You wouldn’t believe what a technology reporter’s work inbox looks like.
Even ignoring the stuff that comes way out of left field — I’m registered on some very bizarre listservs — there's a constant parade of new products, funding announcements, M&A deals and integrations. So many integrations.
There just isn’t time, but InvestmentNews wants to make sure you’re not missing anything. So this is the first edition of Byte-sized fintech, a weekly roundup of some shorter pieces of news for your weekend along with a bit of commentary from yours truly.
Let me know what you think, either on Twitter or via email. And have a great weekend!
—Ryan W. Neal
Called Portfolio Quick Check, this tool from Fidelity Institutional lets advisers analyze and compare investment strategies to unearth new strategies and show clients the value of actively managing investments. PQC has been in pilot with 300 firms since the end of 2021 and is now available to all Fidelity Institutional clients.
The way markets are going these days, advisers are going to be searching for ways to continue justifying their fees to clients. Maybe PQC can help some advisers do more than just rebalance a basket of ETFs.
The risk-based wealth management technology firm is now moving into compliance with the launch of Command Center. Compliance teams can use Command Center to analyze every holding across a firm’s book of business and identify accounts or households that are misaligned with the risk tolerance assessment assigned by Riskalyze’s core technology.
It has been fascinating to watch Riskalyze expand beyond risk management in recent years into becoming a more comprehensive suite of adviser fintech. In addition to compliance, Riskalyze is also helping advisers with investment product discovery, portfolio construction and trading. As it goes after deals with larger financial institutions, don’t expect this company to be done yet.
Speaking of risk tolerance, financial advisers using Envestnet MoneyGuide for financial planning can pull in client risk assessment data from startup Tolerisk.
MoneyGuide remains one of the most popular financial planning softwares among advisers, and Tolerisk is quickly getting some attention in the market, according to the 2022 T3 Tech Survey. Riskalyze still dominates the risk assessment software arena, but this integration could help expose Tolerisk to a greater swathe of the adviser population.
Tolerisk is one of the best risk analytics tools available to analyze market data, customer behavior patterns, and economic indicators.
Onramp Invest, which is building an infrastructure that financial advisers can use to manage digital assets for clients, announced it raised an undisclosed amount of Series A funding from JAM Fintop. Onramp previously raised $6 million in seed funding in August. The company plans to use the assets to accelerate Onramp’s go-to-market strategy, CEO Eric Ervin said.
It’s been a rocky year not just for Onramp — with former CEO Tyrone Ross departing in March and a round of layoffs following shortly after — but for the entire cryptocurrency market. Bitcoin continued to tumble this week and other digital assets seem to be following suit. If this becomes a prolonged downturn, it will be interesting to see how things fare for companies launched at the height of crypto enthusiasm.
Clearstead Advisors, an institutional and private client advisory firm with $32 billion in AUM, will start providing clients with access to bitcoin and other digital assets through Eaglebrook Advisors’ separately managed account platform.
Despite the current downturn, large wealth management firms are continuing to move into the cryptocurrency market to satisfy client demand. Perhaps it’s a sign that advisers shouldn’t give up on Bitcoin, but instead prepare their firms and clients to capitalize on a future upswing.
Fresh off a $109 million round of funding, the company announced another deal with a large wealth management firm. Hightower has selected Tifin's digital marketing platform, Clout, to help advisers on the RIA network drive more leads, referrals and client conversions.
It’s remarkable to watch how fast Tifin is spreading through the independent advisory market. Though its market penetration remains small, according to industry surveys, its risk tolerance product Totum seems to be gaining traction, and high-profile deals like this will only help its footprint expand.
Fintech provider FIS launched a store in the metaverse for attendees at the annual FIS Emerald conference to explore possibilities for growing business in the virtual world. Attendees could purchase both physical items and NFTs.
Look y’all, I’m not sure I’m ready for the metaverse. I’m not trying to ignore it or say in any way it's a bad thing, it just sounds exhausting. Things are tough enough in the real world right now; not sure I need to figure out buying and selling things in virtual reality too. Anyway, to really learn about wealth management's future in the metaverse, check out our recent deep dive into the topic.
Many advisers are miscalculating fees as a result of manual systems and inaccurate disclosures, according to the Securities and Exchange Commission. To address the problem, Smart Kx, a startup focused on automated and compliant billing for the RIA market, has closed a $750,000 pre-seed round of funding. It’s investor group is 50% women, according to the company, and includes industry leaders like Larissa Roesch and Ric Edelman.
While Smart Kx is still a very young company, it’s interesting to see a newcomer not only founded by a woma, CEO Lacey Shrum, but also attracting funding female investors. The lack of diversity in fintech continues to be an issue, and at a recent conference it was suggested that one of the answers is bringing more women into the venture capital world to help grow more fintech companies led by women.
Snappy Kraken, which does digital marketing services for financial advisers, now has an exclusive license with Carl Richards, the certified financial planner whose weekly "Sketch Guy" column has run in the New York Times since 2010. For $1,200 per year, advisers can pair Richards’ sketches with Snappy Kraken’s copywriting services, though the first 500 advisers can get it for just $500 per year.
I can’t say I’m familiar with Richards’ work, but I can attest to how difficult it can be to find art to pair with written words about financial advice. The price sounds like a decent deal to me, but if this goes gangbusters for Snappy Kraken, won’t a bunch of advisers end up with the same art in their marketing and kind of defeat the purpose of trying to stand out?
Small businesses that use Patriot Software for payroll services can now access integrated 401(k) plans thanks to a new partnership with digital record keeper Vestwell. Any employers that choose to offer a retirement program through the integration will also access special pricing.
Many advisers’ clients are small business owners, who have traditionally struggled to offer compelling retirement programs. With the “great resignation” still going on, offering to help a client with payroll and a retirement program to retain employees could be a great value-add service.
During its annual conference this week, LaSalle St. introduced a new “technology learning center” for the independent broker-dealers and registered investment advisers on its network. The goal is to offer a single digital portal with live webinars, recorded instructional videos, written documents and a podcast designed to help advisers and registered reps evaluate their firms’ technology stack.
The process of identifying, integrating and learning how to use technology can certainly be intimidating, time-consuming and costly. Just look at the latest update to Michael Kitces' fintech chart. Thing is nuts. If firms can’t shell out for a technology consultant, resources like this could certainly be helpful.
Relationships are key to our business but advisors are often slow to engage in specific activities designed to foster them.
Whichever path you go down, act now while you're still in control.
Pro-bitcoin professionals, however, say the cryptocurrency has ushered in change.
“LPL has evolved significantly over the last decade and still wants to scale up,” says one industry executive.
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