Leverage the power of the Risk Number® to set expectations with clients, document your fiduciary approach, and grow your business.
Tap into sophisticated analytics at the security, account, and portfolio level to craft the perfect investment strategies for your clients.
Let Riskalyze monitor your client accounts so you can focus on making great decisions when something needs your attention.
Give home offices and compliance offers the tools they need to standardize their business around the common language of risk.
Below is the June edition of the Fintech Report Card, a monthly piece by Riskalyze CEO Aaron Klein originally published in WealthManagement.com.
What happened: After the death of the Department of Labor's Fiduciary Rule and the SEC's announced replacement, Regulation Best Interest, the states of New Jersey, Nevada, and Massachusetts each decided to create their own more stringent interpretations of what it means to be a fiduciary.
Why it matters: It should not take thousands of pages and years of debate to define a simple concept: financial professionals need a simple way to transparently show clients whether they're selling a financial product or offering the service of advice. Form CRS, created by the new SEC regulation, looks like a good step in the right direction, but states creating a mishmash of different regulations is going to be less transparent and less understandable for consumers. What a mess.
What happened: TD Ameritrade announced the creation of an open source coding library, called STUMPY, that will be available to developers through Microsoft’s GitHub website. The project is designed to analyze and identify patterns in time-series data.
Why it matters: This isn’t TD Ameritrade’s first foray into open-source, but it will be interesting to see how the fintech community tries to put this technology to work. Spotting anomalies and patterns in large datasets is an interesting data science problem, and bravo to TD for contributing what may be a powerful building block for many fintech firms.
What happened: Salesforce, the world’s most-used CRM, purchased Tableau, a cloud-based analytics software providing business intelligence reporting, for more than $15 billion.
Why it matters: Salesforce has been pushing hard into financial services, including its dedicated Financial Services Cloud solution. On the one hand, investing in BI reporting would make a ton of sense for many advisory firms. On the other hand, Tableau is known for its desktop products rather than cloud architecture, which feels like a step back. We’ll see how quickly Salesforce can turn this into a relevant part of their overall offering.
What happened: Personal Capital, one of the more well-known digital advice firms, has leveraged its scale to create a high yield cash account for its clients. The account provides a 2.35% APY for existing clients and is FDIC insured up to $1.25 million.
Why it matters: This is a great move by Personal Capital to add value to the advisory relationship they’ve developed with clients. It’s tough to differentiate yourself when you’re truly trying to deliver advice via video chats and phone calls, and this will help. The rest of the advisory community isn’t left out though—they can tap into great fintech tools like MaxMyInterest to help their clients maximize yield while protecting their cash.
What happened: Fidelity announced the Fidelity Managed Account Xchange (FMAX for short) as an open architecture managed account/TAMP platform that advisors can use to streamline their money management responsibilities. It will launch in 2020.
Why it matters: Fidelity has long been a reseller of Envestnet’s managed account platform, and this move signals that they want to take on more of the stack themselves. ENV will remain an important part of FMAX though, signaling the Chicago firm’s staying power. It looks like Fidelity and Envestnet will remain partners—this industry is full of coopetition.
What happened: Following Plaid’s acquisition of Quovo, the two have announced a new tool, Investments API, that provides detailed data on account balances, holdings and transactions.
Why it matters: For years, advisors were simply happy if they could get held-away account data at all. Now the technology has advanced so advisors can have confidence in that data. This tool looks like the next step in providing more rich data analytics for advisors to offer more accurate advice on all of a clients’ assets. Disclosure: Riskalyze is a Plaid/Quovo partner.
What happened: After announcing its Libra cryptocurrency, Facebook added more details about the companies who will manage it. Visa, Mastercard, and PayPal will all be part of the group, but JPMorgan, Bank of America, and Citigroup won’t as of right now.
Why it matters: Libra could have been just a really simple way to handle international money transfers, sending money to a friend or paying a dime to read a New York Times article. But Facebook made an interesting choice to tie Libra to a basket of stable currencies, meaning that the dollars you transfer into your Libra wallet will gain or lose some value if you try to transfer them back into dollars later. There are clearly some long-term plans Facebook has for the currency that led them to make this strategic choice. Time will tell!
What happened: Independent Broker-Dealer Advisor Group launched eQuipt FP, a new tool that allows advisors to bill clients for one-time, periodic or ongoing services and includes additional features like electronic signatures.
Why it matters: Like AdvicePay, the payment solution from our friends at XY Planning Network, this new tool aims to make it easier for advisors to bill for financial planning and consulting services. As new models like monthly retainers and fee-only advisors sprout up, it’s great to see new tools become available that will make it easier for advisors to ride that wave.
Aaron Klein is CEO at Riskalyze.
Editors note: The views expressed in this column are Aaron Klein’s, and do not necessarily reflect the opinions of Wealthmanagement.com.
For more great content, visit WealthManagement.com.
Join tens of thousands of advisors who empower clients to invest fearlessly.BOOK A DEMO