Get to know the three most powerful letters in advisor tech: API

How APIs can help you create a seamless digital practice

Key Points

  • Application programming interfaces (APIs) allow different pieces of software to share information in real time.

  • Financial advisors can use APIs to simplify workflow, get the most out of data, and improve the client experience.

  • Finding an API that works for your practice means asking your tech provider the right questions.


Financial advisors have a range of digital tools that can help improve virtually every aspect of their practice. But each piece of software becomes even more powerful when they talk to one another. 

The secret to seamless communication among digital tools is special code called an application programming interface (API). Despite the complicated name, APIs can simplify complex tasks you do every day, help you get the most out of your data, and create a seamless, feature-rich digital experience for you and your clients. Even better, you don't have to be a programmer to take advantage of them. 

The basics of APIs

Put simply, an API is the link that connects different pieces of software or sources of data. It carries messages between individual programs and can trigger actions on either end. 

The term may be new to you, but APIs are everywhere. For example, when you track your Lyft or Uber driver on your phone, you're not looking at a map generated by the ride-sharing app. Instead the ride-sharing app is using the Google Maps API to pull in up-to-date location data from Google's system. 

Many software programs come with built-in APIs, which makes them easy to connect to other digital tools. For example, your customer relationship management (CRM) system might offer an API that connects to your portfolio management software and billing program—allowing those platforms to share important information about each client's account.  

Building the best suite of digital tools

Using APIs to integrate various pieces of software can help streamline your workflow—especially when your back-office platform offers access to all your tools through a single log-in. But the flexibility of APIs also allows you to integrate new software as needed to handle even more tasks, such as trading, rebalancing, tax reporting, and risk analysis. You can choose best-in-class tools for specific tasks and still have a unified experience because they're sharing data across your entire technology suite. 

Instant access to more data doesn't just make your workflow more efficient. It allows you to better know your clients and improve your services. For example, APIs can deliver alerts around important events—such as a period of low activity from a client or an investment loss—that can signal it's time to reach out to that person. 

Asking the right questions about APIs

By understanding the role that APIs play in digital workflow, you can start examining your current systems or future additions to make them more integrated and efficient. Ask technology providers the following questions to help determine what's possible with their platform's API: 

  • What tasks are supported by your API? APIs vary in quality and functionality, so look for APIs that support a range of essential tasks, such as opening accounts, transferring money, delivering alerts, and accessing user information with a single log-in.
  • What other programs integrate with your system? Many software providers have a list of other applications or programs that their API supports. Review that list to make sure it includes the applications you currently use. 
  • Can I test drive the API? The speed of APIs varies, and simply reading technical specs might not give you a good sense of how well it works. A demo that shows how the API integrates with other software tools can give you a better sense of the experience you'll have. 
  • Is the API open or closed? Open APIs share their code freely with other developers, who can then design features or tools that work with that platform. As a result, open APIs may have a greater number of compatible apps to choose from. Closed APIs are private networks, allowing the software developer to limit integration to only a handful of select partners. Closed APIs may have an inherent security advantage and greater quality control.
  • What kind of service and support do you offer to manage API integration? APIs are meant to simplify—not complicate—your work. Look for a provider that offers API support to help smooth out any wrinkles that may appear during integration.

The good news is that you can improve your digital practice without understanding all the technical details behind APIs—just as we enjoy the benefits of the apps on our phones without knowing what's happening under the hood. Simply recognizing how APIs can improve workflow and offer a seamless experience for your staff and clients can help you make the most of the APIs available through your technology vendors—and stay competitive in an increasingly digital industry.

What you can do next

  • Check out Schwab's technology integration to learn how we're using APIs to deliver seamless experiences for you and your clients.
  • Discover more about how Schwab's technology offerings can help your practice deliver exceptional service with less effort. 
  • Consider a custodian that invests in your success. If you're thinking about becoming an independent advisor, contact us to learn more about the benefits of a Schwab custodial relationship.