Category: Axys


iStock_000011255731XSmallWhen Advent first introduced The Professional Portfolio (aka Proport) 25 years ago, one feature that contributed  largely to its long-term success was the ability to get data in and out of the program easily.  Advent software has continued to make this feature a priority throughout every iteration of their original portfolio management product line.

In contrast competing products like Centerpiece, which would eventually be purchased by Schwab and rebranded Portfolio Center, appeared to be a black box.  You could see what was being calculated, but could not see the components of the calculation.

Proport files were stored in an open text format and could be easily read and written as necessary.  Axys v1.x, Advent’s premier Windows product at the time, maintained a similar open file structure.  Axys v2.x was the first version to implement a binary file format.  At the time, some users were concerned that the format change would complicate maintenance of existing customized solutions and inhibit their ability to continue to create solutions that exchanged data with Advent’s portfolio management system.

Firms were slow to embrace Axys v2.x and some never upgraded to it.  Perhaps it was concern over the new file formats.  Instead, most firms eventually upgraded to Axys v3.x. Concerns about the format change were moot since Advent also introduced IMEX, which allowed users to import and export files in CSV, tab, and fixed formats.

Exceptions apply, but the IMEX tool facilitates the ability to move data in and out of Axys with relative ease.  The features of IMEX combined with the ability to import transaction and label data through the trade blotter provide a comprehensive means to get fundemental data in and out of Advent Axys and APX.  Additional methods of importing and exporting data follow:

Axys users may write or read data directly to data files if they have knowledge of the underlying data format.  However, this is not a best practice due to changing file formats between versions.  For example, upgrading from Axys v3.7 to v3.8 requires a file conversion process.  Some of the resulting Axys v3.8 files have a different file format, so any process directly writing or reading these files would need to be updated to take the new file formats into account.

APX users may

  1. query the APX database via Excel (and other software programs).
  2. write SSRS or Crystal reports to extract data.
  3. use many other SQL based tools to export and import selected data.

Axys and APX users can

  1. export reports directly to Excel with the push of a button or create a macro that stores report output in XLS and other file formats.
  2. create custom reports via Report Writer Pro, which can easily be changed to CSV format.
  3. modify existing replang reports to build CSV, other text formats, and various Advent file formats.
  4. use third-party Extract, Transform and Load (ETL) products like xPort.

APX (v1.x to v4.x) maintains the functionality of IMEX, but the ability to generate files in a fixed format has been eliminated.  In addition, you can export data to an Axys v3 format.

Due to these capabilities and a host of other Advent features that facilitate automation and integration, Axys and APX users as well as third-party vendors like ISITC.com have developed many custom solutions utilizing Advent Software’s infrastructure to address day-to-day investment operations workflow and reporting requirements.  The building blocks of these solutions faciliate subsequent projects and allow investment firms to further enhance Advent’s portfolio management systems to meet their evolving needs with less effort and cost.

Here is a sample of some VB code we use to integrate and automate data handling of exported Axys and APX data.  The code can be used in Excel with VBA and User-Defined Functions (UDFs) to pull data from Axys and APX like Bloomberg BLP functions are used in Excel. This function is just one of the routines in our library of code that enable us to seemlessly integrate our solutions with Advent’s infrastructure.  I wrote the original source code for this routine twenty years ago and have updated it as necessary to support later releases of Axys and APX.

Using similar resources, integrators can move quickly from prototype to production when developing solutions for Advent users.  In fact, Advent’s most recent annual report continues to cite customers building their own solutions as one of their largest sources of competition.  For instance, a number of firms have created their own Order Management Systems – not that I’d recommend it.

Advisors abhor inefficiency and are typically willing to make a reasonable investment to reduce it.  Automation not only increases efficiency, but lowers risk by eliminating manual processes that may rely on individuals and their exclusive knowledge of manual or semi-automatic procedures.  Some financial services firms have customized their systems to a degree that makes staying on the Advent platform for twenty plus years possible and the thought of switching to another platform regrettable.

Thanks to the way Advent handles getting data in and out of their systems, users can continue using Axys to meet their ever-changing system requirements and leverage most solutions created for Axys on the APX platform.   Similar and potentially better tech options may exist on other competing platforms, but most of those systems lack the maturity, depth of resources, third-party relationships, and corresponding reliability of Advent’s platform choices.  Knowledge and acceptance of these competing products among advisors, employees, and third-party solution providers won’t match Advent for a long time.

As a result, even though technologically superior portfolio management platforms may emerge, many firms will continue using Advent’s best known portfolio management systems for 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, contact Kevin Shea via phone at 617-720-3400 x202 or e-mail at kshea@isitc.com.

iStock_000011903357XSmallAs quarter end approaches once more, investment advisors gather their resolve and strive to implement new system enhancements to client statements before Q2 arrives. We all wish it could be different, but it is simply the nature of the business. Even firms with good-looking statements may rush to enhance them by incorporating new features such as blended indexes or minor report edits prior to quarter end.

Most of the systems implemented at investment advisories are run on a daily basis, but client statements are typically generated on a quarterly basis. Some investment managers produce monthly statements, but they are in the minority. In the near future, these types of periodic statements will become less relevant than an investor’s ability to generate meaningful client statements on demand.

Amending the quarterly reporting process and report packages requires a disciplined process of setting manageable goals, gaining approval, implementing changes, testing systems and resolving potential problems. Those responsible for creating the reports require approval from management, and until they get that final approval, the time necessary to comfortably implement the changes continues to slip away.

“THE ONLY CONSTANT IS CHANGE” -Heraclitus

As quarter end gets closer, it is not unusual for those involved in the project to get mixed messages about what needs to be done for this quarter. Operations staff juggle various responsibilities. Ad hoc requests, changing priorities and management decision delays inevitably create the need to do last-minute work or postpone the project until the next month, quarter, or even year. With these types of delays, it is a wonder that any progress towards creating better client statements is ever made.

At most larger firms, management is comprised of a number of voices that have a say in whether a firm adapts new systems and reports. The decision to change quarterly reports isn’t made in a vacuum. It is a decision that may depend on a firm’s dedication to their current portfolio management system or a need to allocate limited budget resources to other high-priority issues. Good quarterly reports also underscore a firm’s philosophy, so deep thought and considerable discourse can play a part in determining the content and appearance of client statements.

SOME AXYS USERS DO NOTHING WHILE OTHERS THINK ABOUT MAKING A DECISION.

Before you summarily dismiss all Axys users as being hopelessly outdated and technically inept because they haven’t upgraded to APX or moved to another more recently released Portfolio Management System (PMS), you should understand that there are many decent-sized firms out there that are still using Axys to manage hundreds of millions or billions in assets.  Though a small group of firms really do fit the preceding description, most firms do not. The majority are firms that understand the current shortcomings of Axys and the potential benefits of APX, but also value the simplicity, efficiency, and reliability of Axys.  These firms may have considered Advent’s other offerings: Black Diamond and Geneva, but haven’t managed to find a solution that works for their firm.

As a growing number of these Axys users may be questioning their commitment to Advent, it is only natural that they vacillate to some degree between putting more money into their existing platform or changing the platform altogether. I suspect that many of Advent’s Axys clients now fit into two categories: those who are indifferent and those facing decision paralysis.

Those who are indifferent use Axys like a calculator and will continue to do so until it becomes apparent that they cannot use it any more. Those facing decision paralysis will also continue to use Axys – albeit with some reservations – until another vendor steals them away or Advent makes a bold announcement to continue to support these lost souls with renewed vigor.

In the end, a firm’s need to keep pace with client expectations and technology by providing innovative reporting should win out whether that is achieved by spending money on their existing platform or embracing another. For now, like many in the industry, I continue to hurry up and wait for investment advisors and Advent Software to do something.

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

Account vs InflationReporting a portfolio’s comparative performance against representative benchmarks over various periods of time has been an widely implemented technique of investment advisors for decades.  Firms do this in a variety of different ways, and some methods are more meaningful than others.

Advisors may show the CPI as a baseline index against the portfolio and other indexes in an effort to illustrate how their investments have performed against inflation and hopefully point out the most basic benefit of investing with their firm versus keeping it under the mattress.

If a firm manages equity they may show the the Dow Jones or the S&P 500 indexes.  If they manage international equities, or have a bond component they will likely show other representative indexes.  They may further isolate performance by asset class and show it with the corresponding indexes to facilitate a client’s ability to draw a direct comparison between the performance of like asset classes and underscore the value they add to the investing process of specific asset classes.

PROBLEMS WITH TOTAL PERFORMANCE BLENDS

Firms typically show total performance too, but many run afoul when trying to show a representative index to match total portfolio performance.  Portfolio management systems like Advent Axys and APX have long supported the ability to create blended indexes, but the actual implementation of the feature falls short of real-world requirements.  In the past, many advisors were content to create a blended index with static weights, but firms soon recognized that these ballpark blends weren’t good enough for their requirements because they didn’t accurately reflect the asset mix of their portfolios over time.

Advent Software initially supported the creation of blended indexes in their portfolio management systems (Proport and Axys) through a report that was engineered to create simple index blends.  This method of creating indexes was somewhat limited because index weights couldn’t be changed over time, but it allowed advisors to manage many indexes centrally through the use of scripts and macros, and it also created separate index (DEX) files.  Having separate files allowed clients to track and show a number of blends if they chose to.

Advent improved the feature to some degree by creating the synthetic index, which allows users to change index weights over time on an individual portfolio basis.  The synthetic index feature works best when used to create ad hoc indexes for selected portfolios, but when users try to scale the feature to be used for a large number of portfolios its usefulness tested.  The ability to change the index weights over time is a plus, but updating the info in an automated fashion is not a feature of the system.

AUTOMATED BLENDING SOLUTIONS

In the early 90s, we started working with advisors to create custom blends with dynamic index weights in order to match the ever changing asset mix of portfolios.  This was done by categorizing assets as fundamental asset types, and assigning those asset types to like indexes.  Once the infrastructure was created we created an extract containing the historic month end asset type weights for all portfolios and used those weights along their corresponding index returns over time to create a true blended index.  The process was automated with a combination of Axys reports, macros, scripts and Visual Basic.

Years ago, we  helped firms address the some of the short-comings of the synthetic index feature by creating a product dedicated to creating blended indexes and managing them.  This allowed users to manage the indexes centrally rather than at the portfolio level.

Last year, we revisited the problem of effectively managing custom index blends for Axys and APX users again.  This time we automated the process of refreshing the index weights stored in each portfolio’s corresponding performance file through a process that updates the synthetic weights by stripping the performance files of their synthetic weight values and rewriting them based on each portfolio’s asset mix and correspondingly assigned indexes.  The process builds monthly synthetic index weights for the inception-to-date period.

This most recent update to our index blending automation tool leverages Advent’s synthetic index capability, and adds the much needed automation that users require to implement the existing synthetic index feature in a way that makes more sense.  Unfortunately, there are still limits to the built-in blending functions of Axys and APX.  For example, synthetic indexes create a blend called simply “Blend”, and users trying to show multiple blends need to create those other blends somewhere else and then generate index files, so that they can be shown alongside synthetic blended indexes.

Thankfully, Advent’s import/export functions, scripting and macros allow savvy users to workaround these limitations as long as they are willing to roll up their sleeves and do a little work or know someone who can help.

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

In my role over the years as a designer and developer of client reporting packages for dozens of investment advisors, I typically work with decision-makers to facilitate the creation of new client presentations. Many of my clients already know what they want and just need help making it happen.

Though I have an excellent understanding of what is important to most investors and their clients, my opinion is seldom solicited. I speak up when an issue demands it, but most of the time I defer to advisors, listen, and do my best to create what my clients (investment managers) want. In many cases, the bulk of the project is spent on individual report exhibits with little emphasis on the way reports are organized and presented to clients.

I have worked with firms who have wanted to do the bare minimum for their clients (appraisal, and invoice) as well as clients that go above and beyond their duty to report. However, even those with the best reporting intentions can err by including a level of complexity and detail that will not benefit their clients.

On occasion, I am lucky enough to work with investment professionals who are modern thinkers and savvy marketers. The combination of these important characteristics leads to engaging projects and sophisticated report packages. These advisors apparently understand what their clients want to see, and are determined to make the desired reports a reality.

Instead of reporting only what is required, these advisors are trying to exceed the reporting expectations of their clients, and in doing so they engender trust. Their reports are comprehensive and transparent. As such, they have the possibility of highlighting poor performance, but that is a risk that needs to be taken by most advisors. The significance of disclosing this level of information is recognized by investors’ clients and should improve client communications.

In terms of presentation, reports should be bound, with a cover and/or table of contents and well-organized. When a client opens the report up, the most important things are first, and less important details follow. For example, there is a hierarchy to the way the reports are organized in the package such that the relationship is reported first and individual account reports later.  You can view a full report sample illustrating this approach here. In this specific example, the physical report package opens to display pages two and three of the PDF document, which are a relationship summary. The pages that follow provide account-level information.

Reports are typically bound electronically (i.e. PDFs) for those who deliver reports through portals or encrypted email, but firms send most their reports out on paper due to low adoption rates. Paper copies should look professional, and there are cost-efficient options to make this possible whether it is done through printing report packages on 11×17 stock with a saddle stitch or via manual binding of reports after they have been printed. Some of the manual binding options are fairly quick, but shops with hundreds or thousands of reports should not bind reports manually.

Another key to producing impressive report packages is the one-page summary, which allows a client to look at a single page if that is all they want to see. Usually, it is an exhibit that shows them where their investments are, how much they are worth, how they have grown, and how they have performed over various time periods. One-page summaries are also produced to provide information about specific asset types and performance. The idea is to create an executive summary. Clients really want a concise overview of their investments, and rarely look at all the other details that get sent to them on a quarterly basis.

How will you know if your reports have made an impression?

You will hear it from your clients. Even hard-to-please clients should appreciate these types of report improvements. So get to work now, and your new report packages could be ready for next quarter.

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

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.