Boston, MA, July 12, 2010 – A new report from Aite Group examines off-platform investments, one of the more difficult investment styles faced by broker/dealers today. The report describes the off-platform process and outlines best practices for off-platform investing. It also profiles several front-office, account-opening applications for off-platform investments and describes the platform steps covered by each application.

Broker/dealers face numerous difficulties in opening accounts for off-platform assets (mutual funds, annuities, and 529 college savings plans, for instance), including applying a suitability standard to these investments. The trading of these assets is subject to compliance oversight, and the positions should be recorded on a brokerage firm’s books. While a number of procedure-driven solutions exist for off-platform account opening, helping broker/dealers achieve compliance on behalf of their brokerage clients, leading broker/dealers have deployed technology-enabled processes that enhance efficiency as well as compliance. Vendors of off-platform, account-opening technologies provide solutions that support select segments of the process or the whole process — some with product specialties.

“Broker/dealers run complicated businesses; their revenue engines are brokers, some of which — out of choice or necessity — will always conduct a portion of their business off-platform,” says Doug Dannemiller, senior analyst with Aite Group and author of this report. “Broker/dealers must decide whether they want to cater to that business, and if so pursue a strong technology capability to support it in an efficient and compliant manner. Those that neglect off-platform investments face attrition from brokers seeking greater efficiency, and may encounter the regulatory issues likely to arise from tracking off-platform activity without a strong technology investment.”

The report profiles six off-platform account opening vendors: Arius, EAI Information Systems, Laserfiche, Quadron Data Solutions, Scivantage, and SunGard.

This 26-page Impact Note contains 10 figures and four tables. Clients of Aite Group's Wealth Management service can download the report.