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fi360's Biggest Tech Project has Schwab as a Client

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Fiduciary services provider fi360 has completed what Chief Executive Blaine Aikin describes as its biggest technology project yet: a system that will make its advisor toolkit available to clients of the nation’s largest custodian, Charles Schwab.

Schwab’s Retirement Business Services unit, which offers trustee and custody services to advisors and recordkeepers who work with small retirement plans, has integrated fi360’s toolkit into its platform.

The system will allow advisors on Schwab’s platform, with a single sign-on, to prepare retirement plan proposals for potential small business clients that sponsor such plans, and to follow up with regular performance reports.

As part of the deal, fi360 will also offer training for its Accredited Investment Fiduciary designation to clients of the Schwab unit. About 5,500 people in the industry hold the designation now.

Retirement Business Services works with 185 recordkeepers and about 4,000 advisors whose sponsor clients have plans of $30 million in assets or less, Vice President Debbie Pritchard says. A large number of advisors are RIAs that already custody with the firm on Schwab Advisor Services, she says.

Her business handles assets for 9,000 to 10,000 so-called “unbundled” plans— those whose sponsors hire multiple service providers. Pritchard wouldn’t comment on the amount of assets on the platform. The tools and services that Schwab will provide to its clients via fi360 are already a mainstay among service providers to sponsors of much larger retirement plans, she says.

“These services are coming down-market. (Small plan providers) really need the type of fiduciary services that the larger markets have been demanding for many years,” Pritchard says. Schwab hopes the service will also draw more clients; she says her business has targeted growth of 25 to 50 percent in net new assets for next year.

“We really recognize the role that advisors play in the smaller market, and I think it’s increasing,” she says. “What we would have found five years ago is that many of our small plans would have not even had an advisor on their plan. But I don’t see that any longer. I see even the smaller plans asking for advisors.”

The partnership with Schwab completes a challenging integration—the project took 12 to 15 months—that will open doors for fi360, Aikin says.

“It’s the first major integration effort that we’ve done, and certainly our largest technology project to date,” he says. “It established additional capabilities that allow our toolkit to be applied in a very comprehensive way, with ease of access and integration of the investment data from a major provider like Schwab. It opens the opportunity to be able to provide similar services to others as well.”

fi360 developed the system with a staff of about a dozen, and also partnered with outside firms, whom Aiken declined to identify. The toolkit allows both advisors and sponsors to fulfill their range of obligations as investment fiduciaries, he says.

Advisors can model investment portfolios for asset allocation, perform due diligence on the investments, create monitoring reports, and develop the investment policy statement. “It equips the advisor to not only do their own job better in terms of fulfilling their obligations in the agreement with their plan clients, but it also helps the retirement plan sponsors meet their fiduciary duties by providing those sorts of services,” Aikin says.

Other custodians, including Fidelity and TD Ameritrade, are potential clients for the new toolkit, he says. There are more development projects in the pipeline, he adds.

“Obviously we would like to make these available to as many advisors as we can because they serve an important function,” Aikin says.

Bluff Point Associates, a private equity firm, took a majority ownership stake in fi360 last October.

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