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Independent investment advisors often ask us if Investor's WorkStation will replace portfolio accounting software such as Advent?

The answer rests with, "It depends on what you need" and your definition of and need for "back-office" accounting capabilities.

Investor's WorkStation Niche

Advent and the like (primarily as links between the investment advisor and the back office and secondarily as links to the client) perform only the most basic of portfolio creation and modification operations for you by letting you create/input investment portfolios, by rebalancing investment portfolios, by generating client reports (individual, one dimensional, unconnected 'this is where you are now' reports), by performing "back-office" accounting functions, and by generating internal, compliance, and associated reports; more accounting for what you have done with investment portfolios, but without the detail of showing the portfolio creation, modification, and management process.

Though Investor's WorkStation accounts for every penny, it was never meant to replace portfolio accounting software.

Investor's WorkStation is a utility program that is the link between investors, investment advisors, and portfolio accounting software; 'a client communication, connection, and performance tool,' if you will, to help investment advisors explain, demonstrate, prove, and perform their most important responsibility—the primary reason investors come to them in the first place — the ongoing investment advising process to build and to protect capital by creating and processing structurally sound and competitive investment portfolios as investor investment profiles, the current market conditions, the market outlook, and relative investment values change.

Both portfolio management software and portfolio accounting software, with some overlapping, are equally important investment advising steps.

Accounting

From an accounting capability standpoint, we did not want to duplicate the accounting capabilities of our Custodian/Broker Dealers.

In fact, we don't use in-house portfolio accounting software.

All of our accounts are held at custodian/broker dealers and all moneys go directly between them and our clients.

Fees are sent to us from the Custodian/BD.

BDs/Custodians supply all of the historical "accounting" information we need from transactions, to confirmations, to daily reconciliation, to balances, to taxes -Consolidated 1099 and Year End Summary Statement.

Why duplicate that information just to have it in-house?

We do not want to be in the accounting business and we like the separation of our clients' assets from our firm.

Investor's WorkStation Situations and Applications

We are more interested in the complete investment advising process and the ongoing portfolio management process as they relate to clients.

We want to be able to handle any type of portfolio creation and modification situation and do it in an instant; individual, selected, or global investment portfolios.

Investor's WorkStation is intended to demonstrate your capabilities to create, manage, and modify investment portfolios to your clients; you don't walk prospects/clients through Advent, for example, to explain what you do.

More specifically, we feel it is far more important, to clarify what you intend to do, the what ifs of investing, and the ongoing investment selection and portfolio management processes of how you are going to get there by creating, managing, modifying, monitoring, measuring, and processing investment portfolios

We have Investor's WorkStation in our desktop and laptop computers.

When we meet with clients inside/outside the office, we actually walk them through the detail of the portfolio creation and modification process; actually creating a portfolio on the spot after we know the amount to be invested and a prospects/clients objectives to give them an idea how we conduct our business.

When preparing to meet a prospect/new client who already has investments, we request a list of their investments and costs, input their existing portfolios into Investor's WorkStation when we meet them, and we go through the portfolio creating process, in this case Blend Portfolios, with them; much more compelling, detailed, and complete than the standard, generally default pie chart presentation.

Then we actually create rebalancing, reallocating, and investment replacement situations to show them what we might do in the future; never fails.

Beyond that, let's assume that a prospect becomes a client and trades need to be executed.

Investor's WorkStation, in effect, is "linked" to Advent in that created and modified portfolios are updated at the custodian when trades are executed using the Trade Export function of Investor's WorkStation and then new/modified portfolios are downloaded both to Investor's WorkStation and to Advent, for example to reconcile all portfolios with the custodian, Advent, and Investor's WorkStation.

At the very least, if you do not want to export Investor's WorkStation trades, you can create or modify a portfolio, enter the portfolio in your current portfolio accounting software, and generate a Buy/Sell/Hold report and enter trades as you do now.

You are ready to move on.

Investor's WorkStation Design Limitations

Investor's WorkStation does not include multi-currency support and pooled funds accounting for hedge funds and other pooled funds investment situations such as family partnerships and limited liability corporations.

Investor's WorkStation, because of investment philosophy and by design, does not have margin or shorting capabilities.

Return on Investment

ROI can be computed by using an AIMR/GIPS compliant time-weighted return method. See: Time-Weighted ROI Standards and Calculations.

Investor's WorkStation does not use internal rate of return methodology.