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Schwab escalates the RIA custody arms race by releasing more plug-in business practices called workflows

TD Ameritrade, Schwab and others have designs on inserting neural pathways into advisor practices but one expert questions the workability of automated workflows

Friday, June 22, 2012 – 3:36 PM by Brooke Southall
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Chris Cordaro: We have 25 different workflows in our system....If we waited for Schwab to develop best business practices for us we'd be five years behind.

Brooke’s Note: Talk about unsexy — “workflows” might win the award for the least exciting topic in the RIA business. I had to drink an extra cup of coffee (and control myself from downing some of Neal’s bootleg whiskey) just to get started. Still, I believe this topic merits attention. If you read the no-nonsense comments in here by Bill Winterberg, you’ll know more than 99% of humanity and not have to delve back into the topic again for a long while.

Charles Schwab & Co. announced today that it is making 28 workflows available to cover lead generation, client onboarding, service requests and business operations. The announcement followed hard upon a bigger one related to its tecchnology.

RIAs that keep assets under custody with Schwab Advisor Services can download the X’s and O’s of management practices as way to make greater use of whatever customer relationship management system they use. See: As advisors flunk social media 101, CRM makers are starting to pick up the slack.

Cracking the code

The release of this sheaf of instruction manuals is an admission that technology can take you only so far.

“We know that technology by itself isn’t enough to help advisors achieve maximum efficiency and scale, it needs to be married with consistent business practices and processes — that’s the important role that workflows play,” Neesha Hathi, senior vice president of technology solutions for Schwab Advisor Services, said in a prepared statement. See: T3 reflections: Where to watch for the next big advances in RIA technology.

But technology and operations consultant Bill Winterberg questions whether custodians are the right ministers to preside over this kind of marriage.

“Give custodians credit for tackling the lack of formal workflows in most advisory firms, but in my opinion, addressing complex, multi-step workflows properly is very hard to do,” says Winterberg, a certified financial planner who owns FPPad.com in Dallas. “At its core, designing workflows is like writing software code. One needs to consider all of the potential corner cases in a set of processes and identify what needs to be done for each situation, not just the main process.”

Andrew Lin: [Schwab is] creating a great starting point for us to customize into our own workflow process with minimal additional effort.
Andrew Lin: [Schwab is] creating a
great starting point for us to
customize into our own workflow process
with minimal additional effort.

Andrew Lin, head of strategic development for Signature Estate and Investment Advisors LLC, a Los Angeles-based RIA with about $2 billion in assets under management, says that Schwab seems to be sensitive of these workflow issues — after sitting through one of its workshops where they were addressed.

“We came out very excited. I think very few advisors (our practice included) will be able to take it off the shelf and use it “as is” without a little bit more customization. Instead of trying to create an off the shelf workflow as a magic panacea for everyone, they have done a very thoughtful job of highlighting key steps that are common to advisor practices and creating a great starting point for us to customize into our own workflow process with minimal additional effort.”

Lin is also the former director of investment operations at United Capital Financial Advisers


Jon Patullo, managing director of technology product management at TD Ameritrade Institutional, says that a good example of workflow in action is how a firm handles a client meeting with all its attendant tasks — ranging from printing out performance reports to taking the coffee orders in an organized, logical and complete manner. See: TD Ameritrade’s technology, Veo, wins high praise from advisors so RIABiz took a look.

But TD is taking it one step further, he says. Ideally, the CRM system would send out the various tasks to the various parties involved in conducting the meeting.

Schwab chart shows that workflows can make a difference.
Schwab chart shows that workflows can
make a difference.

“The advisor doesn’t have to do all that and makes sure things aren’t slipping through the cracks. It’s automating a process that may be manual today.”

Not that tough

But that automation isn’t always like setting the timer on the microwave, according to Winterberg.

“Simple workflows, for example when A is finished, move on to step B, and when that’s finished, move to step C, are straightforward to design and implement. Custodians should have success in identifying good practices for simple, sequential processes like this,” he says.

“But complicated workflows with multiple conditions can quickly become unmanageable. A basic example would be needing to get multiple signatures for a check exceeding a specific amount. That workflow creates a branch; one task goes to one signatory, a second to another, and both must be completed before the workflow continues. Add in additional complexity of issuing e-mail notifications after a specific time frame, or escalating the task to a supervisor after a longer time period, and the workflow diagram soon resembles spaghetti.”

Get out the map

Bill Winterberg: Complicated workflows with multiple conditions can quickly become unmanageable.
Bill Winterberg: Complicated workflows with multiple
conditions can quickly become unmanageable.

TD Ameritrade hired ActiFi Inc. to generate the workflows for its advisors and makes them available for free to its advisor clients.

Fidelity Investments’ John Eidson said his company is placing emphasis in this area.

“This is definitely an area we feel strongly about,” he says. “Since 2008, Fidelity has engaged with multiple market leading providers to help advisors seeking assistance with streamlining and automating highest priority workflows: Bringing on 1) New Clients, 2) New Accounts, and 3) New Money. Fidelity has implemented single sign-on and streamlined navigation & workflows between WealthCentral and leading 3rd party technology providers”

But Schwab emphasizes that advisors don’t always need to think of workflows as something connected to a computer. It says the workflows are applicable to advisors regardless of which CRM system they use in their office, and even if they are not using a CRM at all.

“Workflows are essentially actionable road maps that guide advisors and their staff along a consistent and efficient route for common office tasks,” Hathi said in the release.


In addition to the 28 workflows, Schwab’s arsenal already includes five workflows customized for advisors who use Junxure CRM and five workflows for advisors who use SalesForce. The Workflow Library was first launched in October, and as of May 31 more than 250 advisor firms have downloaded nearly 500 workflows. See: Schwab connects CRM to account opening for RIAs.

But Schwab was too slow on the workflow trigger for Chris Cordaro, CEO of RegentAtlantic of Chatham, N.J.

Jon Patullo says workflows can encompass who makes the coffee and when for a client meeting.
Jon Patullo says workflows can encompass
who makes the coffee and when
for a client meeting.

“We adopted Microsoft CRM (Dynamics it’s now called) about eight years ago,” he says. “One of the features that we really liked about the program was the ability to build out workflows. We have 25 different workflows in our system. Everything from Roth conversion to cash needs. We continually revise and improve these workflows. If we waited for Schwab to develop best business practices for us we’d be five years behind.”

Indeed, CRM is not exactly artificial intelligence, so RIA firms themselves still have to play a big role to make this work, according to Winterberg.

“If workflows implemented in technology tools can automate actions traditionally completed by advisors, offices can run significantly more efficiently by removing dependencies on human input or action. Even if workflow diagrams are delivered in documents, someone who knows what they’re doing needs to properly program CRM or document management software to successfully execute those workflows.”

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January 6, 2022 – 10:33 PM

Oisín's snippets: Charles Schwab brand goes up on Omaha's TD Ameritrade stadium, home of college baseball world series • Interactive Brokers lands an RIA custody insider, Charlie Latimer, to climb the custodian ladder

The TDA brand lives on until the techies figure out how to make two systems into one, but change is in the air in Omaha, while Interactive Brokers gets a leg up in the custody business with a new hire.

December 27, 2021 – 9:58 PM

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February 6, 2021 – 2:39 AM

Goldman Sachs nabs TD Ameritrade's Darla Sipolt for RIA custody; Kate Healy, Jim Dario and Peter Dorsey are among 1,000 staffers cut by Schwab post TD merger

Included in the wholesale reduction of the Omaha, Neb.-based broker's redundant talent, about 40% of TD Ameritrade's marketing staff also got word today they have no future with their San Francisco-based owner

October 27, 2020 – 1:20 AM

See more related moves

Mentioned in this article:

TD Ameritrade
Asset Custodian
Top Executive: Tom Nally

CRM Software
Top Executive: Greg Friedman

CRM Software
Top Executive: Marc Benioff

ActiFi, Inc.
Consulting Firm
Top Executive: Spenser Segal

Consulting Firm
Top Executive: Bill Winterberg



June 25, 2012 — 2:19 AM

I would tend to agree with Pete. CRM platforms are rarely a great solution for task, workflow and/or global project management platforms.

Moreover, workflows are rarely 'one-size-fits-all’. Why have 500 downladable workflows? Is each client relationship the same? Does every client drop what they’re doing and answer emails, sign forms, answer calls; from an automated service?!?

Communication and understanding of workflow CONTEXT is key. Is a custodian going to reach out to an advisor when a workflow task has gone stale? Not likely. Advisors need attentive and dynamic staff that understand the contexts.

Don’t get me wrong. Workflows are essential…..for back office and associate/assistant persons that understand the holistic needs of clients and advisors. Where can advisors find such scalable resources? Dynamic Wealth Advisors.

Stephen Winks

Stephen Winks

June 26, 2012 — 1:51 PM

The spagetti factory observation suggests that high level expert investment counsel is unmanageable, which is not the case, it just requires a comprehensive understanding of advisory services. Thus, to those that have a high level of understanding of a small aspect of advisory services—advisory services may seem unmanageable, which perpetuates the myth of impossible complexity—placing massive on professional management. Acute knowledge in narrow areas is important for an optimal solution, the problem is there is no context from which an optimal solution can be achieved.

So far, there is no will or laditude to execute on the part of professional management within the industry to advance the necessary innovation to support fiduciary standing so advice is safe, scalable, easy to execute and manage as a high margin business. This is partly beause it places operations staff in an entrapreneurial position in which they feel awkward, in part because it places top management in a position where theymust exercise expert judgement in areas in which they are not familiar and in part stresses the culture of a brokerage business model where brokers are neither accountable or responsible for their recommendations. We all know the right thing to do. Leadership is in short supply, yet a rennaisaance in advisory services awaits which outdates everything that has come before it.

Harvard’s Clayton Christensen observes, the biggest mistake established industries make when faced with industry redefining innovation is to look at innovation in the context of its existing business model, when a new business model is in order. Has the industry’s existing business model become a high cost low value added option which is rapidilt becomming obsolete ? In any case the consumer and the advisor wins, as in a free market there has never been a case where the best interest of the consumer has not prevailed. The trust and confidence of the investing public is in jeapardy—where is principled leadership ?


Stephen Winks

Stephen Winks

June 26, 2012 — 7:13 PM


There are tens of areas that require the granulatity of a solution you cite and then some when it comes to an integrated solution. Certainly managing complexity and ease of use are near the top of the consideration criteria but topping them are effectiveness and safety which assure reliability. First firms (broker/dealers and custodians, more so than RIAs other than the very largest) need to jump of the bandwagon to assure the advice they support their advisor in executing is safe, scalable, easy to execute and manage as a high margin business. Second is how good is the solution.

The industry hasn’t yet decided whether it wants to support fiduciary standing even with a Congressional mandate to do so (illustrates the power of the industry at the expense of the consumer). Until the industry supports fiduciary standing and the trust and confidence of the investing public, everything else is secondary. There is no need for an excellant trading system in the consumer’s best interest, if the consumer’s best interest doesn’t matter to the industry.

Thus, in my humble opinion, we either wait for the best interest of the investing public to be important to the industry or for a critical mass of advisors to insist on the best interest of the investing public prevail.

Nothing is going to happen one advisor at a time, as large scale innovation is required which makes expert personalized advice safe, scalable, easy to execute and manage as a high margin business at less cost than a packaged product.

As much as individual advisors benefit from innovation, it may require too much for the advisor to managea broad range of innovation unless incorporated in a simplifying authenticated expert overarching prudent process.

Otherwise, you require the advisor to add sucessive layers of complexity that may stress a small enterprise, which just wants to benefit from the use innovation rather than having to manage it all. This is where broker/dealers used to be helpful, when innovation was not a choice between serving the consumer’s best intererst rather than the broker/dealer’s.

Through process we greatly simplify the industry, increase margins, exponentially increase the advisors value proposition and regain the trust and confidence of the investing public.


Peter Giza

Peter Giza

June 22, 2012 — 5:35 AM


I couldn’t agree more with Bill Winterberg’s statement “Complicated workflows with multiple
conditions can quickly become unmanageable.” And for the life of me I don’t understand how CRM became the center of the universe with regard to work flow management.

I know that Junxure’s Greg Friedman will battle me to the death on this, but a Client Relationship Manager is just that, a respository of client data made to make collection of private client data easier.

CRMs were never designed to automate and control work flows which are made up of tasks both synchronous and asynchronous in nature. Management of swim lanes, statefulness, bi-directional data flows, inter-process communication, and so forth were never the target of the CRM.

There are task management engines specifically designed to handle these problems and they are very good at doing them. Companes such as TaskServer for which RedBlack’s chief architect Roel Vlemmings holds a patent, have the infrastructure and intelligence needed to control complex workflows.

Other work and data flow automation products such as Dell’s Boomi and Jitterbit are well-suited to glue it all together.

But the industry has decided that CRM is the center of the proverbial universe for now. I wonder what Galileo would say if he were here? Then again I wonder if we would burn him at the stake for pointing out the obvious.


Stephen Winks

Stephen Winks

June 26, 2012 — 8:39 PM


A decade ago I put together a group of 50 top advisors, technologist and technical experts to define advice based on statute, case law and regulatory opinion letters, establishing best practices and the enabling resources (process, technology, work flow management, conflict management) necessary to support expert fiduciary standing. I incorrectly thought it was the unknown that precluded the industry from supporting advisory services. It wasn’t, it was the lack of the accountability and responsibility of brokers for their recommendations. It didn’t matter what was in the client’s best interests.

A decade later, many of those very top brokers are now advisors and fiduciary standing is now a regulatory imperative.

I am in the process to see if we can get hundreds of billions in interest to support the development of large scale institutionalized support for fiduciary standing that will make advice safe scalable, easy to execute and manage as a high margin business at the advisor level.

Feed back has been most enthusiastic with just a few of the well know advisors I have called. Over the comming month or two, I believe the reconstitution of the old standards group can make it in the industry’s enlightened best interest to make advice safe, scalable, easy to execute and manage as a high margin business which will restore the trust and confidence of the investing public, facilitating an unprecedented level of investment and administrative counsel at a lower cost than a packaged product. All dedicated to the public domain, to assure perpetual innovation in the clints best interest.

Either the brokerage industry’s inertia in supporting fiduciary standing will be swayed by its enlightened best interest or custodians will be blessed with a faster better and cheaper mechanism to support advisory services.

No coersion, just the best interest of the advisor and the investing public prevailing in a free market.


Peter Giza

Peter Giza

June 26, 2012 — 4:38 PM


I don’t think we are inferring what you state, and I quote:

“here is no will or laditude to execute on the part of professional management within the industry to advance the necessary innovation to support fiduciary standing so advice is safe, scalable, easy to execute and manage as a high margin business”

Note: In this entire context I use the term “firm” to represent any business, not just advisors.

However, having been intimately involved with workflow automation ranging from scheduling fluorescent light bulb change-outs in buildings measured in acreage; cell phone build and configure; to financial services pitch book creation and management; I can tell you that work flows are 75% repetition and 25% ugly, nasty, spaghetti tasks that tend to be highly fixed to the process and/or the firm.

If work flow automation were so simple to put into a neat little box and then copied from one firm to another, the work flow management business wouldn’t have so many consultants pulling down six figure plus salaries.

Additionally a firms’ secret sauce may be tied to its processes and procedures. These represent very unique ways of thinking and scaling that many other firms may not have thought about. Speaking in that context, the originator of those process flows is not likely to share them if they represent significant competitive advantage.

This is not conjecture. I have been told to my face by advisors that they do not want to see normalization. They like to see the technical complexity because they get it and if their competition can’t figure it out – tough. The business case for discontinuity has been made in that argument. I believe that normalized or not, if you do not know how to use tech or build a business, it can be cookie-cutter and you still will not be able to leverage it. However, I digress, back to work flows automation.

Let’s just pick on trading and rebalancing since its so near and dear to my RedBlack heart. One of the reasons advisors like RedBlack has all to do with work flow management flexibility AND on demand training. I mention training because it is so instrumental in the work flow discovery process.

One might imagine that trading is a simple process of portfolio monitoring, action identification, rebalancing, trading and trade reconciliation – It just isn’t that simple. That is one of the reasons that Excel no longer meets the needs in this area. Loss of opportunity, the inability to act adroitly, lack of or poor compliance, etc., are all reasons that advisors are looking to third party applications like RedBlack to help fine tune their practices.

Let’s take a simple example – High Plains Drifter:

1) Identify accounts / households out of drift tolerance
2) Identify which positions need immediate attention
3) Cull out accounts / households not needing immediate attention
4) Determine needed position action, rebalance, swap, close, etc.
5) Execute action
6) Review resulting trades
7) Adjust trades as necessary; adds/changes/deletes
8) Jump to step 5 or step 6 as necessary
9) Submit for final review
10) Submit to custodian

The ten basic steps above may become 20 or 30 steps for other firms depending on the level of documentation, auditing and review processes and reviewers required. The devil is in the detail. The above example is by no means comprehensive and is a thumbnail of an actual process.

It goes without saying that every firm has their own way of doing things. And while 75% of this may be normalized into standard work flows, that last 25% is a killer. Most firms (not just picking on advisors) do not really know what their work flows look like until they really sit down and walk through them lock-step with someone and this is where the training-discovery phase comes into play so prominently.

You could build some basic automated work flows based on the above, however how much of it can you truly automate? Things such as audit archiving and messaging can be automated, but human intervention is needed at the review stages in all cases. Even on a basic position swap, I know of no firm that will just generate the swap and then send the trades to the custodian without doing its’ due-diligence to insure all trades are a expected. In fact RedBlack will warn you prolifically to do so.

While I do agree with your points on fiduciary responsibility, I don’t think its’ all negative and I do believe there are many software vendors out there like RedBlack that are really trying to make things better for the industry at large.

What we need now is for the industry, starting with the advisors themselves, to jump on the bandwagon and help the vendors by insisting on collaboration and standards. Don’t you agree?



Peter Giza

Peter Giza

June 26, 2012 — 8:59 PM


I hope your efforts prevail. I will be looking for an announcement with great interest.



Peter Giza

Peter Giza

June 26, 2012 — 8:02 PM


I couldn’t agree more with the spirit behind your statement, and I quote:

“a critical mass of advisors to insist on the best interest of the investing public prevail”

and that is precisely why I drafted the proposal I referenced in our last discussion and offered you the opportunity to comment and contribute to.

The overriding spirit is Advisor Involvement in their own destiny. As you state either we wait on the industry or we push the industry. Whether that is for fiduciary standards that protect the investing public or provide better technology, compliance, etc., ad nausem., it is incumbent upon those who are dissatisfied to step up to the plate and start hitting the ball in a direction that makes sense for all not just a privileged few.

Neither you, or I, or individual companies like RedBlack can make things change. It will require something along the scale of an Internet Open Letter to the industry with wide-scale advisor buy-in and involvement to get things off and running. Even then, if working groups with charters and action items are not formed then the best of intents will die with such a letter.



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