Charles Schwab & Co. is making significant investments in technology as it makes a bid to gain management firms that will be attracted by the simplicity of the Schwab platform. John Morris, head of asset management products and services, said an increasing number of advisory firms want to deal with a handful--say five--not 35 different firms. This is particularly important in separate accounts, where operations is more complex than with funds. “I want to make sure I’m one of those firms,” he said.
Morris said Schwab is enhancing its technology platform to better share information with firms, handle new accounts, and provide information on trends in the industry. He declined to say how much the firm is spending on technology. In addition, Schwab said the firm is committed to making it easier for managers to interact with the firm so “they become our best sales people,” referring to how money managers can spread the word about the SMA platform. He said one of the improvements it wants to make is to simplify processes involving ADVs, proxy voting and other information about the firm. “We can build windows or pipelines so they can feed it to us directly. It makes everybody’s lives easier.”
Schwab also has recently consolidated both SMAs and funds under Morris, in part so it can begin building a unified managed account. A UMA offers a consolidated account and platform whereby advisors can offer investors all types of investments through one centralized window. Morris said having the investment products under one executive will make the process of building a UMA easier. Schwab has not yet made a decision on whether it will build the technology itself or outsource the project to a third-party firm.