Products February 13, 2015

Schwab Outlines New OpenView Integrations

Schwab Intelligent Technologies signed agreements with Orion Advisor Services and Redtail Technology to establish additional technology integrations benefiting registered investment advisers.
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Orion Advisor Services specializes in portfolio accounting solutions, while Redtail Technology deems itself a leader in the financial services client relationship management (CRM) space. The integrations with Schwab’s open-architecture technology platform, Schwab OpenView Gateway, will enable registered investment advisers (RIAs) to directly link Charles Schwab custody systems and those of the participating technology providers.

Schwab notes that over 1,400 RIA firms already leverage the Schwab OpenView Gateway, and the latest integration is expected to boost that number. Schwab OpenView Gateway now includes participation from technology providers that support independent adviser firms in the areas of CRM systems, portfolio management, and automated trading and rebalancing.

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“As advisers continue to optimize technology, some have identified Orion and Redtail as attractive platforms for their firms, so we are pleased to welcome both of these firms to Schwab OpenView Gateway,” says Neesha Hathi, senior vice president, Schwab Advisor Services.

Specifically, the integration of Orion Advisor Services technology offers advisers a range of portfolio accounting solutions directly in Schwab OpenView Gateway, leading to real-time, intraday updates on Schwab accounts and more seamless trade integration.

As a Web-based CRM solution, Redtail Technology’s integration with Schwab’s custody platform will enable real-time custodial data and transactions directly into the Redtail CRM, resulting in advisers having quick access to account information and services to empower more efficient client service.

Several existing providers to Schwab OpenView Gateway have made other recent enhancements to their integrations, according to Schwab. Among the updates:  

  • PIEtech’s MoneyGuidePro and Advicent’s NaviPlan have added integration to Schwab PortfolioCenter Hosted; and Advicent’s Profiles has added integration to Schwab’s custody data.
  • Integration with Junxure Cloud is now available, providing real-time access to Schwab custody data and alerts to advisers using or transitioning to Junxure’s new cloud-based CRM solution.
  • Representing a new integration capability, streamlined trading integration is now available for advisers using the Advisor Rebalancing application from Envestnet | Tamarac.
  • Additional integration with Morningstar Office will be in pilot soon, Schwab says.

More information about Schwab Intelligent Integration, including the providers that participate in Schwab OpenView Gateway, is available at www.schwabintelligenttechnologies.com.

The Markets February 12, 2015

Lockheed Lump-Sum Payments Highlight Opportunity

Lump-sum payments from Lockheed Martin’s defined benefit pension plan to certain former employees significantly reduced its pension benefit obligations—though not enough to offset a mortality-related increase.
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Lockheed said in a recent filing with the Securities and Exchange Commission (SEC) that it made lump-sum payments of $427 million last year to certain pension plan participants who had not started receiving their vested benefit payments. The action reduced the corresponding benefit obligation by $529 million, according to the Lockheed filing.

In the SEC filing, the company noted that the measurement of benefit obligations is affected by key assumptions such as discount rates, employee turnover and participant longevity, among other factors. Its benefit obligations at December 31, 2014, reflect new longevity assumptions, which had the effect of increasing the defined benefit pension benefit obligations by $3.4 billion despite the sizable lump-sum payout.

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Lockheed Martin utilized a discount rate of 4.00% when calculating its benefit obligations. It noted that an increase of 25 basis points (bps) in the discount rate assumption, with all other assumptions held constant, would have decreased its DB benefit obligation by approximately $1.5 billion, while a decrease of 25 basis points would have increased the obligation by the same amount.

Some retirement specialist advisers and plan service providers see a big opportunity in supporting pension plan sponsors, like Lockheed, as they evaluate means to reduce costs and risks associated with running an ongoing pension plan (see “Pension Risk Insights Can Be Significant Value Add”).

A 2014 report from Aon Hewitt found 62% of pension plan sponsors are somewhat or very likely to adjust their plan’s investments in 2015 to better match the liabilities in the year ahead—a task advisers are well-suited to support. The same report found lump-sum window settlements are becoming increasingly popular. Twelve percent of plan sponsors had recently introduced or expanded the availability of lump-sum windows for retirees or terminated vested participants, according to Aon Hewitt, and 43% said they were somewhat or very likely to complete a lump-sum window for inactive participants in the next year.

Lockheed’s 10-K filing is here.

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