Schwab’s PortfolioCenter to Envestnet Sale Sparks New Interest In Multi-Custodian Software

The recent deal between Schwab and Envestnet has caused a market-wide ripple effect, prompting advisors to rethink their software platforms.

Last month, Schwab Advisor Services announced the sale of their desktop-based platform, PortfolioCenter, to Envestnet. Schwab had promised to relaunch a cloud version but was not able to deliver after a four-year campaign.

They had planned to add multi-custodial portfolio management capabilities with a new software product called PortfolioConnect. But in September 2018, new Schwab Senior Vice President of Digital Advisor Solutions Andrew Salesky broke the news that neither PortfolioCenter nor its successor, PortfolioConnect, would be released as planned. Envestnet confirmed the acquisition in a press release on February 21.

Technology Tools for Today president Joel Bruckenstein may have seen this move coming when he first reported on Schwab’s failure to launch in 2018. “While some critics will, no doubt, blast Schwab for the abrupt turnabout on the multi-custody promise, upon further examination it is probably the best option available to them under the circumstances.”

Bruckstein went on to suggest that since so many providers have expanded their capabilities in recent years, Schwab’s offering meant less now than it might have before.

The Schwab Envestnet deal is being called “a defensive move” by analysts, allowing Schwab to cut its losses. The 2018 T3/Inside Information Technology Survey reported that while PortfolioCenter still retained its title as a market leader in 2017, its share dropped from 24.48% to 17.63% in 2018. The survey also showed a significant drop in usage and satisfaction among users compared to competing software platforms.

Schwab Envestnet sale effect on the market

Sold at an undisclosed price, PortfolioCenter will merge with Envestnet’s subsidiary, Tamarac, to target a more mid-market audience. This announcement has caused a feeding frenzy among advisory tech providers eager to offer their services to displaced RIAs.

Schwab competitors BlackDiamond, Orion Advisory Services, and MorningStar jumped at the chance to promote discounted bundles for PortfolioCenter users. In response, Envestnet’s Tarmarac announced a price slash for long-term contracts.

Many advisory firms use the same portfolio management software for years, or even decades, due to the cost and inconvenience of migrating to a different platform. With so many options now available, the temptation to make the switch may outweigh concerns about the move itself.

But total migration is no longer the only option for RIAs who want to combine multi-custodial integrations with a single, secure trading platform.

Blaze Portfolio integration with multiple custodians

Looking to transition to a new accounting system or change an entire suite of tools? We can get your business up and running.

As an “agnostic” platform, Blaze integrates with many portfolio accounting and reporting systems. No matter what reporting system you choose, you will never have to worry about trading with Blaze.

Our trading system can also help reduce operational risk as you pick and choose your integrations.

The Blaze Portfolio system allows client accounts to run while their historical data converts to a new accounting system. Accounting systems can take months to transition and migrate, but for us, pulling data is a quick overnight process.

As a result, you’ll only have to learn one new system at a time. And  you can rely on a stable trading process while you wait.

To learn more about Blaze offerings, contact us to set up your software demo today.


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