Even before the first report is printed, it's a necessity to explore numerous areas of product functionality and output as well as gaining an understanding of the steps needed to support the tasks your software will perform. If extra time is spent up front in assessing the product and how it fits with your firm's needs, the transition from getting started to full deployment will be much easier.

Once the decision has been made to pursue a PMS system for your practice, there are 4 primary areas to carefully consider prior to purchase. These include product availability, technology, functionality and services offered, which all work together to complete the overall PMS package. Let's briefly explore each of them:

Product Availability & Access
Product use, access and pricing are important considerations in choosing the right PMS solution for your practice. Some vendors have certain limitations and/or restrictions over their offerings and/or data methodology, so good questions to ask should include:

1. Are there any restraints or limitations on how you access and/or retrieve your custodial data records?
2. Are there pricing differences depending on where you custody your assets? If yes, could this be a conflict of interest for you?
3. Do you have full control over your data?
4. Does the vendor have any access or control over your data?

Pricing, particularly for small to mid sized advisory offices, can also be a major component to the decision making process. Carefully assess your list of functional and technical requirements, and then separate the "have-to-have's" from the "nice- to-have". Once you have prepared a punch list of "must-have's", you will need to assess the costs involved in order to meet these requirements and in the end, if it all makes sense. Oftentimes advisors have a long laundry list of requirements but sometimes the end the cost can outweigh the need. Items such as network seats for simultaneous users, add-ons such as customized reporting modules or custodial interfaces can also greatly contribute to the cost of the initial purchase, so it's sometimes wise to start slow and build as the practice grows, particularly if up-front costs are an issue.

Ongoing maintenance fees and costs should also be reviewed as part of the overall purchase. Vendors have wide variances on their pricing models and it's recommended to compare the initial purchase costs PLUS ongoing maintenance and add-on costs. Spread sheeting these costs over a number of years, for example a 5 (up to 10) year comparison, could be worthwhile in your cost study and give you additional insights upon which your decision can be made.

Once you have a narrowed-down list of vendors, check with your custodians for potential affinity agreements for those products. Oftentimes custodians have arrangements for product discounts with various software vendors which could translate into additional savings on your purchase.

Technology
Exploration and assessment of the data platform can be a key issue. Is desktop vs. web based a consideration for you? And, does the underlying technology offer compatibility with your needs such as export functionality? Is import/export functionality an important aspect to your practice so that underlying data can be utilized in other applications?

You may be an advisor who feels strongly about data ownership and (possibly) data portability, so the decision to go with a desktop platform versus web-based could be critical to your purchase decision. Desk top models offer a high degree of data control, security and portability, and for some advisory clients, a desktop solution may be viewed as a preferable alternative simply from the perception of increased security offered by desktop solutions as compared to client data storage via the web. Web based systems usually offer "top down" administration of the transactional data since data is held and manipulated on the vendor's servers. Oftentimes data ownership is retained by the vendor and portability can be a fee-for service, sometimes the data is format incompatible with desktop platforms, or a (viable) data dump may not be available for purchase at a later date should the user decide to discontinue web service. Make detailed inquiries about these issues to determine if the data platform, data export, ownership and security issues are in sync with your needs.

Easy access to your data, particularly for satellite office situations or the advisor who travels is another important consideration. Web based solutions offer great user accessibility irregardless of location -so satellite office and/or traveling scenarios can be accommodated. Desktop platforms can also accommodate remote access through such means as a vpn connection or specialty software such as PCAnywhere, but the user may need to do some additional setup work initially to establish the access for remote use.

Data extraction could be another factor that is important for your practice. Extraction of client data for use in other software applications may be desirable, possibly for the purpose of customized reporting or portfolio analytics, as examples. Define the specific data needed, how the platform will accommodate the extraction process, and if the output format is compatible for the use and systems desired.

Functionality
An in-depth functionality assessment is essential for your overall satisfaction and long term use of the product by you and your team.

First, define the primary use of the tool and how it relates to your practice. Will it be utilized as only a reporting engine or will it be the centerpiece of your practice? What other functions within the tool could your firm utilize now or in the future? The following are some basic questions that you may want to consider during your evaluation process:

Custodial interfaces & integration with 3rd Party vendors
> Does the vendor offer linking to your primary custodian? Are there other custodians that you deal with or may in the future, and does the tool have linking to those?

> Does the tool offer other means through which various types of data, such as transactions or pricing, can be imported into the system?|

> Does the tool interface with other vendors, such as pricing services or CRM systems?

> What is the process through which data is imported?
- Can imported data be easily manipulated?
- Can imported data be easily deleted and re-imported if needed without fear of double-downloading?

Basic Functionality
> Is the user interface (the overall look/feel and use) of the product "user-friendly"?

> Is there a free version of the product available for "test-driving"?

> How much ramp-up time will be needed to learn the new system?
- How complex is it? Is it intuitive or must a user manual be employed to initially navigate the system?
- What type of training materials and service offerings are available for new users?
- Could staff turnover be an issue, and if so, can the system be learned quickly and easily by new hires?

> Does the system have any client contact information capabilities such as telephone numbers, contacts, addresses, etc?

> Does the system support various matching methods that match your needs?

> Does the system support trade-lot accounting?

> Does the system support account grouping?

> Can the user create "groups" of groups?

> Does the system offer corporate action functionality such as spin-offs, merger/exchanges, ticker symbol changes?

Will the tool accommodate the types of assets you manage and be supported in the reporting module?
> Do you need asset classing, industry groups or sectors, and if so does the system support it?
- Can customized categories such as security types or asset classes be created?
- Is there a limitation on the number of custom categories created?

> Do you require in-depth fixed income reporting?

> Do you need functionality for non-managed and/or illiquid assets such as real estate or collectibles? How does the system make accommodations for these items relative to reporting and pricing, for example?

Reporting
> What reports are a "must" for my practice and does the tool offer them?

> Does the system support the return calculations you prefer?
- IRR, TWR, Modified Dietz, other

> Are comparative index returns and/or index blends supported in the reporting module?

> Does the printing module offer various output options such as .PDF or .xls?

> Does the module offer graphical reporting and is there an extra cost associated for graphics?

> Does the system offer compliance related reports?
- Are the reports in the compliance suite, if offered, both useful to your practice and sufficient to answer auditor's questions?
- Is there an extra charge for compliance reporting?

> Does the system offer batch printing capabilities?

> Are composite reporting options available?

Client Billing
> Does the system offer the flexibility required to accommodate your billing style and formulas?
> Does it offer project billing?
> Tiered billing? Is there are limitation to the number of tiers created?
> Fixed rate billing?
> Asset exclusion?
> Is billing supported at the single account level and/or available for groups of accounts?

Asset Allocation Modeling &/or Trading
> Does the system offer an asset allocation system that will accommodate your specific investment style and rebalancing needs?
- Modeling capabilities at the security type, asset class, industry, sector or individual security levels?
- Is modeling capability offered at the account level, on a group of accounts, or both?
- Can the allocation include portions of other models or must it be based on a single model?
- Does the rebalancing report meet your output requirements?

> Is there an extra charge for allocation modeling functionality?

> Is there a trading module component?
- Is there an extra charge for the trading "platform"?
- Does the platform include trade upload, execution and/or matching?
- Does the platform include creation of trade tickets?
- Is there functionality for security exclusion and/or constraints?
- Is there a component for client Investment Policy Statements?
- How does the system account for/accommodate cash, or cash shortages, when rebalancing and trade execution is desired.

Services
There are numerous components to vendor service packages that should be explored prior to making a final purchase decision. Items for consideration can include customer service offerings, staff training services and available training materials, data conversion services and back office service offerings.

First, what types of training materials are available for you and your staff? Are there tutorials available? Can one-on-one training be purchased, and if so at what cost? Does the product come with training manuals, is the product help documentation easily understandable and sufficient to meet your needs, and are free user training sessions such as webinars available for viewing?

Second, what is the vendor's overall reputation for providing customer centric service? If you call for help how long will you be placed on hold and will you reach a live person? Will you be treated politely and as a valued client, and is the expertise provided sufficient to answer your issue? What methods of service are offered such as support via email, telephone or fax and what are the typical response times, and what support packages are available for purchase and will they meet your needs?

Next, define your plan for populating your initial database. Who will be responsible for setting up the system and importing data into it? Does your staff have the training, skill and orientation to accurately and completely handle the initial setup? Check with your vendor to see if they offer services to assist you with the initial system setup and the cost associated with the service.

Finally, if data migration is desired or required, there is much to be explored before embarking on such a project. Pricing and services for data migration vary widely between vendors so all offerings must be carefully assessed and compared. Determine the list of items that will be converted such as account activity, pricing, security information, billing formulas, etc and compare each offering for items included vs. items that are excluded or that l involve additional costs. Keep in mind that depending on the amount of data to be converted, data conversion is typically expensive, time consuming, and difficult. Oftentimes projects require significant time commitments by both parties and much collaboration between the advisory firm and the vendor is required in order to achieve the desired results. Key components in the final decision (and pricing of the project) will directly tie to the amount of history that must be migrated, the overall condition of the underlying data (have all accounts been reconciled consistently and accurately?), and if there are any date gaps of transactional, pricing and/or reconciliation data.

Purchasing and deploying a PMS system can be one of the most important decisions made by an advisory firm. Because deployment of these tools can be expensive, time consuming and oftentimes painful, careful assessment prior to purchase is highly recommended. Performing due-diligence early on will help insure your overall product satisfaction and use of the tool over the long-term.