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TD Ameritrade Institutional to Hold Its First Advisory-Focused Fintech Competition

Finalists don’t seem to mind stipulations like the right of first refusal, which are said to be expected when working with a large custodian or other similar institutions.

Three finalists have been chosen for TD Ameritrade Institutional’s first-ever competition for technology geared toward financial advisors and their clients.

Emotomy, a cloud-based wealth management platform, submitted a risk assessment tool that will use machine-learning algorithms to warn registered investment advisors when client accounts are at risk of leaving to prompt more timely interaction with clients. Derrick Wesley, the owner of iMar Learning Solutions in Van Alstyne, Texas, proposed a financial literacy application that teaches the importance of financial planning to anyone from aged 5 up through retirement. The third, Dynamic Wealth Solutions, a Southfield, Mich.-based registered investment advisory, seeks to use natural language processing, a form of artificial intelligence, to develop a voice-activated assistant.

All three finalists of the Innovation Quest competition, selected from 135 eligible submissions, will each be awarded $25,000 and a all-expenses-paid trip to the custodian’s 2019 National LINC conference next year, where they will present their ideas and compete for an additional $25,000.

Relative to the millions of dollars investors dole out to some financial technology companies, a $25,000 prize might seem paltry. But Tim Hooker, a co-founder of Dynamic Wealth Solutions, said it’s enough to further develop what his company dubbed the “RIA Genie” to help automate advisor tasks and ease regulatory burdens. He sees Innovation Quest as a seed investment that could lead to other rounds of funding down the road if the RIA Genie takes off and there’s a good chance TD Ameritrade will be involved in that fundraising down the road.

To be eligible for the competition, participants must agree to grant TD Ameritrade “the right of first negotiation to develop, integrate, license, purchase or otherwise use or acquire the technology described in the proposal” until 2022. In other words, TD Ameritrade guaranteed itself a seat at the negotiating table for the technology in the competition for the next four years. 

Still, that stipulation didn’t deter at least two of the finalists. “The reality was this opportunity would have come with those ties,” said Patrick Beaudan, the CEO of Emotomy.

Beaudan said his company weighed the stipulation and considered it like it would with terms of any other agreement. But the opportunity to work with TD Ameritrade was advantageous for the firm. Emotomy has had a relationship with the company for years and only a large custodian, like TD Ameritrade, has the data necessary to get the most out of machine-learning algorithms, Beaudan said. Companies like Emotomy are eager to work with the largest players in the RIA space and Beaudan said he was surprised there are not more competitions like Innovation Quest.

“It’s kind of surprising that people haven’t felt the heat but [TD Ameritrade] has taken the lead,” Beaudan said. “You'd expect the other big custodians to follow.”

While the big custodians may not have followed yet, there have been competitions within the advisor technology space. Two examples would include the advisor-focused fintech competition ScratchWorks, which began accepting submissions for its second “season” of competition in September and the FUSE technology competition, which is part of the annual Ascent conference held by Orion Advisor Services. ScratchWorks, which has an undisclosed investment awarded to winners is backed by several large RIA firms whereas Orion’s FUSE lacks monetary awards, it’s more of a real-time coding competition specific to integrations with Orion’s technology and architecture.

Wesley of iMar Learning Solutions could not immediately be reached to comment on being named a finalist. 

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