Charles Schwab plans to roll out a tool for advisors on its custodial platform to open paperless accounts, it announced at the Orion Ascent conference in Miami on Thursday.
The new tool, formally named Digital Account Open, will launch in a pilot mode later this year.
‘Technology is the most powerful lever firms have to build scale and enhance service,’ Charles Schwab head of digital advisor solutions Andrew Salesky said in a statement. ‘The roll out of Digital Account Open… is the latest example of our ongoing efforts to digitize the Schwab custody platform so that it is a secure, efficient, and simple user experience for advisors and their clients.’
The new platform will also be available through Orion Advisor Services, a portfolio management solution provider that Charles Schwab said it also plans to work more closely with.
The RIA custodian said it would allow advisors to directly import their client information from Orion into Schwab’s platform, which could potentially allow new clients to have their applications ready for funding in ‘seconds.’
‘We have heard from our advisor clients that they want to combine the best of Schwab with their chosen third-party solution to meet their changing and individual business needs,’ Salesky said. ‘As we continue to listen and respond to advisors, we look forward to expanding third-party integrations by going both broad and deep with the industry’s premier technology providers.’
Schwab’s new tool could pose a threat to existing business-to-business tech firms who specialize in client onboarding, such as Invesco-backed Jemstep and BlackRock-backed FutureAdvisor.
XY Planning Network co-founder Michael Kitces said that
And... here's the beginning of the death of most B2B digital advice tools. Most have no moat against RIA custodians simply improving their own digital account opening capabilities to make them irrelevant? https://t.co/71PEj0KZB8— MichaelKitces (@MichaelKitces) September 6, 2018
Why buy a robo onboarding overlay to an RIA custodian when the custodian makes its own digital onboarding tools?— MichaelKitces (@MichaelKitces) September 7, 2018
Orion has been building up its tech stack in recent weeks. In August, the firm said it would include financial dashboards from financial asset visualization firm Asset-Map on its platform.