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Schwab's Portfolio Connect Graduates From Early Access

Schwab's automated, simplified portfolio management system is now generally available to advisors, the firm said.

A development that’s been teased for months, including at Charles Schwab’s IMPACT conference, is moving out of its early access phase and into general availability, according to the firm. On Tuesday, Schwab told advisors its Portfolio Connect portfolio management tool was open for business, according to Lauren Wilkinson, vice president of digital advisor solutions at the firm. The free tool is intended for firms managing less than $100 million in assets that are custodied at Schwab.

The early access program gave 60 advisors a chance to try out the new tool, while soliciting feedback on billing, reporting and even wording within the feature, said Wilkinson. Since announcing the availability of the tool to advisors custodying with Schwab yesterday, 30 more firms have signed up to use the product, she noted. Initially planned for a mid-2019 launch, the general availability of the tool benefited from the iterative approach to advisor feedback that’s been implemented in Schwab’s technology development lifecycles, she added.

For one of the first advisors who had access to the tool, it was a culmination of years of hints and waiting. “We purposely held off on PortfolioCenter, kind of a waiting to see what would happen with Portfolio Connect,” said Eric Uchida Henderson, chief investment officer at Cambridge, Mass.-based East Horizon Investments. The firm has $18 million in assets under management, according to its most recent regulatory filings. Because of the pace of wealthtech evolution, he said he is always concerned about obsolescence of advisor tools and tends to adopt new technology only after the bugs have been worked out. Schwab’s support of the tool helps relieve those worries, he said. The free price was also a factor in his satisfaction with the tool.

“I think it's almost ready to go,” he added, noting the ways in which his firm benefited from the accuracy of the billing and the presentation of invoices to clients. “I'd recommend this experience that we've had so far.”

Portfolio Connect allows advisors to brand their reports with their own logo and brand information, linking brokerage accounts to the payment system for asset- or flat fee-based transactions. While the system allows for manual input of payments received via check, it does not connect with Schwab’s banking system, for example, to allow for ACH-style payments, said Wilkinson.

“The focus for Portfolio Connect is to keep it purpose-built and simple,” she explained. “It's not a fully customizable system like you would get from a third-party portfolio management system. And that's very intentional. We did not have intentions to evolve this into a multicustodial, fully customizable system,” she added.


Another early access advisor saw Portfolio Connect as an all-around upgrade from the Excel spreadsheets and self-built reporting he was previously using. “I'm not saying I drank the Kool-Aid, because I was part of the early development of this, but I will tell you this is a game changer,” said David McInnis, founder and CEO of Madden Creek Advisors, in San Francisco. His firm tallies $5 million in assets managed, according to its most recent regulatory filings. “It's a total game changer in my eyes—for me.”

As much as McInnis benefited from early access to the tool, he said his feedback on the way in which Schwab was calculating flows and charging on commissions benefited from the feedback he gave the firm. "It was a little clunky in the beginning on the billing," he said.

Wilkinson confirmed that the tool saw changes to its billing, including a feature that allows advisors to recognize manual payments in the system, was based on suggestions and feedback from early access advisors.

Like Horizon's Henderson, McInnis noted that there were still adjustments to be made to the tool. “This is still under development. It's not 100% finished yet,” he said, pointing out a button called “Management Views (coming soon).” Schwab did not immediately indicate what was planned to link with that button or when it might happen. There’s room for a CRM integration as well, McInnis said. Portfolio Connect is not currently integrated with third-party tools.

To help ensure advisors are happy with Portfolio Connect, Schwab screens potential users to make sure they understand the features they're getting. For advisors with larger or more complicated books of business, Schwab recommends partnering with a third-party portfolio management provider, Wilkinson noted. Schwab plans to have around 100 integrations with Schwab Advisor Services by the end of the year, up from the 50 or so it has now. Those will come on a rolling basis as the year progresses, she said.

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