Tag Archives: Schwab Advisor Services

FPPad Bits and Bytes for November 4, 2016

On today’s broadcast, Brian Shenson updates Schwab’s technology roadmap, Riskalyze raises $20 million in capital, SS&C acquires Salentica, and more.

So get ready, FPPad Bits and Bytes begins now!

(Watch FPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by eMoney Advisor, who just announced their Fiduciary Framework initiative to help advisors and firms comply with the recent DOL Fiduciary Rule. The framework weaves DOL-friendly solutions into each stage of the advisor-client lifecycle—like client acknowledgments, event logs, best interest workflows, and more—all within the existing integrated wealth management platform.

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For more information on Fiduciary Framework, visit fppad.com/emoneyadvisor

Here are the links to this week’s top stories:

Riskalyze Raises $20 Million Growth Equity Investment to Accelerate Risk Number® and Robo Platforms for Independent Financial Advisors from PRNewswire

[Now first up, I attended Schwab IMPACT 2016 in San Diego last week and posted a few videos about Schwab’s technology updates, including a detailed discussion with Brian Shenson about the phase out of Integrated Office, new providers in OpenView Gateway, and the much anticipated timeline of Portfolio Connect. It’s an informative interview, and stick around for the tour of OpenView MarketSquare where I Brian and I practiced our sprints in the massive exhibit hall.

And then on Monday this week, Riskalyze announced that the company secured $20 million in capital from FTV Capital to fuel its future growth. Here’s CEO Aaron Klein on how this additional capital will help Riskalyze execute on its mission.

Aaron Klein: “Our mission every day is making sure that we’re empowering those advisors to really build fearless investors, to align the world’s investments with each investor’s Risk Number, and you know, for us finding the right partner to allow us to continue the incredible growth we’ve seen so far was the right move.”]

SS&C to Acquire Leading Advisor CRM Solution, Salentica from PRNewswire

[Next up is news from SS&C Technologies, which you should recognize as the company that acquired Advent Software for $2.7 billion earlier this year. Last week, SS&C announced it acquired Salentica, a professional services firm known for customizing Salesforce and Microsoft Dynamics CRM for institutions and large RIAs. Terms of the deal were not disclosed.

So this acquisition is important for its vertical integration, as thousands of advisors who already use Advent or Black Diamond for portfolio management today should soon benefit from better integrations of Salesforce and Dynamics CRM all from the same provider.
This also helps SS&C close the gap with a competitor like Envestnet | Tamarac, who has offered an all-in-one technology solution to advisors for several years.

But on the other hand, not all advisors want to be captive to an all-in-one provider, and prefer the best-of-breed approach to their technology, so with Salentica now under the ownership of SS&C, we’ll have to see how the political aspects of this relationship play out in the near future.
Nevertheless, I’m optimistic that SS&C will support Salentica’s integrations with a variety of portfolio management providers, but I definitely would proceed with a little more caution if my business used a solution other than Advent and Black Diamond.] SS&C Technologies Holdings, Inc., a global provider of financial services software and software-enabled services, today announced its acquisition of leading CRM solution Salentica.

TD Ameritrade to Buy Scottrade in $4 Billion Deal from the New York Times, and

TD Ameritrade Announces Essential Portfolios Robo-Advisor from BusinessWire

[And finally, I’m wrapping up with two updates involving TD Ameritrade, starting with the announcement of the acquisition of Scottrade for $4 billion dollars, then followed up by the soft launch of Essential Portfolios, the company’s own automated investment service for retail investors.

First, the Scottrade acquisition is likely to affect advisors with under $10 million in assets under management, as Scottrade has historically been welcoming of advisors with smaller accounts. So over the next year or two, I’d expect smaller advisors to be under pressure to grow their assets under management, or find another custodian altogether like Shareholders Service Group, or join a membership group like the XY Planning Network that leverages the size of its network to facilitate business with TD Ameritrade Institutional.
Either way, I think it means structural changes are on the horizon for dozens of smaller advisory firms.

And the second story about Essential Portfolios adds yet another retail-facing automated investment solution to the crowded marketplace. It features a $5,000 account minimum, fees of 30 basis points, and offers just five model portfolios, each made up of five ETFs, with allocations recommended by Morningstar Investment Management that are automatically rebalanced.

Look, clients are getting bombarded with all this marketing about low-cost, automated, intelligent investing services from nearly every provider in the business. So unless your marketing pockets are as deep as theirs, you’re going to have to craft a message that your technology rivals that of the automated services, and that you offer advice and services that go way beyond what the low-cost solutions provide. Not only do you have to say it, but you have to do it.] TD Ameritrade announced on Monday that it would acquire Scottrade Financial Services, a rival discount brokerage, for $4 billion, in a bid for scale at a time when small investors are losing their taste for stock trading.

Here are the stories that didn’t make this week’s broadcast:

Web Design Pros Enter the Financial Advisory Industry with the Public Launch of Twenty Over Ten from MarketWired

Twenty Over Ten, an unparalleled, compliant website-builder, today announced its formal public launch. Cofounded by Penn State Associate Professor of Graphic Design Ryan Russell and Designer and Developer Nick Dimatteo, Twenty Over Ten helps financial advisors create beautiful and compliant websites tailored to their unique brands.

PIEtech℠, Inc. to Complete Deep Integration With Riskalyze Creating the Most Powerful Client Risk Analysis Experience from PRWeb

PIEtech℠, Inc., creator of the leading financial planning software, MoneyGuidePro®, announced today that it is building a multi-faceted, deep integration with Riskalyze, the risk alignment platform founded upon the Risk Number®.

Junxure Cloud, Riskalyze Announce Integration from PRNewswire

Junxure, the industry leading CRM solution and technology company for financial advisors, this week announced new enhancements to its cloud-based CRM platform, Junxure Cloud®. As part of its ongoing work to integrate with leading platforms serving advisors, Junxure Cloud has partnered with Riskalyze, the industry-leading risk alignment platform and inventor of the Risk Number®, to integrate the two popular systems.

Get LastPass Everywhere: Multi-Device Access Is Now Free! from LastPass

I’m thrilled to announce that, starting today, you can use LastPass on any device, anywhere, for free. No matter where you need your passwords – on your desktop, laptop, tablet, or phone – you can rely on LastPass to sync them for you, for free.

Passing the Baton, Again from Wealthfront

After an amazing tour of duty, Adam Nash is handing the baton back to me [Andy Rachleff]. While Nash will be transitioning out of an operating role at the company, he will continue to play a strategic role as a member of our Board of Directors.

FOLIOfn, Inc. Acquires Leading Responsible Investing RIA, First Affirmative Financial Network from PRNewswire

FOLIOfn, Inc. announced today that it has acquired First Affirmative Financial Network, one of the nation’s most prominent registered investment advisor firms specializing in sustainable, responsible, impact (SRI) investing.

Invessence and PrairieSmarts Partner to Arm Advisors with Better Risk Assessment Tools for Easier DOL Compliance from PRWeb.com

Digital wealth management technology provider Invessence announced today that it has partnered with PrairieSmarts, an innovative risk analytics firm, to provide risk assessment tools for financial advisors and their clients. Enhancing Invessence’s comprehensive digital wealth platform, the robust risk tools from PrairieSmarts will assist advisors in calculating, documenting and managing the alignment of a client’s risk profile with a compliant portfolio recommendation.


Watch FPPad Bits and Bytes for November 4, 2016

Watch FPPad Bits and Bytes for November 4, 2016

FPPad Bits and Bytes for April 1, 2016

On today’s broadcast, Betterment raises $100 million in fresh capital, Fidelity tests FidelityGo, Schwab pulls the plug on OpenView Integrated Office, and more.

So get ready, FPPad Bits and Bytes begins now!

(Watch FPPad Bits and Bytes on YouTube)

First, a heads up, Steve and I will be on the road later this month covering the massive NAB 2016 event, scouring the exhibit halls for technology you can use to make great videos and podcasts, followed by the 2016 Shareholders Service Group conference in San Diego. Visit fppad.com/subscribe and sign up today so you don’t miss any of our coverage from the events.

Betterment Raises $100 Million from Betterment.com

[Now on to this week’s top story which comes from Betterment, as the automated investment service raised another $100 million dollars in venture capital, bringing the total amount they’ve raised to $205 million. Betterment is pulling away from a crowded field of robo competitors, now servicing over 150,000 customers, managing $3.9 billion in assets, and valued at a reported $700 million.

Betterment says they will use the funding to grow the Betterment for Business 401(k) platform and the Betterment Institutional offering for you, the financial advisor.

But despite all the money raised and what they say about being their customer’s central financial relationship, Betterment’s questionnaire still doesn’t tell customers that they should pay off high interest credit card debt or build up an emergency fund first before investing. Oh, that’s right, customers can find that advice somewhere on the blog.

So I’ll reiterate what I posted on Twitter this week: Betterment, I hope you use the money to make unbiased fiduciary advice accessible & affordable to everyone.

If you want to read more about the latest round of Betterment’s funding, head over to fppad.com/183 for the links to this week’s top stories.] Today marks an important milestone for Betterment and our more than 150,000 customers who have invested over $3.9 billion with us. We’re excited to announce that Betterment has closed a $100 million investment, led by a new partner, Kinnevik.

Fidelity Starts Testing Robo-Adviser Service on Existing Clients from Bloomberg.com

[Next up is news from Fidelity, as the company announced plans to begin testing Fidelity Go, its own automated investing service for retail investors, with roughly 500 customers this week, with an official rollout sometime in the second half of this year.

If you remember back to November of 2015, Fidelity broke off its relationship to promote Betterment Institutional to advisors, and then coincidentally announced the Fidelity Go retail product that competes more or less with Betterment. Fidelity Go will feature investment portfolios managed by Geode Capital Management, all in fees at 39 basis points or lower, automatic rebalancing, but no tax loss harvesting.

With Fidelity Go as a retail offering, you should know that Fidelity told me that a B2B version is under development, and while they couldn’t give me a solid release date, they did say the offering will be customized to your needs as an advisor.

Nevertheless, Fidelity joins Charles Schwab as an institutional custodian with an automated investment solution in the retail space, but at no platform fee in exchange for a little extra cash allocation, Schwab Intelligent Portfolios, in my opinion, is going to be tough to beat.] Fidelity Investments, the second-largest U.S. mutual fund company, will test an automated-investment service starting Wednesday on a small group of existing customers. Fidelity plans to offer the service to the public in the second half of this year.

Schwab Unplugs Its Customized Version of Salesforce from WealthManagement.com

[And speaking of Schwab, this week’s final story is news that Schwab Advisor Services is discontinuing the Schwab OpenView Integrated Office solution effective July 31. Roughly 150 firms are using the solution, so they’re going to have to find some other technology to replace Integrated Office, specifically the custom version of Salesforce that came with it.

The link to the story at fppad.com/183 has the details on options for affected advisors, including using Salesforce with Schwab OpenView Gateway or migrating to a completely new CRM, but here’s the angle I want to focus address.

This is absolutely an example of what can happen when you choose a custodian’s proprietary solution for a part of your technology. How committed is that custodian going to be to offer that technology over the lung run? In this case, Schwab, for whatever reason, is shutting down Integrated Office, leaving 150 advisors with just three months to figure out what to do.

So I don’t blame you one bit for getting a little uneasy when custodians offer proprietary technology solutions to you that they own and control. But with more custodian acquisitions of technology on the horizon, I’m afraid this is a risk you’re going to have to assume more frequently as time moves on.

One more thing: if you want a firm with Salesforce experience in financial services, get your pencils out, because you should consider contacting LiquidHub, Concenter Services, Navatar, Salentica, or AppCrown.] One hundred fifty Charles Schwab advisors must find a new client relationship manager (CRM) by July 31.

Here are stories that didn’t make this week’s broadcast:

Envestnet | Tamarac Rolls Out New Household Structure and Service Team Functionality in Advisor View™ Client Portal from PRNewswire.com

Envestnet | Tamarac has launched four major software updates designed to strengthen RIAs’ online engagement with clients. The roll-out is part of the firm’s March 2016 technology release.

Advyzon Integrates Laser App Software to Enhance Client Advisor Relationship from LaserApp.com

Laser App Software, the premier provider of forms automation and management software for the securities and insurance industries, has announced that Advyzon, an all in one cloud-based platform combining portfolio management, performance reporting, CRM, client portal and planning, integrated with Laser App Software to enhance its client dashboard.

Marketware International is pleased to announce that it has become a new member of the IBM Watson Ecosystem Partner Program.

Our team has been hard at work creating the AdvisorQA mobile product experience for Financial Services. It provides a new mobile Content Management and Social Collaboration tool that utilizes the cognitive computing and research capabilities of IBM Watson.


Watch FPPad Bits and Bytes for April 1, 2016

Watch FPPad Bits and Bytes for April 1, 2016

Schwab IMPACT 2015: Conference wrap up

We wrap up our coverage of Schwab IMPACT 2015 from the floor of The Exchange, noting that this is an incremental year in technology updates from Schwab Advisor Services.

Following last year’s major announcement of Schwab Intelligent Portfolios, I left Schwab IMPACT 2015 with the impression that Schwab Advisor Services is busy delivering incremental updates and improvements to the company’s existing solutions.

Thank you to Itegria for sponsoring our coverage from Schwab IMPACT 2015.


Schwab IMPACT 2015: Brian Shenson outlines the company’s technology roadmap

Brian Shenson, Vice President of Advisor Technology for Schwab Advisor Services, met with me at Schwab IMPACT 2015 to update the company’s technology roadmap.

In this interview from the heart of “Schwab Center” in the nucleus of The Exchange exhibit hall, Shenson walks me through the status of Schwab Advisor Mobile Connect, Schwab Advisor Portfolio Connect, and Schwab OpenView MarketSquare™.

Schwab IMPACT 2015: Conference Preview

Here is a quick conference preview for Schwab IMPACT 2015 to highlight what you can expect from our coverage of one of the industry’s largest events for independent RIAs.

FPPad Bits and Bytes for June 26

On today’s broadcast, Schwab releases Institutional Intelligent Portfolios™ into the advisor marketplace, Advent rolls out a new advisor experience for Black Diamond, and TD Ameritrade Institutional assembles dozens of vendors in Chicago to help you move your business forward.

So get ready, FPPad Bits and Bytes begins now.

(WatchFPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by Autopilot, the only automated asset management platform built on the power of the Risk Number™.

Autopilot powered by CLS Investments and Riskalyze

Powered by CLS Investments and Riskalyze, Autopilot empowers advisors to revolutionize their business model, profitably service clients of all sizes, and democratize access to investment advice with a client service platform embedded directly in your firm’s existing website. Sign up for a demo today by visiting fppad.com/autopilot.

Here are the links to this week’s top stories:

Schwab Institutional Intelligent Portfolios™ from Schwab.com,

Institutional Intelligent Portfolios™ ETF List: Evaluation and Selection from Schwab.com, and

Schwab Wealth Investment Advisory, Inc. Institutional Intelligent Portfolios™ Disclosure Brochure from Schwab.com

[This week’s top story comes from Schwab Advisor Services, as the company officially rolled out its Institutional Intelligent Portfolios™ solution to advisors that was first mentioned back in episode 158, which I will try to link right over here. One change of note is that Schwab increased the number of available ETFs to more than 450 from the original 200 announced back in March, but the platform fees remain unchanged.

So I looked into the disclosure materials and uncovered a few items that I think you should know. First, anytime a new client signs up, you, the advisor, are required to make a final decision to select a portfolio strategy for that client. Until you make that decision, your clients’ cash will be held in the sweep program.

Second, accounts over $50,000 are eligible for tax-loss harvesting, but hold on, you, the advisor, must use the software built in to Institutional Intelligent Portfolios™ to activate and implement the tax-loss harvesting strategy.

And third, at any time, clients can authorize you, the advisor, to suspend trading due to “market conditions” and then reactivate trading “when the Advisor decides it is appropriate to do so.”

So I don’t know about you, but this sounds like Institutional Intelligent Portfolios™ doesn’t really streamline any of your portfolio management activities, it may actually increase your workload a bit, which is ironic given the automated focus of the program. It’s definitely not a set-and-forget automated solution, and for this added workload in your business you’ll earn how much in new revenue? That’s what I thought.

And before I forget, Schwab says that the system “will not monitor the type and amount of capital gains” so you’ll have to manage that information in a separate solution, say Schwab Advisor Portfolio Connect or perhaps PortfolioCenter, if you want to report on the gains and losses in each client account. Oh, one more thing, as of today, the mobile app isn’t yet ready.

But to be fair, this is version 1.0 of the solution for advisor, so if anyone is listening out there, maybe you can get Schwab to acknowledge these opportunities to make Institutional Intelligent Portfolios™ an attractive technology solution for your business.]

Advent Debuts the All-New Black Diamond Wealth Platform for Advisors and Wealth Managers at AdventConnect 2015 from Advent.com

[Next up is news from Advent, as the company held AdventConnect, it’s annual advisor conference in Las Vegas last week. The company used the event to showcase the next generation Black Diamond® wealth platform, which was being called “BD3” during internal development.

Gone from the Black Diamond name are the Performance Reporting label and the old widgets and BlueSky titles, which is now being replaced by the wealth platform description that represents the radical refresh of the advisor experience.

The main advisor dashboard now uses tiles that you can customize based on the information you want at a glance, portfolio performance graphs are much more streamlined, report pages contain relevant portfolio data without being overly crowded and busy, and a presentation mode is now built in to give you a way to walk through reports while redacting confidential client data.

Advent also announced a new initiative called Black Diamond Link, which adds “bi-directional, workflow-oriented integrations” with a variety of third party technology providers, including MoneyGuidePro, AdvisoryWord, XLR8, Junxure Cloud, Advisors Assistant, and Redtail Technology.] On the heels of last year’s unveiling and this year’s rollout of the new Black Diamond® investor experience, Advent today showcased its next generation Black Diamond® wealth platform. The next generation platform which has been dubbed “BD3” by clients and the development team, as it represents the third generation of the Black Diamond® platform, has been a multi-month effort to redesign and reinvent Black Diamond® to go beyond its roots in performance reporting.

Technology Innovators Get High Marks for Maximizing Integrations for Independent Registered Investment Advisors from MarketWatch

[If integrations with best-in-breed solutions sounds familiar, that’s because TD Ameritrade Institutional offers a similar platform under Veo Open Access, Schwab Advisor Services offers OpenView Gateway, and Pershing announced its own API store just a few weeks ago.

And for custodian-agnostic integration providers, Orion Advisor Services has been offering integrations to their advisors for several years. Full disclosure, you should watch my first vlog about Orion. So Advent, welcome to the club!

Now speaking of integrations, I’m going to wrap up with news from TD Ameritrade Institutional, as the company held its 6th annual technology summit in Chicago this week for Veo Open Access integrated solution providers. The number of solution providers now stands at 91 representing over $300 billion in assets advised across all of the technology solutions.

I’m running out of time for this broadcast, and I made a vlog about my trip to the Tech Summit in Chicago, so just watch the vlog and you’ll be up to speed on how this custodian is helping advisors like you take their business to the next level.] To help independent registered investment advisors (“RIAs”) keep pace in an era of accelerating technology change, TD Ameritrade Institutional1 has pursued a unique strategy of collaboration, harnessing the innovative and cutting-edge work of an entire community of technology leaders through its Veo Open Access vendor network.


Watch FPPad Bits and Bytes for June 26, 2015

Watch FPPad Bits and Bytes for June 26, 2015

FPPad Bits and Bytes for April 3

On today’s broadcast, Schwab Intelligent Portfolios gathers over $500 million dollars in its first few weeks, find out why Orion Advisor Services is regarded as one of the good fintech vendors, and personal dossier app Refresh gets acquired by LinkedIn.

So get ready, FPPad Bits and Bytes begins now.

(WatchFPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by Wealthbox CRM. Be the first to see the release of Wealthbox version 1.8 with a ton of new features and integrations, including one with MoneyGuidePro.

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Here are the links to this week’s top stories:

Exclusive: Schwab robo-adviser crosses half-billion dollar mark from InvestmentNews.com

[For the second week in a row, this week’s top story comes from Charles Schwab, as the company told InvestmentNews that it gathered “considerably over” $500 million in assets in the new Schwab Intelligent Portfolios program.

Schwab Intelligent Portfolios was released to retail investors just three weeks ago, which you heard three episodes ago, and now they have over $500 million. And just four weeks ago, my broadcast covered Wealthfront’s news that they surpassed $2 billion dollars in assets under management.

So it took Wealthfront a little over three years to get to two billion dollars, and Schwab Intelligent Portfolios is on pace to do it in about two months. NOW who’s going to be the fastest growing and most trusted automated investment service in the world? I think that title’s up for grabs.

But hold on: there’s a deeper story here. Your business is experiencing grocery store econ 101. That’s right, it’s all about shelf space. You might have the best business in the world, but if you don’t have any shelf space, you don’t even have a chance to step up to the plate.

So all of these new solutions online are taking up shelf space and they’re crowding you out of the market. Sure, investors are getting low fees, rebalancing, even tax loss harvesting, but are they getting any REAL advice that actually matters? Not from what I can tell. But what I do see is that your shelf space is slowly being eroded, so you better start doing something about that today.

You can start by sharing this broadcast to your colleagues. Go on, the button’s down there, or up in the corner. Use it.] The Charles Schwab & Co. robo-adviser has crossed a symbolic threshold in just three weeks, raising more than half a billion dollars, the San Francisco-based firm told InvestmentNews on Monday.

What Makes Orion So Special? from Financial Advisor Magazine, and

Envestnet | Tamarac™ Rings in 2015 with a Record Year of RIAs Adopting its Portfolio and Client Management Platform from PRNewswire.com

[Next up is news on Orion Advisor Services, as this week Joel Bruckenstein highlighted the portfolio accounting service bureau for a number of the company’s innovations in financial technology.

Here are the most relevant updates from Bruckenstein’s column. Orion now serves over 570 advisory firms who collectively process over $200 billion in assets, and the company expects to add another 280 firms this year.

Bruckenstein highlights many of Orion’s innovations, including its free private labeled mobile app for advisors, video client statements powered by Engage, and trading sleeve capabilities in its order management system.

Bruckenstein also writes that Orion exhibits a company culture of innovation, which you saw first hand from my Fuse 2014 hackathon coverage, which is an event the company will repeat once again this September.

To be fair, Orion’s competitor Envestnet | Tamarac has also recently achieved some significant milestones, as the company now serves over 800 advisory firms with over $500 billion dollars on the platform, and they also offer a custom branded iPad app for use by advisors and clients. So remember what I said about shelf space and competition? Both of these companies, plus many other technology providers, will put you in a position to differentiate yourself in a crowded market.] When pondering this month’s column, I thought it might be interesting to focus on a single firm whose story involved all of these trends, Orion Advisor Services, which offers “software as a service” and portfolio accounting services to RIAs.

Refresh Joins the LinkedIn Family from Refresh

[And finally, I’m wrapping up this broadcast by revisiting Refresh, an app I told you about way back in episode 107. Refresh is an app that creates a real-time dossier about people you’re going to meet, pulling information from a variety of sources to help you, well, refresh your memory about your connections.

This week, Refresh announced that it will be acquired by LinkedIn (probably because of the Bits and Bytes bump!), so the company will soon be sunsetting its standalone app and rolling in its dossier capabilities into LinkedIn. I’m pretty happy about this move, because Refresh has been one of my go-to apps for a while, and I’m glad to see how the technology can enhance the value of LinkedIn as all of us continue to develop meaningful relationships with clients and colleagues everywhere.] Today, I’m excited to announce that Refresh has been acquired by LinkedIn.

Here are the stories that didn’t make this week’s broadcast:

External IT Upgrade Democratizes Access to User Activity, Improving Advisors’ IT Security and Workflow from ExternalIT

External IT, a cloud-based IT outsourcing firm that focuses on RIAs and Broker Dealers, today announced a new capability to be part of its best-in-class Cloud Desktop solution. The enhancement to the recently redesigned platform creates a visual and easily readable interface to view user activity that tracks login location, IP address, time and device, along with the specific applications launched.

FPPad Bits and Bytes for April 3, 2015

Watch FPPad Bits and Bytes for April 3, 2015

FPPad Bits and Bytes for March 27

On today’s broadcast, Schwab reveals details about its Institutional Intelligent Portfolios™ platform for advisors, LearnVest gets acquired by Northwestern Mutual, and Periscope becomes the latest trendy app for live video streaming.

So get ready, FPPad Bits and Bytes begins now!

(Watch FPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by Total Rebalance Expert, the industry’s leading tax efficient and multi-custodial rebalancing platform – now available anytime, anywhere on any device with TRX Edge.

Total Rebalance Expert

Sign up for a demo in the next two weeks and receive 50% off your set-up fees by visiting fppad.com/trx

Here are the links to this week’s top stories:

Technology details of Institutional Intelligent Portfolios™ from Schwab Advisor Services from FPPad, and

Charles Schwab Unveils Institutional Intelligent Portfolios Details from BusinessWire

[There were two big stories this week you need to know about, so let’s begin with Schwab Advisor Services, as the company announced details of its Institutional Intelligent Portfolios™ solution created for you, the financial advisor, that will be released in the second quarter of this year.

Institutional Intelligent Portfolios is an automated investment management solution that allows you to add your firm name, logo, and contact information to the platform as well as design your own portfolios, provided that you choose from a pool of about 200 ETFs.

Now if you custody over $100 million dollars with Schwab, there’s no platform fee, but if you custody under $100 million, Schwab will charge users a platform fee of 10 basis points. And no matter what, you can’t allocate less than 4% in cash for any of your custom portfolios.

So what does this mean for your business? You now have yet another technology solution to offer a low-cost automated investment service to emerging clients, but IIP has the potential to be “free” if you custody enough assets with Schwab AND you ignore the drag on returns due to the 4% minimum cash requirement. But for that rock bottom price, you’re giving up some control.

If Schwab decides to change the available ETF options, or decides to require a higher minimum cash allocation, well, it’s their way or the highway. And don’t forget, this is not a set and forget business model.
These are people that we’re talking about signing up for automated services; they’re more than just users. Your business may already be spread thin today, and unless you’re thoughtful about a new strategy for serving this market, you may not be setting yourself up for success.

So will you be adding IIP and its ETFs to your RIA ASAP for your VIPs, or will you be SOL and suffer from FOMO? Hashtag LOL.] 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).”

Northwestern Mutual Life Insurance Co. to acquire LearnVest from FPPad

[Next up is the surprising announcement this week that LearnVest, the New-York based financial planning startup, has agreed to be acquired by Northwestern Mutual, the largest direct provider of individual life insurance, AND one of the top 10 biggest independent broker-dealers in the financial planning industry.

Terms of the deal were not disclosed, and rumors have been flying in every direction about valuation, revenue, burn rates and more.

Now a lot of times LearnVest has been mischaracterized as another robo advisor, but the company actually employs over 40 full-time financial planners, and they built their own proprietary financial planning software and tools because existing solutions were too complex and time consuming to use.

So while financial planning has been the big focus of LearnVest, I don’t think that was a big factor in this deal at all.

According to CEO John Schlifske, Northwestern Mutual advisers created over 400,000 financial plans last year. If you take LearnVest’s number of clients in their February 2015 Form ADV Part 2, at best they delivered 3,700 plans in the last fiscal year, not even 1% of the Northwestern Mutual’s volume.

For me, this deal is all about lead generation. By acquiring LearnVest, Northwesten Mutual now gets access to the over 1.5 million people who use LearnVest’s free mobile app or subscribe to LearnVest’s content. Schlifske was quoted saying that LearnVest “is expected to continue providing unbiased planning,” so assuming that’s true, what’s the upside for Northwestern Mutual?

How does one bring together “best-in-class products” with a “cutting-edge client digital experience,” without an inherent conflict? The jury’s still out on this one, so be sure to watch future broadcasts as this story develops.] According to the Wall St. Journal, Northwestern Mutual Life Insurance Co., said it would acquire New York-based online financial planning startup LearnVest Inc.

Here are the stories that didn’t make this week’s broadcast:

Twitter’s Periscope App Lets You Livestream Your World from Wired

Periscope is consensual voyeurism. That’s not a new idea—millions use Twitch to watch other people play videogames, while YouTube, UStream, and a dozen others have tried to make businesses out of live-streaming video—but it feels like the right platform and the right time.

Tax-Loss Harvesting for Everyone from Wealthfront

We’re proud to announce that our daily tax-loss harvesting service will be made available to all Wealthfront taxable accounts, starting in April. 

Watch FPPad Bits and Bytes for March 27, 2015

Watch FPPad Bits and Bytes for March 27, 2015

Technology details of Institutional Intelligent Portfolios™ from Schwab Advisor Services

Schwab unveils details of Institutional Intelligent Portfolios™ to financial advisers

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.

Adviser Branding, but Schwab Domain

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.

Proprietary Paperless Process

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.

Mobile Minus Android

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.

Account Management

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.

Fees and Cash Minimums

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.



FPPad Bits and Bytes for February 20

On today’s broadcast, I have explosive news from eMoney, Riskalyze, Betterment, Schwab and Orion.

So buckle your seat belt, FPPad Bits and Bytes begins now!

(WatchFPPad Bits and Bytes on YouTube)

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Here are the links to this week’s top stories:

eMoney Reveals New emX Select Dashboard At 2015 T3 Conference from WealthManagement.com

[Now you probably know that the Super Bowl of advisor technology, a.k.a. the T3 conference, was held in Dallas last week. By last count, there were over 40 press releases made at the event, but since this is just a five minute show, here are my picks for the most important stories.

First up is eMoney Advisor, as their CEO Edmund Walters took the stage with no slide deck, no apologies, and proceeded to shock the audience with a preview of emX Select, completed by a video filled with explosions.

Awesome, right?!? On everyone’s mind was the Fidelity acquisition, so Walters told the packed ballroom eMoney “had to sell” because “this tech is expensive” and he wants to “kick the crap out of the B2C” robo advisors (implosion!).

I told you, ! No apologies.

From what I’ve seen so far, emX Select resembles the Veo One™ dashboard recently announced by TD Ameritrade Institutional (you did watch my Veo One coverage, right?) but eMoney aims to have 28 integrations by September, which beats the 11 integrations planned for Veo One, one of which includes eMoney Advisor. Interesting!] On Friday at the 2015 T3 Conference in Dallas, eMoney Advisor, recently acquired by Fidelity for $250 million, gave advisors the first look at its new emX Select platform.

CLS Investments and Riskalyze Join Forces to Launch Autopilot, Arming Advisors With the Digital Tools Needed to Neutralize Robo-Threat from Riskalzye, and

Riskalyze Reinvents the Client Meeting from Riskalyze

[Next up is Riskalyze, as CEO Aaron Klein announced a new partnership with Omaha-based CLS Investments to provide an end-to-end online investment service called Autopilot. At a high level, Autopilot is similar to Betterment Institutional, Upside, JemStep and others where clients answer an online questionnaire and can then invest directly in a recommended portfolio allocation based on their answers.

Klein also demonstrated a new tool called Meetings, a simple way advisors can conduct screen sharing with remote clients without exposing private data, embarrassing cat videos, or the random Godzilla attack (woah!) that might pop up on an advisor’s screen. Meetings comes out February 23rd, so make sure you give it a try.] Autopilot Will Offer Automated Asset Management and Risk Measurement, Embedded Into an Advisory Firm’s Existing Website.

Betterment Valued At Nearly $500 Million In New Round from the Wall St. Journal

[And let’s crush this broadcast (woah!) with a quick roundup of other news: Betterment just raised another $60 million in venture capital for a total of $105 million. What are they going to do with the cash? Betterment CEO Jon Stein says they’re going to refine algorithms to answer questions like “Am I saving enough relative to my goals?” Warning: financial planning algorithms ahead!] New York-based Betterment is closing a new $60 million round, the company is set to announce on Thursday.

Schwab tells the SEC its robo-advisor has a 30 basis-point fee and big-time cash allocations held by Schwab Bank from RIABiz.com, and

Schwab Wealth Investment Advisory, Inc. Schwab Intelligent Portfolios™ Disclosure Brochure from SEC.gov

[Schwab’s Form ADV for their Intelligent Portfolios robo-solution revealed the service is “technically” free, but they will use client cash, aka the “sweep allocation” for Schwab Bank activity where Schwab earns income on the spread, so Intelligent Portfolios discloses that most strategies maintain a higher sweep allocation than other providers designed to fully invest client cash. But hey, it’s “free” and consumers LOVE free!] The Charles Schwab Corp. will charge a fee of 30 basis points to clients of its robo-advisor, but those investors will not pay it out of pocket because Schwab affiliates will reimburse the client behind the scenes, according to SEC documents relating to Schwab Intelligent Portfolios.

TA Associates to acquire majority interest in NorthStar from Orion Advisor Services

[And finally, private equity firm TA Associates recently signed an agreement to acquire a majority interest in NorthStar Financial Services Group, the parent company of Orion Advisor Services, CLS Investments, Gemini Fund Services and six other sister companies. So you’ve been asking me, is this good or bad, specifically for Orion. I believe it’s good, and here’s why: Orion has a strong track record of growth, Orion’s leadership will remain in place, the company remains privately held, and now there’s extra cash available for strategic opportunities.] TA Associates, a leading global growth private equity firm, today announced it has signed a definitive agreement to acquire a majority interest in NorthStar Financial Services Group, LLC, and its nine subsidiary wealth management industry service providers.

 Here are stories that didn’t make this week’s broadcast:

Advicent Unveils Narrator™, a Tool for Advisors to Fight Commoditization, at T3 Conference from Advicent.com

Advicent Solutions announced at the 2015 T3 (Technology Tools for Today) Conference at the Hilton Anatole in Dallas, Texas, that it is launching a new product for the North American market—the Narrator™ application builder. The product is available to buy immediately.

Watch FPPad Bits and Bytes for February 20, 2015

Watch FPPad Bits and Bytes for February 20, 2015