Charles Schwab selling PortfolioCenter to Envestnet Tamarac

More than 3,000 advisers use the portfolio management and reporting engine

Feb 21, 2019 @ 5:22 pm

By Ryan W. Neal

Charles Schwab is selling PortfolioCenter, a portfolio management and reporting engine used by 3,000 registered investment advisory firms, to Envestnet Tamarac.

Envestnet announced the acquisition Thursday afternoon when reporting its fourth quarter 2019 earnings. Terms of the deal were not disclosed. The companies expect the deal to close in the first half of 2019.

PortfolioCenter was key to Schwab Advisor Services' plan in 2010 for a cloud-based, multi-custodial portfolio manager that would have competed directly with rising third-party tools like Tamarac, Orion Advisor Services and Advent's Black Diamond.

Schwab has since changed course. Under Andrew Salesky, who took over as Schwab Advisor Services senior vice president of digital adviser solutions in June, the firm is focusing more on partnering with third-party vendors while also rolling out PortfolioConnect, a next-generation portfolio manager with deep integrations into Schwab's platform.

(More: New Schwab adviser technology chief Andrew Salesky brings veteran pressure to his team)

Mr. Salesky said the sale is consistent with Schwab's platform strategy to go "broad and deep" with third-party integrations.

The companies already have a history of partnership. PortfolioCenter actually serves as the accounting engine behind Tamarac's reporting software.

"Over the years, we came to understand each other's strengths," said Tamarac executive managing director Andina Anderson. "We recognized that they had a really strong portfolio accounting engine. Their reporting wasn't as robust as ours."

Schwab advisers make up a significant portion of Tamarac customers, so it only made sense to bring the technology in-house as Schwab goes in a different direction, Ms. Anderson said. Owning it will give Tamarac more control over future features and enhancements.

It also ensures Schwab advisers using PortfolioCenter will continue to be supported.

"We believe Tamarac is the best strategic fit to provide ongoing stewardship for the PortfolioCenter platform," Mr. Salesky said.


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