It feels like this column would be incomplete without recognizing an industry icon who has left us far too soon. Envestnet CEO Jud Bergman and his wife, Mary, passed away in a tragic automobile accident. Jud had a profound impact on every facet of the wealth management industry, and he will be truly missed. I am so grateful we had the opportunity to remember him with a moment of silence on stage at the Fearless Investing Summit. Without Jud’s influence and vision, many of the fintech providers covered in this article may not even exist, and so this article is dedicated to his memory.
Vanguard Unveils Another Digital Investing Solution
What Happened: Vanguard, which already offers Personal Advisor Services, will enter the all-digital investing arena with Vanguard Digital Advisor. The platform will provide automated investment strategies, require an investment minimum of $3,000 and charge a .20% fee on assets.
Why It Matters: Once again, a self-directed investing service gets called “advice,” but let’s move on. Candidly, this is pretty negative for the prospects of the original “robos.” Their plan was to get acquired by Schwab or Vanguard, and both of those firms have built out their own services.
Wealthfront and Betterment have to spend big money to bring in very light revenue; Schwab and Vanguard are taking transactional customers with occasional revenue and converting them into recurring revenue customers, with near-zero customer acquisition costs. Game, set, match.
RIA in a Box Makes Compliance Reviews Easier for RIA Firms
What Happened: RIA in a Box has expanded its MyRIACompliance platform with an Annual Review Tool. The new solution walks compliance officers through each step in the annual compliance program review process and then creates a summary report upon completion.
Why It Matters: The list of regulatory requirements for RIA firms is long—and it keeps getting longer, especially as Regulation Best Interest continues to shake up the industry and what it means for who gets to be called a fiduciary. Any software that makes it more efficient for RIAs to stay in compliance (and thus, continue to grow and provide more assured service to clients) gets a thumbs-up from me. And if you saw the news that RIA in a Box unveiled at our Fearless Investing Summit this past Wednesday, you know they’re really on a tear with big news.
Digital Banking Startup Aims to Improve Financial Literacy in Kids
What Happened: Atlanta-based digital bank Greenlight raised $54 million in Series B funding to help it continue its mission of helping parents raise financially aware kids. The subscription service offers tools for parents to set spending limits and controls on their child’s account, and also track payouts according to chores.
Why It Matters: As a parent of three, I appreciate the attention Greenlight wants to put on kids and financial literacy. Good financial habits need to start young, and giving parents a digitally enabled way to help their children become more aware of their spending just might be what the country needs to improve its financial intelligence.
XYPN Files Lawsuit Over Regulation Best Interest
What Happened: The XY Planning Network, led by Michael Kitces and Alan Moore, filed a lawsuit alleging that the SEC’s Regulation BI rule gives broker/dealers an advantage over RIAs because it allows them to offer similar services without actually having to register as investment advisors with the SEC.
Why It Matters: This is an interesting move by Kitces and Moore, and I’m fascinated by the differences of opinion on what this rule actually means. XY is saying that Reg BI doesn’t go far enough and undercuts the advantages of fiduciaries by not requiring broker/dealers to eliminate conflicts of interest.
Meanwhile, at the recent FSI conference, every enterprise was saying the rule requires elimination of those conflicts, and firms are scrambling to figure out how to prove and document that their advisors are aligning their recommendations with a client’s best interests. (Disclosure: Riskalyze is working with many of those enterprises to solve Reg BI compliance.)
TD Ameritrade Expands Voice Controls to Google Assistant Devices
What Happened: Any investor with accounts custodied at TD Ameritrade can now check their account balances and holdings with voice-activated commands directed at any Google Assistant-powered device.
Why It Matters: TD Ameritrade is no stranger to experimenting with consumer tech—they already provided market and account updates through Amazon Alexa devices. Advisors may not be asking Google to bring up client portfolios in a meeting instead of using a client review report, but technology like this is important to watch for the way it influences consumer expectations about how they can access their accounts and interact with financial institutions.
Apex Clearing Adds Two to Leadership Team
What Happened: Apex Clearing added Josh Gray from Citrix-owned web traffic optimizer Cedexis as chief technology officer, and Dustin Kirkland, formerly of Google, as chief product officer.
Why It Matters: In the race to provide the financial advice profession with ever more-personalized services and advanced technology, one component that can’t be overlooked is the people within an organization. I know that our firm has always been fortunate to have a dedicated leadership team that works tirelessly to bring fearless investing to the world, and every member has been pivotal to our success. Congratulations to an already forward-thinking custodian on bolstering their team with some pretty impressive tech talent!
Digital Life Insurance Platform Expands Offerings for Financial Advisors
What Happened: Legal & General America enhanced its partnership with Covr Financial Technologies to give advisors direct digital access to term life policies from LGA. The Covr platform is powered by Envestnet’s MoneyGuide.
Why It Matters: Life insurance exchanges are becoming more commonplace for financial advisors, and while history might suggest that insurance and investments shouldn’t be intertwined, independent advisors don’t have to fear. Who better to recommend life insurance than a financial advisor who isn’t getting a commission for the advice they provide? Finances don’t begin and end with investments, and independent advisors need to embrace their role as comprehensive financial guides.
MaxMyInterest Launches New Checking Account
What Happened: MaxMyInterest, a technology platform specializing in cash management and high-yield savings account solutions, has launched its own checking account. Max Checking is FDIC-insured with no fees, free global ATM access and offers a 1% annual percentage yield.
Why It Matters: As financial advice becomes increasingly competitive, advisors have to be on the lookout for new ways to offer more value to their clients beyond the traditional planning and investment management services. Can Max equip financial advisors with the same capabilities for cash that Betterment and Wealthfront are now touting? This is a space advisors should watch.