3 Updates to Tamarac Integration Partners that RIA's Will Love

I’m writing this post from seat 29C on a United flight from Newark to Los Angeles where I’ll be attending this year’s T3 Advisor Conference. The ability to stay productive almost 24/7 is both a boon and bane. Advances in technology provide me with wifi access at 35,000 feet, but also piles on the pressure to avoid any downtime.

The advisors that I speak to in my consulting business express some of the same concerns. The T3 event is a wonderful opportunity to hear the latest news as well as kick the tires on products that could provide your firm with an edge in gaining new clients or reducing operating costs and complexity.

In advance of the conference Envestnet | Tamarac put out a joint press release with TD Ameritrade announcing new integrations. This should be of interest to RIA’s whether you are a Tamarac customer or not. Could these integrations help your firm? Does your current portfolio management platform offer similar features? Tamarac has been pushing the envelope of advisor technology for over 15 years. Their pace has only quickened since their acquisition by Envestnet back in 2012.

Envestnet’s string of acquisitions has led some industry experts to comment that their platform could limit advisor technology choices. Sure, the end-to-end technology stack of deeply integrated solutions is great in theory. But how does it play out in the real world? Do Tamarac Integration Partners integrate better than with other advisor-facing technologies? Can there still be a seamless user experience if you want a best of breed solution?

To help us better understand this announcement and it’s impact on advisors, we spoke to Stuart DePina, Goup President Tamarac, Matt Stroh, SVP of Marketing, and Brandon Rembe, SVP of Product Development.

Straight-Through Processing

A frequent complaint from advisors using both Tamarac and Envestnet ENV2 was the lack of intra-day updates to positions and cash after trades are executed. This forced users to switch over to their custodian websites to check balances before submitting additional orders.

Having to check balances externally was an annoying speed bump in advisors’ workflow – especially for multi-custodial RIAs that, as DePina shared with us, make up 95% of their client base.

Tamarac has recently addressed this issue by leveraging the deep application programming interfaces (API’s) provided by TD Ameritrade to offer real-time updates for accounts custodied there. This effort was boosted by Envestnet’s decision to go open architecture last year in an initiative dubbed, Open ENV.

The new integrations allow advisors to see real-time cash and account balances directly in Tamarac’s portfolio accounting and reporting system, Advisor View. This move is part of the company’s commitment to expand its API capabilities and offer full create, read, update, delete functionality by the end of 2017.

Most larger wealth management platforms still rely on overnight batch files from custodians to update accounts. This is fine for firms where investment management is centralized, such as broker-dealers, banks or very large RIAs. Most Tamarac advisors trade their own accounts directly. (See Advisor-Managed Portfolios Knocked Out by Home Office Performance)

This goes back to Tamarac’s heritage when they were just a portfolio rebalancing tool. In fact, around 200 of their over 800 clients still only use their rebalancer functionality in conjunction with another portfolio accounting system such as Portfolio Center (from Charles Schwab) or Advent (purchased by SS&C in 2015). (See How Consolidation Is Transforming Wealth Management Platforms)

An additional workflow improvement that resulted from deeper custodian integrations is in trade processing. Previously, an advisor would have to create a trade file inside Advisor Rebalancing and upload it for execution, now the process is completely seamless for those who custody with Charles Schwab, Fidelity and TD Ameritrade. That covers nearly 80% of Tamarac’s user base. Similar integration with Pershing is underway.

It’s important for Tamarac integration partners to offer equal functionality and that is especially true across the four major RIA custodians. As they have grown, their customer base has diversified from 100% Schwab in the early days, to now, where a majority of their clients are using custodians who are not Schwab. According to DePina, their current asset breakdown is:

Schwab – 45%
Fidelity NFS – 20%
TD Ameritrade – 12%
Pershing – 12%
Others – 11%

Best Frenemies: Partnership with Salesforce

Tamarac announced Salesforce integration last year, which allowed advisors to open new accounts from Salesforce as well as automatically sync data between the two. They already partner with Salentica CRM, which was recently purchased by SS&C.

Of course, they have offered an integrated CRM solution, called Advisor CRM, for over seven years, which was built on Microsoft Dynamics. They chose Microsoft over Salesforce because of the former’s deeper support for custom development, at least at the time. That would be a more difficult choice today Salesforce’s AppExchange has become a development platform and third party app delivery channel rivaling Apple’s app store. (See Which CRM is Right for You? Envestnet|Tamarac’s Advisor CRM)

DePina explained that while their Advisor CRM offering is popular, many clients use other CRMs, including Salesforce, as their primary CRM. To respond to demands for a smoother overall client experience, Tamarac is rolling out a new app within the recently launched Salesforce Financial Services Cloud store that will allow for bidirectional integration. (See CRM Shootout: Redtail vs Salesforce FSC)

Tamarac has no choice except to support Salesforce users even as the CRM behemoth encroaches into their core RIA market with their Financial Services Cloud offering. While Salesforce has traditionally appealed more to larger organizations, they recently initiated an effort to appeal to smaller RIAs – the same audience that makes up bread-and-butter clients for Tamarac.

DePina explained that the shared audience actually makes Tamarac a good partner to Salesforce. “We have a proven track record for combining powerful portfolio management capabilities with the workflow automation of a CRM and our new Salesforce App will deliver tremendous value for our mutual RIA clients,” he insisted.

According to research firm Cerulli Associates, there were 532 independent RIA’s that managed $1 billion or more in 2016 and 34% of those firms were Tamarac clients. The Envestnet unit has managed to maintain this market share by continuing to win new deals at a rapid pace as the number of larger RIA’s has grown year-over-year (largely due to M&A activity).

More Options for Financial Planning

Since Envestnet’s acquisition of Finance Logix in 2015, subscribers have had access to a personal financial planning tool inside the suite. So when DePina shared the news that Tamarac has added integrations with MoneyGuidePro and eMoney Advisor to the offering, we were surprised. Won’t this move create a conflict with Finance Logix?

The answer is “No,” according to DePina. He explained that Tamarac is more interested in enhancing their user experience than limiting clients to using a proprietary system. “If you love another product, we want to make sure you can have a great experience while using our core products and leveraging others,” he declared. (See eMoney Advisor vs. MoneyGuidePro: Which is the Best Financial Planning Software?)

For eMoney Advisor, the integration is one-way only. User can pull account information, holdings and transactions daily from Advisor Xi into eMoney Advisor, but not the other way around. The integration with MoneyGuidePro is deeper: users are able to see planning data in Tamarac’s Advisor View, while end clients can access the same through the client portal.

Expanding APIs are a double-edged sword: they could build stronger bonds with existing clients or push them into the arms of competing offerings. Matt Stroh believes that expanded API support will strengthen their position in the market. “RIAs could use this to support their own proprietary applications – but frankly, the challenge of maintaining and integrating proprietary systems is one of the top reasons RIA’s replace them with our comprehensive platform,” he shared.

Tamarac Integration Partners List is Expanding

Industry opinions on full-stack platform capability as a strategic offering vary. Joel Bruckenstein, the founder of Technology Tools for Today, believes that ultimately, it’s a matter of personal choice for advisors. “There are some firms that are happier to put all their eggs in one basket if they are confident the firm they are working with is capable of providing them a good service across all applications. And some firms are more content to take either a best-of-breed approach or have a third party as their integrator.”

The last few years have shown that the FinTech coopetition trend is here to stay, touching everything from banking to wealth management. Building a business case for it is easy from the customer perspective: great technologies combined can add up to more than the sum of their parts. On the provider side, tech firms must be careful to balance offering options to clients with not becoming overly reliant on competitor technology for key pieces of infrastructure.

3 Updates to Tamarac Integration Partners that RIA’s Will Love

Straight-Through Processing

Best Frenemies: Partnership with Salesforce

More Options for Financial Planning

Tamarac Integration Partners List is Expanding

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