An interesting startup that I have written about,
HiddenLevers.com (March 28, 2011), is completing a series of integrations with TD Ameritrade Institutional's Veo account management and reporting platform.
This is being done through TD's open application programming interface, a frequent subject of mine since the initiative began in the summer of 2010.
With the integrations, advisers can easily and directly import their clients' portfolio data, including equities, fixed income and options, into HiddenLevers' macroanalytics program from Veo.
HiddenLevers automates the continuing synchronization of accounts so that advisers don't have to go through the same import process again. This allows them to perform analyses within the program without logging in to Veo.
In the near future, the integration will be improved to allow advisers to bring in client data seamlessly, without going through the import process.
Although this is good for HiddenLevers and the advisers already using it, or hoping to, it also points at the possibilities that the future holds for other third-party technology providers.
There are more than 60 providers in various stages of the integration development process with the TD Ameritrade open-API initiative.
Most of these firms already are mainstream providers for advisers.
The API integration mechanisms are playing a significant role in speeding adoption of new providers, such as HiddenLevers, within the advisory industry.
ONLINE INTERFACE
“It would have been tremendous,” said Dean Barber, founder and president of Barber Financial Group, referring to how advantageous such an integration could have been to his work, had it been available previously.
The hybrid firm manages $800 million in assets, mostly held in custody at TD Ameritrade.
“The Veo integration lets me use HiddenLevers to validate what we have done in terms of balancing out our risk tolerances, and it has been wonderful to load a new or prospective client's portfolio into HiddenLevers and then get comments back from them, like: "I had no idea we were exposed to that much risk,'” Mr. Barber said.
HiddenLevers provides a low-cost, online (read: no software to update or maintain) intuitive interface for analyzing the impact of macro trends or big-picture events on portfolios or individual stocks, or it can zero in on any of the major asset classes including bonds, exchange-traded funds, mutual funds, money market funds, currencies and preferred shares.
In addition to the macro scenario modeling, advisers can perform portfolio stress testing and provide the client reports mentioned by Mr. Barber.
HiddenLevers also has been building a name for itself by providing digital infographics based on its own analysis for various publications and financial services websites.
It hosts popular webinars that both train users in how to use the interface and tools, and also shares its often provocative analyses.
EASIER SELL
The online application should be a part of every adviser's next-generation risk management tool kit, whether they are a registered investment adviser, private-wealth manager or part of a family office, said Raj Udeshi, one of the co-founders of HiddenLevers.
TD Ameritrade Institutional is the first custodian to have opened its API, making tools such as HiddenLevers even more efficient and an easier sell to the adviser community.
“Why is integration capability so important to us?” Mr. Udeshi asked, rhetorically. “More advisers will take advantage of HiddenLevers if the portfolio upload is instant. Advisers should be spending time with clients or analyzing their portfolios — not doing data entry.”
Chris Valleley, a senior product manager at TD Ameritrade who works closely with third-party providers on the API initiative, expects the project to expand not only his firm's platform but also give users access to other tools from independent providers.
TD representatives are very careful not to single out or highlight any particular vendor's offerings.
"ONBOARDING PROCESS'
“We put them through the standard onboarding process to ensure their coding, security and client data are secure and private,” Mr. Valleley said of HiddenLevers.
HiddenLevers has access to the same nonproduction development environment — TD refers to it as the “alpha environment” — as other firms that have passed muster on the custodian's stringent and comprehensive security audit, he said.
“This is one of several integrations we are working on with providers that are outside of the traditional core set of software that advisers use,” Mr. Valleley said.
Others include financial software provider AdvisoryWorld Inc. and the portfolio analytics company StatPro Ltd., he said.
HiddenLevers has an ambitious agenda for additional Veo integrations, which includes generating performance reports using Veo's account history and being able to provide access to HiddenLevers tools from within the Veo platform.
Other products and features being developed by HiddenLevers outside the TD platform include a client-facing iPad application, a scenario hedging wizard and tools to track actual portfolio performance within hypothetical scenarios.
“Advisers are going to flock to TD because of the flexibility of their approach and being able to get at the tools they want — and having access to a catalog of tools they did not know they wanted,” Mr. Udeshi said.
Mr. Valleley said that there will be no mad rush to add more third parties.
“Our focus is to continue working with vendors in the pipeline,” he said, adding that the project is very much a “work-at-your-own-pace environment” where the vendors aren't obligated to complete their integrations by any particular date.
djanowski@investmentnews.com
Related stories:
Technology helps advisers tap insight on global scale (HiddenLevers Part 1)
TD Ameritrade Institutional reporting progress on its open API initiative
TD to open Veo architecture to third parties to lure advisers
TD Ameritrade launches tech initiative, moves toward completely open architecture
