Standard Invests Wisely in Financial Management Tech

As Standard Insurance expands investment management services to individuals with $100,000 or more to invest, the Portland, Ore.-based company has found that the technology investment is among the least risky aspects of the venture. The Standard ($1.9 billion in annual premium revenue) got into the investment advice business with the formation of its StanCorp Investment Advisers division in 2000 to provide investment advice to clients of the carrier's employer retirement plan business, founded in 1932. Through the acquisition of a Portland-based financial advisor firm in 2003, StanCorp Investment Advisors tested its business model for individual financial planning and investment management services and will be providing services under the StanCorp name through the assets of that company, as well as a subsequently acquired California-based firm.

Through the new business venture The Standard hopes to compete with independent investment advisors, whose service is often biased to either investment research or client service but seldom excels at both. "What we bring to the table is the same close-knit relationship with a professional that meets face-to-face with the client as often as the client wants, but it's backed up by a very robust institutional quality research process and a very smooth-running operational support system-and of course that's made possible by technology," says Julie Grandstaff, vice president and managing director of Stancorp Investment Advisors.

StanCorp intends to expand its business nationwide, principally through further acquisitions, according to Grandstaff. However, all operations personnel will be located in the company's Portland headquarters. "The two halves of the team have to look like a cohesive unit to the client, so it's tremendously important that both parts of the team have all of the information available on the client," Grandstaff comments.

To address that need, StanCorp invested about $40,000 in desktop-based client relationship management system Sage CRM (Sage; Scottsdale, Ariz.), which tracks client communications and workflow. "A professional in the field can assign a task to the operational person, and the operational person can enter updates on the task," Grandstaff explains. "If the client calls either part of the team, either party can answer questions about where things stand." Following the acquisition of the Portland-based financial advisor operation StanCorp also implemented Schwab Performance Technology's (Raleigh, N.C.) Portfolio Center (in the solution's earlier "Centerpiece" version) portfolio management system for tracking client activity. "It's a very robust system in that it allows you to very efficiently set up target allocations for the clients so that it's easy to see when [their portfolios] need to be rebalanced," Grandstaff remarks. "The system will actually help you to set up trades to rebalance the portfolio when it strays from its target, and it also has easy uploads and downloads from our [account] custodian."

The vendor also helped StanCorp to develop a secure client Web site that enables uploading of client holdings so that both advisors and clients can view portfolio information online. The site affords not only convenience but also economy, according to Grandstaff. "The Portfolio Center application costs about $1,500 a year per license, but we can limit the number of licenses that we need through deployment of the [Web site]," she relates. "Our folks in the field don't actually have to have a Portfolio Center instance on their desktop." Implementation costs were kept low by the out-of-the-box customization features of both the Sage CRM and Portfolio Center products, Grandstaff claims. "It was a very inexpensive implementation," she says. "The really great piece of getting this up-and-running was that we were able to take advantage of existing capabilities on the part of the vendors."

StanCorp expects to see a return on its technology investment within about five years, conservatively. "We believe that the business plan is very robust and that we'll get good returns on it," Grandstaff says. "But the capital investment is not huge, so the risk of failure is not significant for the overall company.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio