead may find solace in moving to APX on Demand (a SAAS offering), but in doing so they will have to sacrifice some of the flexibility and functionality available to self-hosted users of APX.

 

Final Score: APX 4, Axys 0

Looking at version releases of APX and Axys over the past seven years, it is easy to understand the focus of Advent’s primary resources.  Though four minor releases of Axys have been made since APX came out, there have been no major releases.  A major release implies a major change to the software, and at this point it doesn’t appear that a major Axys release is coming from Advent.

Last year’s acquisition of Black Diamond provides Axys users with another choice under the Advent umbrella, but I haven’t seen many users go from Axys to Black Diamond. While Axys improvements have stalled out, Advent’s full-throttle APX development has many of its Axys users feeling disenfranchised.  From my own perspective, Advent appears to be losing some valuable clients through a failure to more actively communicate with their SMB client base.

If Advent wants to keep Axys clients as Advent clients, they should connect with their users and reassure them that they want to work with them. Still, Advent should also understand that for some, it may make more sense to move on.

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 isitc.com or contact Kevin Shea via phone at 617-720-3400 x202 or e-mail at kshea@isitc.com.

For me, scheduling a lab of my choice at an Advent Conference has been an elusive goal.  I have gone to a number of Advent conferences since 1993, five years after I started using Advent products.  Though I have been interested in attending one, I had never managed to go to a lab at an Advent conference.

I signed up for the conference the week before, and immediately started reviewing the sessions and labs I might attend. There were a wide variety of general sessions that I was interested in, so I wasn’t terribly disappointed – or surprised – to see that the labs I wanted to go to were full.

Determined that I would finally attend a lab – any lab – this year, I settled on one that I didn’t exactly have high hopes for.  The name sounded dull.  Other labs went by the name of “Taking Command of Axys/APX Macros” or “Building Custom SSRS Reports”, and my lab was “Pathways to Proficiency: Security-Level Performance in APX.”  The lab was hosted by Advent’s Trent Berry, whose enduring eloquence could no doubt make a blow-by-blow description of paint drying interesting. 

With twenty plus years of experience using, implementing, integrating, enhancing, and consulting on Advent products, I was probably not a typical lab attendee, but I was determined to learn what there is to learn in a lab session. 

I was impressed by Advent’s level of preparation, which included four classrooms with 48 PCs each and two more classrooms with 24 PCs each.  Every one of the systems was running Windows Server 2008 Standard and VMWare with 8GB RAM to host an insulated, fully functional copy of Advent’s primary applications.  Advent provided booklets for all of the labs that detailed the lessons, and appeared to have at least three Advent employees in attendance at each lab: one to speak, one to navigate the primary lab PC, and another to assist those in the lab with any individual issues they ran into.

You never know until you try. 

I also learned that attending a lab really isn’t that difficult after all. Though the hallways near thelab rooms were packed on Monday and Tuesday, it was very quiet when I headed for my 7:45am lab Wednesday.  Because of this, that morning I could go to any lab I wanted to.  Many extra PCs were available in each of the labs I attended.  In addition, there were a couple rows of chairs in the back where you could sit and watch without following the exercises on the PCs provided.  With that encouraging experience, I hopped into “Report Writer Pro in Axys and APX II: Building Upon a Foundation”, “Taking Command of Axys/APX Macros”, and “Building Custom SSRS Reports”, but what I really wanted to learn was what can they possibly teach users in an hour?

What can you learn in an hour?

The labs are so short that substantial learning is severely limited.  They are focused on empowering users by acquainting them with conceptual building blocks, but users will likely need to take the next steps on their own.  In my opinion, any attendant who applies him – or herself during the lab should gain a surface understanding of the fundamentals involved.

This type of basic training is a necessary starting point for many novice users, but intermediate and advanced users can see greater benefits from attending interactive sessions with panelists that share specific detailed experiences.  After sitting in on a few labs, I wished the names of the labs had been preceded by the phrase “Intro to.”

I saw more value in the “Building Custom SSRS Reports” lab, because using Visual Studio to build custom SSRS reports for APX is a non-intuitive process for most.  The labs on automation via macros/scripts and use of Report Writer Pro seemed less useful, because these are relatively intuitive processes that also happen to have sufficient documentation from Advent detailing how they work.

In the end, I walked away with a better understanding of Advent’s labs – they simply and effectively introduce concepts to users as they apply them firsthand.  Those interested in attending these labs should register for the conference as early as possible and show up even if the lab appears to be full.

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 isitc.com or contact Kevin Shea via phone at 617-720-3400 x202 or e-mail at kshea@isitc.com.

If you saw $500 on the ground, would you pick it up?

In late 2008, most investment firms were focused on getting lean and surviving a heretofore unprecedented economic downturn. Because we specialize in working with these firms, we wanted to use our core expertise to help create efficiencies and save them money. We ran an ad in the Advent User Group (AUG) newsletter offering two free hours of consulting. It wasn’t a completely altruistic idea; we figured we would gain some long-term clients for the effort.

The ad was run, and I honestly thought we’d get some calls. Surely there were investment firms that would want FREE consulting, right?  We typically receive calls from investment professionals across the nation inquiring about our products and services, but not one person called to inquire about the two hours of free consulting.

It is possible that users were so busy that they weren’t reading the newsletter.  Perhaps the ad, which was kind of ugly, didn’t inspire firms to call us.  In all likelihood, this ad failed to generate interest because of its target market: investment advisors and their trusted professionals.

I have worked with these folks for over twenty years and understand who they are, so perhaps I should have known better. The typical investment advisor is a conservative skeptic who believes you get what you pay for. In their view, our offer of free consulting must have appeared hollow or even insincere. Investment firms are stereotypically risk-averse regarding their back office operations. For these reasons, many investment advisors are victims of a negative feedback loop. 

Software companies are able to continually increase fees without making dramatic technology improvements because, by and large, investment advisors are resistant to change and afraid to try anything else. This inertia obstructs new firms from competing with the established firms since the market share they need to capture is engaged in agreements that investment advisors may not think entirely reasonable, but acceptable for now.

Advent Software, for example, consistently raises the cost of Axys support and focuses on compatibility and bug fixes without implementing large-scale feature additions to further merit such sustained cost increases. Advent could change this with a little effort, but historically it hasn’t been part of their agenda. Nevertheless, I still believe that Axys is the most cost-efficient and feature-rich portfolio management system available to investment advisors today.

Axys users need to remember that the name of the company is Advent Software, not Axys Software. They are a for-profit business, and that is a good thing for their customers in the long-term. From my limited knowledge and perspective, it does seem like a grossly disproportionate amount of Advent’s research and development efforts go into things that are not related to Axys. For an Axys user paying annual maintenance fees which hypothetically go to support, research and development of their product, this is problematic – especially if they rarely call Advent for support.

Advent has invested significant resources in APX, an enterprise product offering which is a possible upgrade for Axys users. In reality, APX currently doesn’t make sense for the vast majority of non-enterprise Axys users. In May, Advent finalized a deal to buy Black Diamond for $73M. Three months later, just how or whether Black Diamond will be integrated into Advent’s other product offerings remains to be seen.

Advent is not alone. Earlier this year I had a call from a prospective customer that was frustrated by Satuit’s pricing plan. After paying roughly $2K per year to use Packman to package their reports and host statements on their portal, they were told that pricing would increase 300% over the next three years. If I made that announcement, I know what would happen to my clients.

To be fair to Satuit, they gave their client a year’s notice of the increase – enough time for them to find and implement a suitable alternative. We have experience selling competing products, and we feel that Satuit’s product, originally from Lync Consulting, had been underpriced at $2K per year.  Unfortunately, their client got used to paying $2K a year and didn’t feel like they could stomach more than $6K per year, even though the cost was scheduled to increase gradually.  Regardless, my advice to this prospective client was to stick with Satuit for now, because the cost of switching from their solution to our solution would outweigh any benefit in terms of cost over three years.

Rational product pricing takes competition, expectations, value, ongoing support and profitability into account, but don’t expect to make any sense of pricing in the industry where “greed is good.” Investment advisors that really want to change the status quo should follow Gandhi’s advice: “Be the change you want to see in the world.” In order to make it happen, they need to be willing to take on a certain level of risk. If the last twenty years is any indication of what we can expect, don’t hold your breath on this one.

Most investment advisors will continue to get what they pay for in the foreseeable future.

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 isitc.com or contact Kevin Shea via phone at 617-720-3400 x202 or e-mail atkshea@isitc.com.