The progress schwab advisor Services has made on the technology front speaks for itself: In six months’ time, it has increased the number of advisory firms using its latest software integration services by nearly 70%.

As of the end of May, 735 firms, representing $272 billion in assets under management, were using some aspect of Schwab Intelligent Integration (SII), says Neesha Hathi, senior vice president of Schwab’s Advisor Technology Solutions. That’s up from 440 firms and $115 billion in AUM last November.

Although the number using SII represents a relatively small percentage of the 7,000 firms that custody assets with Schwab Advisor Services, the growth has been impressive. Most firms are working through OpenView Gateway, Schwab’s open architecture platform that allows advisors to integrate with the custodian directly from their own technology providers. Schwab also offers a more extensive integration package, the turnkey OpenView Integrated Office, but only 71 firms had signed up for it as of May 30.

For the first time, Schwab is adding financial planning software to OpenView Gateway, Hathi says, and the initial two financial planning software suites being integrated are MoneyGuidePro from PIEtech and the NaviPro Planning Suite from Zywave. The latter includes both NaviPlan Premium and Profiles Premium. The first step in integrating the financial planning software will be to make sure client profile and account information, including balances and positions, is seamlessly available. This should significantly shorten the time necessary to create and update financial plans.

Schwab is also adding Tamarac’s Advisor Rebalancing application to OpenView Gateway. Hathi says the move will allow advisors to access real-time custody data from Schwab, including cost basis, which will help ensure accurate trading and rebalancing. Tamarac will also be integrated with Schwab’s new Web trading platform to streamline processing for advisors of account-level and block trades.

The new Web trading platform, which has been in the works for quite some time, is now being rolled out. The site will streamline trading and provide contextual information, such as the impact of trades on balances, and is deeply integrated with the rest of Schwab Advisor Center. “Our client base, comprised of over 7,000 advisory firms, is incredibly diverse with varying trading and workflow needs,” Hathi says. “We built a more flexible, intuitive Web trading experience that will provide an enhanced, integrated trading experience for all of our firms.”

Unlike the old system, which was based on Java programming, the new Web trading platform will be based on Microsoft’s .NET technology, she says. This is significant for a number of reasons, most notably the fact that Java has been a popular target for hackers over the last several years. As a result, many security experts advise users not to install Java on their computers. Of course, not installing Java wasn’t an option if you were a Schwab advisor and wanted to trade through the Schwab Advisor Web site. Now, advisors who upgrade to the new trading platform will be able to avoid installing Java, assuming that it is not necessary for other Web sites or applications that they run.

Then there is Schwab’s PortfolioCenter, a popular portfolio management and performance-reporting package used by approximately 3,700 firms. A few months ago, when PortfolioCenter 5.7 was released, Schwab made a point of talking it up to the press, but a number of PortfolioCenter users I’ve spoken with have been underwhelmed so far. Hathi acknowledges that Schwab “still has a way to go” on improving PortfolioCenter, but she points to a few positives. She says the user’s ability to customize date ranges, which is included in 5.7, was one of the most requested features. She adds that scalability enhancements included in version 5.7 will set the stage for further PortfolioCenter improvements in the fall.

Another product, PortfolioCenter Hosted, allows advisors to have their version of PortfolioCenter hosted and maintained by Schwab Performance Technologies (SPT) on SPT servers. Interest is strong in the hosted offering, which recently came out of beta for full release, Hathi says.

Schwab is also looking at increasing its use of mobile apps to improve communication among investors, advisors and Schwab. For example, Schwab is exploring whether to allow advisor clients to use mobile apps for authorizing wire transfers, and thus see if such authorizations foil hackers. As many readers are aware, advisors are receiving fraudulent e-mail requests that appear to be from clients directing the advisors to wire money to a third party. These attacks typically happen when a client clicks on a phishing e-mail and the hacker takes control of the client’s e-mail account.

From there, the hacker can often obtain sufficient information to create an e-mail that appears to come from the client and looks legitimate to the advisor. Currently, according to most experts, the best defense against these attacks is to call the client for confirmation. The callback usually (but not always) defeats hackers, but it can be an inconvenience for client and advisor. At first, Hathi says, Schwab will probably use a mobile app just to alert clients of a wire transfer request, but assuming clients and advisors like the idea, electronic authorizations could become a reality.

Yet another area where Hathi sees a role for mobile is Schwab Signature Alliance, a set of services designed for the clients of advisors doing business with Schwab. A main component of the offering is a Web site that gives clients access to their account information (and trading if the advisor enables it). The site can be privately labeled with the advisor’s name, logo, colors and more. Hathi thinks that extending the capabilities of Schwab Signature Alliance, and making it available through various mobile devices, is something that advisors will find appealing.

Another technology issue is advisors’ need for straight-through processing of account applications and transfers using mobile devices. Hathi says nobody has fully integrated e-signatures, which would need to be available on all forms and at virtually all levels of advisor and custodian workflows for straight-through processing using mobile devices. Once e-signatures are fully integrated, she says, it will be inevitable that larger RIA firms will be able to offer such processing. “They understand the benefits and they have the scale,” she says. “They are also more comfortable with the security aspects of such a system.”

Hathi thinks that the complexity of technology, and the increased security threats that advisors face from fraudsters and hackers, are subtly changing the relationship between Schwab and its advisors. “Historically, advisors have always said, ‘We, the advisor, will deal directly with the client in all cases,’” says Hathi. But that’s starting to change. “More recently, we are seeing situations where the advisor requests help from Schwab.”

What are Hathi’s thoughts on Windows 8? Should it be used to build mobile apps? “We are in an evaluation phase,” she says. “We are not yet building Windows 8 mobile apps, but we are keeping a very close eye on it.” She says that Schwab is waiting to see how fast the operating system is adopted, and so far the pace has been slow. On the other hand, she personally believes that advisors will warm to it.

She cites a number of reasons advisors have been slow to use Windows 8. One is hardware issues. For example, when the operating system was released, few computers were available with touch screens. Second, she says, most advisors are not early adopters, and those that are have purchased Apple mobile devices. Third, she says that Windows 8 is very different from previous versions, so it will take time for advisors to become comfortable with it. (Some of the reported features in Windows 8.1, such as the return of the “Start” button and the user’s ability to boot directly to the desktop, may significantly reduce the learning curve.)

Finally, Hathi talks about Schwab’s MarketSquare review site, where Schwab advisors can submit feedback on the products and services of technology vendors. I’ve been somewhat skeptical about the viability and usefulness of this endeavor, but I am keeping an open mind. Hathi agrees that MarketSquare is basically uncharted territory for Schwab, but she says that the company is willing to try some new things to help the industry and support advisors.

Time will tell how successful the effort turns out to be. In May, Hathi noted that 22 products were listed on the site and had been reviewed. They were primarily from established firms, such as Junxure, Laserfiche, MoneyGuidePro, Morningstar, PortfolioCenter, Tamarac, Trumpet and Zywave, but there were some from lesser-known firms, like Arcons and Process Composer. Another 39 products are in the program, but they have not been listed yet because of insufficient feedback from advisors.

Clearly, Schwab has made substantial progress in building its OpenView Gateway platform. With the addition of two well-respected financial planning applications to the platform, advisors can now achieve integration between Schwab and best-of-breed providers in most industry-specific software categories. Adoption of its turnkey OpenView Integrated Office platform has been much slower, but Schwab appears to be happy with the progress so far. By Hathi’s own admission, PortfolioCenter requires further work to keep up with the competition, but Schwab is aware of the need and plans to address it. It is clear that mobile applications and mobile devices will play an important role in Schwab’s technology for advisors in the future.

Schwab has made a great deal of progress on software integration compared with where it was a year or two ago. But competitors, including Fidelity, Pershing, TD Ameritrade and Trade PMR, are also making major enhancements to their advisor technology offerings. I expect the pace of technological development in the custodial space to remain high for the foreseeable future.