Chuck Gets To $16 By Giving Advisors More Tech Support
Charles Schwab (NYSE:SCHW) unveiled 28 new universal workflows, available for advisors, through Schwab Intelligent Technologies on June 21. [1] The workflows complement the Schwab OpenView Workflow Library covering lead generation, client onboarding, service requests and business operations and provide a roadmap to help Registered Investment Advisor (RIA) firms manage and maintain their investment practices.
See our complete analysis of Charles Schwab’s stock
A Helping Hand In Troubled Times
The Workflow Library was launched in October last year and has been widely accepted so far, with over 250 financial advisory firms using its services to enhance their business. The addition of new workflows will expand the customized versions of customer relationship management (CRM) software presently available for free download from the company’s website.
Workflows can be embedded into the Junxure and Salesforce CRMs used by RIA firms and will help them develop best practices to make efficient use of resources and maximize profitability. [2] This offering by Charles Schwab will lure more investors to the online broker as people look to extract profit from the current market uncertainty.
Brokerages such as Schwab, E-Trade (NASDAQ:ETFC) and Ameritrade (NYSE:AMTD) have come under pressure in recent years as volatile market conditions, particularly with the sovereign debt crisis in Europe, have discouraged retail investors from trading. The markets face uncertain times ahead with a bail-out imminent in Spain [3] and a pro-austerity result in the Greece elections. [4]
We expect trading volumes to pick up once the dust surrounding the market settles down. Charles Schwab has 8.5 million active brokerage accounts and earns commissions from client trades and principal transactions. Trading commissions account for around 20% of the Trefis estimate price for Schwab.
Our price estimate for Charles Schwab is $16, implying a 35% premium to the current market price as we maintain a positive outlook for the firm with interest rates set to rise. (See Schwab Worth $16: Earnings Fall But The Outlook Improves)
By modifying the chart above, you can gauge the impact of a change in the forecast on our price estimate.
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Notes:- Schwab Announces Availability of 28 New Workflows for Independent Investment Advisors, Press Release, 21st June, 2012 [↩]
- EmbeddedWorkflows The Missing Link in Your Business Practice Infrastructure, Schwab Intelligent Technologies [↩]
- Spain full-blown bailout all, but inevitable: Analysts, Economic Times, June 21st, 2012 [↩]
- Greece election results: Pro-bailout parties look to forge coalition, Economic Times, June 18th, 2012 [↩]