Canadian Portfolio Management Software Company With 7,000 Users Coming To America; Low-Cost, Feature-Packed System

Friday, December 21, 2012 20:19
Canadian Portfolio Management Software Company With 7,000 Users Coming To America; Low-Cost, Feature-Packed System

Tags: Portfolio Management Software

A Quebec-based portfolio management software (PMS) company serving 7,000 Canadian advisors is coming to America. Croesus Finansoft, a nationally-known advisor technology company from Quebec, Canada, will set a new standard for value in performance reporting by U.S. RIAs.

This Website Is For Financial Professionals Only

For CFAs, CFPs, CPA/PFSs, CIMAs, CPWAs, and other investment advice professionals, Croesus, king of the ancient empire of Lydia

from 560 to 547 BC and renowned for his wealth and notable gifts, is itself a gift to RIAs. In providing a highly sophisticated portfolio accounting, account reconciliation, and reporting for just $4,800 a year, Croesus is the lowest-priced PMS system for fiduciaries extent. It will push down the cost of technology and improve efficiency for RIAs.

Moreover, Croesus is breaking the pricing mechanism used by online PMS providers. Other online PMS systems charge based on the number of accounts an advisor put on the system. Not Croesus. It charges a flat fee per license for as many clients as you have.    





Croesus Overview

For $7800 a year,* a frugal RIA gets in Croesus an excellent PMS and performance reporting system with an iPad app for you and clients to view reports on demand. In addition, a CRM — that does not stack up against best of breed systems like Redtail but is built on a solid foundation for the future—comes with the package. 

Croesus is a Microsoft .NET program. .NET is a popular development platform for building apps for Windows and allows developers to create sophisticated apps. Croesus uses a “smart client” that runs locally on your computer but is connected to an encrypted database on the Web. Smart Clients came about because businesses developing web applications to replace desktop applications saw productivity decrease because web-based user interfaces are typically slower than locally-run desktop apps. Smart Client applications bridge the gap between web applications and desktop applications. They provide the benefits of a web application, leveraging the internet and offering remote access to data, while also providing the look and feel in desktop applications.

At $7,800 a year, for a single license, an RIA gets a sophisticated PMS system. Croesus is GIPS-compliant (Global Investment Performance Standards), capable of multicurrency management and reporting, handles all methods of tax accounting (Actual, Average, FIFO, LIFO), and comes with an iPad client view with beautiful graphics. Croesus downloads and scrubs your data daily.

For many RIAs, price is the crucial factor in selecting a PMS system. Not only does Croesus provide excellent value for RIAs, but it supports an RIA adopting best of breed solutions, which is the lowest cost way for an advisor to create an integrated desktop. Croesus is likely to quickly become a serious contender. Croesus would not be so serious a new contender if it were a startup. It already has $350 billion of Canadian assets on its system.

The RIA Challenge
The biggest challenge to Croesus is that RIAs are much smaller than Croesus’ current client base. Croesus has 7,000 users but they are spread over just 60 firms. Croesus’ average client manages about $5.8 billion (with currencies at parity). Those are much larger firms than the average RIA managing private wealth. What could go wrong?   

At $7,800, Croesus’ U.S. pricing will attract RIAs with $0 million to $5 billion AUM. RIAs at the low end of the AUM range require the most support, and Croesus could quickly acquire more low-end RIA-clients than it wants.

But—and this is a proverbial “big but”—Croesus is a 25-year old company. It’s doing the download and reconciliation for 7,000 advisors now. True, they’re not American RIAs, which indeed is a very special brand of customer to serve.

The $7,800 Question
For $7,800 a year, you get a single user license to Croesus. But an RIA can share a single license among multiple staff and professionals. Multiple users can log in with the same credential and use the app concurrently. Moreover, you can designate which advisor owns each client.

Guyaux volunteered none of this. However, knowing how incredibly cheap RIAs can be, I grilled him about how far one license could be stretched.

Guyaux said he would not recommend using one license across a firm with multiple advisors.  You can do it, he admits reluctantly. Then, in a melodious French accent, Guyaux explains that an RIA sharing one login with multiple employees would lack an audit trail of each user’s activity on the system.

For an RIA, as a fiduciary, with two or three successful professionals, the single-license could indeed be unwise. The SEC or state might even regard it as a deficiency—if regulators had the attention span and resources to examine RIA systems in such depth. It’s safe to say that any list of best practices for private wealth advisors would not include using a single PMS system license for multiple IA reps or support staff. For liability reasons and just to keep everyone honest, everything a fiduciary does for clients should be transparent and trackable in a database. Another big negative in sharing one user name and password is that an RIA owner’s portfolio cannot be hidden from your staff and other advisors. Anyone with your login credentials can look at your portfolio and your client portfolios and generate orders.

Pricing Details
In addition to the annual software and reconciliation fee of $7,800, Croesus levies a setup fee, of $2,275 for on-boarding, training, and customizing your reports to your branding. To convert your data from another PMS system, a separate fee would be levied that is determined on a case-by-case basis and can vary depending on how many accounts are being converted, the amount of historical data that must be converted, and whether your database is logically structured.

The $7,800 a year price applies to an RIAs first five users. Adding six to 49 users costs less. These prices are discounted by 5%, however, for TD Ameritrade Institutional. TDAI is the first custodian so far to integrate its brokerage system with Croesus. Guyaux says that, as advisors using other custodians seek to adopt Croesus, the company will build additional interfaces. “We’d love to integrate with Schwab,” says David Mastroberardino, a Croesus product manager.  Adding an interface will cost an advisors 10% more than their annual license fee. So if you’re paying $7800 a year, it would be an additional $780 annually for each additional interface. 

Other Notable Features
Advisors can change security prices if they see an error in a report. That’s important, since some online apps don’t allow advisors to touch their data.

A rebalancing function is included that allows as an advisor to create model portfolios and rebalance against the model.


 * Pricing of $7,800 updated as of March 24, 2015.


Editor's note: When this story was published on December 21, 2012. Croesus announced pricing of $4,800. In March 24, 2015, an A4A user who read the article, called Croesus and it honored the pricing. However, Croesus a spokeswomman asked A4A to correct the old pricing quoted in the article three years ago. The correct price as of March 24, 2015  is $7,800 a year. While a 40% price hike in three years sounds steep, RIAs who want to outsource portfolio accounting and performance reporting will find (as of March 2015) that, at $7,800 a year, Croesus is one of the lowest-cost solutions for automating download and reconciliation available to RIAs.   

Comments (24)

How would this product compare with Asset Book?
stvnrsmth , December 22, 2012
AssetBook has been the leader in low-cost PMS services for RIAs. Croesus costs less for a one-user license.

If you have more than one user on Croesus, AssetBook may be slightly less expensive.

AssetBook has interfaces to many custodians and is intergated with ByAllAccounts, while Croesus has just a TDAI interface--for now.

Croesus is unproven in the US at serving RIAs, while AssetBook is 10 years old.

AssetBook packages AdvisorVault (my company's app) into its offering. Croesus has an iPad app for client but not a vault.

AssetBook has more graphical reports.

Croesus is multi-currency, while AssetBook is not.

Croesus has what is now a crude but promising CRM, while AssetBook has no CRM and integrates with Redtail and other best of breed systems.

The big thing with Croesus is breaking the account-based pricing system now used by PMS systems.

A few years ago, I use to describe the PMS category is "gridlocked." Schwab PortfolioCenter dominated the RIA market because it is subsidized by Schwab. Now, with AssetBook and Croesus priced much lower than Schwab's offering for similar outsourced services, the gridlock is breaking up.

Croesus is a credible new competitor and that is good for RIAs.
agluck , December 22, 2012
Thanks, Andy.
stvnrsmth , December 24, 2012
Why is GIPS important to the type of RIA who is your audience here? Most firms who work with retail investors market their ability to meet client's unique goals.

Seems to me, they are marketing (like everyone else) an institutional product to retail advisors.

GIPS is designed for advisors to investment companies. It is designed to evaluate a single strategy across a broad spectrum of accounts. Essentially to overcome the ever present time period bias.

Advisors registered under the Investment Advisors act would by promoting GIPS compliant reporting to their clients, be flagging themselves as not complaint with Rule 3a-4 - Fund of Funds Prohibition.

brentb843 , December 24, 2012
RE - Assetbook versus Croesus. Which one reports how well the investor is achieving their goal as stated in their financial plan?
brentb843 , December 24, 2012
Thanks Andy. This has a lot of potential.
mnelson , December 24, 2012
brentb843, thank you for your comments.

You bring up a good point about the GIPS standards. You are correct in that these standards were designed for the institutional market. However, they are also widely recognized in the retail space as the accepted methodology for performance calculations. While advisors may not all claim compliance to the GIPS standards, most still want to ensure that performance numbers are calculated in compliance with accepted industry standards.

One last point I would like to clarify is that Croesus was never developed for the institutional market. It is designed specifically for the retail space.

If you would like to discuss these or any other points directly with me, please don't hesitate to write to me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Thanks again and Happy New Year!

David Mastroberardino
Product Director, Croesus Finansoft
DMastro , December 31, 2012
Thanks David. You bring up what I consider to be THE differential in between CFA and CFP.

Everyone notice that David says 'calculated in compliance' with industry standards...really, the CFA Institute.

Financial Planning has no such standards. Anyone can can create illustrations inside a plan (monte carlo) that adhere to no standard aside from FINRA's sales guidelines. The Financial Planning industry needs to set this standard if they will ever be taken seriously.

We need standards in Financial Planning, not just financial planner standards.
brentb843 , January 03, 2013
Andy editorial note/comment on 'For CFAs, CFPs, CPA/PFSs, CIMAs, CPWAs, and other investment advice professionals,'

I believe you have incorrectly assumed the designations infer these individuals provide advice and are professionals......

brentb843 , January 04, 2013
Clearly, not all CFAs or CPAs or, for that matter, CFPs, are offering investment advice. But they are all professional designations whose holders may offer investment advice.

But your comment on CFPs needing an investment standard of their own is off base. CFP Board should not reinvent the wheel by creating its own version of GIPS. It should just seek to align with CFA Institute and embrace GIPS.

The provincial view of one designation for all advisors is silly. The professional accrediting bodies should be in an alliance to help consumers.

CFPs are one branch of the financial advice profession. Its adherents are known to be strongest in financial planning, while other credentials see personal financial issues through a different lens. They are specialists in different areas.

While I have taken flak for revealing the weakness in the notion that one credential should be "the" credential" in the financial advice professional movement, it is not only unrealistic but not in consumers' best interest to advocate that one credential is best for consumers seeking financial advice.

By the way, A4A is the only media outlet for advisors attempting to steer the conversation in this direction. While that makes me proud, it's not fun being out here alone in this effort.

agluck , January 06, 2013
CFP is a membership designation. Financial Planning, not CFP, needs the standard. For example, a CPA has to pass tests to practice, continuing education, etc AND have to complete returns in a GAAP manner. There is no calculation standard for financial planning.

Never said anything about recreating GIPS. That is performance, I said it should be financial planning, ie, how much it takes to fund retirement should have a specific auditable calculation.

The largest part is the assumptions incorporated in plans have no 'meat' just made up. A user can assign any asset class to any investment and then just input the return, correlation and standard deviation assumptions. That is crazy!

I think instead of reading my comment, you had a kneejerk reaction to defend other's commentary.
brentb843 , January 07, 2013
my example would be WealthTrace's statement "Use Monte Carlo analysis to determine the probability of meeting all spending goals."

Can't be done. See disclosure :Map To (For Monte Carlo Standard Deviation And Correlations): The assset class that is used for Monte Carlo purposes. The program needs a standard deviation value and correlations for each asset class. For program-defined asset classes, the asset class simply maps to itself for this information. For usergenerated asset classes, the program needs to map to an existing asset class for this information.

Monte Carlo as describe in WealthTrace's disclosures is not doing what is being sold. If a planning application claims to be able to predict such, the calculations need to be valid.
brentb843 , January 07, 2013
WealthTrace and Doug Carey impress me as careful and smart and I'm sure that if you are right, any disclosure issues will be addressed.
agluck , January 07, 2013
Thanks Andy. Users in our software are free to change all return assumptions, correlations, and standard deviations for asset classes. If they map a user-defined asset class to another asset class for Monte Carlo purposes then either a)They can change the mapped-to asset class assumptions or b)They simply use those assumptions. We don't hide this from advisors. They obviously know that they're mapping to another asset class because they have to do it themselves.

Keep in mind that there are many planning apps out there that force users to input one standard deviation number for all assets combined and don't even take into account correlations. Is that "correct"? It certainly isn't rigorous, but as long as advisors know what they're using then we shouldn't have to hold their hands.
douglascarey , January 09, 2013
The problem is both are wrong. Monte Carlo, more specifically, any regression analysis cannot use 'estimates' of returns, ie, standard deviation and mean, because it simple illustrates what is already contained in the standard deviation.

The assumptions need run on the returns themselves, not assumption of them to be valid.

Doug there is a tremendous amount of research done in the 1970s and early 80s that clearly state this to be incorrect. The issue is that MCS is used to meet FINRA compliance.
brentb843 , January 14, 2013
The larger problem is Doug claim that the "Use Monte Carlo analysis to determine the probability of meeting all spending goals."

That is complete BS. Because of the manner in which it is calculated using standard deviation and mean, Wealthtrace simply asks 'what is the probability the returns modeled will repeat if we assume they repeat in the same order? The mean and standard deviation causes the assumption to be made. Simple math and statistics.

More specifically, it cannot, because no math can predict, the probability of meeting spending goals in the manner he attempts.
brentb843 , January 14, 2013
Understand, I am not attacking Doug other than the extent he should know better, but the financial planning industry as a whole. The calculations need to be accurate.
brentb843 , January 14, 2013
brentb843 and Monte Carlo - Nawrocki.pdf

brentb843 , January 14, 2013
It sounds like you don't like Monte Carlo for financial planning, which is your right. But most planning apps out there tweak their projected rates of return while using historical standard deviations. Like our process, many of the other ones out there were vetted by a phd in Statistics. I myself have a masters degree in Economics with a strong background in Statistics. I have also consulted with phds on the subject. What is your background in math and statistics may I ask? If it's strong I will gladly debate the matter further. Otherwise the experts have given our process the thumbs up.

-Doug Carey
douglascarey , January 14, 2013
Ok, Doug, why not use Wealthtrace for your own clients? Your website indicates you are using a retirement planner from Torrid Technologies? which PhDs? Can we get commentary from them?

Why is Wealthtrace not registered as an RIA? Claiming probabilities means you must.

I want your PhD to write a letter in support that your application of MCS can 'determine the probability of meeting all spending goals."

MCS is a manner to estimate historical returns, BUT CANNOT determine the probability of meeting all spending goals."

Who are these people? Why not just remove the incorrect marketing line?

As someone with masters in mathematics, I am also confused why you think that MCS as applied is validated by an economics degree...

So, debate on...but please include the experts work on Wealthtrace.
brentb843 , January 15, 2013
That is an outdated page on my RIA website. I use the RIA firm only to help WealthTrace clients with financial plans. And of course I always use the WealthTrace software for planning.

We're working on statements from our phd colleagues. Stay tuned.
douglascarey , January 21, 2013
We just signed up for Wealthtrace. After reading these comments, I would like a letter of support from Doug's mom on his calculations.
ericm205 , July 08, 2013
That A4A user that posted that comment is sharply critical of other financial planning packages as well, including the largest ones, and he is working on his own product.

I know of only a few programs for calculating statistical probabilities (Monte Carlo) that are registered as are RIAs. Most are not.
agluck , July 09, 2013
The 40% price hike sounds steep, but RIAs who want to outsource portfolio accounting and performance reporting will find that, at $7,800 a year, this is one of the lowest-cost solutions for automating download and reconciliation available to RIAs.
Please tell me if I am wrong.
agluck , March 25, 2015

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