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The Financial Advisor Technology Landscape as of March 2017. Copyright © 2017
The lede!
Betterment announced today that the company will introduce hybrid advice offering with access to an in-house team of financial advisers.
For the full details from Betterment, see the post below from the Betterment website:
https://www.betterment.com/resources/inside-betterment/product-news/smart-technology-licensed-financial-experts-cfp-professionals/
One unfortunate consequence of the new 25 basis point pricing structure is the elimination of the 15 basis point tier that formerly applied to accounts over $100,000.
Reaction on Twitter was swift, as these customers will see their fees increase by roughly 67%.
@Betterment that's an awfully long email i just got just to say you're raising your fees from 0.15% to 0.25% 🙁
— Ian Dees (@iandees) January 31, 2017
This is kick in the face to customers that were saving aggressively to reach the lowest cost .15% management fee.
— Mylo Carditis (@rjpedigo) January 31, 2017
Despite the frustration of customers who formerly qualified for the 15 basis point tier, Betterment Digital’s pricing establishes parity with the pricing offered in the Betterment for Advisors (formerly Betterment Institutional) service.
Since the Betterment for Advisors introduction, I had been critical of the conflict the different pricing tiers presented for advisors who chose to implement Betterment for Advisors for their clients.
I often questioned how an adviser could meet his or her fiduciary obligation to clients with over $100,000 in assets, as that client would pay fees of 15 basis points using a “retail” Betterment account, where a minimum fee of 25 basis points would be charged on a Betterment for Advisors account, for asset management services that I felt were essentially equivalent.
Today, that fee disparity, and the fiduciary quandary, is eliminated, but at the expense of raising fees for customers who qualified for the former 15 basis point tier.
One other observation is Betterment Premium now enters the competitive hybrid advice market, a space dominated by Vanguard Personal Advisor Services, that is also occupied by Personal Capital and the Schwab Intelligent Advisory offering scheduled to debut sometime in the first half of 2017.
Betterment Premium is more expensive than the 30 basis point fee Vanguard Personal Advisor Services and the 28 basis point fee from the upcoming Schwab Intelligent Advisory, but at 50 basis points, the service undercuts Personal Capital’s current 89 basis point pricing.
In an email to current users, Balance Financial, a personal financial management app acquired by TaxAct in 2013, announced it will shut down operations on January 31, 2017.
See the email announcement below:
Balance Financial shutdown email announcement sent to users
Balance Financial was an alternative to well-known personal financial management apps, or PFM, such as Mint.com and Personal Capital that performed account aggregation to deliver a consolidated dashboard of a user’s financial accounts.
In the wake of Intuit’s decision to discontinue its Financial Data APIs, any PFM apps using Intuit’s aggregation had to migrate to other account aggregation options (See How Intuit’s account aggregation shutdown may impact the fintech solutions you use)
One provider, Guide Financial, shut down as a result of the change combined with other changes in its business model (See Guide Financial to shut down operations on October 11.)
I listed Balance Financial as a potential alternative for Guide Financial users, but quickly removed it since I had no success in connecting with the company for a statement regarding support for the application in the near future.
Alas, it seems that TaxACT is not interested in supporting Balance Financial beyond January 31, 2017.
I suspect that the number of advisors using the Balance Financial app is very low, likely below a dozen, so few are likely to be affected by the shutdown. What’s less clear is how many retail customers Balance has and what alternatives they find offer similar functionality and pricing to that of Balance.
Have any tips? Feel free to contact me.
Guide Financial, the financial planning startup acquired by John Hancock in June 2015, told its users via email this week that the company plans to discontinue operations on October 11.
Guide Financial is the first financial adviser technology provider that I know of that has decided to close its operations in the wake of Intuit’s announcement that it is discontinuing its Financial Data APIs for account aggregation. Those APIs will be maintained only for current production developers until November 15, 2016, Intuit said in an email to developers.
In a phone call with Guide Financial, I learned that the company first attempted to contact as many advisers as possible by phone to communicate the news, and those who were not able to be reached received an email with the details of the shutdown on Thursday.
In the email, the company noted that Intuit had recently announced the discontinuation of the account aggregation services that powered the Guide Financial Service. But in my post from March 2015, How Intuit’s account aggregation shutdown may impact the fintech solutions you use, Intuit told developers that Finicity would be providing façade APIs to facilitate the transition from Intuit to Finicity for aggregation services. Guide Financial did not comment on the option to transition to aggregation provided by Finicity.
In the weeks prior to the shutdown, Guide Financial users will not have the ability to request an export of their data contained in the system. Generally, data on clients is limited to basic demographic information and is likely to be found in other systems used by advisers, such as CRM and portfolio management software, so an export of that data would not be useful in most circumstances. Guide Financial said that transaction data aggregated from financial institutions will not be made available.
Guide Financial has offered a brief FAQ on its website regarding the transition, and additional questions can be directed to support@guidefinancial.com
For alternatives to Guide Financial, I can think of a few financial planning and financial dashboard solutions that perform account aggregation to update financial plans. The list of the solutions are below:
Note: I originally listed Balance Financial in the list of alternatives above, but I have not been able to connect with them for any updates. Also, their website’s terms and conditions have not been updated for two-and-a-half years (last updated January 28, 2014). Until I connect with someone at Balance, I’ll keep them listed in this note and not as a viable alternative to Guide Financial.
There are other solutions that perform aggregation (ByAllAccounts, Aqumulate, Quovo, Blueleaf, Wealth Access, etc.), but they generally don’t also have financial planning capabilities built directly in to the program.
If you can think of other solutions that should be on this list, contact me (or tweet me @billwinterberg) and I will update this list.
Last updated: August 30, 2016 at 11:54 AM ET
Intuit’s Financial Data API looming shut down will have a ripple effect across popular account aggregation providers
Intuit’s looming Financial Data API shut down will have a ripple effect across popular account aggregation providers
Quick Take:
On March 15, 2016, Intuit announced they have decided to discontinue the Financial Data APIs (formerly CAD). No new direct Financial Data API (CAD) developers will be allowed to move into production.
The API will be maintained only for current production developers until November 15, 2016 to enable time for migration.
In the wake of Intuit’s decision, Guide Financial became the first adviser fintech provider to announce they are shutting down their service later this year. See Guide Financial to shut down operations on October 11.
Intuit identified Finicity as a solution that will provide a “façade” API interface that translates Intuit-structured API calls into Finicity-structured API calls.
The Financial Data APIs from Intuit allow developers to link to end-users’ banking accounts from within their application.
In September of 2012, Intuit announced that it was opening up the technology that powered Intuit products like Mint.com, Quicken, and QuickBooks to the developer community via a library of APIs that it called Customer Account Data (CAD).
Customer Account Data, which was rebranded Financial Data APIs, is composed of two separate products: the Transactions API and the Identification API Beta.
The Transactions API offered connections to roughly 20,000 US and Canadian financial institutions, enabling third-party developers to quickly and cost-effectively deploy aggregation functionality to a wide array of financial sources.
The Identification API Beta facilitated customer’s identity and banking account verification using banking credentials. Developers were able to configure ACH connections via the API instead of relying on microdeposits (a series of deposits under $1 that the customer verifies) and a process called “fatfingering.”
The general availability of the Intuit Financial Data APIs opened the floodgates of all sorts of new B2C fintech startups that featured the aggregation of users’ financial accounts. These startups included popular names such as LearnVest, SaveUp, Hello Digit, BillGuard, and more.
A similar increase has taken place among B2B account aggregation providers, with companies like Blueleaf, Wealth Access, Quovo, Plaid, and Right Capital all appearing with some type of advisor aggregation fintech solution over the last four years.
Prior to the new wave of account aggregation providers, advisor solutions were dominated by four key players:
So now that Intuit is going to shut down access to its APIs, several fintech aggregators should find themselves scrambling for a suitable replacement before November.
Based on my research, many companies I mentioned earlier are going to have to fill the gap left by Intuit’s hole in the marketplace. They include:
Note: Prior to August 30, 2016, I had Right Capital in the list above. After connecting the Right Capital co-founder Shuang Chen, I learned the company had considered Intuit’s API for aggregation at one time, but ultimately decided to engage Yodlee for account aggregation. Therefore, Right Capital will not be affected by the Intuit API shutdown.
In its press release, Intuit identified Finicity as an alternate provider of aggregation services.
We have identified a new aggregation partner, Finicity, for whom this service is a core part of their business. Finicity can offer long-term benefits and service for our aggregation customers. To minimize developers’ engineering work to switch APIs, Finicity will provide a façade API interface that translates Intuit-structured API calls into Finicity-structured API calls.
The “façade API interface” means that developers with existing code that calls on Intuit APIs will not need to change their codebase. Instead, Finicity will publish an API interface that is 100% compatible with existing calls to the legacy Intuit APIs and return data to the developer’s application as if Intuit’s APIs never went away.
For me, Finicity is a newer name in aggregation that came to my attention last year while monitoring Quora for details on Yodlee despite founding the business in September 2000.
While the Finicity compatibility endorsed by Intuit sounds good for existing developers, there are certainly other issues to consider before building a business on top of Finicity services, and that absolutely should factor into the due diligence process of advisors.
Finicity has a relatively unremarkable profile in CrunchBase, but a few more details about adoption and marketshare come from Finicity co-founder Nicholas Thomas from this Quora question:
2015 has been a good year for Finicity. We’ve signed hundreds of Fintech and Financial Institutions to build their solutions on our API, have quietly launched over a dozen partners, and are launching dozens more in 2016. Our partners tell us that our broad native data source coverage and our fanatical agg support teams are the primary reasons why they love us.
-Nicholas Thomas
So with relatively little marketing (e.g. as I published this, their most recent tweet was on October 27, 2015), Finicity managed to sign up “hundreds” of customers, launched “over a dozen” partners, with more on tap in 2016.
Is account aggregation Finicity’s only play in the industry? No.
To see what other lines of business Finicity offers in addition to their aggregation services, their website lists two other divisions: Mvelopes and Money 4 Life Coaching
Mvelopes is a software application for personal budgeting and has extremely high ratings for its apps in the app stores. Surprisingly high, actually (more on this later).
Mvelopes allows users to create virtual envelopes for different spending categories and allocate money to them accordingly. The idea is that throughout the month, users refer to the amount of money left over in each envelope after paying bills in order to preventing overspending. Transactions are aggregated from connected accounts, and transactions are automatically deducted from applicable virtual envelopes of available cash.
The service is free to use with a limit of four aggregated cash flow and credit accounts (here’s the Finicity aggregation connection). To access unlimited accounts, users subscribe to the Mvelopes Premier plan for $95/year.
Where things get more controversial for me is Finicity’s division called Money 4 Life™ Coaching. The Mvelopes pricing page makes the first mention of coaching services and describes how customers can benefit from one-on-one coaching customized for individual needs.
So I looked into this coaching services with a quick Google search and came across quite a few consumer complaints (36 to be exact) about the services on the Better Business Bureau website.
Most of the complaints seem to be centered around the Money4Life coaching including allegations of no contact by coaches for months at a time and allegations of cancellation difficulties.
Most complaints listed on the BBB site appear to reach a satisfactory conclusion once customers initiate the dispute process (which results in an overall BBB rating for Finicity of A+) , but it is surprising that many customers feel that they need to involve BBB in the first place in order to reach a resolution.
Also, the Mvelopes mobile app ratings are overwhelmingly positive, but many of the five-star reviews have no details in the description or come from users with no other app reviews other than Mvelopes. It’s eyebrow raising.
Critical Mvelopes app reviews such as the one below from iTunes are enlightening:
I contacted Finicity for comments and have not yet heard back from the company, so I will update this post accordingly.
So what’s next? Given Finicity’s connection to awkward customer experiences under the Money4Life coaching program, how likely are the younger aggregation providers to migrate their API calls to the Finicity API? Or will there be a trend to simply abandon the aggregation of financial institutions currently covered by Intuit?
No matter what, as the aggregation vendors make their decisions behind the scenes, advisors’ clients will need to reauthenticate their usernames and passwords once a migration to a new aggregation service is implemented.
For some firms that have a handful of aggregation accounts, this may be a non event, but for larger firms with thousands of aggregated accounts, the issue could take weeks or months to resolve as all clients work through their accounts to reauthenticate their login credentials.
Ed O’Brien hired as CEO of eMoney Advisor
Quick Take:
(3 minute read) (Updated 4:01pm ET)
In a press release yesterday, eMoney Advisor announced Edward O’Brien was hired as Chief Executive Officer of the firm.
I’m not as overly enthusiastic as others seem to be on the prospects of innovation from eMoney Advisor.
I posted a poll on Twitter to survey my followers whether they think the hiring of O’Brien as CEO of eMoney is positive, negative, or let’s wait and see.
It’s a close race between a positive and the “let’s wait and see option,” and I fall into the wait and see camp.
In order to maximize its acquisition of eMoney (for a reported $250 million), Fidelity needs assurance that eMoney’s product roadmap will directly benefit the custodian’s various lines of business in order make a return on their investment.
And once Edmond Walters abruptly resigned as CEO of eMoney in September 2015, Fidelity was granted the opportunity to fill the vacant position with an individual who can strongly influence eMoney’s strategy in Fidelity’s favor.
It makes a lot of sense that Ed O’Brien, a long-time Fidelity executive with decades of industry experience, fill the CEO position.
Don’t get me wrong: few in the industry have O’Brien’s experience and tenure leading teams to develop financial services technology, and that experience should directly benefit eMoney.
This is most definitely a good thing.
But when it comes to developing an innovative, yet untested/unproven, feature versus developing the market of Fidelity’s existing customers, who wins?
Even though eMoney Advisor will continue to operate “technically” as an independent organization, I cannot help but connect the dots that the hierarchy of O’Brien under Durbin will influence the eMoney Advisor product roadmap.
O’Brien is not only a Fidelity insider, he has reported directly to Fidelity Wealth Technologies president (and former Fidelity Institutional Wealth Services president) Mike Durbin for over seven years.
When originally acquired, eMoney was organized under the yet-to-be-announced Fidelity Wealth Technologies, a division of Fidelity Enterprise Services led by president Michael Wilens. Fidelity waited several weeks after the eMoney acquisition to announce the creation of Fidelity Wealth Technologies, according to the company spokesperson.
eMoney was technically never organized directly under Wilens and Fidelity Enterprise Services, as the company has always been under the direction of Durbin’s Fidelity Wealth Technologies group.
Durbin most definitely anticipated the connection I made, stressing how O’Brien topped a long list of “both internal and external candidates.”
Durbin also took the liberty to call out doubters (such as myself), saying in an open letter posted to the eMoney blog.
Don’t buy it? No problem – actions speak louder than words. And I welcome you to watch and see for yourself how it continues to unfold.
Ok. I’m watching.
See, I’m just a guy in Atlanta who wants to help advisors sort through copious (and often confusing) technology options for their business so they can be better advisors. I’m not the head of a major custodian, CEO of a technology vendor, or even an executive of a multi-billion dollar RIA.
But I take my role seriously to navigate what can be a very murky and (sometimes) conflicted fintech ecosystem.
I can’t help but imagine how the connection between O’Brien and Durbin will steer eMoney’s strategy to favor Fidelity relationships ahead of other innovation.
Yet I agree with Durbin: Actions will speak louder than words.
Will eMoney’s existing culture of relentless innovation and development continue to flourish, or will O’Brien’s longtime bond with Fidelity suppress eMoney’s characteristic risk-taking in favor of the parent company’s interests?
I so want the former scenario to transpire, but hey, business is business, and it’s not always possible to satisfy multiple objectives at once.
Let’s wait and see.
Updated: The following corrections to the original post have been made
If you’re not completely in the know regarding the events that preceded this news, here’s a timetable of what’s happened.
I also made two flowcharts (being updated now, so check back soon) showing the hierarchy of Fidelity’s different businesses that illustrates how not much has changed between Durbin and O’Brien before and after the eMoney acquisition.
BlackRock to acquire FutureAdvisor
In a press release this morning, BlackRock, Inc., the world’s largest asset management firm by AUM (source: relbanks.com) announced it has entered into a definitive agreement to acquire FutureAdvisor. Terms of the acquisition were not disclosed.
Let’s hit some fast facts again, shall we:
Not much. Really. Return to your business.
But here’s the thing. BlackRock is an asset manager. BlackRock does well when its asset base grows. How can the company continue to grow its assets?
One way is to offer a new, simple, and attractive way for investors to automatically add their assets to low-cost, broadly diversified portfolios of funds and ETFs.
Enter FutureAdvisor.
A bonus for BlackRock is if the company can find a way to invest those assets into BlackRock-managed products.
Say, iShares ETFs.
You come to FPPad for ideas on what to do with the technology in your business. So here’s what I think you should do.
Number one: Offer your own online, user-friendly interface
If the world’s largest asset manager sees the need to add a low-cost user-friendly online asset allocation tool to its arsenal, isn’t it time you have one for your business?
Prospects are comparing your capabilities to the services they see from Wealthfront, Betterment, FutureAdvisor, et. al., and if you come up short and don’t have an answer to their slick platforms, you’re probably viewed as a laggard.
Number two: Tell clients what you really do
Automated investment management is a commodity.
Anyone can get it from Schwab, Wealthfront, Betterment, FutureAdvisor. You could argue that the first mutual funds were the earliest automated investment management solution!
Sure, tax loss harvesting, daily rebalancing, and instant deposits are bells and whistles for automated investment solutions, and the results of whether or not those features actually result in any additional money in customers’ pockets is highly dependent on each customers’ personal situation.
But for you, as an advisor, investment management is just ONE of the things you do. It’s not the ONLY thing you do.
You do SO MUCH MORE.
So let clients know.
Even better, let your prospects know how much more you do.
You’re not justifying the fees you charge, you are reinforcing the value you provide by giving clients the service they need in ALL areas of their financial life.
You go WAY BEYOND investment management.
So do that. Tell clients what you really do, and why what you do goes way beyond automated investment management.
Fast Facts:
Noteworthy adviser technology vendors who use Yodlee include Blueleaf, CircleBlack, MoneyGuidePro (see MoneyGuidePro to integrate Yodlee for account aggregation), Orion Advisor Services, Wealthminder, Wealth Access, and Wells Fagro.
The MoneyGuidePro relationship presents an interesting conflict, as the financial planning software provider competes with financial planning solutions from Finance Logix, a company that Envestnet also acquired earlier this year (see Envestnet Acquires FinanceLogix As The Integrated Financial Planning And PFM Buying Frenzy Continues from Kitces.com).
The Yodlee acquisition by Envestnet, now owner of Finance Logix, can’t be sitting well with PIETech, Inc. executives (the creators of MoneyGuidePro).
Outside of adviser-specific tools, Personal Capital is also a Yodlee subscriber, and so is Blooom, Future Advisor, LearnVest, and Openfolio.
Interestingly enough, eMoney (see Fidelity Investments acquires eMoney Advisor) uses its own proprietary connections for roughly 90% of all data feeds and rounds out the rest using Fiserv’s CashEdge. NaviPlan had once used Yodlee more than ten years ago, but I cannot confirm today whether or not aggregation by Yodlee is in use today. I suspect it is not, given Advicent’s recent acquisition of Figlo.
So is this good or bad for financial advisers?
If you’re Envestnet, or if you use Envestnet products and services in your business, this acquisition is good. Very good. Envestnet now has a very broad portfolio of services that helps financial advisers run efficient businesses.
What services, you ask? They offer CRM, portfolio management and reporting, client portals, business intelligence, and mobile apps from Envestnet|Tamarac, financial planning software from Finance Logix, and now account aggregation from Yodlee.
If you’re a vendor who competes with Envestnet AND offers account aggregation to your financial adviser users, it could be bad. One of your product’s competitive differentiators, account aggregation, just got acquired by a leading vendor of financial technology and portfolio management solutions to advisers. Now what do you do?
And if you’re an adviser who doesn’t use Envestnet, your choices for an independent account aggregation solution are now smaller. Who’s left? Aqumulate, Intuit, Quovo, and Openfinance.
ByAllAccounts is owned by Morningstar (but an important note is that Morningstar doesn’t sell investment products or portfolio services, but rather adviser technology and investment research).
And Intuit is a special case, too, as once again, advisers can’t directly purchase or subscribe to Intuit aggregation. Aggregation from Intuit must be integrated by a third-party technology provider.
Openfinance is one to watch, as I was told recently that First Rate, SunGard’s main performance reporting partner, teamed up with OpenFinance to provide aggregation solutions for First Rate integration partners (e.g. Grendel CRM from Big Brain Works).
Plaid is out there too, but as far as I can tell, their bread-and-butter customers are consumer-oriented financial apps like Acorns and robinhood.
So overall, are the limited choices among aggregation solutions good or bad? I’m not entirely sure.
Some advisers choose not to offer account aggregation at all. Some do. It largely depends on how the business is structured and whether or not account aggregation boosts the overall value proposition of the firm.
One of the Achilles’ heel of financial services is the forced fragmentation of where all of us keep our money.
Seriously, why must the industry be so fragmented that consumers have no choice but to open so many discrete accounts across so many financial institutions?!?
So if you’re like most people who live on planet Earth and use money, it’s nearly impossible to see what you have one place AND keep that report up to date as your spending fluctuates and your investments rise and fall.
Enter Yodlee.
Yodlee seized the opportunity among this fragmentation to facilitate all-in-one reporting. As online financial account access became mainstream, Yodlee allows consumers to grant permission to read data from each financial account and aggregate all that disparate data into one dashboard, the Yodlee MoneyCenter. To build a buisness, Yodlee charges third-party companies (e.g. banks, insurance companies, trust companies, broker-dealers, financial apps like Personal Capital and LearnVest) to be on the receiving end of the aggregated data.
Fast forward to today and Yodlee’s market value for its business is in the neighborhood of $660 million.
And now you know the Yodlee backstory (well, as I tell it. There’s a lot more to the story, but this is what matters for you, the financial adviser).
Note: An earlier version of this post suggested that rumors indicated the Fiserv adviser-facing product AllData Advisor® was being phased out. A company spokeswoman for Fiserv wrote, “At this time, Fiserv has no plans to phase out the referenced advisor-facing product.”
Northwestern Mutual to acquire online financial planning provider LearnVest
(This is a developing story)
According to the Wall St. Journal, Northwestern Mutual Life Insurance Co., said it would acquire New York-based online financial planning startup LearnVest Inc.
Terms of the deal were not disclosed.
Here’s your Too Long;Didn’t Read (TL;DR) summary:
@FeeOnlyIndy 150 employees at @LearnVest is a helluva burn rate. "Just" $60k salary average is $9M/year? @BillWinterberg
— MichaelKitces (@MichaelKitces) March 25, 2015
More reactions to the potential for conflict between LearnVest’s financial planning advice delivery and LearnVest’s ownership by a retirement plan and insurance provider are in this InvestmentNews article by Darla Mercado.
Schwab unveils details of Institutional Intelligent Portfolios™ to financial advisers
Details of Institutional Intelligent Portfolios™ unveiled as Schwab arms its advisers with a robo solution
In company webcast and press release today, Schwab Advisor Services provided details of its Institutional Intelligent Portfolios™ solution that the company describes as an “automated investment management solution for independent registered investment advisors (RIAs).”
Earlier I had the chance to speak with Schwab Intelligent Portfolios executive vice president Naureen Hassan and Schwab Advisor Services technology and strategy senior vice president, Neesha Hathi to clarify several details about what financial advisers can expect from the new service.
Here are my important takeaways with a focus on the technology impact for your business.
Institutional Intelligent Portfolios™ will be made available in Q2 2015 and it will allow advisers to use their own branding, which includes their firm name, logo, and contact information inside the end-client dashboard.
However, Institutional Intelligent Portfolios will be hosted on the Schwab web domain, so advisers cannot use their own custom website domain. Advisers must provide a link to Institutional Intelligent Portfolios somewhere on their website to direct end investors to the adviser-branded version of the solution.
Once logged in to the dashboard, investors go through an experience very similar to that of the retail Schwab Intelligent Portfolios solution (but one that uses the adviser’s branding and the adviser’s custom portfolios).
Investors answer the same questions about their goals and level of risk tolerance found in Schwab Intelligent Portfolios, and upon completion, investors are matched to a portfolio designed by the adviser that best fits the investor’s profile. This paperless process is proprietary to Schwab and does not support third party form-filling or electronic signature providers that are made available by other institutional custodians.
Investors use the paperless application process to open and fund their accounts and also receive their disclosure documents when they engage in the service.
Schwab Intelligent Portfolio will be available as a native app for iOS devices, and a responsive website will offer an interface that is suitable for devices of all sizes.
According to Hassan, an Android app is in development but did not provide details on a future release date.
Institutional Intelligent Portfolios allows advisors to create custom allocations from over 200 ETFs in the platform. Automated rebalancing and the opportunity for tax-loss harvesting is available for investor accounts greater than $50,000, and advisers can disable the loss harvesting algorithm if they so choose.
Loss harvesting applies only to the assets held within Institutional Intelligent Portfolios, so advisers must pay attention to transactions that trigger wash sales if substantially identical securities are held in outside accounts.
Note that advisers can view investor accounts using Schwab Advisor Center just as they do for the institutional accounts they manage on behalf of clients today. That means that data downloads are supported for assets held in Institutional Intelligent Portfolios. Since the data feeds are available just like any master account, Institutional Intelligent Portfolios holding data can be downloaded into other portfolio management software solutions available from third party vendors.
Finally, for account registrations, Institutional Intelligent Portfolios supports standard taxable brokerage accounts, joint accounts, Traditional and Roth IRA accounts, and living trusts.
With the technology attributes addressed, here are details of the fees of Institutional Intelligent Portfolios.
From the press release, Institutional Intelligent Portfolios has “a two-tiered pricing structure based on total assets custodied with Schwab outside the Institutional Intelligent Portfolios program.”
For advisers with less than $100 million in assets under management (AUM) with Schwab, investors will be charged a 10 basis point platform fee.
But for advisers with more than $100 million in AUM with Schwab, no platform fee is charged.
Schwab Intelligent Portfolios has been questioned for its up to 30% allocations to cash, but on the Institutional Intelligent Portfolios platform, portfolios must maintain a minimum of four percent in cash. The top end of the cash allocation is determined by the custom portfolios designed and configured by each adviser.
