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Portfolio Pathway, LLC: A Digital Wealth-management Platform for Financial Advisors

Site: www.portfoliopathway.com
Established: 2007
Value proposition: Provider of a cloud-based platform that encompasses portfolio management, rebalancing, trade-order management, performance reporting, and fee billing.
The executive team: Dave Miller, Chief Executive Officer
Ryan Brucker, Chief Technology Officer
Brian Lake, Vice President of Marketing
Anthony Valente, Senior Vice President
Victor L. Bonilla, Vice President of Business Development

 

Portfolio Pathway, LLC is a cloud-based platform for financial advisors, asset managers and broker-dealers. It enables them to manage clients’ accounts using a wide range of tools that have been aggregated into one solution. Among some of the tools are portfolio reporting, rebalance and trading, composite reporting, and a billing system. Dave Miller, CEO at Portfolio Pathway, says they have built their own full suite of products and will continue adding features that their clients report they would like to see in the platform. The system currently has SMA and UMA capabilities, but will soon add a strategy bucket approach as well.

Dave: “The bucket approach is a little bit different than a UMA. For UMAs, everything has to be sleeve-based. The benefit, of course, allows for multiple strategies (even different managers) within one account.  Additionally, we can provide composite reporting for the strategies while providing reporting for the advisor. The drawback is that you may have the same strategy sleeve twice – for two different registrations.  A bucket approach provides for one strategy across a household.  We offer UMA and will soon offer strategy buckets.”

Before that, Dave started the company on the premise of a multi-custodian operations platform. The custodians, however, were not ready for that because the integrations were not there at the time. This pushed him to change the strategy and build a portfolio management system.. Time passed, new features were launched, and over the last three years Portfolio Pathway has started to grow rapidly. At this point, they have more than 33 billion dollars on their platform, representing more than 800,000 accounts—despite their team only consisting of 25 people.

The key differentiators that represent the biggest strengths of the company include an intuitive, modern user interface, a rebalancing and trading system including third-party strategists within a UMA or SMA; a very robust billing system, composite reporting and the significant capacity to take on even multi-billion-dollar money managers.

For this interview, we were lucky enough to speak to Dave Miller (CEO), who started the FinTech company back in 2007, and Ryan Brucker (CTO), who rose through the ranks from a developer to a stakeholder of the company. Together they described the system in detail and shared some future plans for the platform.

Dave Miller with Vasyl Soloshchuk

Teamwork, organization, and structure

The team at Portfolio Pathway is divided into several departments:

  • The marketing team, led by Brian Lake
  • The data-management team, which handles most of the data operations
  • The customer relations team, which provides quick feedback from clients and guides users through training for the new features
  • The development team, which develops both front-end and back-end with business analysts

In the case of Portfolio Pathway, the data team is somewhat similar to DevOps—they are ensuring a continuous integration and delivery process. However, Ryan says that they are not using continuous integration fully because they do not release every cycle.

Portfolio Pathway Team

According to Ryan, the customer relations team communicates with clients on a regular basis to get feedback and help to identify potential new features. The feedback is used to get ideas and concepts that will be discussed by top-level executives; the most valuable insights will go into the backlog.

Ryan: “[The team has] a regularly occurring iteration schedule where they bring feedback that they’ve received. We talk about it and discuss [whether] we can turn that into something useful.”

For each technical domain they have functional architects who are responsible for taking a business requirement and turning it into specific functional solutions. These team members not only work inside their own technical domain, but also find ways to best integrate parts with one another.

Ryan: “Sometimes the business objects aren’t going to directly correlate to the database objects, just because of their different nature. [The architects are] bridging the gap between the two. And they all work together to provide the bigger solution around that item.”

As for the other team members, they all have a prevailing technical domain and work with an appropriate architect. However, each has a wider range of skills, and can apply them if needed.

Ryan: “We expect that everyone on our team is a developer and can do more than a particular specification of our system. Yes, they have some [specific] focus, but that doesn’t mean that, for example, a front-end developer won’t ever write a query in the database.”

Portfolio Pathway screenshot

Software architecture and product management

Portfolio Pathway is basically a .NET solution with other Microsoft products applied—for instance, SQL Server. This technology stack makes it possible to do the very data-intensive job. They started with WinForms desktop applications for internal use and are still in the process of retiring them. Also, they have parts of a project that handles user interaction written in TypeScript and JavaScript using Angular 2. The software has a service-line architecture and multiple UIs.

Ryan: “Our website acts and behaves like an application, versus a traditional website. It’s not refreshing the page every time you […] click. What we try to do is more of a thinner client experience.”

At Portfolio Pathway, they use Scrum and have a six-week cycle consisting of three distinct stages (two weeks each): the requirement cycle, the development cycle, and the QA cycle.

Ryan: “You’re very limited in the scope of what you can do in a two-week-cycle, and we’ve found it just doesn’t work out well for us, especially with the amount of testing that’s involved in the finance space.”

Also, Ryan says that it is crucial for them to have a combination of manual and automated testing, because they often make changes in the user interface and are unable to cover all the functionality with automated tests.

As for the integrations, they partner with various systems including Salesforce, Redtail and SmartOffice CRMs, as well as rebalancing tools, such as BlazePortfolios and others. Also, they intend to deepen their integrations with custodians such as Schwab, TD and others. Despite that, they do not rule out the possibility of building some tools internally, rather than integrating with other companies.

Ryan: “From our experience, […] there’s a balance between integration and simplicity of a platform. […] We want to allow for integrations, but we really want to focus on providing a fuller platform of tools to use.”

Portfolio Pathway screenshot

Communications and training of developers

According to Dave, communication is an important part of team culture. At Portfolio Pathway, they have daily standup meetings for 20 minutes, as well as weekly learning sessions that are often led by Dave himself. During these sessions, team members from different departments can get to know what the other teams are working on.

Dave: “It’s important to us [that] people have knowledge exchange. We don’t really use the knowledge base, though. We prefer to actually meet and talk about our company and our products.”

When it comes to training newcomers, Ryan says that they are putting the focus on getting people together. Sometimes team members can be involved in another part of a project in order to see how a particular domain works.

Ryan: “No matter how [much] formal training you do, within finance you really have to get your hands in it to learn as it’s so detailed and so involved.”

Also, they have business analysts working closely with the staff to give them an understanding of the processes they will reproduce.

Ryan: “The idea of a BA is to be the business expert. They’re the ones who are really learning what the business is and then helping [to] translate that into a developed solution and work very closely with our developers.”

In addition, they provide recurring webinars for new customers, employees, and existing customers who want some more training on the software. Despite all of the training opportunities offered, Ryan feels it is important not to go too far with education, and to find ways to encourage learning but not make it an obligation.

Portfolio Pathway screenshot

Future plans and upcoming features

Dave and his team have many plans concerning what will be done in the future. In March, they plan to make a significant release to make the solution even more modern, more intuitive and include bucket-managed strategies in addition to UMAs which includes third-party managers. In addition, Dave says that the release will contain some pre-account-opening workflow, planning and other management tools. While implementing them, they will try to provide more information to clients, since the current generation requires this, and to provide more mobile adaptation.

Dave: “People in their 20s and 30s want information. They want to know how investments should be done [and get] some general information—news, market details, and tax information—and this will be somewhat controlled by the advisor.”

To ensure people are aware of new opportunities the company is offering, they will make a huge push towards the end of this year to get their name out.

According to Dave, they currently do not offer financial planning, risk metrics or an IPSbut intend to introduce more of these tools in the upcoming release.

Dave: “We’re looking at planning tools and risk metrics right now which may include a goals-based approach. It depends on the needs of the younger generation, [which] continue to change. That was trendy and it still is a little bit, but that may evolve a little bit more.”

Major challenges of the platform

In general, Dave feels that challenges can have a positive impact on the project:

Dave: “Certain struggles that advisors experience can create opportunities. [if] you’re doing something inefficient [then there’s an area] where you can grow. If you can solve this, you can [push] your business to the next level.”

Regarding challenges, Dave particularly highlights data. Portfolio Pathway receives data from different sources, including those that are missing some valuable details:

Dave: “Data can sometimes be tricky. Part of our job is to automate those tough situations where the data is just not there, or is inconsistent and try to normalize it on an automated basis..”

Another challenge is scaling the system while providing the same experience to customers:

Ryan: “We’re a cloud-based solution. Behind the scenes, though, what we’d like to provide is a more distributed methodology to allow our system to scale horizontally as our clients grow.”

Takeaways

Portfolio Pathway is a financial-management platform that aims to gather all the necessary functionality in one place. Another great advantage is its ability to run data-intensive operations and work with top asset managers. The company’s consistent growth attests to the fact that the company chose the right strategy and that there is a demand for such solutions. Thus, there are considerable reasons to pay attention to Portfolio Pathway’s platform.

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