Schwab Launches Automated Investment Platform for RIAs

Schwab Launches Automated Investment Platform for RIAsThe rise of automation has replaced human workers with robots and other automated processes, not just in the manufacturing sector but increasingly in the world of finance, too. So-called “robo-advisors” saw their assets under management grow by more than 21% in the final five months of 2014, according to Business Insider, and they’re projected to see their AUM top $250 billion by 2020, according to MyPrivateBanking Research.

Charles Schwab’s announcement that it would launch a robo-advisory service this year caused Forbes to question whether robo-advising was “the next big thing,” and on June 23, Schwab expanded its presence in the automated investment management space with the launch of its Institutional Intelligent Portfolios platform for Registered Investment Advisors (RIAs).

Technology for RIAs to Leverage Their Business

“Advisors see the opportunities ahead of them – whether the transfer of wealth from one generation to the next, the emergence of Generation Now investors, or the shifting investment priorities of retired clients,” said head of Schwab Advisor Services Bernie Clark, in a recent statement. “Recent research found that 70 percent of advisors believe that technology advancements enable firms to provide clients with a better experience, and many firms have identified automated solutions as a key opportunity in their firm’s growth strategy.”

The Institutional Intelligent Portfolios gives RIAs the ability to create their own branded sets of portfolios from more than 450 ETFs across 28 asset classes, selecting the ETFs that reflect their own investment philosophy. The ETFs on the platform represent more than 80% of total ETF assets currently held by RIAs’ clients at Schwab, and virtually 100% of the assets invested in the 28 asset classes represented in the platform. Thus, advisors have a wide selection of products from which to build their own custom and branded portfolios for their clients.

“Personally, I am very excited to see how entrepreneurial advisors use Institutional Intelligent Portfolios to expand their reach and to scale some elements of their practice,” said Mr. Clark.

24/7 Customer Service

Schwab will also provide extensive resources and support for RIAs to help them evaluate and setup the Institutional Intelligent Portfolios at their firms. The platform provides 24/7 customer service to advisors’ clients when their advisor is unavailable, and a dedicated service team to provide technical support and ensure the functionality of the platform.

“Institutional Intelligent Portfolios is a pivotal addition to the breadth of offerings for RIAs at Charles Schwab,” said Mr. Clark. “Using technology to automate portions of the investment process can create efficiencies and scale for firms and enables them to augment their full-service wealth management capabilities for a broader range of clients.”

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