Charles Schwab Expands Managed Account Services Platform for Advisors

Wednesday, March 26, 2008 9:00 am PDT



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SAN FRANCISCO--(BUSINESS WIRE)--Charles Schwab today announced enhancements to its managed account platform to assist independent investment advisors who choose to outsource functions such as money manager research and portfolio construction in order to run their businesses more efficiently. As part of this effort, Schwab Institutional has recently formed new and expanded relationships with three firms that provide investment products and back-office services to advisors. In addition, Schwab has grown its own managed account program, including expanding the selection of available strategies and the introduction of a multi-strategy portfolio.

New and expanded strategic relationships

As part of its managed account services platform, Schwab has relationships with turnkey asset management providers (TAMPs) who offer a variety of products and services to advisors who custody assets with Schwab Institutional. The TAMP category is one of the fastest growing parts of the managed accounts industry and is expected to approach $1 trillion in assets by 20121. In order to provide advisors with greater choice in this rapidly growing category, Schwab has expanded its TAMP platform to include:

  • An expanded relationship with Envestnet Asset Management to include a full product line-up of unified managed accounts (UMAs), multi-manager accounts, mutual fund and exchange traded fund (ETF) wrap products, and separately managed accounts (SMAs).
  • A new relationship with FundQuest Incorporated to offer a full product line-up of UMAs, multi-strategy products (MSPs), mutual fund and ETF wrap products, and SMAs.
  • A new relationship with Morningstar Investment Services, Inc., to offer its line of actively managed mutual fund, stock, and exchange-traded fund portfolios.

More advisors today are looking for turnkey solutions that provide research capabilities, sales support and back-office administration, allowing them to focus on serving clients and growing their businesses, said Barnaby Grist, managing director of strategic business development for Schwab Institutional. We see this trend occurring among established and fast-growing RIA firms but also among newly independent advisors who have left established firms and are setting up shop on their own.

As part of their offerings for advisors, Envestnet, FundQuest and Morningstar Investment Services provide a range of back-office services to advisors, including client management (e.g., client profiling and proposal generation), investment management (e.g., portfolio construction, manager research and rebalancing), performance monitoring (e.g., reconciliation, and reporting) and operations (e.g., billing and compliance tools.)

With todays announcement, Schwab now has 18 providers on its TAMP platform including longstanding relationships with Callan Associates, BAM Advisor Services, LLC and Fortigent, LLP.

More information on Schwabs TAMP platform is available at shtml. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

Growth in Schwabs separately managed account platform

In addition to new third-party relationships, Schwab has enhanced its Managed Account Select® and Managed Account Access® bundled programs to provide access to more than 230 investment strategies from more than 75 money managers, including the 15 largest separate account managers in the industry2. Both Managed Account Select and Managed Account Access include the benefits of streamlined administration, pre-negotiated fees, and minimums as low as $100,000.

Schwab also recently introduced Diversified Portfolios in Managed Account Select, an MSP combining multiple strategies for a complete portfolio solution in one account. Parametric Portfolio Associates and Nuveen Investment Advisors, Inc. oversee the portfolio according to target asset allocations based on models designed by the Schwab Center for Financial Research, which provides the intellectual capital behind the core investment and financial planning advice at Schwab. Diversified Portfolios and Managed Account Select are also available to Schwabs retail brokerage clients.

As advisors clients financial needs become increasingly complex, we are seeing more demand for solutions that provide diversification and access to institutional-quality money management, said Jeff Carlin, vice president of managed accounts for Charles Schwab. In developing our managed accounts platform, we aim to find the right balance between sophistication, simplicity and flexibility.

As part of its overall managed accounts platform, Schwab also offers Managed Account Marketplace, a flexible solution that allows advisors to access 865 managers and 2,440 different investment styles, conduct their own due diligence on managers, and negotiate their own fees.

About Schwab Institutional

Schwab Institutional is a leading provider of custodial, operational and trading support for independent investment advisors. As of December 31, 2007, client assets custodied with Schwab Institutional stood at $583 billion. These assets, managed by the approximately 5,500 independent advisor firms Schwab Institutional currently serves, represent approximately one-third of total client assets custodied with The Charles Schwab Corporation. Brokerage products offered by Schwab Institutional are not FDIC insured, are not guaranteed deposits, and are subject to investment risk, including the possible loss of principle invested. Schwab Institutional is a division of Charles Schwab & Co., Inc.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.1 million client brokerage accounts, 1.3 million corporate retirement plan participants, 302,000 banking accounts, and $1.4 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,, and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Schwab Institutional division. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at (0308-0477)

Schwab does not recommend or endorse any particular TAMP or separate account manager. Schwab is not affiliated with any of the TAMPs available on the platform or with any of the separate account managers in Managed Account Select or Access. Schwab makes no representation or warranty about any TAMP or separate account manager or its suitability for advisors clients. Services may vary depending on which money managers or TAMP providers are chosen.

1 Tiburon Strategic Advisors, A Comprehensive Overview of the Separately Managed Accounts & Other Fee-Account Programs Industry, January 2008.

2 Cerulli Associates, The Cerulli Edge, Managed Accounts Edition, Fourth Quarter 2007. Based on total assets under management.


Charles Schwab
Lindsay Tiles, 415-667-3997

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