Schwab Advisor Portfolio Connect®

MAN: Hello, and welcome to the Portfolio Connect Overview. This webcast will review the central features and functionality of our simplified portfolio management solution for Schwab accounts. We will also show how we deliver core capabilities and features through an intuitive, modern experience without a need to download and reconcile data.

Before we jump to the demo, let's quickly preview the features. We'll begin with an introduction to data management. Portfolio Connect automatically pulls Schwab brokerage data from Schwab Advisor Center. There is no downloading and no reconciliation needed. It has historical data available from December 31st, 2016. Portfolio Connect offers interactive balances, positions, transactions, and cost basis. It also has the ability to customize account profile information, and account groups can be created for household-level calculations and presentations.

Next let's take a look at client billing. Portfolio Connect offers calendar quarterly billing on the account and account group level. It has the ability to prorate forms, including the client's first and last invoices, and it also has the ability to include or exclude cash balances from billing. It has an easy transmission of fees to Schwab Advisor Center.

From here we'll preview the dashboard and reporting. Report featured dynamic client and firm reporting, offering interactive components for essential data needs. These reports are automatically generated each quarter. They provide time-weighted return at the account, account group and asset class levels. Users can customize time periods from logo, title and footnote. To interact with data and Portfolio Connect initial setup is required. We'll discuss this process during this webcast. Detailed training support for initial setup is provided when access is granted. Let's take a look at the essential features of the platform.

Access to Portfolio Connect is available through Schwab Advisor Center and only viewable by firm security administrators. Portfolio Connect is best run using Google Chrome and is not supported on Internet Explorer. We will launch the program from Schwab Advisor Center by navigating to the More tab and selecting Portfolio Connect from the dropdown menu.

In the New tab we will then see a notification that we are leaving Schwab Advisor Center and Portfolio Connect will open. The default landing page of Portfolio Connect will be a list of all accounts. We'll use the first level navigation at the top of the page to tour back-office features starting with billing. After selecting Billing from the back-office menu, we will see a billing overview which will show projected or paid invoices for the designated timeframe.

Once quarterly bills are finalized, users will be able to transmit their fees directly to Schwab Advisor Center from the billing overview page. By selecting Fee Schedule, users will be able to view, edit or add a fee schedule. Portfolio Connect allows for accounts and account groups to be billed in advance or arrears on a calendar quarterly basis. Please note monthly and average value billing are not supported at this time.

Fee schedule settings include the option to prorate flow, prorate first and last invoices for clients whose relationships started or ended mid-period, round the total bill amount, and to include or exclude cash from the total billable account value.

There are three main fee types in Portfolio Connect: traditional tiered-rate, which allows multiple rates to be applied across the total account value, single-rate qualified tiers, which applies a single rate across the total account value, and flat fee, which applies a single dollar amount in front of us at the portfolio value. Looking at the tiers below, we will see that program allows us to enter tiers and annual rates, as well as additional tiers.

For our next back-office function, we will look at benchmarks. Portfolio Connect will come prepopulated with more than 50 indices and gives us the ability to put these into a collection, a collection is an assortment of multiple indices that we wish to show on a client report. Please note the system does not give us the ability to blend benchmarks into a target at this time, but merely shows the index returns next to the account performance on reports.

Next let's look at securities. By default, securities will automatically be defined with a security type and asset class. If we were selecting classification, we will have the ability to view, edit and add new security types and asset classes for use in Portfolio Connect. Please note Portfolio Connect does not offer sector or subsector classification.

Now let's take a look at our list of accounts. This is the default page each time we launch Portfolio Connect. Here we will see all accounts held across all matches for the firm. It is important to note there are currently no permission settings to limit which accounts are seen in the platform. In order to fully use Portfolio Connect accounts must be taken out of review during initial setup, as mentioned earlier. You can expect to dedicate about an hour per 25 accounts to complete the process. Accounts are reviewed one by one by selecting Review from the far-right column.

The review process allows us to set attributes to accounts for billing and reporting purposes. We will have the ability to change the name displayed on the system on client-facing reports, and from where the contact information is inherited. The account information, which is not editable, will be displayed.

We will also configure our performance settings, select benchmark and billing setting, as well as choose whether we want the system to automatically generate quarterly performance reports. Once the account has been reviewed, the system gives us the ability to create groups or households. Here we have similar settings to the account review process. We can edit the display name and client-facing name, as well as assign any benchmark or settings for billing and reports.

For accounts that will be billed and reported as a member of an account group or household, there is a multi-account review feature that will allow us to assign billing and reporting settings for these accounts simultaneously. After the account group has been created, settings, including the account group detail, benchmark assignment and fee allocation will still need to be configured for each account group.

Once our accounts are at a review, and account groups created, we can begin to interact with our data. By clicking on the account name, the system will bring us to the overview dashboard. The overview dashboard comes with prepopulated content items that show information regarding the account value, holdings and performance. This information is calculated each morning using the previous market close data. The many content items on the top of the overview include a quick high-level snapshot of the data, including account value, total cash and net contribution. Below these are the main dashboard content items, which include more in-depth data views and dynamic interaction. The title and default date ranges for these content items can be customized in the content management section of the system.

The date selector at the top left allows us to select from pre-populated dates or a specific one. This date will be the as-of date for all data shown on the overview dashboard. Let's take a look at how some of the data interactions work.

If we were interested in more detail regarding the income value within the components of change, we could go to the analysis view by clicking the square and arrow icon on the top. Once in the Analysis view, we can expand income numbers to see the breakdown between interest and dividend payment. We can further dive into this value by clicking on the hyperlinked dissident value to see all the interactions that make up this value. You will see that selecting that analysis view of these other content items will also allow for a comprehensive review of the data. All performance returns, information in Portfolio Connect is shown using a TWR calculation. Please note IRR calculations are not currently supported. As we can see here, Portfolio Connect has the ability to show returns, both net and gross of fees. Please note position level TWR is not available at this time. The system can also show both actual and annualized return.

The client overview also includes positions and transactions data. The positions page will allow us to see all current holdings for the account or account group. Columns here will include symbol, security name, quantity of shares held, the position cost basis, previous business day close price, the total value of the holding, accrued income, and unrealized gain information. Please note Portfolio Connect does not report realized gain-loss information.

This page also includes an analysis view, which can be reached by clicking on the hyperlinked value. The positions analysis view will also allow us to view any trade lot information for that position. Using the account trade at the left of the screen, we are able to run a meeting book. The meeting book is an ad hoc report that can be run on any date using the date selector at the top of the overview screen. The meeting book can be printed as a hard copy or saved as a PDF.

When working with quarterly client reports, the system will automatically generate these based on our selections during the account review process. We have the ability to add a logo and disclaimers, as well as select which pages are included for both the client report and meeting book pages.

Reporting features for Portfolio Connect allow us to add a logo, remove unwanted report pages, and edit the title and time period settings for some content on the report. Please note the program will not customize or add any graphs or additional pages to the report. Historical reports can be accessed using the Date Selector at the top. From the client list, we will have the option to both generate and download all PDFs for client distribution.

The firm overview provides a high-level snapshot of global data for the firm. Data on the firm overview will include total firm assets under management, projected revenues, top flows and top holdings. The main content items on the overview page will also have an analysis view to allow for more comprehensive review of the firm's data.

Now that we've previewed the central features of Portfolio Connect, let's review if Portfolio Connect might be a good fit for your firm. Portfolio Connect works best for advisors that have Schwab-only client accounts, a part of a small but growing firm, do not have restrictions required for account or firm-level data, bill all clients at the same time, each quarter, on a total value of their account, utilize time-rated return, and leverage standardized reports with prepopulated data.

For next steps, please visit SchwabPT.com and select the link for Portfolio Connect to view additional documentation and submit your interest survey.
If you'd like to speak with a team member, please call the Product Information line at 877-813-5728.

This concludes our introduction of Schwab Advisor Portfolio Connect. Thank you for joining us and have a nice day.