Schwab’s plans to take robo-advisory services to the next level
Schwab has announced a series of enhancements to its Institutional Intelligent Portfolios (IIP) and clearly plans to set new standards in the robo-advisor sector. Schwab said it will add new asset classes, giving it an advantage over other popular platforms, and also expand the type of account registrations to include custodial accounts, inherited IRAs and organisation accounts. It will also add a multi-program support for firms with multiple offices or advisors looking for a unique robo-offering, to the white-label robo, which has attracted nearly 500 advisors since launching in June. Schwab is also testing a new online portfolio management system, Advisor Portfolio Connect, which shares infrastructure and data processing with IIP, and is designed to remove mundane back-office tasks for advisors. Yesterday, as we reported, Walt Bettinger, the firm's CEO and President dismissed the business model of many robo-advisory startups as one built to flip rather than provide a long-term solution.

Charles Schwab announced enhancements to its Institutional Intelligent Portfolios automated investing platform as part of its 2016 roadmap at the IMPACT 2015 conference in Boston this week.

The custodian confirmed that it is looking to add more asset classes beyond ETFs to the IIP, giving it an advantage over other, more popular robo-advisors in the marketplace, according to Brian Shenson, Schwab's VP of Advisor Technology Solutions.

The firm is also looking to expand the type of account registrations available to include custodial accounts, inherited IRAs and organization accounts, said Jessica Heffron, Schwab's vice president of advisor services, client experience.

Other plans for IIP include multi-program support for firms with multiple offices or with advisors wanting a unique robo offering, more account funding options, goal tracking and better advisor notifications.

“We have to make sure we stay on top of where the market goes as well as individual advisor’s needs,” Heffron said. She added that the white-label robo has attracted just under 500 advisors since it launched in June.

Shenson also provided updates on Advisor Portfolio Connect, a new portfolio management system in beta testing. He said the online advisor portal is sharing infrastructure and data processing with IIP, with the goal of removing the mundane tasks from the advisor’s back office and improving the front-office experience.

Without giving an expected release date, Shenson said Advisor Portfolio Connect is a “primary focus” in 2016.

In addition to Schwab’s expanding ecosystem of proprietary technology, the firm is also stepping up efforts to support third-party vendors. Shenson said the Intelligent Integration platform will add support for Redtail CRM, Orion and the Envestnet Advisor Suite in 2016.

Lauren Wilkinson, vice president of advisor technology solutions at Schwab, said the priority with the custody platform is continuing many of the initiatives that began in 2015. Wilkinson said the company is working to expand its universe of digital forms and signature processes to make the advisor’s job as paperless as possible. Schwab also wants to expand the new online Service Center to make it easy for advisors to get help when and where they need it.

“We want online help to be as simple and intuitive as calling Schwab,” Wilkinson said. Soon, Schwab wants to make Service Center the central hub for tracking service requests, viewing the status of open transactions, and depositing checks by scanning and uploading them.

John Connor, Schwab’s managing director of trading platforms, said the trading research and rebalancing platform will soon get an auto-updating streaming of quotes and pricing, eliminating the need for advisors to continually refresh. Connor also said his team is looking to enhance online fixed-income sales and will develop a new active trader application that will replace CyberTrader Pro in 2017.