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fintech report card

January 2017 Fintech Report Card - Top 8 Tech Events

Welcome to the latest edition of the Riskalyze Fintech Review, where Riskalyze CEO Aaron Klein gives you the thumbs up or thumbs down on the biggest happenings in advisor technology over the past month. Regardless of your Risk Number, failing to read this piece may be the riskiest move of all!

Confusion Surrounds the Future of the DOL Rule 

What happened: While President Trump’s Bible was still warm, Reince Priebus issued a memorandum directing all executive organizations to temporarily postpone the effective date of new regulations for 60 days. Four days into session, Congress witnessed a bill to delay the rule itself for two years, and now the fiduciary rule page has disappeared from the DOL’s website. Will it be overturned? Postponed? Does President Trump even know it exists? For now, the applicability date remains: April 10, 2017. Is the rule likely DOA? Yes. What do I think? I actually don’t think it matters.

Why it doesn’t matter: The effects of the DOL fiduciary rule have already taken root within the industry and have been penetrating the broader consciousness of consumers. The SEC is thinking about how to implement a fiduciary rule, and wealth management businesses of all stripes are trying to figure out how to act in a “best interests” way. I predict we’ll continue to see more transparency, better documentation of client best interest, and the adoption of fintech to address it all. Welcome to the Best Interest Economy.

New M&A Record in 2016 

What happened: A new report from Echelon Partners shows that merger and acquisition activity in the wealth management industry hit an all-time high this past year; all signs show that the trend isn’t slowing. This record has been broken four years in a row. If you weren’t already convinced that consolidation has been a heavy trend in our industry, it should be pretty clear now.  

Why it matters: I’m not surprised that this trend correlates with record growth in what this report calls “wealthtech.” Why? Many speculate that M&A activity is due to two prominent factors: shifting regulatory environments and an aging advisor population. Ready to sell your business? Preparing for regulatory changes? Both circumstances are best faced by organizing your book around the right fintech systems.

T3 Buzz Picks Up Steam 

What happened: The Technology Tools for Today (T3) conference has become a well-established platform for major fintech players. In addition to advisors and tech firms, the conference draws media outlets seeking to report on all things fintech. This year, the conference takes place February 14-17 in Orange County, CA.

Why it matters: Expect updates from companies like Black Diamond, CircleBlack, eMoney, Junxure, Morningstar, Orion, Redtail, Schwab, TD Ameritrade, and there’s always something uniquely entertaining from MoneyGuidePro. Yours truly will kick off the conference with the first keynote on Wednesday morning and we have a lot in store! For advisors, this conference is always a good time to hang out on Twitter. Check in on #T32017 starting Wednesday!

Industry Group Supports Customer Data Rights 

What happened: This past month, a new industry group was established to support the consumer’s right to access their financial data. The Consumer Financial Data Rights (CFDR) group is comprised of several companies in the financial sector. They’re advocacy mirrors Section 1033 of Dodd-Frank, which codified a client’s right to access their data from third-party tech platforms.

Why it matters: Here’s a prime example of the effects of a Best Interest Economy regardless of the DOL rule’s fate. Increased transparency is here to stay and the consumer knows it. So, what stake do fintech firms have in lobbying for it? It’s pretty clear that even more compliance and client visibility enhancements to fintech are just around the corner.

Betterment’s Robo to Add “Advice” 

What happened: Betterment just hired about a dozen advisors to assist their retail clients via email or phone for an additional cost. The new multi-tier model only offers the advisor call center service to client accounts over $100,000. “Betterment Plus” (for accounts with more than $100,000) increases fees from .25 percent to .40 percent of AUM and offers one annual phone call. “Betterment Gold” (for accounts over $250,000) offers unlimited calls for .50 percent of AUM.

Why it matters: After parodying advisors early on in its corporate life (“pig” graphic, anyone?), Betterment has since taken to building well-received tools for them. Still, I can’t seem to give this a thumbs up, but we’d like to extend a warm welcome to the advice business. Whereas Betterment tried to pretend they offered advice before at a 75 percent discount, now they are offering limited real advice exclusively over the phone at a 33-50 percent discount. It’s pricey compared to Vanguard, and many full-service advisors at 100 bps will compare nicely given their superior value. This business feels stuck in the middle and I’m not sure if adding 15 bps for a single phone call is worth it to consumers, for “Better-ment” or for worse.

Redtail Integrates with RIA in a Box 

What happened: Redtail and RIA in a Box have teamed up to deliver compliance solutions for mutual clients. The integration, initially announced in September, is now ready for advisor use at no additional cost. Unified calendar features and compliance logs now live in the Redtail CRM, so advisors no longer have to switch back and forth.

Why it matters: GJ King, CEO at RIA in a Box, is wise to acknowledge the CRM as the advisor’s hub for managing clients. Regardless of where the dust settles on our compliance landscape, deepening your CRM’s compliance features is a safe bet. RIA in a Box is a great solution and now our friends at Redtail can be the “box” that King speaks of.

TDAI and Orion Integrate Notification Functionality 

What happened: TD Ameritrade Institutional and Orion Advisor Services have announced the successful integration of “Veo Advanced Alerts” and Orion Connect. Veo Advanced Alerts were set up to consolidate notifications from a plethora of TD Ameritrade systems into the Veo dashboard. Now, these alerts can be received directly in Orion’s notifications app.

Why it matters: Advisors managing portfolios on Orion’s platforms are doing such critical work that they can’t afford to be overwhelmed by information storming at them from unrelated sources. The ability to consolidate notifications, then filter them intelligently is a cool addition. Congratulations to our friends at Orion and TDAI.

Wealthfront Launches “Selling Plan” 

What happened: Wealthfront’s latest initiative targets employees at publically traded firms, allowing them to sell the stock they receive in their company’s IPO process. “Selling Plan” gives shareholders the ability to diversify their windfalls by reinvesting the resources into Wealthfront’s self-directed robo portfolios.

Why it matters: IPO’s are often associated with complex and important financial decisions, which is why this type of service is typically delivered by human wealth managers. While Wealthfront’s “Selling Plan” is an attempt to take advantage of 2017’s anticipated blockbuster IPOs like Snapchat, Spotify and Uber, I’m betting these complex questions will be a tad more nuanced than Wealthfront’s algorithms can handle.

Editors note: The views expressed in this column are Aaron Klein’s, and do not necessarily reflect the opinions of

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