Tuesday, September 12, 2006

Intuit Bows Out of Portfolio Management Arena

In a move that took me by surprise, mainly because I didn’t know the product existed, Intuit announced yesterday that they were shutting down a service aimed at independent financial advisers called Intuit PortfolioMinder.  It appears to be a product that was out there as a test, and Intuit apparently gave PortfolioMinder an “F.”

As near as I can tell, the program was introduced early this year, and was aimed at independent financial advisers with fewer than 100 clients.  PortfolioMinder (which I will call PM from here on out) was able to download data from three online brokers:  Charles Schwab, TD Ameritrade and Fidelity.  If your clients trades were placed elsewhere, you had to enter the data manually—and for me, that would be a deal-breaker.

Given all the connections that Intuit’s Quicken has, I’m surprised that the company couldn’t set up more online brokers to link into PM.  One of Quicken’s few failings in my book is its inability to easily track portfolio items other than stocks and mutual funds.  A user can convince it to keep tabs on options and bonds, but it’s clearly a kludge. 

A solution for independent financial advisers that wasn’t terribly expensive actually fills a niche in the market that, on the face of it, I would think would be successful.  I’m guessing Intuit didn’t do a very good job getting the word out, though, given my surprise that the product even existed.  I don’t want to sound conceited, but I’m typically one of the first people to be notified about anything having to do with financial technology.

Looking at the pricing, however—a $995 setup fee plus $150 per month for online access—combined with the program’s inability to import data from brokers that represent over 50% of the online brokerage transactions, I’m thinking that Intuit set up its own enormous barrier to entry.  Just to get the product off the ground and create some buzz in the industry, they should have charged significantly less. 

There are other portfolio management programs that are geared towards much larger firms that aren’t much more expensive.  Hmm.  There’s an idea for a column.

Here is Intuit’s announcement that the product would be discontinued:

As of October 16, 2006, the Intuit PortfolioMinder product and service will be discontinued and closed to new and existing customers. This decision was made after receiving important in-market feedback and carefully considering Intuit’s short- and long-term strategies.

Intuit’s strategy is to be in growth businesses, high profit businesses, and attractive new markets where we can solve large unmet or underserved needs.  We will continue to invest in the best opportunities to drive top line growth, by making our existing products better and creating new offerings driven by customer need. This move helps us to invest in the best growth engine opportunities for Intuit and better align our internal resources for future growth.

Our goal with PortfolioMinder was to offer a low cost, self-serve, easy to use product for independent financial advisors to manage client portfolios, better serve clients and compete with big brokerages. Through in-market feedback from real customers, we discovered that the amount of effort needed to enter years of complex historical data and the resources required to support the product would not enable us to offer this product at the low price and ease that was our intent.

Because of our decision to roll the product out slowly and continue to learn from customers, less than 75 customers will be impacted by this decision. Each customer will be notified today (9.11.06) and receive at least three weeks notice prior to the site closing. We will offer a full refund of the purchase price and monthly fees, and make all data entered into the product available to them. Interactive Advisory Software (IAS) will offer special reduced rates for a limited time ($150/month for the first year, plus conversion fees) to PortfolioMinder customers who are interested in converting to the IAS platform.  IAS offers full Customer Relationship Management (CRM) capabilities and other functionality in addition to portfolio management.  Customers interested in this option can contact PortfolioMinder customer support for information on this offer. 

Customers may contact the PortfolioMinder team at 1-800-843-0012 or email contact@portfoliominder.com for more information.

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And here is how I found out that the product existed and then was discontinued—a press release from a competitor, Portfolio Systems, Inc.:

Portfolio Systems, Inc. Ready to Serve Advisors Orphaned by Intuit

In the wake of Intuit’s exit from the portfolio management software field, Portfolio Systems, Inc. (PSI) has responded aggressively to assure the market that they remain committed to serving the industry and supporting the recently released version 8 of their Portfolio Director™ software.

“We have seen this happen before with TechFi,” company spokesperson Fred Standridge stated. “We were able to begin serving many of their subscribers very quickly, and we made the transition as smooth as possible.  We believe we can offer the same support to Intuit’s former PortfolioMinder subscribers as well.”

In addition to its standing policy of charging no up-front or service initiation fees, Portfolio Systems will provide former Intuit subscribers with an hour of training and support at no charge, and a rate of just $50 per support hour thereafter.  And because Portfolio Director™’s monthly service fee of $150 for a single-user license matches the rate published by Intuit for their product, advisors should not see any increase in their monthly overhead either.

Portfolio Systems, Inc. also offers the optional PDWeb™ service, which allows subscribing advisors’ clients to access their account reports online through the advisor’s own web site.  Advisors can customize the online reports as easily as they can customize reports in the application.

Portfolio Systems, Inc., has been a provider of investment portfolio management software for Registered Investment Advisors, CPAs, and individual investors since 1999.  The closely-held company is headquartered in Hollidaysburg, Pennsylvania.

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I took a quick peak at Portfolio Director on in my June 24 column.

Posted by twcarey on 09/12 at 02:42 PM
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