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Schwab’s Clark, Bradley Tout 2 Emerging Tech Tools for RIAs

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Schwab continues to see strong enrollments by advisors for its free Advisor Portfolio Connect management system that was launched in April 2019, according to Bernie Clark, executive vice president of Schwab Advisor Services.

“We’ve had great adoption,” he told ThinkAdvisor on Wednesday, pointing out the number of Schwab Advisor Services clients is approaching 1,000.

The number of clients using Portfolio Connect already passed 800 advisors, Schwab spokesman Rob Farmer said Thursday, adding that “about 99% of the advisors using it manage less than” $100 million.

“We greatly exceeded our expectation for year-end enrollments on the platform, with over 700 clients now utilizing the platform on a daily basis,” Andrew Salesky, senior vice president of Schwab Advisor Services, told reporters during a Technology Tuesday conference call Jan. 21. At that point, the average assets under management for those clients was about $40 million, he said.

“What you’ll see this year [are] more capabilities for larger firms that are interested in using Portfolio Connect: some data capabilities, export capabilities, bulk account management capabilities,” Salesky said at the time. However, he added that Portfolio Connect “will stay a Schwab custody-only solution.”

Portfolio Connect “saves firms tens of thousands of dollars,” Clark told ThinkAdvisor on Wednesday. And that is especially significant when you factor in the fact that it is “focused more on the smaller advisor — that single custodian,” he noted. If those advisors turned to Orion or Envestnet Tamarac for the same services, they would have to pay for what Schwab is providing to them for free, he said.

This is a “great solution for the smaller firms,” according to Tom Bradley, the TD Ameritrade veteran whom Schwab hired as senior vice president to oversee the integration of the two advisory businesses as part of Schwab’s planned acquisition of TD Ameritrade.

AI-Enhanced Voice Technology

Also new on the technology front at Schwab is an an artificial intelligence-driven, voice-activated phone system for its “core advisor” group — those RIAs with $100 million or less in assets — that is designed to connect a caller directly with the person who has expertise to answer their question.

Schwab launched the AI phone system Wednesday, Bradley told ThinkAdvisor. “The interesting thing about this system is it’s designed to do the opposite of what most telephone systems are designed to do,” he said. Most phone systems are automated and tell callers to press certain numbers to get the person or department they need, he noted. In other words, “They’re designed to do everything but get you to a person” you need to speak to right away, he joked, adding: “Our system is actually designed to get you to someone as quickly as possible, and to get you to the right person” immediately.

This is an “investment in first-call resolution” by Schwab to help their advisors, Bradley said. As an example, he pointed out that while just about anybody available when a Schwab advisor calls may be able to help with a simple request like checking on a wire transaction, advisors with a more advanced question, such as one involving an estate account, are going to be better served by talking to an expert in that area.

In 2019, Schwab Advisor Services handled more than 3 million incoming calls from its advisor clients, or more than 8,000 calls per day, the company says at its website.

Therefore, the firm “saw an opportunity to handle the volume more effectively by employing the latest developments in artificial intelligence,” it notes, adding: Although the RIA industry has grown increasingly complex, it became apparent that the number of incoming calls from advisors could be reduced by enhanced digital capabilities and, with improved voice-assistant technology, ensuring that when they do call, they get the right answers the first time.”

Schwab Advisor Services analyzed more than 2.5 million phone calls to “uncover the most common requests advisors have when they call,” and the reasons cited varied widely — address changes, trading questions, trust accounts and alternative investments — “but commonalities emerged,” it says. The most important point: “Essentially, advisors want to speak to the right person, the first time, to answer their questions,” Schwab says.

The new voice technology is “as simple as interacting with the natural-sounding voice, explaining the reason for the call, and being routed to the right person for immediate help,” according to the company.

“The voice assistant is part of our multi-year, multi-layered journey to deliver a more modern approach to supporting advisors,” according to Jalina Kerr, senior vice president of Client Experience at Schwab Advisor Services. “As advisor businesses grow and evolve, so does our support for them,” she said in a statement, adding: “We need to handle inbound calls elegantly, because time spent on hold is time that advisor could be spending with clients and we could be spending more productively, supporting advisors and their businesses where they need us.”

— Check out How Schwab Plans to Sweeten the Deal for Small RIAs After Merger on ThinkAdvisor.


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