Scottrade retools custodial platform as it works to bolster its numbers

Custodian hopes to land on growth path with new technology and new hires

Oct 2, 2014 @ 1:17 pm

By Joyce Hanson

Scottrade Advisor Services, which has struggled with dwindling numbers of advisers on its platform, is working to stop the bleeding by attracting new RIAs, upgrading its technology and improving the experience for its existing advisers.

While Scottrade Advisor Services has primarily served as custodian to small, state-registered RIAs, it is actively seeking advisory firms with sizable assets under management of $1 billion and more, said Matt Wilson, president and CEO of parent company Scottrade Inc.

“We believe this segment [smaller RIAs] of the business is growing,” Mr. Wilson said. “We're very invested in being in this space, whether they're state-registered, which is the majority, or larger advisers. We want the ability to attract advisers with the right platform.”

To oversee upgrades to its technology platform, Scottrade last month brought aboard former TD Ameritrade and ActiFi Inc. executive Brian Stimpfl as senior vice president of program strategy and operations.

Technology “will be a critical part of the equation” in Scottrade's push to attract advisers, Mr. Stimpfl said.

This year, Scottrade has upgraded several parts of its custodial platform. Redtail customer relationship management system and the MoneyGuidePro financial planning tool were integrated into the system in February. In July, the custodian added the Advisor Software Inc. portfolio modeling and re-balancing tool and last month brought in the Laser App Anywhere account-opening tool for prefilled forms.

Launched in 2005, Scottrade Advisor Services in March 2012 hit the milestone of serving 1,000 RIAs on its platform. But since then, growth has gone wobbly.

InvestmentNews' 2014 rankings of 14 custodians by number of RIA custody clients showed Scottrade as one of three custodians with a loss in RIA clients, down 12% to 1,100, as of June 30. Fidelity Institutional Wealth Services saw an 8.2% loss to 2,948 clients and RBC Advisor Services saw a 1.0% loss to 98 clients. In comparison, just a year earlier, Scottrade Advisor Services under Mr. Davis' leadership saw its RIA custody clients grow by 13.6%, to 1,250.

Other initiatives to get new business include new hires and more efficient workflow processes for advisers. Scottrade will expand its relationship teams serving advisers by 30%, hiring 16 new employees, Mr. Wilson said. The firm also plans to expand its business development teams by 50%, to 20 employees from the current 10, he said.

While acknowledging that advisers are now being asked to pay more for access to the Scottrade platform, Mr. Stimpfl said there are no stated minimum assets under management numbers.

“We look at a number of factors: AUM, commitment to business, growth trajectory. We don't have stated minimums, and we still strongly support state-registered advisers,” he said.

Mr. Wilson said Scottrade Advisor Services is searching for a new RIA business leader to be named by year-end.

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