Joel Bruckenstein’s Thoughts on Schwab

Nationally-known brokerage firm Charles Schwab recently announced a new initiative — the Schwab Intelligent Advisory. This program is designed to serve an under-represented market in the financial advisory industry, providing clients with a customized financial plan, guidance and assistance from planning consultants as well as an automated, diversified portfolio. These services, which will be provided by certified financial planners, are going to be available for a significantly lower cost than traditional financial planning and wealth management services, and it could change the way that the financial advisory industry operates. Schwab intends to launch the program in the first half of 2017.

Joel Bruckenstein published his thoughts on this recent announcement on T3 Technology Hub, in a blog post titled: “Will Schwab Upend the Advisor Business?” Bruckenstein argues that Schwab is providing financial services to a set of clients who have not traditionally had access to these services, and the firm is taking advantage of an opportunity that has been ignored by other wealth management experts in the industry. Given the fact that Schwab is a brand with national recognition and satellite offices throughout the country, it has a decent chance of being successful in this endeavor.

Bruckenstein makes the following points in the article:

• Schwab has to compete with other brokerage firms that offer similar programs. However, the Schwab program is hands-down the most affordable option for clients who are interested in these services, and Schwab has the advantage of a well-oiled marketing machine.
• Schwab is running the risk of competing with its own team of advisors, which could adversely impact the company’s relations with its financial planners and advisors. Bruckenstein acknowledges that most advisors at Schwab will not be immediately threatened by the program, but it could cause dissent in the future.
• Bruckenstein recommends that financial advisors play close attention to the developing situation, as it certainly could have a significant impact on the wealth management industry and the strategies employed by financial advisors.

What Technology Can Advisors Use to Differentiate Themselves from Commoditized Management Services?

With the launch of the new service packages from Schwab, financial advisors should set their sights on diversifying their own packages and programs for their clients. Technology can help financial advisors and wealth management professionals improve the customer experience and boost their client satisfaction rates.

Tolerisk® is risk tolerance assessment software that can change the way that advisors do business. Designed to determine both the willingness and ability of an individual client to take investment risk, this innovative risk tolerance assessment tool provides a wide range of features that allow for accurate, customized results. With a Tolerisk® report, financial advisors can provide their clients with insight into their risk directive decisions, help them determine whether they will have enough resources throughout their lifetime and give them actionable steps they can take to improve their strategy.

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