At the end of April, Charles Schwab and Texas Tech University announced the creation of a Schwab Technology Complex on the University’s campus, and also named Danielle Winchester as the first Schwab Research Scholar.
Click the link to view the Charles Schwab and Texas Tech University press release.
This is a fairly smart move for Schwab as currently there is no dominant portfolio management software platform in the independent investment adviser space. According to survey results in Joel Bruckenstein’s 2007 Software Survey in Financial Planning magazine, Schwab’s PortfolioCenter platform captured just 12% of the adviser market space, trailing behind Morningstar’s Advisor Workstation (28.3%) and Albridge (16.3%).
According to a recent article in Investment News, Texas Tech’s financial planning program has more than 300 enrolled students. That is a large group of potential users of Schwab’s new technology center who all will likely learn about Schwab Institutional’s platform and technology (namely PortfolioCenter).
I would not be surprised at all to see Schwab’s penetration in the portfolio management software segment of the adviser industry increase steadily over the next five years. Firms currently using Schwab’s tools will soon be able to hire qualified candidates that require little to no training on the existing platform, and firms using other technologies may be persuaded to change platforms due to the increase in supply of employees who know the Schwab interface.
How long will it take for Schwab’s PortfolioCenter to become the number one portfolio management program out there? Albridge should provide PortfolioCenter a significant challenge, but I suspect that in less than three years, PortfolioCenter will overtake all other platforms as the most adopted program in the marketplace.
Let’s hope that I continue with this blog to review my prediction in three years time.
