Schwab
There are three technology themes that the folks at Schwab Advisor Services are focused on right now, according to Neesha Hathi, senior vice president of advisor services technology solutions at Charles Schwab. The first is “the client experience transformed.” According to Hathi, Schwab takes great pride in the quality of the service it has traditionally provided to its advisor clients. The goal of the “client experience transformed” initiative, which is well under way, is to extend that same great client experience to digital channels. As part of that initiative, Schwab plans to release its next-generation Service Center to advisors in the second quarter of this year. The Service Center is where advisors can view images of paperwork and checks, check the status of tasks, view history and submit checks electronically, as well as do many other things. Schwab already offers many of these capabilities, but the goal of the new Service Center is to create a better, more user-friendly experience.
Electronic work flows are also part of this initiative. As of the third quarter of 2015, approximately 25% of forms were being submitted electronically, but Schwab expects that number to increase as the company makes more forms eligible for e-signatures and as it makes usability improvements to electronic work flows in 2016. One impediment to the stronger adoption of e-signatures in 2015 was the resistance of end clients to answering questions (part of the e-signature process). Schwab recently began offering the option of text-based authentication as an alternative, and the initial results are very promising.
Forty percent of advisors had tried eAuthentication by the third quarter of 2015. Seventeen percent had had a wire transfer approved by eAuthentication, usually within 15 minutes.
A second major focus in the technology area is on infrastructure. Schwab is making numerous online security enhancements. Additionally, it is working on data infrastructure. Based on its estimates of account growth and asset growth in the coming years, the company is investing to make sure its data managing capabilities are sufficient to handle the increased volume of data it expects.
Hathi calls the third area of focus “Beyond Custody.” Here, she is referring to the additional products and services that Schwab makes available to clients such as Schwab Institutional Intelligent Portfolios (SIIP), Portfolio Connect (the company’s next-generation portfolio management/accounting system, scheduled for release in the fourth quarter of 2016) and practice management support.
In the second quarter of this year, Schwab will roll out enhancements to SIIP. These will allow users to create different sets of portfolios for each office of a multi-office RIA firm. The initiative will also expand the account registration types available through SIIP. Later in the year, Schwab will expand the set of investment products on the platform to include mutual funds. The initial response to SIIP has been impressive. As of the third quarter of 2015, 500 advisory firms had signed up for the program.
Finally, Schwab is preparing the launch of a cybersecurity initiative, perhaps by the end of the first quarter. According to Hathi, advisors have asked Schwab to help them meet their cybersecurity obligations, and the company is responding. The initiative is expected to include education, tools and other resources to help advisors deal with cybersecurity threats.
Raymond James
At Raymond James, the technology emphasis continues to be on data. “This past year, the client reporting system really came to life,” says Vin Campagnoli, chief information officer at Raymond James. The platform now allows advisors to build custom reporting packages for client meetings and gives them a high degree of control over the data to be presented as well as the presentation of that data. For example, advisors can design their own investment overview pages and save them. Advisors pick the data to be displayed, the layout of the data and even the computation method for performance reporting (time weighted or dollar weighted). Once the package is saved, it can be programmed to run on a regular schedule. So, for example, if a client meeting is scheduled quarterly, the report will run automatically the day before the quarterly meeting is scheduled so it can be reviewed by the advisor beforehand. Report packages can be saved and used for groups of clients, or advisors can customize them down to the individual client level. Customizing reports used to take hours; it can now often be done in minutes.
Previously, Raymond James relied on account aggregation provided through MoneyGuidePro. This worked well for populating financial plans, but it had some limitations, so Raymond James decided it wanted more control over the aggregation of third-party assets. To that end, the company partnered with Fiserv. This will allow for two-way synchronization with MoneyGuidePro, and it will also allow Raymond James to use aggregated data in the advisor workstation and the client portal.
In the first quarter of this year, Raymond James will begin making third-party data available within reports. This will allow the company to provide a more complete, holistic view of client holdings and allow its advisors to better compete with some of the consumer-facing digital providers. For example, by incorporating third-party data into balance sheet reports and asset allocation reports, advisors will be able to provide clients with a more complete understanding of their financial condition. Access to this data also allows advisors to give better advice.
The firm is also focusing on the usability of its platform. The goal is to make it as interactive as possible while retaining maximum flexibility. “Each of our advisors operates a little bit differently,” says Campagnoli. “We’ve designed our system with so much customization that each advisor can make it their own.”
This past year, Raymond James built a practice management suite for advisors. It offers an interactive dashboard to help advisors manage their business. It includes all sorts of business analytics at the firm level, the advisor level and even the individual client level.
There are three new initiatives for 2016: “Opportunities,” client-side enhancements and wealth management. “Opportunities” are data-driven alerts tied to client information. For example, if Raymond James releases a new research report on a security, the new system can alert the advisor to all clients who hold that security and offer the advisor the opportunity to share the report with them. The company will be able to send a list of all maturing bonds to an advisor, or a list of all client accounts that have cash in excess of the investment policy statement on a periodic basis.
On the client side, Raymond James will give advisors the option to make goal planning and modeling available to clients so that a pre-retiree can view the MoneyGuidePro Play Zone from within the Raymond James client portal and perform some simple what-if scenarios on his or her own or in collaboration with the advisor. The company also plans to build a document storage and collaborative capability into the client portal powered by Box.com.
The wealth management initiative will create a new, improved proposal system; an interactive product catalog; and a portfolio construction/model management tool.
While each custodian profiled this month has a different set of priorities, it is clear that all of them are investing heavily to support advisors in 2016. These investments should positively impact advisors and their clients in the year ahead.