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Fintech Report Card July 2017

Riskalyze Fintech Report Card: March 2019

Riskalyze CEO Aaron Klein gives the thumbs-up or thumbs-down on the biggest news to hit advisor technology in the previous month.

Apple Card Unveiled in Steve Jobs Theater

thumbs upWhat happened: The all-new Apple Card, powered by Goldman Sachs and Mastercard, is built in to the Apple Wallet app on iPhone. It also includes a physical chip-equipped card for transactions that aren’t eligible for Apple Pay. Customers will receive a percentage of every Apple Card purchase amount back as “Daily Cash” in their digital wallet.

Why it matters: This move has many speculating on the extent to which the FAANG companies (Facebook, Amazon, Apple, Netflix and Google) will continue encroaching into finance and what it all might mean for advisors. My prediction is that tech giants won’t truly try to compete with advisors, because big tech has massive competitive disadvantages and zero ability to create scale in an advice business. They’ll have to wait for the invention of sentient robots with empathy, and that’s a long, long way off.

Envestnet Announces Acquisition of MoneyGuidePro

thumbs upWhat happened: Envestnet Inc., parent company to a plethora of wealth management tools, announced that it will be purchasing PIEtech, the creator of popular goals-based financial planning software MoneyGuidePro. The transaction, expected to close in mid-2019, consists of $295 million in cash and over 3 million shares of Envestnet (roughly $500 million in total value).

Why it matters: When MoneyGuidePro founders Bob Curtis and Tony Leal were on stage in their bathrobes at Bruckenstein’s T3 conference, I tweeted that they really should have brought one for Envestnet’s Jud Bergman, who had just stepped off after their joint “Apprise Labs” announcement. It appears that Jud went all in and just donned a figurative $500 million bathrobe. It will be a big sign that Bob and Tony are continuing to operate independently at Envestnet if T3 2020 includes one of their infamous skits, and I’m going to throw down the gauntlet here—Jud should be the one holding the live chicken this time.

Price War for PortfolioCenter Users Continues

thumbs upWhat happened: Black Diamond is the latest to join multiple other portfolio management tools in offering aggressive deals to capture PortfolioCenter users after Schwab sold the platform to Envestnet in February. SS&C Advent’s platform follows others like Orion and Morningstar in offering extended free use of their products and other incentives.

Why it matters: The competition is intense for portfolio management and accounting, so this is understandable. Orion led the way in trying to convince nervous advisors to jump ship after the PortfolioCenter transaction, then Morningstar jumped in and now SS&C Advent’s Black Diamond. Firms would be well-advised not to let cost be the number one driver of their technology choices—slow down, evaluate well and decide which tech platforms are right for your firm.

Snappy Kraken Announces Redtail Integration

thumbs upWhat happened: Snappy Kraken, a marketing platform designed to help financial professionals automate their business growth processes, announced an integration with Redtail Technology, a leading CRM for financial services firms. Advisors can authenticate Redtail from their Snappy Kraken account to pull contacts and groups into campaigns. Robert Sofia, Snappy Kraken’s CEO, announced the development of a two-way sync to be released in the future.

Why it matters: Marketing campaigns are far more effective when integrated into your CRM, and tapping into Redtail opens up a whole lot of opportunity all at once for the Snappy Kraken crew. Congrats to Robert, Brian and their teams!

Wealthfront Supports Users’ One-Off Goals 

thumbs downWhat happened: Known for their self-directed investing platform, Wealthfront’s free financial tools can now account for a user’s future one-time expenses. Examples cited on Wealthfront’s blog include “renovating your home, putting together your dream wedding, or buying a car.”

Why it matters: Wealthfront has built another mile of the road to a very uncertain destination—the idea that people with complexity in their personal finances will dump the expertise and peace of mind of a financial advisor, in exchange for figuring it all out and doing the work themselves. There is absolutely a market for self-directed investing services just like there’s a market for TurboTax—but there is no more evidence that TurboTax has done anything to reduce the market for CPAs than there is that Wealthfront has reduced the market for real advice.

eToro Platform Comes to the U.S. 

thumbs downWhat happened: The eToro platform has long been popular throughout Europe and beyond, but it will now allow U.S. customers in 32 states and territories to trade 13 kinds of cryptocurrency; they will launch their own exchange, called eToroX, later this year.

Why it matters: Crypto has weathered its crash, and there is little question that it’s less of an investment and more of a technology to drive decentralized settlement and value transfer. But with all of these apps for trading the stuff come clients asking their advisors “why aren’t I invested in bitcoin?” Advisors will need to continue sharpening how they show clients the risk of that “hot idea” their buddy bragged about on the golf course.

Stash Launching “Stock-Back” Debit Card Rewards 

thinking face emojiWhat happened: A New York-based investing startup has announced a new “stock-back” feature on its debit card product. Rather than earning cash back when shopping at a company like Amazon, consumers will earn fractions of shares of that company’s stock. For purchases at private institutions (like local restaurants), consumers will earn shares in related exchange traded funds.

Why it matters: Kudos to the Stash team for another fascinating idea. Stash has been one of the leading microinvesting startups, and this move further sets them apart from their competition. I’m not sure what I think of it, though. There are a lot of companies I do business with very reluctantly—for example, every ticket I buy on United Airlines because my schedule requires it. Just because I spend money doesn’t mean I want to be long in the stock. We’ll see how this plays.

Cybersecurity Provider Adds Human Concierge

thumbs upWhat happened: Cybersecurity evaluation business Entreda is adding a “concierge” service to its solution. Their Unify 360 Concierge Service provides round-the-clock monitoring and responses to cyberthreats in real time, supplementing the cybersecurity solutions it already serves for wealth management clients.

Why it matters: Nobody knows the value of reaching out for human expertise like an advisor, and now Entreda is making sure advisors and home offices get the benefit of hands-on service. When it comes to your role as an advisor, there is nothing more important than ensuring that your security practices don’t endanger client assets. Kudos to Entreda for broadening its solution to help advisors earn an A+ in cybersecurity on their next audit.

Strong Backing for Effort to Fund Female FinTech Entrepreneurs

thumbs upWhat happened: In an effort to bring venture capital money to startups founded by women, a Female Founders in FinTech Live Pitch Event was held last month at PayPal’s SoHo office. The program, which was launched in 2017, was just recently backed by Wells Fargo, PayPal and Discover.

Why it matters: I love this initiative. There are so many great FinTech ideas out there (many at this pitch event, I’m sure!), and we need more great female entrepreneurs to tackle them. It starts with a shot at decent startup funding, and I hope to be writing about new innovations from these leaders in the FinTech Report Card in no time.

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