Charles Schwab Enhances Institutional Intelligent Portfolios™

Updates follow new research about how independent advisors are using automated investment management

SAN DIEGO, Ca., October 25, 2016 /BUSINESS WIRE/ — Charles Schwab today announced a number of new features and enhancements to Institutional Intelligent Portfolios — the automated investment management platform designed specifically for independent advisors and sponsored by Schwab Wealth Investment Advisory, Inc.

The primary update is enhanced portfolio customization, which launches next month and will provide advisors greater flexibility to design portfolios based on their investment philosophies. Other enhancements include new account funding options, and ways for firms to manage multiple Institutional Intelligent Portfolios programs. In early 2017, Schwab will also roll out an updated client-user app for smartphones and tablets that will enhance navigation and deliver a more intuitive user experience.

“Automated investment management continues to be an important and evolving trend in our industry. Our research shows that advisors are optimistic that this technology can help scale their businesses and allow them to stay competitive in the marketplace,” said Jessica Heffron, vice president, client experience, Schwab Advisor Services. “Most advisors tell us that the biggest opportunity for automated investing tools is to more efficiently serve smaller accounts or reach clients that their firms have been unable to serve before.”

The company shared the news today at Schwab IMPACT, the nation’s largest and longest-running annual gathering of independent advisors. Among more than 30 technology-focused sessions at this year’s event is an Institutional Intelligent Portfolios user panel discussion, where three early adopters will share insights about how they have built new offers on the platform. During this panel, Schwab will also share findings from a recent study of more than 500 advisors who use or plan to introduce automated investment management.

Schwab’s Automated Investment Management Research

Schwab surveyed more than 500 advisors to learn more about sentiment and gather feedback from firms that already use or plan to introduce automated investing offers. The survey participants included Schwab client firms (70 percent) as well as advisors at wirehouses, insurance broker/dealers, and other RIA firms.

Key findings from the study include:

  • Overall, six in 10 advisors see automated investing as a way to expand reach to clients they have not typically served.
  • Two thirds of current and future users agree that automated investment management is a scalable and efficient way to grow their business.
  • When it comes to pricing, 83 percent of advisors plan to offer asset-based pricing and 64 percent say their automated offer will be priced lower than their traditional offer.
  • Few advisors are going completely digital. Most advisors are incorporating some level of personal interaction, which would largely include meetings and consultations with the client over the phone or electronically (75 percent) or in person (45 percent), in addition to investment management.
Those advisors who are already out in front on this opportunity are using a ‘test and learn’ approach and are ready to modify strategies and assumptions as this trend continues to unfold in the market.

“Since launching Institutional Intelligent Portfolios in 2015, there has been a lot of interest in automated investing solutions, but launching a more digitally-based solution is proving to be a significant strategic endeavor. The technology is only a piece of complex equation. Even advisors who are early adopters are approaching it judiciously in terms of implementation,” said Heffron. “Those advisors who are already out in front on this opportunity are using a ‘test and learn’ approach and are ready to modify strategies and assumptions as this trend continues to unfold in the market.”

Enhancements and updates to Institutional Intelligent Portfolios

Schwab has worked with advisors to determine how this technology can complement their long-term business strategies and to collect feedback to help drive continued improvements to the offer, including:

  • Enhanced portfolio customization. Schwab now offers more than 950 ETFs on the Institutional Intelligent Portfolios platform — more than double the number of ETFs that were available at launch last year. Starting next month, all advisors will be able to create up to 45 advisor-defined asset classes in each portfolio and offer multiple ETFs in each asset class.
  • Multiple-program. Firms can now offer separate programs at the advisor level or establish programs to target specific client segments.
  • New account funding options. Advisors now have more account funding options, in addition to cash, and can journal transfer of asset positions.
  • Easier account open for clients. Enhancements to the account opening process make account open faster and more flexible.
  • Client interface enhancements. In early 2017, Schwab will roll out a new Institutional Intelligent Portfolios app for both smart phones and tablets. The app will continue to be advisor-branded and will now include streamlined navigation and an improved client interface.




About the Charles Schwab 2016 Automated Investment Management Research
The 2016 Automated Investment Management Research was conducted for Schwab Advisor Services by Socratic Technologies Inc. Socratic Technologies Inc. is not affiliated with, nor employed by Charles Schwab & Co. Inc. All data is self-reported by study participants and is not verified or validated. Advisors participated in the study from May 16 to May 31, 2016. Study participants were 509 advisors, including 359 advisors from firms that custody with Schwab and 150 advisors from wirehouses, independent broker dealers, insurance broker dealers, and other RIA firms.
About Charles Schwab
At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.