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Schwab's Project C now has two tiers and three new names

The company's grand technology plan will include a modular plan and a turnkey package

Tuesday, June 29, 2010 – 10:00 PM by Brooke Southall
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Neesha Hathi is prepared to have Schwab accommodate most technology vendors but to marry far fewer

Brooke’s Note: Technology builders always face the choice of whether to prepare their offerings in relative secrecy or to state their plans in advance. Schwab has largely chosen the latter course with its plans to create the biggest, 'baddest’ ecosystem of RIA technology. The bad news is that such metaphorical claim jumping subjects them to show-me-the-product criticism. But Schwab seems to have two things going for it as it plows forward — aside from resources non pareil and the market power to strongly encourage participation. It can — and is — soliciting advisor input every inch of the way to ensure they deliver what’s needed. And they have Neesha Hathi and Bernie Clark who exude a confidence about the plan that suggest that they have been rolling out grands technological ecosystems since grade school. Here’s the latest — including some chiding from a powerful vendor.

Schwab Advisor Services has given its effort to integrate technology a name – Schwab Intelligent Integration – and is offering a few more details about what will happen to third-party vendors who aren’t on its short list for full integration.

Previously called Project C, the integration effort involves bringing a group of industry-leading technologies under the San Francisco-based custodian’s wing and developing a way to have them operate seamlessly together. See: Schwab unveils a plan to create a grand ecosystem of top technology vendors to RIAs

The grand plan was the center of attention at Schwab’s EXPLORE conference held last week on Amelia Island, Fla. and Schwab senior vice president Bernie Clark is using it as exhibit A for how Schwab is going to help advisors who see a sink-or-swim competitive landscape in the coming decade.

“The 'aha’ [from EXPLORE] is that you can’t grow in a linear way and be successful,” he says. When confronted with these concerns at the Florida confernce of Schwab’s biggest RIA clients, “we were able to say: this is how we’re kicking the next decade off” with Schwab Intelligent Integration.

Advisors will have much more time for winning assets if they aren’t busy re-keying information into multiple software applications, says Neesh Hathi, vice president of technology solutions and head of Schwab Intelligent Integration in a release.

The company hasn’t yet announced the list of outside vendors that will be integrated. But, already, the idea that some vendors will be left off the list has caused some angst in the industry from advisors who want to use other vendors and from vendors who want to reach Schwab’s RIA client base.

As part of its renaming announcement, Schwab re-emphasized that it will create a tier to embrace vendors that fail to make its short list of integration partners for the ambitious drawing-board technology project.

Under Schwab OpenView Gateway, it will allow advisors to integrate with leading third party and Schwab technologies in a range of key categories, including CRM, portfolio management, financial planning and document management.

The next tier up — Schwab OneView Office — is a turnkey bundle that contemplates a technological utopia encompassing CRM, the Schwab Advisor Services custody platform and portfolio management. It will be targeted largely at breakaway brokers who are accustomed to such an all-in-one solution.

Schwab acknowledges that Schwab Intelligent Integration is still months from coming to fruition. Advisors are excited – but also skeptical – about whether it will all come together. See advisor comments: A glimpse inside Schwab’s EXPLORE conference

And some vendors also see the embryonic state of the technology plan as the elephant in the room.

“The difference between ours and Project C is that ours exists,” says Connor Wilson, manager of institutional sales at Tamarac. Since September, his Seattle-based firm has sold an integrated platform that includes re-balancing software, CRM and portfolio management.

Wilson adds that he believes that Tamarac is on Schwab’s short list for integration and that the custodian’s effort is “welcome news.”

One reason that Schwab Intelligent Integration will take more time to come to fruition is because the company is still seeking advisor nominations for what vendors they most prefer for the various applications.

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Envestnet | Tamarac
Portfolio Management System, CRM Software, Trading/Rebalancing
Top Executive: Stuart DePina

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