Custodians Offer High Tech Goodies

RIA-facing financial technology is rapidly advancing, pushed by innovative start-ups and new evolutions in consumer technology.

What’s driving the change is that custodians sense the need to create more powerful platforms to serve a broadening RIA client base. Custodians are becoming technological curators for advisors, providing front-office tools for their clientele and offering integrations to help advisors work seamlessly across different tasks.

Each custodian takes a different approach toward technology, colored by the clientele they serve. For example, Pershing’s focus on enterprise firms serving high-net-worth clients has led it to different solutions than the ones offered by Folio, which has prided itself on being efficient and accessible for advisory firms of any size or maturity. Other firms boast a wide offering of application programming interfaces (APIs) that allow third-party software vendors and sophisticated advisors to tap directly into their systems.

The largest custodians are forced to create flexible solutions that can serve the multiple styles of advisors and businesses.

Charles Schwab

San Francisco-based Charles Schwab, for example, offers flexible technology and comprehensive resources for both small practices and megafirms. Schwab supports the larger firms using APIs and integration, says Lauren Wilkinson, vice president of advisor technology solutions, while smaller advisors tend to gravitate toward the Schwab Advisor Center, the firm’s proprietary web platform, though the platform is utilized by RIAs of all sizes.

Schwab’s trading tools enable complex transactions to be easily executed within a simple interface. Schwab’s PortfolioCenter offers management, analysis, accounting and reporting. The Portfolio Rebalancer gives advisors access to real-time batch and household rebalancing.

Schwab is meanwhile introducing StreetSmart Edge, a new trading and research platform that gives advisors the option to get free low-premium streaming quotes for the most commonly displayed market data at no cost to the advisors.

Schwab is also building out its e-authorization system, says Wilkinson, which will be enabled for account openings and coincide with Schwab’s expanded e-signature capabilities using DocuSign. Since introducing e-authentication for wire transfers a few years ago, advisors are now conducting 50% of their wires digitally, says Wilkinson. “We’re extending that to more money movement transactions, starting with checks.”

Schwab’s offerings are accompanied by a comprehensive suite of research tools that incorporate data from third-party providers such as Ned Davis Research and Morningstar. The company also offers a mobile app giving anytime access to advisors and a white-labeled client-facing version.