Schwab technology undergoes metamorphosis

Editor’s note: I have phone calls in to other Schwab Advisor Center beta testers and when I hear from them, I will add their comments to this article.

In the world of RIA technology platforms, Charles Schwab Advisor Services is batting clean-up after many of its competitors completed overhauls of their systems.

The San Francisco-based company hit a solid line drive with its release of Schwab Advisor Center today. The move is significant because Schwab has not overhauled its system in about a decade and since then competitors have been busy revamping their own. Advisors give top marks to Fidelity Investment’s WealthCentral, TD Ameritrade’s upgraded Veo and Pershing’s release of NetX360. Even Scottrade announced its completion of an RIA platform overhaul in June.

Schwab now has the opportunity to set itself apart from the competition again, according to Patty Meneley, chief operating officer of Sargent Bickham Lagudis LLC, which manages $600 million from Boulder, Colo. “They were a leader [after the last website overhaul] and I think they sort of coasted on it for a while,” she says. “I think they were always on a par with their competitors and I think this is re-establishing them as a leader. It will become once again a gold standard.”

Meneley is familiar with competitive websites because her firm uses the services of a number of them including Fidelity and TD Ameritrade, she says.

Schwab’s new web platform will help save advisors time and money but it will be more competitive in coming years, according to Mike Golaszewski, managing director of Schwab Advisor Center who says that his company’s clients can expect to see new modules added regularly.

“I view this as version 1.0 but I think we’ve created some rich value,” he says.

Schwab Advisor Center took two years to develop on Microsoft.net and it was released for beta testing by 60 clients two months ago.

The giant effort has created a difference in capabilities that is as stark as between night and day, according to Sean Cook, a beta tester and president of DCA Global Wealth Management. His firm, which manages $180 million from Norcross, Ga., used the old Schwab Institutional website for years.

“Before we just didn’t use [Schwab’s website] very much with the exception of logging on to read an article,” Cook says. “I never used it. Now I’m logged on all day.”

The most important change was that Schwab finally enabled RIAs to view accounts by household. Previously, a husband and wife’s six or seven accounts couldn’t be viewed holistically — a deal-breaking inconvenience, Cooks says.

The inability to aggregate accounts by group necessitated that an advisor use its portfolio management system for purposes beyond its intended capabilities. The problem is that a PMS tends to carry outdated information because downloads occur daily.

It’s also not a good dashboard for an advisor to broadly view different categories of information, Cook says. Such a dashboard is needed to field a hail of questions by phone from a client without stumbling.

Site is good dashboard

“The new website does a good job of starting to fill the gap” as a dashboard, he adds.

Schwab is able to show both the balances and the positions held by a household. The downside is that it still does not show transactions by household, Cook says.

He is also looking forward to a day when the system allows an advisor can name an account how he chooses – a feature some competitors’ systems have.

On the plus side is that Schwab Advisor Center has a “hidden benefit”, Cook adds. Accounts not held in the portfolio management system can now be viewed much more easily.

The new website has paid big dividends for Sargent Bickham Lagudis as far as data reconciliation goes. The firm hires an outside person to assists with this task.
“It’s much easier to pick up the ball when she’s out of town,” Meneley says.

The one difficulty her firm is having with the technology is getting everyone to make the switch over from the old site, which Schwab will continue to make available indefinitely.

“People are creatures of habit,” she says.

Editor’s plea: Technology can be particularly difficult to judge fairly and it is very useful to hear about from peers. Please offer your thoughts on Schwab’s rollout of its Advisor Center.