50 RIAs sign with RBC’s custodian in wake of Schwab-TD deal
RBC’s custody division is reeling in new RIAs fast.
The custodian has signed on 50 new RIA relationships since August, representing a 58% increase in firm count over a four-month period, according to RBC.
“Our onboarding team continues to remind me of that — they've been busy,” says Brett Thorne, head of RBC’s clearing division, which currently houses assets for 145 RIAs and 190 broker-dealers.
A key contributor to advisors’ interest in RBC is the Schwab-TD deal, which closed in October. Firms are seeking to diversify their custodial relationships, according to Thorne. Another factor: Wirehouse teams are still breaking away, even during the coronavirus pandemic. “We’re seeing a fair amount of that as well,” he says.
RBC’s new business highlights the beginnings of a shift in the custody marketplace due to a series of consolidations, as well as a low-interest rate environment that has pressured revenue across the wealth management industry. Other custodians, including Shareholder Service Group, have said business has surged in recent months.
Earlier this year, Goldman Sachs purchased Folio Financial, and Morgan Stanley bought E-Trade Financial.
At RBC, the clearing division is in a period of change. The company recently renamed its custodian RBC Clearing & Custody. The new name better articulates its offering to financial professionals and advisors, as well as puts the RIA offering more into focus, according to Thorne.
Previously, RBC had two separate names for its clearing division — RBC Correspondent Services, which primarily serviced IBDs, and RBC Advisors Services for independent advisory firms — although the same management team oversaw both segments. RBC’s clearing division also houses assets for hedge funds and other institutional businesses.
“Correspondent Services just doesn't really do justice to describing the business in particular, when we've been growing the RIA portion of our client segment,” Thorne says.
Despite 95% of the Clearing & Custody employees working from home, the company is making plans to change offices in the first half of 2022. RBC is moving its U.S. Wealth Management headquarters into one 37-story building in downtown Minneapolis. The wealth management division currently operates out of two separate buildings, Thorne says.
As part of the construction, RBC is building conference rooms to host office visits for clearing and custody clients, which Thorne is anxious to resume in-person.
“It's hard to capture people's attention for long periods of time over a WebEx call,” he says. The custodian has recently pivoted its strategy for those calls from day-and-a-half sessions to shorter calls over a longer stretch of time.
RBC Clearing & Custody has also been building a new website and mobile app for clients, which Thorne says will be a better user experience with superior navigation. The company has been working with Salesforce and Deloitte to develop a new advisor dashboard, which is still on track to be available for beta testing in the first quarter of 2021 and be fully rolled out by the end of next year or beginning of 2022, according to Thorne.
The platform will host new features, including an integration with performance reporting solution Addepar, a set of APIs, an account opening capability through Docupace and an updated proprietary trading platform, according to Thorne.