Apple’s iPad Is Example of “Disruptive” Technology, Says Black Diamond’s Reed Colley 

• James J. Green

Apple Inc.’s new iPad tablet computer—or expanded iPhone or Apple Touch, depending on your point of view—is an example of a disruptive technology that may change advisors’ lives, says Reed Colley, CEO of Black Diamond, the portfolio management and reporting software company whose product competes with the likes of Advent. Colley, 33, knows something about technology’s impact on conducting an effective advisory practice: while he says his company has been “relatively flying under the radar,” it now has 175 mostly RIA firms using his Web-based software, reporting on $35 billion held in 110,000 accounts.

Black Diamond hopes to get onto more radar screens—and advisors’ workstations—by hiring this month Dave Welling, the former Schwab Advisor Services practice management expert, to raise its profile among both RIAs and within the independent broker/dealer community. Welling said one of the first things he did as a strategic advisor to Black Diamond before going fulltime was to form an advisory board of clients to both help guide the firm’s efforts, and to provide a community that could help each other.

Colley, who built “our entire application—the original version,” says Black Diamond plans a new version of that application in the second half of this year called Blue Sky that he thinks represents “a paradigm shift—though I hate that term; it’s overused—for the industry.” Blue Sky will permit advisors to take a “Next Gen platform that allows them to build the application themselves. They take the content we have and select those pages of content into objects that are meaningful for them and what they do.” On the mobile side, “we’re moving to more of a digestible content, but it better have a ton of power behind it,” he says. That content will then be “distributed into mobile devices, to iPads—technology that is social, networked, shared—there will be a huge shift coming into the mobile world in this industry,” if not this year, then in 2011, he says.

Welling adds that “most advisors don’t have the time or expertise to think about these things; our clients rely on us to think about the future, to apply the technology that’s out there for them and their businesses.”

• • 1/29/2010 9:13:14 AM
  • Bob
  • Lame
  • A poorly veiled commercial for Black Diamond under a headline that had little to do with the story...
• • 1/29/2010 11:24:25 AM
  • Jessica Dellinger
  • What?
  • They didn't say why it's disruptive. Am I missing something?
• • 1/29/2010 12:08:03 PM
  • Rick Engberg
  • Black Diamond
  • Poorly discuised advertisement.
• • 1/29/2010 7:20:38 PM
  • Stephen Winks
  • Great idea, but the next gen content envisioned doesn't exist.
  • The technological extrapolation from Black Diamond to create Blue Sky which would be the "next gen" advisory platform is an important break through as it presumes there are process applications in the free market that could be integrated into a custom advisory services platform for each advisor as they wish. If advice and the creation of an engine that drives the advisor's value proposition is the objective, then there needs to be an investment process (asset/liability study, investment policy, strategic and tactical asset allocation/portfolio construction, performance monitoring) with an audit path back to statute, case law and regulatory opinion letters and an expert third party legal opinion to establish fiduciary standing. This does not exist and as Welling suggests, advisors do not have the time or expertise to think these things out as they rely on us. The custodians and brokerage firms do not provide these resources for fear of diduciary liability and the advisors can't do it for reasons Welling cites. So where does this innovation come from that safely brings fiduciary standing and advice within the reach of every advisor? Blue Sky may be the means to aggregiate the necessary process content, but then there are the questions beyond process and technology which entail (1) work flow and a functional division of labor necessary to create scale, drive margins and build a business with transferable value, (2) management not just disclosure of conflicts of interests, (3) expert advisory services support for each of the ten major market segments (Mass, Retail, HNW, Ultra HNW, DC, DB, Foundations and Endowments, Public Funds, Profit Sharing, Taft-Hartley) in which advisors are active. BlueSky is a start to build the technological frame work that would allow every advisor to build their own custom support infrastructure in support of their unique client value proposition. Great first step, there are however huge content gaps in realizing the inevitable empowerment of advisors envisioned. All the necessary enabling resources cited above have been delineated, defined and confirmed by industry experts which would simplify the execution of fiduciary counsel, provide a preemptive advisor value proposition, drive down cost and significantly increase advisor compensation. Thanks to Blue Sky--we now move to the reality of enabling resources. When vendors start to compete on the basis of the depth and breadth of the advisory services support they provide, in accord with fiduciary standing, the role and counsel of the advisor and their professional standing will be greatly elevated. The trust and confidence of the investing public will be deservatively restored. SCW
• • 1/30/2010 4:05:14 AM
  • Zach
  • That was breaking news?.....I feel like I wasted time reading this.....
  • Wow....title....article....talk....still don't know why......