Independent advisors looking at custody platform options beyond the big three (Schwab, Fidelity and Pershing) should consider the latest addition to Apex Fintech Solutions.
Apex announced that the firm acquired AdvisorArch, a portfolio management company with its rebalancer.
The caretaker informed him integration with AdvisorArch in August 2023. In addition to simple portfolio rebalancing, AdvisorArch's platform is intended to assist advisors in supporting tax loss harvesting, direct indexing, fractional stock trading, and managing concentrated stock positions. AdvisorArch was launched in 2022 and is the latest creation of RobustWealth co-founders Michael Kerins and Robert Cavallaro and a small team.
In January, Apex launched a new user interface for advisers called Astraand recently, it was announced integrations with Advyzon in February. Apex has also recently built new capabilities, including fractional trading, live indexing, digital account opening and digital financing using ACATS, among others.
In October 2023, Apex launched a new fixed income investment platform.
Alois Pirker, founder and CEO of Pirker Partners, said the AdvisorArch acquisition represented a change in direction for Apex, which had previously been more focused on integrations than acquisitions.
“They're getting more into that advisory space where you have to have more functionality to offer them to win that business,” he said.
Apex will have to do more work to build AdvisorArch now that the acquisition has happened, Pirker said.
“(This) can be an advantage as … you can build a direction that works … and make it more suitable for your environment,” he said. “It's about the money. This is where this kind of platform should go.”
Pirker said the Apex acquisition reminded him of when TD Ameritrade bought portfolio rebalancer iRebal in 2007.
“They own the piece,” he said. “This has an advantage. … It's a similar strategy that TDA had back in the day.”
William Trout, director of the securities and investments practice at Datos Insights, said that as the custody business has evolved, the needs of independent advisors are “much broader and deeper than they were even a few years ago.”
“Firms are trying to get this whole financial advisor toolkit to enable cradle-to-grave support for those advisors who are independent and those who are thinking about breaking away,” he said.
Consolidation among the big three has opened the door for custodians like Apex to offer a higher level of service to smaller advisers who might otherwise feel lost in the shuffle, Trout said.
“They're just not going to get that kind of attention from the bigger carers,” he said. “They won't get the support for their growth trajectory that a smaller carer can provide. There is an opening.”
Although Apex wants to “spread its wings,” Trout said he doesn't see Apex putting any larger caregivers out of business. Instead, it will provide more choices.
“For smaller practices that need end-to-end digital support, including things like personalization and rebalancing, it's a great combination,” he said.