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Welcome to the June edition of thenbspRiskalyzenbspFinTechnbspReview where we give a snapshot of the month39s technology news for advisors and judge the merits of said news with a quick thumbs upnbspthumbs down andnbspoccasionallynbspa noncommittal thumbs sidewaysnbspnbspnbsp

Riskalyze Fintech Report Card: November 2018

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

Ark Launching Fintech ETF

What happened: Ark Investment Management, which runs two of the best performing exchange traded funds over the last three years, is planning a new ETF focused on fintech. The ARK Fintech Innovation ETF will invest in companies working to change the way the financial sector operates. The concept is right in the sweet spot for the New York-based $2.3 billion ETF issuer, which has made a name for itself running funds focused on innovation, the internet, and genomics.

Why it matters: You know you’ve arrived when your industry has competing ETFs, right? Nasdaq and Global X already have funds that are doing really well, and Ark throwing their weight behind their own Fintech ETF is an indicator of a bright future ahead. If these funds continue to outperform, I’d be curious to see which of the new generation of fintech companies decide to IPO, and which decide to SPL (stay private longer). 

JPMorgan and Carlyle Group Backing Alternative Investment Startup iCapital

What happened:  JPMorgan Chase & Co. and the Carlyle Group joined forces with iCapital Network—a fintech startup that supports the unique subscription, administration, tracking, and reporting processes of alternative investments—to help with the process of opening up alternate investments to the less-than-super rich. Private equity funds, most of which have a minimum requirement of $10 million to $20 million, can be open to investments as low as $100,000 if aggregated by iCapital’s technology. Other firms that have backed or leveraged iCapital’s innovative technology platform include BlackRock, Morgan Stanley, UBS, Fidelity, AllianceBernstein, HSBC, and more.

Why it matters: The alternatives space has a history of being opaque, difficult to manage, and hard to break into—but iCapital is creating a platform that’s trying to change that perception. It was interesting to see BlackRock invest a few years ago, and now other Wall Street firms are climbing aboard. iCapital is seizing the opportunity to democratize alternatives and has some serious backing to make it happen.

Advisor Group Launching Paperless Onboarding

What happened: Advisor Group has new technology to equip the independent firms in its network—FSC Securities Corporation, Royal Alliance Associates, SagePoint Financial and Woodbury Financial—with digital client onboarding and account management. The new platform, eQuipt, brings together the typically disparate systems advisors use into one digital portal. Advisors can use eQuipt to collaborate with clients on the account-opening process, set up financial goals and provide an online portal for clients to track progress, creating a fully digital experience.

Why it matters: Advisor Group is rapidly putting themselves on the map as a fast innovator for their advisors. They are expanding technology across the board, but with eQuipt they have really started to tackle some of the toughest operational pieces of being an advisor. Rumor has it there is more to come.

Ohio Will Accept Bitcoin for Tax Payments

What happened: Businesses in Ohio will be able to pay their taxes in bitcoin, making it the first state in the nation to accept cryptocurrency officially. Companies that want to take part in the program simply need to go to and register, paying anything from cigarette sales taxes to employee withholding taxes through the portal. The bitcoin program, led by Ohio State Treasurer Josh Mandel, is intended to be a signal of the state’s broader ambitions to remake itself in a more tech-friendly image.

Why it matters: Nice job-making headlines, but the truth is, Ohio will turn your bitcoin tax payment into actual dollars. We’ll get excited about bitcoin as a currency just as soon as its value doesn’t fluctuate 10 percent or more during overnight trading.

Radius Bank Partners With MaxMyInterest for High-Interest Savings Accounts

What happened: Radius Bank, a virtual bank, announced its nationwide partnership with MaxMyInterest, a cash management platform for individual investors and financial advisors. With this partnership, Max members open and begin funding a high-interest savings account in less than one minute. The account, Radius Max Savings, currently earns 2.06 percent APY and is offered exclusively on the Max platform. Individuals can also give their financial advisors visibility over their accounts with one click.

Why it matters: Max is rapidly becoming a great way for advisors to increase the yield they deliver to clients on cash. The easier this gets, the more pressure it puts on the custodian business model. High-interest savings is a space to watch for sure.

Betterment for Advisors Gets a Redesign

What happened: Betterment, the automated advice platform that manages more than $13.5 billion, has redesigned the dashboard that financial advisors use to manage investors’ money with the company. The upgrades include a more detailed overview of client assets, net deposits, and pending client activity, as well as a new navigation bar. It also automatically populates a list of clients with pending activities they need to complete, like opening a joint account, where the advisor can send an email to remind them with the push of a button.

Why it matters: If Betterment for Advisors really wanted to make an impact, they could change their name and stop reminding advisors that they are actively competing with them for clients.

Acorns Seeking $700 Million Valuation in Latest Funding Round

What happened: Acorns Grow Inc. is in talks with investors for a new funding round that would give it a valuation north of $700 million. Acorns is looking to raise more than $100 million in the new round; existing investors include BlackRock Inc. and PayPal Holdings Inc., along with celebrities Ashton Kutcher and basketball player Kevin Durant. The startup has more than $1 billion in assets under management and around 4 million users who put spare cash into exchange traded funds managed by Vanguard Group Inc., BlackRock, and others.

Why it matters: Acorns is an amazing story and it’s a “self-directed investing service” that makes so much sense. To watch the first micro-investing firm cross $1 billion in assets is really cool, and they have a lot of interesting opportunities to serve early-stage investors. I remain convinced this is a rising tide that will lift a lot of advisor boats as those investors hit the stage where they need more sophisticated help.

Firms Launch Association to Make a Crypto “Code of Conduct” 

What happened: Ten financial and tech firms have established an Association for Digital Asset Markets to create a “code of conduct” for the cryptocurrency sector. Among ADAM’s founding members are Mike Novogratz’s crypto merchant bank Galaxy Digital, global financial services firm BTIG, fintech firm Paxos—of recently-launched stablecoin PAX—and crypto liquidity solutions provider GSR. ADAM will focus on working with regulators to seek “comprehensive standards” for digital asset market participants. These will aim to encompass trading, custody, clearing, and settlement in the sector, and to provide a framework for “ethical conduct” and “professionalism.”

Why it matters: You can’t really give a thumbs down to an effort like this one, but color me skeptical. It all sounds nice, but who enforces it and what crypto players actually sign up? Chances are: not the ones we’re concerned about

TD Ameritrade Adds AdvicePay to Veo One

What happened: Payment processing platform AdvicePay is now integrated with TD Ameritrade Institutional’s Veo One. Advisors using both AdvicePay and Veo One will be able to bill directly within Veo One, expediting the payment process. “Current billing systems are not flexible enough to avoid compliance issues around custody,” said AdvicePay CEO Alan Moore, who co-founded the company with Michael Kitces. “As the fee-for-service movement gains momentum, more and more advisors are working with clients by directly charging for advice outside of an asset management fee.” AdvicePay is designed to address that situation.

Why it matters: This is a very cool integration. AdvicePay solves an important problem for financial advisors who are adopting a fee model for financial planning, and those kinds of advisors are just the kind of RIAs that custody at TD Ameritrade. AdvicePay should call up our pals at Shareholders Service Group who cater to the smaller RIA as well.

Orion Releases Next-Gen Report Builder

What happened: Orion Advisor Services launched an all-new version of its Report Builder app, one of several enhancements in the platform’s November 2018 software update. The new Report Builder consolidates all of Orion’s reporting capabilities into a central location inside Orion Connect. The app includes new interactive features, such as the ability to add images and multilevel pie charts, as well as drag-and-drop capabilities to easily format tables and other graphic elements.

Why it matters: Orion has really been delivering a lot of innovation this year. With their work on trading, tax optimization, alternatives, compliance, integrating the FTJ TAMP into their business, and now the new Report Builder, Orion is following through on their promises in a big way. Whoever said Omaha was sleepy?

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