Big custodians are continuing to use technology to make advisors’ lives easier. Electronic e-signatures, wire transfers and account openings, as well as better performance reports and integrations with third-party providers, are just some of the improvements on their platforms.

Schwab
Schwab continues to enhance its technology offering for advisors. Neesha Hathi, senior vice president, Schwab Advisor Services, says, “Advisors are looking to technology to enhance the client experience.

“Historically, our clients have viewed technology primarily as a back-office issue,” she says, “but perceptions are changing.” A recent survey of RIA employees attending Schwab Advisor Services SOLUTIONS workshops this past summer found that over half (53%) of respondents view technology as a front-office function—a key strategy for delivering a high-quality client experience while building scale and differentiation for the firm. In addition, more than two-thirds of respondents said they either feel mobile technology’s impact at their firm or expect to within the next three years.

At the same time, clients of advisors are embracing a technology-enhanced service experience if it is made available to them. Sixty percent of survey respondents reported that clients were adopting new service approaches and technology solutions when they were offered to them.

In response to these findings, Schwab is tailoring some of its technology to capitalize on these trends.

In October, Schwab announced plans to launch a robo-advisor platform, called Schwab Intelligent Portfolios, for retail investors early in 2015. The company will offer advisors a customized, white-label version of the platform shortly thereafter. The platform will feature portfolios of ETFs selected by Schwab representing as many as 20 distinct asset classes and will be offered free of commissions and advisory and account fees.

The company also recently rolled out electronic authorizations to all advisors. So far, mobile electronic authorizations are limited to wire transfers, but they will be expanded over time. Already, over 20% of all wire transfers across the whole Schwab Institutional client base are being transacted through the new system. That is a very rapid rate of adoption.

Next year, Hathi anticipates that e-authorizations will be enabled for checks and for the journaling of funds from one Schwab Institutional account to another. After that, the company will be further expanding its e-authorization capabilities to include address changes and other transactions that currently require a wet signature.

E-signature is currently available for all Schwab forms. The company recently allowed advisors to transmit their own firms’ forms to clients for e-signatures as well.

The Schwab Alliance website (the Schwab website for clients of advisors) has been upgraded to make it more customizable, so advisors can better tailor it to their needs. The company has also rolled out a “view only” option that allows clients to give permission to trusted parties (family members, CPAs, etc.) to log on and view their Schwab account details.

Hathi says that all is going well with the development of Schwab Advisor Portfolio Connect, Schwab’s next-generation portfolio management solution. The product is already in the early stages of beta testing, and advisors are already providing good feedback.

Schwab Advisor Portfolio Connect is most likely to appeal to advisory firms that custody exclusively with Schwab, because the software will sit atop the Schwab custody platform. This means that there will be no need for advisors who custody with Schwab to perform daily downloads or reconciliation. That factor alone will be a big draw for some. PM2 will include an end-client portal. Clients will have access to reports on their phones and tablets through Schwab OpenView Mobile.

One thing that has not been decided yet: the nature of the reports. According to Hathi, there seems to be a preference for static reports among advisors at this time, so the initial reports made available to advisors for their clients may be PDF reports. Hathi emphasized, however, that Schwab Advisor Portfolio Connect is also capable of generating dynamic reports, and it is anticipated that both reporting options will be available. The issue at this time is which one to do first.

 

Schwab also believes that there is a trend away from frequent performance reporting in favor of a more diversified approach. “Some advisors want to generate performance reports less frequently and supply other types of information,” says Hathi. She cited Schwab market commentaries and advisor-generated content as examples of other information that advisors will be able to make available to their clients through the new, enhanced OpenView Mobile platform.

Finally, Schwab just announced plans for its own “robo-advisor” service: Schwab Intelligent portfolios.

Fidelity
Fidelity is working on a number of technology enhancements, but Ed O’Brien, senior vice president of technology platforms at Fidelity Institutional, is most excited to talk about the automation of the client on-boarding process. This digital process allows advisors to open accounts, initiate asset transfers and accept e-signature authorizations all in one package. It is available to all Fidelity advisors now. “Having a seamless online experience is becoming expected by prospects and clients,” O’Brien says. “We want to help advisors meet those expectations.”

There’s more to this than meeting client expectations and helping advisors project a tech-savvy image, however. It’s also about quality. According to O’Brien, in this new, seamless process, some of the firms that are using all of the tool’s functionality are reporting up to a 50% reduction in NIGO (not in good order) transactions. It also allows clients to open and fund accounts in minutes instead of hours or days. Firms using the system report that they can open an account, get an account number and submit the transfer-of-asset paperwork in under eight minutes.

This is just the first phase of Fidelity’s work in this area. Before year’s end, the firm will begin allowing third parties to connect to this system. It is expected that the Athene Group’s Skience for Salesforce will be the first such integration, but more are sure to follow in 2015. In addition, Fidelity intends to extend this digital request and authorization process to other common work-flow tasks in the near future.

Mobile check deposits have been a big success at Fidelity—the company took in more than $1 billion in these deposits during the first year they were available. Mobile depositing allows faster processing, creates fewer errors and saves account holders the cost of shipping checks overnight. Advisors are able to initiate investments for clients faster, which improves client satisfaction.

Fidelity is in the process of building additional functionality in this area as well. For example, the company plans to provide advisors with check reporting so they can see who deposits money remotely and who still sends checks directly to Fidelity by mail. This will allow advisors to educate clients about the latest technology and improve the client experience. Fidelity will also enhance the mobile check deposit interface. For example, if a client wants to deposit a check to an IRA account, the interface will show contributions year to date, so clients don’t inadvertently exceed annual contribution limits.

Before year’s end, advisors will be able to initiate future dated transactions so they can, for example, schedule monthly income distributions to a client in advance.

In 2015, Fidelity will make money movement APIs available to third parties, so advisors and their clients can access this new money movement functionality through other applications. Fidelity envisions this being used by broker-dealer platforms, by third-party software providers to advisors and by mobile apps targeting the consumer.

 

One additional enhancement coming soon: the ability for advisors to access their client’s Fidelity.com accounts through WealthCentral. The idea here is that if a client of an independent RIA or a dually registered advisor is having difficulty with something on Fidelity.com, the advisor can log on and help address the issue in real time. “We want to be more supportive of collaborative online engagements between the client and the advisor,” O’Brien says.

Fidelity also recently announced a referral program with Betterment Institutional. Although there is no integration with the Fidelity custodial platform at this time, nor are there any integrations between Betterment Institutional and third-party software providers serving the RIA community, this relationship does provide an outlet for those Fidelity advisors looking to team up with a robo-advisory technology provider.

TD Ameritrade
The new TD Ameritrade advisor dashboard is currently in production. It is the first open, fully customizable, deeply integrated custodial dashboard. Some custodians offer deep integration with a select few third-party providers, but the TD Ameritrade platform breaks new ground in custodial dashboard integration.

In the initial release, only a handful of TD Ameritrade Institutional’s 77 VEO integration partners are participating, but more partners will be added regularly. The initial participants in the dashboard rollout are: Orion, Redtail, MoneyGuidePro, DocuSign and Laser App Anywhere. Within a few months, TD Ameritrade plans to add Morningstar, Salesforce, FinanceLogix, eMoney, iRebal, ThinkPipes, Black Diamond and Junxure to the dashboard.

The dashboard is designed to provide the advisor with a unified, customizable experience. The advisor can select widgets provided by TD Ameritrade and/or third-party providers and place them on a home page. In most cases, with the click of a mouse, you will be able to shift from a table view to a graphic view. In the initial release, smart searches will be limited to the VEO environment, but they will be expanded in a future release to search the third-party data as well. Searches are powered by the Google Search Appliance.

This dashboard provides the ability to designate the data sources. For example, if you create a landing page comprising firm analytics such as asset mix, revenues per client and largest holdings across the firm, you can designate which data feed flows into the widget. If all of an advisor’s assets were held at TD Ameritrade, it would be appropriate to use TD Ameritrade as the data source for those widgets. However, if there are a lot of 401(k) assets and other held-away assets to account for, a third-party provider can supply a more comprehensive and accurate data set, so the firm would designate its portfolio management firm or an aggregation firm as the source of the data.

Initially, there will be a selection of widgets, most of which will be TD Ameritrade-sourced, but as more third parties participate in the project, the library of widgets should expand rapidly. One TD Ameritrade widget that will be available from the launch is a cash activity widget. This much-requested feature will let users see, at a glance, all recent money movements.

A Client Center will provide all relevant information about a client relationship. There will be a client dashboard page from which advisors will be able to access CRM data, financial planning data, portfolio management data—and soon iRebal data—all with a click, in context.
Deep integration with Redtail will allow advisors to make edits to a contact within the VEO environment and have it reflected in the Redtail contact. Advisors can also create a note within the VEO dashboard and have it post to Redtail. There is even some drag-and-drop capability, where you can drag an activity from a VEO screen right into the Redtail calendar or into a Redtail task.

One enhancement already being built is what Jon Patullo, TD Ameritrade Institutional’s managing director of technology product management, refers to as “easy buttons.” The concept is to build some common work flows like account openings, processing management fees, etc. into the system so that advisors can initiate them with as little as a single click.

Pershing
This year and next, Pershing is undertaking a total revamp of its technology ecosystem. According to CIO Ram Nagappan, the company’s primary focus is on improving both the end investor experience and the advisor experience.

Pershing has completed the rollout of the new NetXInvestor, the end client portal. In addition to a fresh, intuitive user experience, this new client portal packs many new features and functionality. Perhaps the most noteworthy is its ability to integrate third-party applications into itself. Albridge will be the first application integrated into the portal, so advisors can make performance reports available to their clients from within NetXInvestor. Pershing will also be opening NetXInvestor to its clients, so B-Ds and large RIAs can integrate their own applications into the NetXInvestor experience for their clients. It is anticipated that shortly thereafter, popular third-party software providers will integrate their applications with NetXInvestor.

NetX360, the advisor-facing portal, has also received a total makeover, with a more intuitive interface, and more enhancements are on the way. “I don’t think we’ve received enough credit for the integrations we have done,” says Nagappan. “We have over 250 integrations; about 50 of them are deep integrations,” he says. The plan is to improve and deepen many more integrations in 2015. Pershing also intends to make NetX360 a global platform by adding multiple currency support and multiple language support.

A new, persona-based analytical dashboard is available, and it will be enhanced in 2015. Currently, the dashboard can pull Pershing data and display key analytics in graphical format. For example, the analytics dashboard will provide asset movement visualization, so advisors and management can see where assets are coming from and where outflows are going to. In 2015, the dashboard will be able to pull data from integrated third parties, including providers of CRM software, financial planning software, etc.

Pershing is also working on improving the client on-boarding experience. Currently, much of the process can be automated and initiated digitally, but some types of accounts cannot yet be processed digitally, and there are opportunities to simplify the current process. Look for improvements here soon.

Mobile has been another ongoing area of development, and the company recently released “360 Mobile.” According to Nagappan, “advisors love it.” He says Pershing will be adding even more functionality in 2015. “We’ll be adding collaboration and sharing to the mobile experience soon,” he says.

The Outlook for 2015
As we have seen, all of the major custodians continue to invest significant resources in their technology platforms. While each custodian has its own list of technology priorities, there do seem to be a number of commonalities across all platforms. Each custodian is investing in improving the user experience, both at the advisor level and the end-client level. All are working to enable a seamless client on-boarding and support experience through electronic work flows, e-signatures and electronic money movements. Other areas of commonality appear to be improved integrations with third-party providers and improved mobile technologies.

The pace of change in the field of technology has seemingly never been greater, and custodians are poised to deliver noticeable improvements in the months ahead.