Taking a Huge Risk

How finding and fixing a broken market led to wealth management’s first truly global, integrated technology platform.

Joe UjobaiA few months after Joe Ujobai arrived in London, he organized a dinner at the Lansdowne Club, a posh members-only establishment nestled in London's west end.

Amidst the fusion of 18th century grandeur and Art Deco furnishings, he and his boss dined with top management from several famously blue-blooded British banks.

Ujobai had been dispatched to the U.K. in 1999 to figure out how his company, SEI, an Oaks, Pa.-based asset manager and pioneer in advanced wealth management technology, could expand into Europe. But doing business there was turning out to be more complicated than he had expected.

Ujobai and SEI weren’t the first Americans to underestimate the difficulty of gaining traction in Europe’s financial services market. Many U.S. companies had faced their Waterloo in London — so many, in fact, that at the dinner, after a few drinks, one very senior banker couldn’t resist taunting Ujobai’s boss, SEI founder and chairman Al West.

The banker told West he had seen plenty of American companies come and go over the years. They’d arrive with their best-laid plans, fantastical solutions and dazzling technology, he said. Twelve monthEurope Maps later they’d leave with their tails between their legs, defeated by Europe’s global trading practices, multiple currencies, differing rules and thickets of ever-changing regulations.

“I look forward to having the car pick you up and take you back to Heathrow a year from now,” the banker said.

Building a Partner for Europe

Thinking back on his 25 years with SEI, Ujobai, who had opened offices in Argentina, South Africa, Korea and Taiwan, could understand the banker’s pessimism. There was a lot of truth in what he said. Still, Ujobai and Al West were determined to prove him wrong.

Ujobai couldn’t have foreseen it at the time, but their determination would lead to a decade-long effort and a significant financial investment designed to reinvent wealth management for the 21st century. As Ujobai investigated possible Legacy systempathways to success in Europe, he quickly found that SEI’s legacy software platform, TRUST 3000®, at the time highly successful in the States, wouldn’t work efficiently in Europe. Back then, it could handle only one currency at a time—a non-starter in the multi-national, cross-border financial markets of Europe.

This meant that the only way SEI could succeed with its technology abroad would be to recode it from the ground up, moving away from mainframe and PC-based technology and creating the world’s first integrated, open-architecture-based enterprise system for global wealth management.

Only such a comprehensive system could work for Europe, but it soon became clear that the future of wealth management in the U.S. and all over the world would depend on such digital and global capabilities.

The first release of the ultimate system — SEI Wealth PlatformSM — would launch in the U.K. in 2007. But in 1999, after facing a tough introduction to England’s top bankers, Ujobai was fully committed to finding a way to win business in the United Kingdom.

But first, working to find the right opportunity

CalendarFor his first few months in the U.K., Ujobai scheduled as many meetings as he could to assess the business landscape for SEI. Some simply told him it would be tough for SEI to compete in the U.K. Still others suggested that SEI should just export to Europe its TRUST 3000® platform. They told Ujobai that European banks had been loath to invest in new technology, so there should be an opening for TRUST 3000® technology. But Ujobai knew that would require a major overhaul at the very least.

Eventually, Ujobai realized that SEI’s best bet for entering the European market would be to crack the institutional pension funds, despite widespread warnings to avoid the pension funds because the market was composed of a few large players and, as a result, was virtually uncrackable.

Ujobai knew that winning over the pension funds was a victory he could leverage to sell SEI’s technology platform. There was an established governance model within pension funds, but one that Ujobai viewed as “broken.” It was common knowledge that the model was not fit for its purpose and that the funding level of U.K. pension funds was suffering detrimentally as a result. After doing his homework, Ujobai could see why. It boiled down to a lack of accountability and transparency within the model and, most specifically, amongst investment consultants.

In the U.S., SEI had created a successful pension fund model by emphasizing accountability and by measuring performance so it was possible to jettison the bottom 20 percent of managers each year. When Ujobai floated his broken-model-equals-opportunity hypothesis to local players, he was warned it would never work. Still, the more people told him not to do it, the more he thought, This is what we need to do.

Within six months, SEI had landed its first client, which had $100 million under management. Others soon followed. Not bad, but not enough to get the folks in Oaks, Pa too excited.

At the same time, SEI was growing its asset management business in the U.K. It was slow going, since SEI had only two salespeople in its U.K. office and they had to go one asset manager at a time. One of the companies that had begun offering SEI’s suite of investment products was a young, fast-growing company owned by a South African insurance company. It was in the asset distribution business and wanted to create an investment product for asset managers who handled wealthy and affluent individuals. But it was looking to improve its business by providing a differentiated advice model to its clients. The firm’s CEO wondered if there was a way for the two companies to work together.

A sustainable solution that enables growth

Five years after starting the project, SEI flipped the switch for its first SEI Wealth Platform client and the cycle was complete.

Ujobai had been sent to England to seek expansion opportunities for his company. Now it was the global unit he headed that had driven the creation of a revolutionary leap into the future of global wealth management. Over the years SEI has delivered the SEI Wealth Platform to over 20 banks and financial institutions in the U.K. and today has a growing number of U.S. clients.

Ujobai says SEI’s ultimate plan is to become the only enterprise wide solution for global wealth management. “We’ve built this wonderful core,” he said. “Now, we want to open that up and let the app world start to build to it.”

While SEI has a large team of talented programmers, no single team could ever create every useful new product for wealth managers. Opening the SEI Wealth Platform environment to app developers worldwide would tie in to the movement to mobile devices. Not only could asset managers check their clients’ portfolios, exercise trades, sift through advanced metrics, and much more — the clients could too. As Apple has done with the App Store, SEI would provide the necessary code kits to app makers, establish a global community of app developers and also generate revenue with the sale and use of every app.

“We have this great underlying core infrastructure that is great technology,” Ujobai said recently. “Now we’re talking about putting all these layers on top and creating an ecosystem. No one has made that kind of investment. Now we have to commercialize it.”

And this made him recall that meeting 16 years ago at that posh British club, when the future was murky. By the end of the dinner, the British banker who had initially taunted SEI’s chairman, Al West, had softened a bit. After hearing more about SEI and its technology platform, he said, “This sounds like an interesting idea, but if we helped you build this, we’d want to own half of it or part of it.”

West couldn’t help but give him a taste of his own medicine. “You’re more than welcome to own part of us,” he said. “We’re a publicly listed company. It’s called SEIC. Tell your broker we trade on the NASDAQ exchange.”