Portfolio Service Helps RIAs Enter Institutional Market

The new Institutional Intelligent Portfolios program from Charles Schwab is designed specifically to help registered investment advisers (RIAs) break into new market segments and scale up their businesses in an efficient way.

According to Schwab, the Institutional Intelligent Portfolios offer RIA firms new flexibility around portfolio construction and exchange-traded fund (ETF) selection. The service helps RIA firms create and deliver their own branded set of portfolios to serve unique institutional clients, “reflecting their investment philosophy and choosing from more than 450 ETFs across 28 asset classes and all major fund families.”

Bernie Clark, executive vice president and head of Schwab Advisor Services, suggests the new service is especially timely because many advisory firms have identified automated solutions as a key opportunity in their short- and mid-term growth strategies. “Personally, I am very excited to see how entrepreneurial advisers use Institutional Intelligent Portfolios to expand their reach and to scale some elements of their practice,” he adds.

Clark says advisers can use the service to build customized portfolio strategies and account features—setting each portfolio’s asset allocation and selecting the underlying ETFs to meet the needs of institutional clients. Advisers can also brand the client experience with their firm’s logo and contact information.

Client service efficiency is also delivered through use of investor profile questionnaires, which break down an individual client’s investing goals and risk tolerance to map them into one of the adviser’s custom-designed portfolios. Advisers then make a final review of the client’s profile and portfolio assignment and adjust it if necessary before approving it, at which time money can be invested. To ensure liquidity demands can be met, all portfolios must maintain a minimum allocation of 4% in cash, Schwab explains.

Institutional Intelligent Portfolios accounts will be displayed in the Schwab Advisor Center alongside the adviser’s other client accounts. Data on Institutional Intelligent Portfolios accounts will be available for download directly into portfolio management systems, and users of Schwab OpenView Gateway also will be able to access real-time information on these accounts through all participating third-party applications.