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The Word on WealthTech for August 2023

F2 Strategy's co-founder and CEO provides his take on the most important wealthtech news of the last month.

Welcome to the Word on WealthTech. Each month we offer our take on a few recent industry news stories, identifying what they could mean for advisors across the industry. As we wrap up summer, here are the WealthTech headlines we are talking about around the watercooler in August 2023:

SMArtX To Launch Free Managed Account Platform

SMArtX Advisory Solutions announced a new, slimmed down version of its platform that it is calling SMArtY, will be coming this fall. The managed account platform will be free and is geared toward advisors who want to use models but don’t have access to SMArtX UMA technology. For us, the most interesting part of this news is the impact it has on competitors. Quite possibly, it is just the first of many lower platform fees. We are eager to see who moves next. Will companies like Smartleaf follow suit?

Charles Schwab Announces TD Ameritrade Data Breach

The breach last month came from a vulnerability in MOVEit, the vendor it is using to transfer files during this long-anticipated merger. The breach wasn’t necessarily preventable. Schwab is doing things right. Like all large financial institutions, it has armies of technology security professionals working to disrupt hackers, but it is incredibly bad timing. The transition of TDA firms is just around the corner over Labor Day weekend, and this won’t change that, but it does give ammunition to critics who were already disinterested in converting to Schwab. TDA firms didn’t need to have to convince clients to stay with them at this moment or have to worry about compromised accounts. This breach should be a wake up call to the industry. We hear about breaches regularly, but no one expects it to happen to them. If it can happen to Schwab, it can happen to you. The lesson for all firms here is be ready, with so much personally identifiable information (PII) to protect we have to be extra vigilant.

Pershing X Unveils New Multi-Custodial Platform WOVE

BNY Mellon introduced WOVE at its annual INSITE Conference this year, finally delivering on its promises of a multi-custodial approach. It says the platform features advanced data reporting and analytics, AI-enabled financial plan building, billing, cross-custodian trading and rebalancing, which are all integrated with built-in workflows controlled by a central operating system that functions behind a single screen. We haven’t seen much of the technology in action yet, so it’s too early to tell how impressed we are with the functionality. And from our view, this appears to put it in competition with Envestnet | Tamarac. We do like to see things go right, and we are impressed by BNY Mellon’s commitment to rolling out modern technology for advisors. Announces 2023 'Wealthies' Finalists

The Wealthies’ are back for the ninth year and have announced a list of 400 finalists. I’m honored to be a judge for the awards again this year and I can share that we are seeing some amazing technology projects in the industry. My quick highlights included the work being done by LPL’s Greg Gates and Kabir Sethi—two of the best minds in the industry; Morgan Stanley’s fractional share functionality; and Bernstein Private Wealth Management’s AI-enabled client engagement tool, the “Stanford” chatbot. It’s going to be fun to see who ultimately comes out on top in September.

And those are the big WealthTech headlines we think matter. Enjoy the rest of your summer and we’ll see you in September for a few more words on WealthTech.



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