Most advisors think of the RIA custodial space as the province of four behemoths: Schwab, Fidelity, TD Ameritrade and Pershing. In reality, there are many players who are stepping up their game, enhancing their technology and broadening the array of choices RIAs face.

LPL Financial is well-known in the marketplace as the nation’s largest independent broker-dealer, with more than 13,500 financial advisors on its platform; however, you may not be aware that LPL Financial is now among the five largest RIA custodians. In 2008, the firm began offering custodial services to independent RIAs, and since that time, LPL has attracted more than $55 billion in assets to its platform.

The person with the primary responsibility for making sure that LPL financial technology meets the needs of both advisors on the B/D platform as well as those advisors on the independent RIA platform is Victor Fetter, chief information officer (CIO) and managing director at LPL.

Fetter is relatively new to the financial services world, but he is well versed in technology. Prior to joining LPL in December 2012, Fetter was CIO, CTO and vice president of online product engineering at Dell. In this role, he oversaw Dell’s online strategies in more than 130 global markets serving consumers, midsize businesses and large enterprises. He has spent a significant amount of time over the past year meeting with advisors to better understand their businesses and their needs.

Vetter says that LPL is taking a holistic approach to advisor technology. “We recognize that there are many emerging technologies that can benefit advisors,” he says. He also acknowledges that not all advisors consume technologies the same way. Some want a turnkey platform so that they can devote more time to running their business, while others want more flexibility to meet a specific need. LPL is developing its platform with the needs of both types of advisor in mind.

“Our strategy is to focus our technology resources on what matters most,” he says. First, LPL wants to make sure its platform meets the fundamental needs of advisors, allowing them to perform their daily tasks quickly and efficiently. Second, the company is analyzing emerging technologies to see where it can add value for LPL advisors. Third, LPL is looking for ways to expand the horizon of advisor technology by doing things differently from the way things have traditionally been done.

For example, the company asks: Where is there a desire in the turnkey space that is not being addressed? Or, where is there a desire for choice that is not being met? The company then explores how it can do something differently to benefit its advisors.

Recently, LPL has been building on the success of its mobile platform, which it launched last summer. By the time you read this, advisors will have had full access to their book of business through the mobile platform. The company is also working on improving the richness of data that it provides to advisors. In other words, it doesn’t just want to make data available to advisors, it wants to deliver it in flexible ways that make the data actionable.

Fetter emphasized that the new platform is robust and secure, yet flexible. LPL intends to offer choice on the front end while ensuring tight integration. He says that LPL is overhauling its account opening process to support integration, which will facilitate marketing and lead generation. The account opening process will be extended to mobile devices, too.

Enhancements to the portfolio management suite are coming soon. The core reporting engine will receive an upgrade, as will performance reporting. The latter will include more tailored reporting and advanced analytics. By midyear, LPL expects to launch an enhanced version of its Resource Center.

Scottrade Advisor Services was founded in 2005. Since that time, it has grown to become one of the top 10 advisor custodians. It currently serves more than 1,250 advisors on its platform. Scottrade does not impose an asset minimum, nor does it charge an enrollment fee. Initially, its advisor custody platform was generally considered to be somewhat lacking when compared with those of industry peers, but recently the firm has been making strides to catch up.

According to Brian Davis, senior vice president and head of Scottrade Advisor Services, the firm’s main focus has been on partnering with some of the more highly utilized third-party providers in the industry. For example, in 2013, Scottrade inked an enterprise deal with Redtail Technology to bring not only the popular Redtail CRM software to Scottrade advisors but the Redtail document imaging solution and the e-mail archiving solution as well. Scottrade advisors can purchase the Redtail package of products at an attractive discount. 2013 also marked the year that Scottrade completed an enterprise agreement with MoneyGuidePro, an industry-leading financial planning package, making it available to Scottrade advisors at attractive pricing. According to Davis, Scottrade can offer advantageous pricing because it contracts with the provider and handles the billing; this lowers the cost of the service to the end advisor.

For the past 16 months, Scottrade has been preparing its next-generation custodial platform, which is scheduled for release in the first quarter of 2014. According to Davis, the platform is designed specifically to meet the needs of Scottrade Advisor Service’s core client base: state-registered advisors with under $100 million in AUM. “We are not looking to be everything to everyone,” Davis says, “but we do want to be the best at serving our core target market.” He believes the new platform will position Scottrade to do just that.

“When advisors interact with our custodial platform, they want it to be intuitive,” Davis says. “They don’t want to spend a lot of time on routine tasks; they want to get in, do the work and get done.” That is the experience Scottrade intends to deliver with the new platform.

The initial results are promising. According to Davis, Scottrade has a beta group of advisors testing the platform already. These advisors were intentionally given minimal training on the platform so that Scottrade could better gauge the platform’s usability. So far, advisors are asking very few questions, an indication that they are able to navigate the interface on their own.

The first version of the new platform emphasizes enhancements to trading, block trading and the uploading of portfolios to the platform. Additional enhancements will quickly follow on a regular basis. For example, by the end of the first half, Scottrade expects to roll out a basic rebalancing solution powered by Advisor Software (ASI) technology.

With a new platform ready to be released, plus additional enhancements and partnerships in the works, Scottrade looks to be making great strides in its advisor technology offering.

Raymond James
Raymond James can support a wide range of financial advisory business models. Some advisors choose to be an employee of the firm, while others choose to operate as independent contractors. In the past few years, Raymond James has placed growing emphasis on custodial services to independent advisors who operate their own independent RIA firm or those who plan to start one.

Before we get into the specifics of the recent and new technology initiatives of interest to advisors, it is worth noting that Raymond James offers a Web-based tool called the ADVISORCHOICE Business Model Comparison Tool ( This tool allows advisors to compare two or more business models (traditional employee, independent employee, independent contractor, hybrid RIA, independent RIA, or bank and credit union advisor) side by side, according to factors that include qualifications, payout, resources, technology, benefits, location, research and compliance. Although it is by no means comprehensive in all respects, it is a very good place to start investigating the characteristics of the various business models supported by Raymond James.

One ongoing differentiator that Raymond James believes distinguishes it from the competition is its platform’s versatility. It offers a turnkey, integrated platform for those who want it, but independent RIAs can select from a wide variety of third-party applications if they choose to do so. “We make data feeds available to just about all the popular third-party applications,” says Vin Campagnoli, the CIO at Raymond James. “Flexibility is part of our DNA.”

The core of the Raymond James offering, in addition to the custodial platform, is CRM, financial planning software and portfolio management software. The custodial platform itself has some elements of CRM built into it, but about 40% of advisors on the platform use a full, Raymond James customized version of Microsoft Dynamics CRM. For financial planning, it offers a custom version of MoneyGuidePro. “MoneyGuidePro is tightly integrated with our platform,” says Campagnoli. “We use it as a standard for how integrations should be done.” The firm uses FolioDynamics for its client proposals, portfolio management and rebalancing.

Campagnoli says that his firm has three main objectives for 2014. First, it intends to make reporting consistent across the platform. The firm wants the look of the reports to be consistent, and plans to give advisors the ability to create a full periodic report with the click of a single button (or allow them to schedule it in advance and run automatically). Second, Raymond James will continue to build out its advisor platform, providing more deep integrations such as the one it has with MoneyGuidePro. Profiling, proposal generation, planning and monitoring should be seamless, according to Campagnoli. Part of this initiative includes making customization seamless. Campagnoli acknowledges that all advisors operate a little differently, so his team wants to allow advisors to easily customize their own screens, for example, so individuals can optimize their views.

Finally, Raymond James is looking at branch automation. “We can do a much better job of automating common tasks,” he says. Money movement and the account-opening process are two examples of tasks that will be receiving a makeover in the coming months.

RBC Advisor Services
RBC has been offering correspondent services since 1979. Today, it is the fifth-largest clearing firm, serving more than 4,000 advisors with more than $42 billion in assets. RBNC launched RBC Advisor services in 2008. Today, it serves approximately 50 RIA firms with $10 billion in customer assets.

RBC Advisors does not offer the level of technology choice found at other firms, but it does “eat its own cooking.” According to Kathy Gremillion, director of business technology initiatives at RBC Advisor Services, independent advisors have access to essentially the same tools as RBC’s own private client group.
This includes a robust trading platform, back office services and a client portal called Investor Connect. This portal was recently launched with some enhancements and further enhancements are on the way. Currently, advisor clients can gain access to statements, confirmations, positions, trading activity and cost basis. In addition, clients can create hypothetical portfolios. Advisors also have the ability to private brand the site with their logos. RBC is considering using client portals to electronically deliver performance reports to clients, but this work is still in the exploratory stages.

Most RBC advisors use the RBC version of WealthStation for portfolio management. Independent RIAs have the option of using other third-party providers of portfolio management and reporting software, with RBC providing data feeds. RBC is jointly developing an upgraded portfolio reporting package with Morningstar that is scheduled for release in late spring. It is anticipated that this package will include approximately 35 portfolio management reports. Some closely mirror those of Morningstar Office, while others are unique to RBC. Currently, there is no integrated rebalancing and model trading tool, but Gremillion says the firm is currently evaluating one for future inclusion in the platform. Financial planning software on the independent advisory platform is also powered by SunGard. There are no other options at this time.

RBC is in the process of rolling out a new CRM system to its private client service group that is powered by NexJ Systems. Gremillion says that this robust CRM tool will be rolled out to independent RIAs in the fall.

Wrap Up
If there is one common thread that runs through all of the custodians we’ve covered over the last several months, it is change. Not a single custodian is resting on its technology laurels. Each and every one is investing heavily to maintain standing as peers continue to innovate. While it is clear that some firms are farther along the innovation curve than others, it is equally clear that the technology tide is rising, and that it is lifting all participants to some extent. This trend bodes well for advisors and the industry as a whole, and it shows no sign of abating in the foreseeable future.