TurboTax Deliberately Hid Its Free Version from Search Engines
What happened: Multiple tax software vendors have pledged to increase accessibility to low income households, and the Senate is considering the “Taxpayer First Act” that would make their “Free File deal” with the IRS permanent. In the meantime, TurboTax added a line of code to its free file site to keep the option hidden from search engines according to the independent, nonprofit investigative journalism site ProPublica.
Why it matters: When you offer free-filing benefits for military families and those with an adjusted gross income under $34,000, and then you deliberately hide them, do you think you aren’t going to get caught? How did they think this was going to look? To their credit, both TurboTax and H&R Block have since changed their settings to now be indexed in search engines.
Vestwell Raises $30 Million
What happened: Retirement plan fintech provider Vestwell has announced a $30 million funding round. This Series B was led by Goldman Sachs Principal Strategic Investments, and also included companies like BNY Mellon, who announced a major partnership with Vestwell late last year . According to their CEO, Aaron Schumm, the BNY Melon deal was separate from this round of funding, though the deal sparked interest in investors and moved this Series B up on the timetable by about a year.
Why it matters: Congratulations to Aaron Schumm and all our friends at Vestwell! Vestwell has really established themselves as an important and growing player in the 401K space. (Disclosure: Vestwell is Riskalyze’s partner for deploying the Risk Number in retirement plans).
Schwab’s Move to Subscription Fees Causes Concern
What happened: Charles Schwab announced this month that it was moving its self-directed digital investing platform from an AUM fee to a flat, monthly charge. Instead of the 28bps that it had been charging, they will charge investors a one-time $300 “financial planning fee” and then a $30 monthly subscription with no lift. This move has caused speculation as to the level of disruption it could cause to wealth management firms everywhere.
Why it matters: Here’s what Schwab is up to, in my view: they’re accepting the reality that “robo-advice” actually doesn’t offer advice. They can certainly offer basic phone-based planning, which has value, and will eventually lead most clients to wanting and affording a real advisor. In the meantime, advisors—your value is REAL. Please, wait until you lose at LEAST two clients over your fee structure before you change it. Be confident in the incredible work you do for your clients, and for the world.
Retiree-Focused Digital Advice Platform Hits the Market
What happened: Founded by a former managing director at JP Morgan, “Kindur” is the latest self-directed digital advice platform to hit the market. Its target? Retirees. The platform has two offerings: automated investing with passive, low-cost ETFs designed for decumulation, and a no-commission, fixed annuity from American Equity Investment Life. Their goal is to assess retiree’s current savings, spending, health care, and Social Security situations, and recommend investments and income accordingly.
Why it matters: Self-directed investing services—which are not advice—are great and have a market, but of all the people who might need real advice, retirees are probably at the top of the list. Only time will tell if Kinder found green pastures or stumbled across the reason most of these platforms aren’t targeting retirees.
The Wharton School Establishes FinTech Research Center
What happened: The Wharton Business School at the University of Pennsylvania is pioneering fintech education and development with the announcement of a dedicated financial technology center . The Stevens Center for Innovation in Finance held its inaugural event on April 3. According to Wharton Dean Geoffrey Garrett in Penn Today, “The Stevens Center will bring together the best thinkers from academia and industry to ensure that Wharton continues to chart the future of finance.”
Why it matters: Dean Garrett says that fintech is “morphing from a buzzword into the rocket fuel of financial innovation,” and I couldn’t agree more. I’m a strong proponent of equipping universities and their students with free tools, research, and platform access to bolster education and innovation, and I hope to see many more leaders in fintech follow suit!
Envestnet Adding Prequalified Loan Offering to Platform
What happened: Advisors using the Envestnet platform will soon have the ability to give pre-qualified loan offers to their clients. These include commercial loans, real estate loans, business loans, and security-based loans. The “Envestnet Credit Exchange” will be powered by a partnership with Advisor Credit Exchange (ACE), whose advice-driven program supports advisors in helping clients with these types of loans.
Why it matters: On the heels of another busy season of acquisitions from Envestnet, it’s no wonder that their press release cites this as another move toward empowering “holistic advice.” As Envestnet continues to expand, giving advisors access to credit solutions for their clients is a great equalizer to the wirehouses.
TD Ameritrade Sells Retirement Plan Business to a Fintech Firm
What happened: Broadridge Financial Solutions is now the proud owner of TD Ameritrade’s retirement plan custody business. Their fintech platform, Matrix Financial Solutions, now boasts about $420 billion in assets under administration from over 118,000 plan accounts. The terms of the deal were not disclosed.
Why it matters: All signs suggest that TD Ameritrade is making these moves to concentrate on their primary goal of helping their affiliated RIA’s grow. As industry consultant Tim Welsh put it, “If you’re focusing on custody and trading and working with clients on the retail side with individual investors, you don’t want to be distracted from that mission,” and I agree with him. The retirement plan space is entirely unique, and a major custodian focused on their core strengths is a force to be reckoned with.
MoneyGuideElite is Now Live
What happened: A brand new tier of Envestnet’s MoneyGuide has hit the market. A step up from MoneyGuideOne and their flagship MoneyGuidePro, MoneyGuideElite includes more sophisticated annuity modeling. Their announcement featured three primary updates: “Secure Income Modeling,” “Total Income Modeling,” and “Advanced Lifetime Protection.” The new tier is listed as $50/month more than their Pro tier for solo advisors.
Why it matters: I’ve noticed an explosion of new, specialized planning solutions from several firms, addressing very specific, niche needs. How will MoneyGuideElite fit in alongside Apprise? It’s hard to say, but it’s going to be hard to be a high-end financial planner and say, “the right tool still doesn’t exist for me.”
Chalice Financial Drops Monthly Price
What happened: Fintech provider Chalice Financial Network now offers advisors its software-as-a-service plans to advisors for under $100 a month. CEO Keith Gregg says, “accelerated growth enables us to immediately make good on our promise to continuously deploy our growing scale and resources towards enhanced cost savings for independent financial advisors who join us as members.”
Why it matters: This member-benefit organization for advisors has been on quite the road show since its launch in January. With pent-up demand for access to unbundled discounts, it’ll be great to see even more advisors get their hands on their affiliated third-party services. (Disclosure: Riskalyze is a partner with Chalice and is a part of their Chalice Financial Network discount program).