SEC Delivers a Christmas Gift to Advisor Marketing
What Happened: Just before the year-end holidays, the SEC unexpectedly (and unanimously) agreed to update advertising rules for advisors to allow testimonials, third-party ratings, and more.
Why It Matters: The antiquated rules to stop penny-stock pushers in their tracks had kept advisors from sharing real-life stories about how they’ve helped clients live and invest fearlessly. When I’m choosing a service provider, I care 100 times more what other people say about them than what they say about themselves. This is a fantastic move by the SEC that benefits service-oriented advisors. It’s also going to be a big inflection point for many of the advisor marketing solutions out there like Snappy Kraken and FMG Suite.
Disclosure: I’m a member of Snappy Kraken’s board.
Vise Raises $45 Million in Funding Round
What Happened: After raising nearly $15 million in Series A funding, AI-powered portfolio management platform Vise raised another $45 million in Series B funding.
Why It Matters: It’s been quite the 2020 for this young fintech startup with $60 million in venture capital pouring into the company, and a series of eye-popping hires that assuredly weren’t cheap. That all translates into big expectations for Vise co-founders Samir Vasavada and Runik Mehrota, but I’m sure they’re up to the challenge!
Disclosure: Vise is one of Riskalyze’s many integration partners.
Robinhood Trouble in Massachusetts
What Happened: The state of Massachusetts filed a complaint against Robinhood claiming they’ve failed to protect novice investors.
Why It Matters: This is where I struggle with regulators—we want more people understanding and getting engaged with investing early on. I’m unconvinced that the confetti on Robinhood’s app should be considered illegal. There are plenty of ways Robinhood needs to shape up—decent client service, strong service uptime and more transparency about their business model come to mind. Persecuting them for their success isn’t the right call.
RightCapital and LPL Integrate
What Happened: Financial planning software RightCapital announced it is now integrated with LPL’s ClientWorks platform.
Why It Matters: LPL continues their focus on bringing more technology solutions to their advisors, and after a decade plus of partnership with eMoney, the door might be cracking for other financial planning tools to get some market share. RightCapital has been making major inroads in advisor offices since it launched in 2015 and this latest move further cements it as a major player among financial planning providers.
Potomac Releases Union Platform
What Happened: Potomac Fund Management recently announced the launch of their Union UMA platform. Union specifically targets smaller RIAs with an all-in-one solution.
Why It Matters: As the major TAMP players and custodians continue to grow, some smaller advisory firms have questioned whether any of the large outsourced solutions will be willing to serve them. Union promises to provide a home for these advisors by providing technology coupled with asset management and outsourced chief investment officer capabilities. Focused on smaller RIAs and ready to punch above their weight—we’ll be watching this unfold with interest!
Franklin Templeton Adds Robo for Advisors
What Happened: Through a partnership with Apex Clearing, Franklin Templeton announced the launch of its new white-label robo advisor service for advisors called Tango.
Why It Matters: I’m up in the air on this play. On the one hand, this has been tried more than a few times (including by Riskalyze six years ago!), and none of these “robo-for-advisor” plays ever really took off. The successful advisors who have built a great business aren’t about to transition their existing clients to a robo platform, and aren’t too keen on trying to staple a self-directed investing service to the side of their firm.
On the other hand, I’ve long since stopped saying “that will never work” because all great entrepreneurial ideas also involve the element of timing. Will Tango turn out differently for Franklin? They’ve got a lot of assets at their disposal, including the recent acquisition of AdvisorEngine, so we will see.
Skience Hires Riskalyze Alum to Run Sales
What Happened: Skience, a consulting and wealth management technology company, hired Riskalyze alum Kyle Van Pelt, who has also since worked on the Black Diamond Wealth Platform, as its new executive vice president of sales.
Why It Matters: First, Skience snags Marc Butler (former COO at Albridge) as their new Chief Operating Officer. Now they’ve brought Kyle Van Pelt aboard. KVP started life in fintech as Riskalyze’s head of partnerships and had a great run here before moving on to Black Diamond. Aggressive hiring bodes well for this up-and-coming workflow and account opening firm. Congratulations to all.
Jon Stein Steps Down as CEO of Betterment
What Happened: Betterment’s primary founder and only CEO to date, Jon Stein, announced he is stepping down from his role at the firm. Sarah Kirshbaum Levy was announced as his replacement.
Why It Matters: Jon Stein has been a fascinating founder to watch. He’s made his share of missteps, like that infamous blog post portraying financial advisors as pigs, and then trying to mend fences by telling a room full of advisory firm CEOs at a conference “you can keep all the clients over $10 million, and Betterment will serve the rest.”
But if you step back and look at his tenure as CEO, he has consistently worked to get better, expanded to serve financial advisors, bowed to the truth that human advice is valuable by hiring an army of CFPs to work with his retail clients over the phone, and navigated Betterment to being one of the most valuable players in the self-directed investing space.
Where does Betterment go from here? It seems like this news means an immediate IPO is not in the cards, and there’s a few more years of work to do before the company can reach an inflection point. Stay tuned.