JPMorgan Worldwide Securities Services says that Charles Schwab Investment Management (CSIM) has appointed the bank as outsourcing provider for separately managed accounts. Schwab is not disclosing how much its clients have in separately managed accounts, but the firm is running around $180 billion in all. JP Morgan will service 5,000 accounts.
The bank will provide Schwab with shadow accounting, account reconciliation, new account set-up, performance calculation and account maintenance. Morgan says Schwab will access all of these services through a single web-based interface, and is expected to make use of additional services, such as fixed income trading, order management, customized accounts for implementing model portfolios, document management and billing.
“We have been very pleased with the technology platform and the operations resources that JP Morgan has built,” says Ed Patron, Vice President and Chief Technology Officer for CSIM. “Their ability to implement in such a short period of time has been equally impressive.”
JP Morgan boasts that it was able to go live with the 5,000 accounts in three months, which the bank says is much faster than the industry average. “Completing the conversion and implementation in three months was important to the client and we were delighted to deliver,” says Steve Boyle, Senior Product Specialist for JP Morgan. “We look forward to providing any and all services that CSIM needs to successfully expand their Managed Account product offering.”
“The combination of JP Morgan and Charles Schwab Investment Management is a powerful one and will mean best-in-class services for separately managed accounts,” says Steven Smith, head of business development for JP Morgan’s Managed Account Solutions Group. “Our award-winning technology and extensive knowledge in the industry will help CSIM deliver even more investment solutions for their clients.”
Yale Kofman, Vice President of Separate Account Portfolio Management at CSIM, agrees that “the JP Morgan solution provides flexibility and scalability, allowing us to focus our resources on our core business – managing money – instead of operations and administration.”
JP Morgan has invested heavily in the construction of an outsourcing platform for separately managed accounts, which are growing fast in the United States as an alternative to mutual funds. The bank offers a range of services that aim to allow fund managers to outsource their operational and administrative infrastructure for managed accounts. The service includes account workflow, reconciliation, trade support, and performance reporting, compliance, automated trade links, portfolio rebalancing and tax optimization.