FPPad Bits and Bytes for May 8

On today’s broadcast, IBM flexes its cognitive computing muscles at a World of Watson event, Finance Logix gets acquired by Envestnet, and Vanguard deploys Personal Advisor Services to the masses.

So get ready, FPPad Bits and Bytes begins now.

(Watch FPPad Bits and Bytes on YouTube)

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To learn more about Croesus or to sign up for a free trial, visit fppad.com/croesus.

Here are the links to this week’s top stories:

IBM World of Watson and what the future holds for financial advisers from FPPad.com

Visit QuidPick1, and SparkCognition online.

[This week’s top story comes from IBM, as the company held a two-day conclave in New York to introduce the IBM Watson Developer Cloud. I attended the event to look for ways cognitive computing from IBM Watson can enhance the financial services industry, so here’s what I found.

First, a company called Quid, which is using Watson to ingest millions of documents to index them based on information around stocks and portfolios. Something like this can significantly streamline your portfolio research workflow. And another company is Pick1, which uses IBM Watson to segment and analyze your clients based on their personality derived from what they write in emails and post on social media.

And on the cybersecurity side, a company called SparkCognition is leveraging IBM Watson to detect, assess, and research external threats that businesses encounter every day from hackers. Tools like these are poised to help you protect the critical information in your business, as well as the assets of your clients, which has become a huge focus for regulators this year.

I filmed a video blog while at World of Watson to give you a sense of the size and scale of the event, offer some of my candid thoughts from presentations, and keep you aware of what your business will need to stay competitive in the future.]

Envestnet Acquires Finance Logix from BusinessWire, and

Envestnet Acquires FinanceLogix As The Integrated Financial Planning And PFM Buying Frenzy Continues from Kitces.com

[Next up is news from Envestnet, as the company announced it is acquiring Finance Logix, a financial planning software provider, for around $32.5M of cash and stock as calculated by Nerd’s Eye View blogger Michael Kitces. I was on my flight back from World of Watson when the news broke, so thankfully Michael Kitces cranked out a comprehensive post on the deal. Here are the important takeaways.

In 2012, Envestnet acquired Tamarac for their CRM, portfolio management, client portal and rebalancing software platform, then two months ago, they acquired Upside and their automated investment solution, so one of the few pieces missing in an all-in-one platform was financial planning software. Enter Finance Logix.

This deal and Fidelity’s recent acquisition of eMoney means that fewer potential acquisition targets remain, primarily MoneyGuidePro, MoneyTree, inStream, and private-equity backed Advicent Solutions. But clearly, the pace of acquisitions is accelerating, so it’s likely a question of when, not if, one of the solutions you use today gets acquired by a custodian or a large investment and technology provider.] Envestnet, Inc., announced today that it has acquired Finance Logix, a technology company that provides leading-edge financial planning and wealth management software solutions to banks, broker-dealers and RIA firms.

Vanguard unveils advice and investing program for the hoi polloi from Reuters

[And finally, Vanguard is out with news this week that its low-cost Personal Advisor Services, or PAS, is now being rolled out to all investors and the minimum account size has been lowered to just $50,000. With an annual fee of just 0.3%, Vanguard is walking a fine line of putting pressure on the fees advisors charge for investment management services, while simultaneously soliciting advisors to use Vanguard’s low-cost funds and ETFs in their portfolio allocations for clients.

Fortunately, Vanguard officials told Reuters that “Sophisticated investors will still need customized advice on taxes, estate planning and niche areas the new service will not offer,” which is a different stance than others out there who say investors don’t need to pay for expensive financial advisors.

Nevertheless, the pressure is on for you to aggressively price your fees, especially for investment management, but you also need to communicate how your firm goes well beyond offering one-size-fits-all advice.

That means you need to be more efficient and streamlined using technology available today so you have the capacity to establish meaningful relationships with clients and focus on the things that actually matter to their financial success.] Arguing that many of its customers cannot afford to pay high investment advisory fees, The Vanguard Group on Tuesday unveiled a low-cost service combining an automated investment plan with advice from a Vanguard financial planner.

Here are the stories that didn’t make this week’s broadcast:

Envestnet Driving Digital Advice Transformation from MarketWatch

Envestnet, Inc. announced that it will be launching Advisor Now™, a digital advice portal harnessing Envestnet’s core capabilities to help independent advisors demonstrate more value to clients and improve financial outcomes for investors.

Trizic Closes $2 Million In Additional Seed Funding From Operative Capital from Yahoo.com

Trizic, the technology company powering digital wealth advisory solutions for financial institutions and Registered Investment Advisors (RIAs), today announced an additional $2 million in seed funding from Operative Capital, an early-growth stage investor in disruptive financial technology start-ups.

Watch FPPad Bits and Bytes for May 8, 2015

Watch FPPad Bits and Bytes for May 8, 2015


2 Responses to “FPPad Bits and Bytes for May 8”

  1. Heywood Sloane May 8, 2015 9:17 am

    Watson, ‘big data’, AI, etc. can crunch and organize data far faster and consistently then the human brain. What they can’t do well is translate that into what it means for individuals’ personal goals and objectives.

    Just a thought!

    Wealth advisors who think of themselves solely as ‘investment managers’ and portfolio performance as the ‘end game’ are already being marginalized. Advisors who think of themselves as coaches who help individuals apply their financial resources to maintain their “independence” are going to find that’s a different business.

    They’ll have to start thinking more Maslow’s hierarchy of needs, and less about alpha. If they do that, they’ll see that “money” is just a resource or a constraint, depending on where their client is on the hierarchy. They may also realize that the other major resource or constraint is health.

    You mentioned that Vanguard is leaving some ‘niches’ for advisors to fill. I’d posit that the “wealth-health connection is far more than a ‘niche.’ The medical and health areas are being redefined too. There’s a potential for advisors who can help clients see the connections and inter-dependencies between wealth and health, to manage them, and what that ultimately can mean to their clients’ success.

    • Bill Winterberg May 8, 2015 4:48 pm


      Thank you for taking the time to reply. I agree, what good is wealth when it isn’t paired with good health?

      Advisors have the edge today of assessing a more complete picture of every client, whereas the automated solutions are only as good as the amount of boxes and fields provided on intake forms.