A startup technology company that promises to help advisors navigate and discover information about investment funds and holdings as easily as they use Google search is now available to all of Schwab’s advisors with a recent integration.
Anyone can kick the tires, free of charge, on the startup’s search engine. Like a Google search bar, users enter “natural language” search terms, questions or phrases. For instance, entering the phrase “what funds invest in wind turbines” brings up a list of funds with top holdings in wind energy. The free portion of the site allows a user to analyze and compare investments across thousands of ETFs and mutual funds.
With the integration, Schwab advisors can import their clients’ portfolios with a single sign-on and with daily data matching, according to Rick Hurwitz, CEO of Magnifi. Advisors can use the semantic search capabilities across their accounts; for example, if a client is concerned about exposure to China, the advisor can enter "exposure to China" and the client funds that have high exposure to that country will rise to the surface.
“In seconds a Schwab advisor can use Magnifi’s natural language search capabilities to, in essence, Google their book,” said Tom Van Horn, Magnifi’s chief product officer. Searches like “where do I have exposure to TESLA,” or “battery technology” can find and quantify those assets—or the lack of them—in the portfolio.
Unlike typical data tools that rely on the matching of key words, Semantic search uses natural language processing to interpret requests and surface the most relevant data.
The idea is that advisors will be better equipped to have topic-driven or values-based conversations with clients around their portfolios, and make accommodations as needed, according to Van Horn.
“We knew from the first time we saw Magnifi that it was disruptive IP that would benefit the advisor-client relationship, and we are excited to bring it to our clients,” wrote Bernie Clark, head of Schwab Advisor Services, in a statement provided to WealthManagement.com.
It is the premium features that the startup is wagering will both make an advisor's life easier and serve as a revenue generator for Magnifi. Starting at $250 per seat per month, Magnifi Pro includes access to the company's patented product selector and client proposal generator.
With the selector features, an advisor can compare funds, SMAs and models based on customizable portfolio attributes. Advisors can then see the impact of adding those new holdings into a portfolio and download the data to Excel. The white label, customizable client proposal generator creates an IPS for clients. In addition, the proposals can be used for compliance and meet suitability, due diligence requirements for Reg BI and firm compliance.
Magnifi Pro + adds two additional features for $500 per month per seat. It includes the proposal generator, product selector and access to Magnifi's Builder, which lets advisors build portfolios from scratch, test changes and add thematic tilts, as well as a tool, Enhancer, which lets advisors demonstrate to clients how other investments could improve portfolio performance.
A client portal lets an advisor take the deep dive across all client accounts quickly to find specific exposures in response to, say, real-time events.
Before the integration, advisors were able to upload individual client accounts to the Magnifi marketplace. With the integration, Schwab advisors can use the tool to bring in all their client accounts at once, and each day Magnifi will provide up-to-date positions and balances across their entire book of business within the cloud-hosted platform.
The platform has detailed data on more than 7,000 mutual funds, over 2,000 ETFs, 1,100 model portfolios and 10,000 separate managed accounts.
Magnifi also has integrations with other product providers, including TD Ameritrade Retail, Fi360, Morningstar and FactSet.
Magnifi was co-founded in 2018 by venture capitalist and investor Isabelle Freidheim and serial entrepreneur Vinay Nair. Magnifi is one of several holdings within The TIFIN Group, an incubator for startups in investment management and personal finance technology. Until December the group included 55ip, which was acquired by JP Morgan Asset Management for an undisclosed amount. Other startups in the TIFIN portfolio include Clout, Louise, and Positivly.