Sep 25, 2023

An asset management firm, custodian and investment technology provider hosted nearly 100 financial advisors at its offices for a recruiting event aimed at expanding its footprint. Oaks, Pennsylvania-based SEI Investments Company works with more than 8,000 advisors in some capacity with about $90 billion in platform assets across its custodian, investment management and technology arms, according to Erich Holland, the head of sales and experience for SEI's independent advisor business, and Gabriel Garcia, the firm's managing director for client registered investment advisory firm experience. About $35 billion in custodial assets come from 500 to 600 RIAs, with the rest from brokerages and other institutional clients. The firm's Advisor Discovery Forum earlier this month included a town hall with planners posing questions to the firm's executives and panel discussions on industry trends. The event provided a snapshot of the questions that are most important to advisors considering changing custodians or other service providers and a window into SEI's strategy for winning business away from larger firms like Charles Schwab, Fidelity Investments and BNY Mellon's Pershing. Customer service and easy access to SEI's leaders form a key part of the equation, Garcia said. "Spending two days with our team members in our home office really solidifies that and brings that to life," Garcia said in an interview. "This is typically a very successful experience that is a jumping off point for expanding relationships or starting a new relationship with SEI in a meaningful way." July 3, 2023 1:48 PM Garcia noted that the firm currently ranks at about fifth or sixth among industry custodians, which Andrew Besheer, the director of the wealth management practice for consulting firm Datos Insights , said is often seen as a "triopoly of Schwab, Fidelity and Pershing." While most advisors would be likely to move a portion of their assets rather than all of them, established firms like SEI or newer entrants like Altruist or Envestnet and FNZ's strategic partnership could find new business amid the integration of TD Ameritrade into Schwab , Besheer said. "There certainly seems to be a vibrant market for other players in the space, and certainly in a multi-custody world, it feels like there are opportunities," he said in an interview. "There are really two ways you can differentiate yourself and make a case, and those are clearly to me service and technology platform. If you're not Schwab, Fidelity or Pershing, it's going to be really hard to differentiate yourself on price, and I think you'd be stupid to try to get into a race to the bottom." The questions from advisors for SEI's team revolved around technology and finding the efficiency and scale available to billion-dollar teams but often out of reach for smaller firms, according to Holland and Garcia. The proliferation of technology, services and products has become "a bit unmanageable," even in "a new age of the wealth portfolio that's upon us," Holland said. "A different type of consumer has emerged as well — it's a much more educated consumer," Holland said. "Anybody with a smartphone in their hands now believes they're God's gift to investment management. This creates more challenges for advisors. They have to do more now in terms of the services they offer their clients." September 5, 2023 7:32 PM SEI's relationships with private banks catering to wealthy clients and its capacity for trust services could also help the firm gain new business from family offices and advisory teams that work with high net worth customers, according to Besheer. However, the firm could face more competition from technology firms that could potentially act as the "primary point of contact" for advisors while partnering with a custodian on the back end, he said. "I think that changes the business model, and I think it makes it a lot easier to provide rich service and a strong solution to smaller RIAs and more of them than it does for a custodian to do it directly," Besheer said.