Established in 2004, the investment management firm Clearbrook Financial prides itself on its embrace of a philosophy that is still new to the financial services industry: transparency. In executing that philosophy it has formed strong partnerships with financial technology vendors.
For one, Clearbrook uses CheckFree Corp.’s APL-based products (named after an array of programming language dubbed A Programming Language) across business functions running the gamut from operations to performance reporting.
“We use CheckFree APL for setting up accounts and for failure reconciliation, as well as for connectivity from a trading perspective. For trading purposes, it can connect all the way from the money managers to the custodians of account data,” says Chris Trucksess, Clearbrook’s director of operations. Trucksess first became familiar with CheckFree APL back in 1998 in a previous job at Lockwood Financial, where he worked on the money manager side.
At the same time, CheckFree also plays a big role in performance reporting on Clearbrook’s Advisor Workstation, a Web-based interface aimed at promoting transparency by providing financial intermediaries with a single point of access to all capabilities of Clearbrook’s investment management platform.
“We normalize CheckFree extracts into holdings, transaction, and general reports that we send out to our clients,” according to Jeff Crosten, Clearbrook’s director of performance measurement and reporting. A veteran CheckFree APL user, Crosten originally started using the product way back during the year 2000, when he worked at Brinker Capital.
Over the next few years, however, Clearbrook will face a gradual migration from CheckFree’s existing Java-based services platform to an emerging .NET-enabled alternative. Clearbrook is not alone. All of the roughly 350 brokerages and other firms in CheckFree’s investment management customer base will also be moved from APL to the new CheckFree EPL (Enhanced Portfolio Lifecycle).
In fact, very soon, CheckFree expects to announce completion by one of its customers of the first major production rollout of EPL, according to Hilary Fiorella, vice president of CheckFree’s investment services arm.
But meanwhile, other existing CheckFree APL customers, such as Clearbrook, are already openly acknowledging interest in the possibility of conducting EPL pilots of their own.
“We’re not currently beta testing CheckFree EPL. But we will potentially be doing so. We’ve had some discussions with CheckFree about that,” notes Clearbrook’s Crosten.
Provided by CheckFree on an ASP (application service provider) basis, the current CheckFree APL platform supplies brokerages and other investment services firms with portfolio management, client reporting, and a back-end data network for administering separately managed accounts (SMAs) and institutional investments.
The upcoming migration to the .NET solution will happen despite both CheckFree’s recent acquisition of one key competitor, Corillian Corp., and CheckFree’s own pending acquisition by Fiserv Inc., another diversified solutions provider, Fiorella says.
By and large, adoption of the Windows-based EPL platform will bring benefits such as smoother operations, cost reduction, and expanded business opportunities for investment counselors, according to the CheckFree VP.
But Fiorella also freely acknowledges that some end users – particularly highly skilled APL programmers – might be less than thrilled about the change, at least directly out of the starting gate.
“Some APL power users who work on Unix today are so familiar with the language that they can program almost without looking. But most of our customers want to be able to push CheckFree out to the desks of all money managers – so that, if ‘Dr. Smith’ comes in, the advisor can quickly see how the doctor’s investments are doing across all areas,” Fiorella says. “While APL is very scalable and robust, it entails the use of an APL programmer, and it doesn’t easily lend itself to a GUI (graphical user interface).”
Clearbrook’s Crosten predicts that, by bringing needed ease of use, CheckFree’s forthcoming EPL stands a good chance of succeeding in a bid to extend the product’s functionality among money managers.
“People who aren’t traditional SMA managers sometimes have trouble navigating (CheckFree APL). This does represent somewhat of a cumbersome burden for them. EPL looks to be more interactive and intuitive for desktop use,” he explains.
“A lot has to do with technical sophistication. APL does carry strong benefits, but these are mainly for the most sophisticated counselors and clients,” concurs Elliot Wislar, Clearbrook’s president.
In Crosten’s opinion, CheckFree APL already provides a highly unified platform in an otherwise fragmented investment services technology market, which is mostly characterized by point offerings that don’t harmonize all that effectively.
“There are lots of tools out there for trading, reconciliation, and reporting. But generally, they don’t talk very well together. CheckFree’s offerings are much more streamlined, allowing us terrific operational efficiencies,” Crosten says.
But ultimately, the still emerging CheckFree EPL platform will buttress CheckFree’s existing functionality with greater ease of use, made possible by Microsoft’s .NET architecture, according to Fiorella.
Advantages to brokerages and other providers of investment management services will include expanded business opportunities and reduced costs, Fiorella says.
According to CheckFree’s Fiorella, lots of CheckFree customers are now asking for a .NET service, since they seek an environment which is much more accessible to the majority of customer-facing employees. Yet although demand among customers for a .NET solution runs high, virtually nobody is likely to predict immediate adoption of EPL on anything close to a universal level.
Some end users are still quite happy with the existing CheckFree APL, according to Fiorella. Moreover, complete integration of the various EPL components – many of them gotten through various company acquisitions – is due to take several more years, anyhow, she observed.
Actually, CheckFree first announced its EPL platform back in November of 2004, initially releasing two EPL solutions. A new account workflow service module, made available in March of 2004, was followed by a new reconciliation tool.
Also during its initial EPL launch, CheckFree outlined its intentions to build a Web-based front end with full reporting and auditing.
Collaborating with development partner Satyam right from EPL’s outset, CheckFree is now in the process of bolstering the platform with technology gained through its recent acquisition of Upstream Software. Upstream’s Model Management System (MMS), Investment Management System (IMS), and Order Management System (OMS) are currently being implemented as trading solution foundations behind EPL’s new Web-based front end.
Clearbrook’s Trucksess agrees that the upcoming integration of Upstream into CheckFree seems promising. “But much will depend on how CheckFree implements Upstream in its next generation product,” he points out.
In a historical sense, CheckFree does hold a strong track record in integrating technologies obtained through these deals, according to Fiorella.
For instance, CheckFree purchased Integrated Decision Systems (IDS) back in 2005, subsequently integrating IDS’s portfolio management software into its own offering and also using IDS’s data network to expand its existing infrastructure.
Much more recently, CheckFree has developed EPL MMS, EPL IMS, and EPL OMS, the first three solutions to use technology that came with the Upstream buyout.
These three trading solutions for EPL are now in use, along with the previously released account workflow and reconciliation solutions. “They (trading solutions) are on the market already. The (account workflow and reconciliation) tools will be available as part of the EPL Progressive Migration Strategy in the future for any client not currently using them,” Fiorella illustrates.
Under CheckFree’s migration strategy for EPL, the vendor is concentrating on meeting customers’ most critical needs today, while also establishing an incremental migration path for tomorrow.
“EPL is also being developed to include additional asset classes and instrument types, real-time transaction fulfillment, and the capability to integrate more easily with internal and external solutions,” according to Fiorella.
“We are incrementally rolling out tools that will minimize the impact of migration for our clients,” she says. “We expect that the next tools to be made available will include EPL reporting and connectivity solutions.”
Beyond integrating Upstream’s technology, CheckFree will bring together EPL with offerings from Corillian Corp., a major supplier of Internet-based financial software also acquired by CheckFree earlier this year.
Further, she says, Fiserv Inc.’s recently unveiled intentions to acquire CheckFree will bear no impact on CheckFree’s imminent plans for a production rollout of EPL by one of its customers – or, for that matter, on the company’s longer range vision of migrating all of its APL customers to EPL over the course of the next several years. The $4.4 billion Fiserv deal is expected to close by the end of 2007.
The first customer production rollout of CheckFree EPL – also slated for wrap-up by the end of this year – will be oriented to portfolio accounting.
“CheckFree will still be CheckFree. (And) CheckFree wants all money managers to be able to easily access the CheckFree investment management platform straight from their desktops,” according to Fiorella.
www.clearbrookfinancial.com
www.checkfree.com
By Jacqueline Emigh