Technology Update

Schwab plans product review site for advisers

...along with several other mildly interesting things; in other news Motif Investing to build an adviser offering!

Nov 18, 2012 @ 12:01 am

By Davis Janowski

Several new things were announced at the Schwab Impact conference last week.

I was most excited by plans to build and host a site for adviser-generated reviews of third-party technology products, to be called OpenView MarketSquare. I won't have access to them, however; only advisers holding assets in custody at Schwab will.

The service should be welcomed by the thousands of registered investment adviser firms that work with Schwab.

All firms need to purchase new technology applications, related services or hardware, after all. And who better than fellow advisers to give both biased and, perhaps, unbiased opinions?

If Schwab can support the site and promote it enough, it is likely to be a very lively and useful tool.

It will be moderated — “curated” is the term Schwab uses — meaning that Schwab will edit content first, and items deemed salacious or clearly not useful won't be included.

Separately, being a big tree-hugger, I welcomed the paperless push. Details aren't entirely startling, as a big part of this effort was a partnership announced with DocuSign Inc., which has similar agreements with Fidelity Institutional Wealth Services and TD Ameritrade Institutional.

(UPDATE Mon. Nov. 19: I was made aware this morning that like Fidelity and TD, Pershing LLC already has an agreement in place with DocuSign and has already integrated its technology. In fact, Pershing is rolling out its integrated DocuSign offering to RIAs this week. More to follow on this.)

Specifics include enabling e- signature capabilities on most Schwab forms, which will be a welcome development to thousands of advisers and client service reps.

The product is due to be implemented sometime next year. Advisers will be able to visit the Schwab Advisor Center online and create e- packages of forms that clients and prospects can review, complete and sign while online themselves.

In a recent interview with me, Neesha Hathi, senior vice president of adviser technology solutions at Schwab, said something encouraging about going paperless.

“There is not strong adoption to date with these sorts of solutions,” she said. “Our perception is that it has not been integrated enough into the day-to-day workflow of the adviser.”

I was heartened that Schwab intends to be far more comprehensive in this endeavor than the other custodians.

“We are investing in the representatives' desktops, in how we process the work-flow systems, how our internal folks manage these processes,” Ms. Hathi said.

Naureen Hassan, senior vice president of client experience for Schwab Advisor Services, tried to bring the point home during a Tech Talk session and conference call.

“What we are announcing represents a multimillion-dollar investment in work-flow technology, including improved business process management,” she said.

“One process we have right now, for example, requires 17 steps, [and] touches five different internal systems and multiple groups internally,” Ms. Hassan added.

Process improvement plans include reducing the number of steps required to complete key custody activities and further optimizing of Schwab's technology offerings, including its mobile and cloud computing tools.

An Android version of the Schwab Advisor Center mobile application will be rolled out by the end of April (in case you are wondering, an application for the Windows Surface tablet is not on the immediate agenda).

Another development involves, the customized version of for clients of Schwab advisers.

The site will serve as an integral component of the future client experience improvements. For example, clients of advisers using eSignature will be directed to Schwab Alliance to review and eSign forms.

Other types of features, such as requiring clients to consult with their adviser before trading or moving funds, can also be enabled by advisers.


I first wrote in June about Motif Investing Inc., which has a site that lets investors or advisers use or build sets of motifs, which are thematically weighted, index-based portfolios.

Early on, I suspected that advisers would be most interested in Motif from a research perspective. The interface is attractive, and there is plenty of humor to be found in the names and construction of the motifs, but it feels more investor-oriented.

It turns out that it has appealed to advisers after all.

“What we discovered is that the adviser community has a real interest in offering this product to their clients and not just using it for research,” said Hardeep Walia, Motif's co-founder and chief executive.

The firm is recruiting 10 to 20 advisers to act as guinea pigs and help design a site and feature set for that audience.

Among those tentatively on board is a multibillion-dollar RIA and institutional investment firm — which I can't identify, as the contract is under review by attorneys — as well as a few solo practitioners.

A quick refresher on Motif Investing: Rather than the often difficult-to-follow logic behind portfolios built by big fund companies, motifs are meant to be selected based on common sense or areas of particular interest.

For each of the already-built motifs on the platform, the company has identified key companies in which to invest.

Unlike most startups, Motif has a full staff, significant firepower on its board and a former Microsoft Corp. executive with tech experience at the helm.

Sallie Krawcheck, former president of Bank of America Global Wealth and Investment Management, is a director, and former Securities and Exchange Commission Chairman Arthur S. Levitt is an adviser to the board.

Like at any other online brokerage firm, users who want to trade motifs must open and fund a brokerage account.

There are no account minimums and trades cost $9.95 (the print version of this story was in error, having listed the same pricing information from the June story; linked above, we regret the error).

For additional details on pricing and fees etc. visit Motif's "How it works; cost efficient" information pages online (and if you need even more detail there is a "Motif Investing pricing details" hyperlink with a popup on that page as well).


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