Charles Schwab Corp.'s portfolio management technology Portfolio Connect, which it touted as an “easy button” for advisers when it launched in April of last year, has topped more than 1,000 independent advisory firms on the platform, but is still chasing competitors in terms of adviser adoption.
Schwab positioned Portfolio Connect as a simpler and more cost-effective alternative that was designed to go head-to-head with other portfolio management providers like Orion Advisor Services, Advent’s Black Diamond and Envestnet Tamarac, which acquired Schwab’s older portfolio management system, called PortfolioCenter, for an undisclosed sum in February 2019.
While Portfolio Connect only works with Schwab accounts and lacks many of the customization options provided by other software, it is deeply integrated with Schwab’s custodian platform, which is a huge potential advantage to the more than 7,500 independent RIA firms that use Schwab for operational, practice management and trading functions.
Most of Portfolio Connect users are small to midsize firms with average assets under management of $40 million, according to a release. The platform provides performance, billing and reporting, and there's no additional cost to RIAs that custody with Schwab. It's also automatically available to all newly formed RIAs with under $100 million in assets, according to Lauren Wilkinson, vice president of digital advisor experience at Schwab.
“We introduced Portfolio Connect as a solution to appeal to smaller, growth-minded firms who want an efficient, scalable and cost-effective portfolio management solution for serving their clients,” Wilkinson said in a release.
However, Portfolio Connect trails its competitors in terms of market share, according to the 2020 T3 Technology survey. The Schwab tool served 3.83% of the 5,175 respondents, while competitors like Albridge and Morningstar Office had 17.55% and 14.11% of market share respectively. Other tools like Orion Advisor Services (12.37%) and Envestnet (9.37%) were also more likely to be used by financial advisers than Portfolio Connect.
More than eight out of 10 advisers use at least one portfolio management tool, according to the survey, and such tools are the second-most-used software category available to the adviser community.
It’s also the most competitive adviser tech segment, according to the research.
Schwab intends to push further updates to the software later this year. Next up, the low-cost brokerage plans to roll out flexible user permissions that allow firms to grant user-level access to selected client accounts while restricting others, according to the firm.
"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.
Elsewhere, Sanctuary Wealth recently attracted a $225 million team from Edward Jones in Colorado.
The giant hybrid RIA is elevating its appeal to advisors with a curated suite of alternative investment models, offering exposure to private equity, private credit, and real estate.
The $40 billion RIA firm's latest West Coast deal brings a veteran with over 25 years of experience to its legacy division for succession-focused advisors.
Invictus fund managers allegedly kept $10 million in plan assets after removal, setting off a legal fight that raises red flags for wealth firms.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.