Stylus Web, plan-level reporting tool, is available for financial advisers

A new web-based tool, which originated in the institutional investment world, is now available to financial advisers who…

A new web-based tool, which originated in the institutional investment world, is now available to financial advisers who work in the defined-contribution and defined-benefits arenas.

Markov Processes International LLC, known for its quantitative investment and analytics tools on the institutional side, today announced the release of Stylus Web, which the firm said can produce analysis and reports to help advisers acquire new plans and retain existing ones.

It is priced at $5,000 a year per user and includes back-end data from Morningstar Inc. and other service providers.

The price can be negotiated down for large groups of advisers, according to MPI officials. There is also a less expensive version of Stylus Web available for $3,000 that doesn’t include plan-level research.

In the current fiduciary environment, where performance monitoring and reporting are becoming increasingly important for both the adviser and the plan sponsor client, all-in-one tools that provide an adviser with analytical depth at a reasonable price are going to have an edge, according to industry observers.

“The bottom line is that the brokerage/commission 401(k) model is going the way of the dodo bird,” Sean Cunniff, research director at The Tower Group Inc., wrote in an e-mail.

This opens the way for advisers who want to take on fee-based work in this area — if they have the right tools.

With Stylus Web, advisers can generate reports on topics such as individual managers, manager comparisons, portfolios, single plans and plan comparisons. The tool also allows advisers to make comparisons of hypothetical portfolios.

It allows advisers to measure performance using returns-based style analysis as well as holdings-based analysis. Advisers also have access to many of MPI’s proprietary models and statistics, which detect style drift more quickly than other methods.

The software allows advisers to compare fund managers’ performance by assigning them to custom peer groups and using custom benchmarks.

“Stylus Web is user-friendly and understandable, and has the institutional reach the company is known for, yet is graphically simple to understand,” said Kent Fitzpatrick, managing director for the Boston office of Asset Strategy Consultants LLC, a registered investment advisory firm with $7.5 billion in assets under management. MPI referred him to be interviewed.

Mr. Fitzpatrick’s firm focuses on retirement, risk management and investment consulting to institutions, non-profits and family offices.

“I view Zephyr and MPI as the institutional standards at visually communicating numerical data in this area,” said Mr. Fitzpatrick, who was referring to Zephyr Associates Inc., the only other vendor that has a set of products that can be likened to the analytical capabilities of the MPI offering.

Advisers typically use two products from Zephyr Associates (styleadvisor.com), using them in tandem to perform the analyses Stylus Web has been designed to conduct.

That combination includes Zephyr’s AllocationAdvisor, which is used to check the mix of assets used in a plan or portfolio, and StyleAdvisor, which is used to search and analyze managers as well as for performing due-diligence research and reporting.

StyleAdvisor, which includes AllocationAdvisor, starts at $8,000 a year per user license. The latter can be purchased as a stand-alone starting at $5,000 a year per user.

Dan Dubay, managing principal with PPA Investments Inc., which has $700 million in assets under management, said that he welcomes competition in the space.

His firm has relied on Zephyr’s products for four years. Mr. Dubay said that though he is happy with its performance, it isn’t necessarily a fit for everyone, especially smaller advisory shops.

“Zephyr is kind of difficult for your stand-alone guy. I have one portfolio manager using it, and that is all he does — it’s just not that user-friendly,” Mr. Dubay said.

Officials from Zephyr disagree with this characterization, noting that small advisory firms have been the biggest area of growth for the company over the past three years.

“The smaller advisory firms tend to grasp the capabilities of StyleAdvisor quickly and easily, with minimal assistance,” said Kelly Higgins, vice president of sales and marketing at Zephyr.

She said that the company also recently released a template library that makes it even easier for an adviser to produce custom reports.

Even so, coming up with a product tailored for smaller advisory firms was the genesis of Stylus Web, according to Jeff Schwartz, managing director at MPI.

“I wouldn’t call us an arrogant firm, but we are one that has a reputation with sophisticated, quantitative, high-level folks, and we knew that advisers didn’t have the time to learn our day-to-day desktop tool,” he said.

Other options that can get advisers part of the way to what the MPI product promises are offerings from Morningstar:

• The Principia Defined Contribution Plans and Analyst Research Center modules within the Advisor Workstation 2.0 web-based platform.

• Morningstar Direct.

Advisers usually access these offerings through a provider, such as a broker-dealer or custodian, and not on an individual license — meaning that the folks at Morningstar wouldn’t provide pricing.

Other non-Morningstar applications that do much the same include:

• Plan Investments Plus, a collaborative undertaking between Newkirk Products Inc. and its unit, MasteryPoint Financial Technologies (newkirk.com).

• The PlanTools Risk Management System, from Fiduciary Risk Assessment LLC (fraplantools.com).

Pricing and additional information on those products weren’t available by press time, but we will follow up on our blog (InvestmentNews.com/technology).

E-mail Davis D. Janowski at [email protected].

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