Six-year-old Scottrade Advisor Services has hit a milestone: 1,000 registered investment advisory firms now use its custody services.
Built on the promise of low fees for smaller financial advisers and breakaway brokers, its leaders think that its next growth phase will be driven by technology. To get the ball rolling, it has just completed the first of several integrations with third-party providers.
The integration involved
financial planning software MoneyGuidePro from PIE Technologies Inc., which was a natural place to start, given that
financial planning tools top the list of tech requests in survey after survey of advisers.
Advisers who use the custody services of Scottrade will be able to get the software at a significant discount, though no formal pricing announcement has been made.
FLOWING SEAMLESSLY
More important than the pricing, though, is that advisers who purchase the Scottrade version of MoneyGuidePro will find that the application lives within the adviser platform, which means that client account data will flow seamlessly from Scottrade into the financial planning application rather than requiring downloads or multiple logins.
Advisers also will receive the full version of MoneyGuidePro, not the limited-set version used by some hybrid advisers. The full-set version supports advisers who use AllData Advisor from CashEdge Inc. to bring in data on clients' held-away accounts.
“This is our first enterprise relationship with a firm that caters exclusively to RIAs,” said Tony Leal, chief technology officer at PIE Technologies.
“We've put a tremendous amount of development focus on the RIA market and have built a tight web service integration with Scottrade's platform. We're able to provide a more seamless experience so advisers can review plans with real-time account values whenever they need to,” Mr. Leal said.
Scottrade also has completed an agreement with Dow Jones & Co. Inc. to make research and other resources available through a content portal.
To meet the need for
portfolio management software, another “must have” for breakaway brokers, Scottrade purchased Portfolio Director Inc. in late 2008 and integrated it into its platform. The software is available to advisers for $150 a month.
Brian Davis, director of Scottrade Advisor Services, said that the firm hasn't selected a customer relationship management vendor for the integration effort, but Redtail Technology Inc. is clearly the most popular CRM provider among its adviser base, a hint that additional work with that firm may be coming.
THE WISH LIST
Scottrade's adviser clients think that plenty of room remains for additional offerings.
Adviser Tom Mooney said that he would like to see Scottrade launch a plan to develop an open application-programming interface like that under way at TD Ameritrade Institutional, where it's a major priority. More than 50 third-party technology providers now are in some stage of developing products to be integrated with TD's Veo platform, which serves about 4,000 advisory firm clients.
“We would like to be able to perform portfolio management from within our proprietary system,” said Mr. Mooney, whose firm, Veritat Advisors, is among a handful of RIAs that target the mass affluent, making heavy use of online collaboration.
“Currently, re-balancing is a fairly manual process done on an account-by-account basis. Being able to click a button and re-balance all our accounts across our whole book of business would be the next big game changer for us.”
Advisers seem very supportive of Scottrade's work.
“I am kind of an atypical RIA,” said Harold Harkins, principal of Harkins Investment Co., which has been in business for 30 years and has been with Scottrade since 2005.
Mr. Harkins, an attorney who specializes in
estate planning and administration, actively manages assets for just a handful of clients, some of them fairly large, though he is typical of other Scottrade advisers in that his overall assets under management remain less than $100 million.
He said that for the most part, his clients are business owners, some with $10 million or more in assets.
In addition to the firm's custody services, Mr. Harkins said that he also relies on Scottrade's trading platform, which he said is extremely fast and flexible, providing a lot in the way of account group management.
He is also enamored of how well Scottrade's systems work with his platform of choice: Apple's Macintosh and its Safari web browser.
“I think Scottrade has done an astonishingly good job at putting together a platform in a relatively short time, and they have the best customer service of any of the firms I've worked with,” Mr. Harkins said.
Mr. Davis thinks advisers will be even happier with what is coming.
“We think our well-defined technology road map is going to be a strong draw for us,” he said.
“We have a solid mix of firms and are a great fit for those state-registered investment advisers with less than $100 million in assets. Our stance is that if you are an emerging practice and need a home, we're here for you.”
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