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FPPad Bits and Bytes for March 27

On today’s broadcast, Schwab reveals details about its Institutional Intelligent Portfolios™ platform for advisors, LearnVest gets acquired by Northwestern Mutual, and Periscope becomes the latest trendy app for live video streaming.

So get ready, FPPad Bits and Bytes begins now!

(Watch FPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by Total Rebalance Expert, the industry’s leading tax efficient and multi-custodial rebalancing platform – now available anytime, anywhere on any device with TRX Edge.

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Sign up for a demo in the next two weeks and receive 50% off your set-up fees by visiting fppad.com/trx

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

Technology details of Institutional Intelligent Portfolios™ from Schwab Advisor Services from FPPad, and

Charles Schwab Unveils Institutional Intelligent Portfolios Details from BusinessWire

[There were two big stories this week you need to know about, so let’s begin with Schwab Advisor Services, as the company announced details of its Institutional Intelligent Portfolios™ solution created for you, the financial advisor, that will be released in the second quarter of this year.

Institutional Intelligent Portfolios is an automated investment management solution that allows you to add your firm name, logo, and contact information to the platform as well as design your own portfolios, provided that you choose from a pool of about 200 ETFs.

Now if you custody over $100 million dollars with Schwab, there’s no platform fee, but if you custody under $100 million, Schwab will charge users a platform fee of 10 basis points. And no matter what, you can’t allocate less than 4% in cash for any of your custom portfolios.

So what does this mean for your business? You now have yet another technology solution to offer a low-cost automated investment service to emerging clients, but IIP has the potential to be “free” if you custody enough assets with Schwab AND you ignore the drag on returns due to the 4% minimum cash requirement. But for that rock bottom price, you’re giving up some control.

If Schwab decides to change the available ETF options, or decides to require a higher minimum cash allocation, well, it’s their way or the highway. And don’t forget, this is not a set and forget business model.
These are people that we’re talking about signing up for automated services; they’re more than just users. Your business may already be spread thin today, and unless you’re thoughtful about a new strategy for serving this market, you may not be setting yourself up for success.

So will you be adding IIP and its ETFs to your RIA ASAP for your VIPs, or will you be SOL and suffer from FOMO? Hashtag LOL.] In company webcast and press release today, Schwab Advisor Services provided details of its Institutional Intelligent Portfolios™ solution that the company describes as an “automated investment management solution for independent registered investment advisors (RIAs).”

Northwestern Mutual Life Insurance Co. to acquire LearnVest from FPPad

[Next up is the surprising announcement this week that LearnVest, the New-York based financial planning startup, has agreed to be acquired by Northwestern Mutual, the largest direct provider of individual life insurance, AND one of the top 10 biggest independent broker-dealers in the financial planning industry.

Terms of the deal were not disclosed, and rumors have been flying in every direction about valuation, revenue, burn rates and more.

Now a lot of times LearnVest has been mischaracterized as another robo advisor, but the company actually employs over 40 full-time financial planners, and they built their own proprietary financial planning software and tools because existing solutions were too complex and time consuming to use.

So while financial planning has been the big focus of LearnVest, I don’t think that was a big factor in this deal at all.

According to CEO John Schlifske, Northwestern Mutual advisers created over 400,000 financial plans last year. If you take LearnVest’s number of clients in their February 2015 Form ADV Part 2, at best they delivered 3,700 plans in the last fiscal year, not even 1% of the Northwestern Mutual’s volume.

For me, this deal is all about lead generation. By acquiring LearnVest, Northwesten Mutual now gets access to the over 1.5 million people who use LearnVest’s free mobile app or subscribe to LearnVest’s content. Schlifske was quoted saying that LearnVest “is expected to continue providing unbiased planning,” so assuming that’s true, what’s the upside for Northwestern Mutual?

How does one bring together “best-in-class products” with a “cutting-edge client digital experience,” without an inherent conflict? The jury’s still out on this one, so be sure to watch future broadcasts as this story develops.] According to the Wall St. Journal, Northwestern Mutual Life Insurance Co., said it would acquire New York-based online financial planning startup LearnVest Inc.

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

Twitter’s Periscope App Lets You Livestream Your World from Wired

Periscope is consensual voyeurism. That’s not a new idea—millions use Twitch to watch other people play videogames, while YouTube, UStream, and a dozen others have tried to make businesses out of live-streaming video—but it feels like the right platform and the right time.

Tax-Loss Harvesting for Everyone from Wealthfront

We’re proud to announce that our daily tax-loss harvesting service will be made available to all Wealthfront taxable accounts, starting in April. 

Watch FPPad Bits and Bytes for March 27, 2015

Watch FPPad Bits and Bytes for March 27, 2015

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Northwestern Mutual Life Insurance Co. to acquire LearnVest

Northwestern Mutual to acquire online financial planning provider LearnVest

Northwestern Mutual to acquire online financial planning provider LearnVest

(This is a developing story)

According to the Wall St. Journal, Northwestern Mutual Life Insurance Co., said it would acquire New York-based online financial planning startup LearnVest Inc.

Terms of the deal were not disclosed.

Here’s your Too Long;Didn’t Read (TL;DR) summary:

  • At the time of acquisition, LearnVest had 10,000 premium clients who pay a one-time setup fee of $299 and $19/month ongoing. That’s at best $2.28 million in annual revenue plus $2.99 million in non-recurring one time setup fees.
  • LearnVest received $69 million of funding in five rounds from 15 investors (via Crunchbase)
  • LearnVest for Work, a “corporate financial wellness program” had another 25,000 clients. Employers paid or subsidized access to LearnVest planners for employees.
  • LearnVest employs 150 planners in New York and Arizona. Assume an “average” salary of $60,000 and you have an annual burn rate of $9 million (hat tip @MichaelKitces).
  • For now, LearnVest employees will not become advisers for agents of Northwestern Mutual

More reactions to the potential for conflict between LearnVest’s financial planning advice delivery and LearnVest’s ownership by a retirement plan and insurance provider are in this InvestmentNews article by Darla Mercado.

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Technology details of Institutional Intelligent Portfolios™ from Schwab Advisor Services

Schwab unveils details of Institutional Intelligent Portfolios™ to financial advisers

Schwab unveils details of Institutional Intelligent Portfolios™ to financial advisers

Details of Institutional Intelligent Portfolios™ unveiled as Schwab arms its advisers with a robo solution

In company webcast and press release today, Schwab Advisor Services provided details of its Institutional Intelligent Portfolios™ solution that the company describes as an “automated investment management solution for independent registered investment advisors (RIAs).”

Earlier I had the chance to speak with Schwab Intelligent Portfolios executive vice president Naureen Hassan and Schwab Advisor Services technology and strategy senior vice president, Neesha Hathi to clarify several details about what financial advisers can expect from the new service.

Here are my important takeaways with a focus on the technology impact for your business.

Adviser Branding, but Schwab Domain

Institutional Intelligent Portfolios™ will be made available in Q2 2015 and it will allow advisers to use their own branding, which includes their firm name, logo, and contact information inside the end-client dashboard.

However, Institutional Intelligent Portfolios will be hosted on the Schwab web domain, so advisers cannot use their own custom website domain. Advisers must provide a link to Institutional Intelligent Portfolios somewhere on their website to direct end investors to the adviser-branded version of the solution.

Proprietary Paperless Process

Once logged in to the dashboard, investors go through an experience very similar to that of the retail Schwab Intelligent Portfolios solution (but one that uses the adviser’s branding and the adviser’s custom portfolios).

Investors answer the same questions about their goals and level of risk tolerance found in Schwab Intelligent Portfolios, and upon completion, investors are matched to a portfolio designed by the adviser that best fits the investor’s profile. This paperless process is proprietary to Schwab and does not support third party form-filling or electronic signature providers that are made available by other institutional custodians.

Investors use the paperless application process to open and fund their accounts and also receive their disclosure documents when they engage in the service.

Mobile Minus Android

Schwab Intelligent Portfolio will be available as a native app for iOS devices, and a responsive website will offer an interface that is suitable for devices of all sizes.

According to Hassan, an Android app is in development but did not provide details on a future release date.

Account Management

Institutional Intelligent Portfolios allows advisors to create custom allocations from over 200 ETFs in the platform. Automated rebalancing and the opportunity for tax-loss harvesting is available for investor accounts greater than $50,000, and advisers can disable the loss harvesting algorithm if they so choose.

Loss harvesting applies only to the assets held within Institutional Intelligent Portfolios, so advisers must pay attention to transactions that trigger wash sales if substantially identical securities are held in outside accounts.

Note that advisers can view investor accounts using Schwab Advisor Center just as they do for the institutional accounts they manage on behalf of clients today. That means that data downloads are supported for assets held in Institutional Intelligent Portfolios. Since the data feeds are available just like any master account, Institutional Intelligent Portfolios holding data can be downloaded into other portfolio management software solutions available from third party vendors.

Finally, for account registrations, Institutional Intelligent Portfolios supports standard taxable brokerage accounts, joint accounts, Traditional and Roth IRA accounts, and living trusts.

Fees and Cash Minimums

With the technology attributes addressed, here are details of the fees of Institutional Intelligent Portfolios.

From the press release, Institutional Intelligent Portfolios has “a two-tiered pricing structure based on total assets custodied with Schwab outside the Institutional Intelligent Portfolios program.”

For advisers with less than $100 million in assets under management (AUM) with Schwab, investors will be charged a 10 basis point platform fee.

But for advisers with more than $100 million in AUM with Schwab, no platform fee is charged.

Schwab Intelligent Portfolios has been questioned for its up to 30% allocations to cash, but on the Institutional Intelligent Portfolios platform, portfolios must maintain a minimum of four percent in cash. The top end of the cash allocation is determined by the custom portfolios designed and configured by each adviser.

 

 

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FPPad Bits and Bytes for March 20

On today’s broadcast, learn about the technology one planner selected to launch his new RIA, SigFig launches a free portfolio guidance algorithm for investors, and find out what happens when Tony Robbins mentions your firm in his best-selling book.

So get ready, FPPad Bits and Bytes begins now!

(WatchFPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by ITEGRIA, providers of complete outsourced technology support, security, infrastructure and IT solutions exclusively for RIAs.

itegria - providing a 360-degree, comprehensive approach to financial advisor IT needs

In their new book titled Red Flags, you’ll learn how to protect your firm from cyber-attacks, disasters, and IT compliance risks. Learn more about the Red Flags book by visiting fppad.com/itegria.

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

Meeting The Requirements To Start Your Own RIA Without Breaking The Bank from Kitces.com

[This weeks top story comes from Michael Kitces’ Nerd’s Eye View, as this week Kitces featured a guest post from financial planner Andrew McFadden. McFadden tells how he was inspired to launch his own RIA after reading a post by Gen Y planner Sophia Bera about her own experience. He recently launched Panoramic Financial Advice for roughly $7,000 and provided a helpful overview of the technology he selected to get his business up and running.

First, McFadden chose Less Annoying CRM after evaluating Redtail and Wealthbox, because of the CRM’s customization options and low price of just $10 a month. Less Annoying CRM does integrate with Google Apps and Mailchimp, but it doesn’t offer integrations to industry programs like financial planning or portfolio management software. But that’s ok, because McFadden didn’t need to buy portfolio management software, as he opted to leverage the services of third-party money manager Frontier Asset Management which uses Fidelity as its custodian.

For planning engagements, McFadden gathers client data using PreciseFP, builds financial plans using MoneyGuidePro, communicates with remote clients via Skype, and gathers electronic signatures using Adobe EchoSign.

So think about the advisors in your business: For $7,000 and a lot of hustling, practically anyone can start new RIA from scratch. So if you’re not investing in your people, your technology, and your compensation plan so that there’s upside potential in your business, don’t be surprised if you witness breakaways from your firm as advisors decide to go out on their own.] Launching a business is hard enough in any industry, but getting through the requirements for setting up an RIA and figuring out the necessary technology vendors and software to have in place when starting a firm can be especially daunting.

SigFig Launches ‘SigFig Guidance’ to Help the 90% of Investors Losing Money Due to Common Mistakes from BusinessWire.com

[Next up is news from SigFig, another player in the online automated investment service arena, that launched a new feature this week called SigFig Guidance. SigFig Guidance uses an online questionnaire and account aggregation to identify an investor’s current portfolio and risk tolerance, and then proceeds to diagnose common problems in the portfolio. SigFig Guidance looks for things like high fees, uninvested cash, excessive risk, and poor diversification, and then offers portfolio recommendations generated by SigFig’s algorithms, all for free.

So does this sound like a second opinion service or a portfolio checkup? That’s because it is. So if you’ve been using a second opinion incentive to attract prospects to your business, you might need to modify your process in light of this new competition.] SigFig, the fastest and most convenient automated investment service, today launched ‘SigFig Guidance’, a free investment tool specifically designed to analyze any portfolio in less than five minutes, offering unbiased, actionable suggestions to optimize returns and reduce fees.

Stronghold takes wraps off robo matchmaker by InvestmentNews

[And speaking of portfolio checkups, this week’s broadcast ends with another new portfolio checkup service, only this one is offered by Stronghold Financial out of San Diego. Now where have I heard that name before? Oh, yes, Stronghold Financial is the business that motivational speaker Tony Robbins promoted in his book, “Money: Master the Game” published back in November, and the firm is led by Robbins’ own advisor Ajay Gupta, which created a bit of controversy on its own.

That aside, what happens when your firm gets mentioned in a New York Times best selling book? You get flooded with leads. In response, Stronghold now offers a free Portfolio Checkup service on its website that uses account aggregation powered by Jemstep in the back end, but instead of taking on thousands of new clients itself, Stronghold is referring those clients out to roughly 100 financial advisors who are part of the Stronghold network, and in return, those advisors pay 25% of the fees generated by each referral back to Stronghold.

So if you feel like your lead generation could use a boost from riding the coattails of Tony Robbins, this is an interesting option to consider at the least, or you could implement Jemstep on your own for a lower fee, but be totally responsible for your own lead generation campaign.] Stronghold Financial, the advisory firm that found itself at the center of controversy last fall because of its ties to self-help guru Tony Robbins, believes its robo-matchmaking service is ready for prime time.

There were no other of stories of interest this week, so enjoy an early start to your weekend!

 

Watch FPPad Bits and Bytes for March 20, 2015

Watch FPPad Bits and Bytes for March 20, 2015

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FPPad Bits and Bytes for March 13

On today’s broadcast, Schwab and Wealthfront duke it out over automated investment supremacy, Fidelity wants to be the first final app for Apple Watch, and learn what screencasting app I use to delegate work so I can be more efficient.

So get ready, FPPad Bits and Bytes begins now!

(Watch FPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by Croesus, the affordable all-in-one portfolio management & CRM software for RIAs. Over 9,500 investment professionals use the Croesus application to manage more than $700 billion in assets, and Croesus is offering a 50% discount on set-up fees for Advent Axys users until June 30th.

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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:

Charles Schwab Launches Schwab Intelligent Portfolios™ from Business Wire

[This weeks top story features, no surprise, Charles Schwab and Wealthfront, as this week many of us witnessed round one of what could easily be a 12-round match between the industry heavyweight and the up-and-coming contender. Allow me to bring you up to speed in less than 60 seconds:

In June of 2014, Wealthfront crossed a billion dollars in AUM and paid homage to Charles Schwab for building a world-class company (foreshadowing). Then in October, Schwab announced it would release it’s own automated investment service called Schwab Intelligent Portofolios™ in the first quarter of 2015, and offer it with no management fees.
So in January of this year, details emerged that Schwab Intelligent Portfolios generally will have higher cash positions than similar allocation strategies, allowing Schwab to earn revenue on cash that is swept to Schwab Bank.
This week, Schwab officially rolled out Intelligent Portfolios on Monday, so on Tuesday, Wealthfront’s CEO Adam Nash criticized Schwab, remember, the same company he venerated just 9 months ago (does that count as a another pivot?), citing high cash allocations as quote “almost criminal.” Schwab countered on Wednesday, saying Nash was misleading and quote “presented a very loose interpretation of facts.” Now you’re up to date, and with a little bit of time to spare!

So why is this news for you? According to Schwab’s press release, the company plans to release Institutional Intelligent Portfolios™ in the second quarter, a version of the service that allows financial advisors who custody client assets with Schwab to use the solution with their own firms’ branding.

For a yet-to-be-disclosed fee (here’s a hint: I bet it’s 25 basis points), advisors can modify and customize asset allocations in Institutional Intelligent Portfolios™, or they can choose to use existing portfolios for no program management fee.

And second, while Schwab and Wealthfront battle it out, you have a huge opportunity to get in front of investors caught up in this story to communicate how you’re different from automated investment services. Yes, you do offer portfolio management, but you offer so much more, so it’s time you start controlling the conversation instead of allowing others to control the conversation about you.] Charles Schwab today launched a fully automated investment advisory service, Schwab Intelligent Portfolios™, the only investment advisory service using sophisticated computer algorithms to build, monitor, and rebalance diversified portfolios based on an investor’s stated goals, time horizon and risk tolerance – without charging any advisory fees, commissions or account services fees.

Fidelity® to Launch Financial App for Apple Watch™ from Fidelity

[Next up is news from Fidelity Investments, as this week the company rode the wave of interest in the Apple Watch announcement by revealing a financial app for the new product. If you remember waaaay back in my third episode, I told you about Fidelity’s Market Monitor app for the ill-fated Google Glass, so it’s not surprising that the financial services company is also leading the industry on embracing Apple’s foray into wearable computing.

So again, what’s the takeaway for you? While Google Glass has floundered perhaps for being a little too intrusive, the Apple Watch and other devices on your wrist may actually lead to some incremental productivity increases in your daily routines. So will Apple Watch prove to be popular among advisors? Only time will tell. Thank you, I’ll be here all week! Try the veal!] Fidelity Investments® announced today a first-of-its kind financial app for Apple Watch. Through a unique design and experience, the Fidelity Mobile® app for Apple Watch conveniently gives customers a distinctive overview of global markets and alerts on stocks and investments in real-time right on their wrist.

How I Finally Learned To Delegate By Creating Video Tutorials With Screencasting Software from Kitces.com

[And finishing up this week’s broadcast is a recent post from Michael Kitces on his Nerd’s Eye View blog about learning to delegate work to others. I’m sure you’re heard time and time again that you need to delegate work to be more efficient with your own time, but some things are just easier if you do them yourself instead of showing someone else how to get the job done. So what was the breakthrough for Kitces? The answer was screencasting software.

Screencasting software allows you to record your computer screen and also record your narration of what you’re doing. When you’re finished, you can share your screencast video with colleagues or even with clients by uploading it as a private video online.

I make screencasts for my own business, and I even use them for graphics for Bits and Bytes broadcasts. The tool I prefer is Camtasia for Mac, they also have a version for Windows, and if you keep an eye out, you’ll often find a coupon code for 50% off.] For me, the “breakthrough” in how to delegate effectively came from using screencasting software – tools that record what’s happening on your computer screen, paired with the audio of you talking while you’re sitting in front of it.

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

Envestnet | Tamarac™ Rings in 2015 with a Record Year of RIAs Adopting its Portfolio and Client Management Platform from PRNewswire

During the previous 12 months, Tamarac has added approximately 150 RIA firms to its roster of clients, bringing the total to more than 800 firms managing client assets in excess of $500 billion. The dramatic increase in RIA clients has had an exponential effect on the number of financial accounts residing on the Advisor Xi platform, which now number more than 1 million.

Watch FPPad Bits and Bytes for March 13, 2015

Watch FPPad Bits and Bytes for March 13, 2015

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FPPad Bits and Bytes for March 6

On today’s broadcast, Wealthfront wants you to know they crossed another round number in AUM, ByAllAccounts is now aggregating over $1 trillion dollars in investor assets, and Morningstar is out with a new iPad app for advisors.

So get ready, FPPad Bits and Bytes begins now!

(Watch FPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by IMPLEMENT NOW, the independent advisor’s Practice Management Virtual Summit hosted by Kristin Harad broadcasting online March 16th to the 20th. When you register, you’ll get access to interviews and bonus material from 22 industry thought leaders as they reveal their practice management secrets for success.

Register for Implement Now

And if you register by March 15th, you’ll receive a copy of Carl Richard’s new book The One Page Financial Plan. Find all the details for this high-impact event by visiting fppad.com/implementnow

Two Billion Reasons to Believe from Wealthfront, and

Vanguard may expand fast-growing virtual investing service to advisers from InvestmentNews

[First up is news from online investment service Wealthfront, as the company announced this week that it has surpassed the $2 billion dollar mark in assets under management, an increase of 20 times in just over two years. This places the automated investment service just barely in the Top 100 RIA firms measured by assets according to the InvestmentNews RIA database. However, another online provider has also entered this rarefied territory, but with very little fanfare.

That provider is mutual-fund giant Vanguard, as the Vanguard Personal Advisor Services™ reached $10.1 billion dollars in assets as of the end of 2014, and it’s still in a limited pilot program. If you do the math, the company added nearly $8.8 billion to its platform in just nine months, and the company is also considering offering some form of the service to advisers.

So while the startups continue to make headlines and receive face time on cable business TV, the incumbents that the startups say they’re disrupting are putting up some very impressive growth metrics of their own.] Wealthfront managed less than $100 million in client assets when I joined, and had many skeptics. No one outside of the company could have imagined that, just over two years later, we’d celebrate being the first automated investment service to reach $2 Billion in client assets under management.

Morningstar Reaches Milestones, Aggregates More than $1 Trillion in Assets Daily With Access to 20,000 Financial Data Sources Through Morningstar ByAllAccounts Aggregation Service from Morningstar

[Related to online asset tracking is this is news from Morningstar, as the company announced its ByAllAccounts aggregation service now aggregates over $1 trillion dollars in investor assets. You may recall that Morningstar acquired ByAllAccounts back in April of 2014, and since then the number of supported data sources has grown to over 20,000 from 4,500. Can you say Yodlee?

So what does this mean for you? Remember, most of the online investment services don’t take into account the assets users have in their held away accounts. Personal Capital is one exception, but they’re not a pure online service, either. The rest don’t have the complete picture of their users’ net worth, so if you’re on the fence about incorporating account aggregation in your business, this is one area in your value proposition where you can outperform the online competition.] Morningstar, Inc., a leading provider of independent investment research, today announced a number of milestones for its Morningstar® ByAllAccounts aggregation service.

Review: Morningstar’s New iPad App from Financial Planning Magazine

[And finally, Morningstar also rounds out this week’s broadcast as Joel Bruckenstein reviewed their new iPad app built for the needs of financial advisers. I had the opportunity to recently test the app with Morningstar’s Mike Barad as he walked through the market research information, complete with embedded videos from Morningstar analysts, as well as the Clients and Portfolios view that advisors can use to stay up to date on client asset allocations, holdings, and more.

There are a few wish list items that Bruckenstein highlighted, such as the inability to conduct trading or rebalancing activity within the app, or to view Portfolio X-Ray reports on aggregated accounts. Still, for a version 1.0 app, advisors who use Morningstar Office or Workstation in their business should find the app useful for those times they’re away from their desktop computer.] While Morningstar has long been known as a leading provider of independent investment research, the company also produces a number of software applications for advisors.

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

Into The 21st Century, Finally from Financial Advisor Magazine

Years before there was Riskalyze or Pocket Risk, there was FinaMetrica, a comprehensive risk-profiling tool for use by advisors with their clients.

Wealth Access integrates with MoneyGuidePro from InvestmentNews

Wealth Access, a personal financial management platform, announced Tuesday its integration with MoneyGuidePro, a popular financial planning software.

Breaking Delivers the News to Your Mac or iPhone Notification Center from Lifehacker

OS X/iOS: Keeping up with the news is easy, but keeping up with news you care about can be trickier. Breaking is a new app that makes it easier.

FPPad Bits and Bytes for March 6, 2014

FPPad Bits and Bytes for March 6, 2014

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FPPad Bits and Bytes for February 27

On today’s broadcast, Envestnet acquires Upside, the laptop you’re using right now could be vulnerable to attacks, and Mobile Assistant releases updates that will speed up your dictation workflow

So get ready, FPPad Bits and Bytes begins now!

(watch FPPad Bits and Bytes on YouTube)

This week’s episode of Bits and Bytes is brought to you by Total Rebalance Expert, the industry’s largest, privately owned portfolio rebalancing software provider.

Total Rebalance Expert

TRX just announced TRX Edge, a completely rewritten rebalancing platform optimized for the web as well as mobile devices. Sign up for a demo of TRX Edge and also download their white paper on rebalancing ROI by visiting fppad.com/trx

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

Envestnet Acquires Upside from Envestnet

[First up this week is a late-breaking announcement by Envestnet that the company will acquire online investment provider Upside for an undisclosed amount. I’ve covered Upside in several broadcasts before, as their automated investment service is meant to be used by advisors, and their service powers Liftoff, launched last year by high-profile advisors Barry Ritholtz of the Big Picture and Josh Brown, The Reformed Broker. Oh, happy belated birthday, Josh!

Now this is the first online investment provider to be acquired by a larger vendor. Remember, Fidelity Institutional did not acquire Betterment Institutional, they simply announced a collaboration with the company last year (watch FPPad Bits and Bytes for October 17, 2014), so I expect several more acquisitions to be announced this year. You might want to keep an eye on JemStep, SigFig, and Wealth Access, but you didn’t hear that from me!

Now news of this deal broke while I was already in the studio filming this week’s broadcast, so you’ll need to visit fppad.com/154 for more details, like Envestnet’s Thursday afternoon conference call, and see how this acquisition will shake up the online automated investment landscape for advisors.] Envestnet, Inc., a leading provider of unified wealth management technology and services to financial advisors, announced today that it has acquired Upside, a technology company providing digital advice solutions to financial advisors. Terms of the acquisition were not disclosed.

Lenovo PCs ship with man-in-the-middle adware that breaks HTTPS connections from ArsTechnica, and

How Lenovo’s Superfish ‘Malware’ Works And What You Can Do To Kill It from Forbes

Test your computer with The SuperFish vulnerability test at Filippo.io

And visit SuperFish Vulnerability from Lenovo Support

[Um, it’s accumulating, so next up is news of the SuperFish controversy affecting users of Lenovo laptop and desktop computers. For roughly four months in 2014, Lenovo shipped 16 million PCs pre-installed with a “visual search” plugin called SuperFish.

While preloaded software that serves up ads is annoying, security experts discovered a vulnerability in the way encryption certificates were handled. I’ll spare you the technical details, but this means if you’re using a Lenovo computer with SuperFish preinstalled, your web browser sessions could be vulnerable to man-in-the-middle attacks, potentially exposing some of your confidential information.

So how do you know if you’re infected? I’ve linked to a SuperFish vulnerability test in this week’s show notes at fppad.com/154, and you will also find a link to Lenovo’s support site with instructions on how to remove SuperFish from your computer.]

Lenovo is selling computers that come preinstalled with adware that hijacks encrypted Web sessions and may make users vulnerable to HTTPS man-in-the-middle attacks that are trivial for attackers to carry out, security researchers said.

Mobile Assistant Announces New Version of iPhone App; Integration With Salesforce; Enhanced Integration With Redtail Technology from MarketWired

[I’m going to need a shovel soon, so let’s finish up with news from Mobile Assistant, the popular dictation service advisors use to streamline their note taking workflow. This week, Mobile Assistant released an updated iPhone app that offers an expanded notes section with search features, optional push notifications when dictation jobs are completed, and better visibility into the amount of dictation lines used in each billing cycle.

The dictation service also added Salesforce to the list of CRMs that can import completed dictations to client records, and if you’re a Redtail CRM user, you’ll now be able to sign up for a free trial of Mobile Assistant directly from Redtail without having to retype any of your personal information. So if you’re still in the habit of manually typing in notes after a client meeting, give dictation services a try and see how much your productivity can improve.] Mobile Assistant, Inc., the fastest growing mobile dictation service in the financial and insurance industries, is pleased to announce that it has launched the newest version of its iPhone App in parallel with full integration with Salesforce, the nation’s leading cloud based CRM platform.

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

Fidelity Investments® Aligns Clearing and Custody Units; Strengthens Commitment to Innovation in Financial Advice Industry from BusinessWire.com

Fidelity Institutional, the division of Fidelity Investments® that provides clearing, custody and investment management products to registered investment advisors (RIAs), broker-dealers, family offices, retirement recordkeepers and banks, today announced the alignment of its clearing and custody units.

 

Watch FPPad Bits and Bytes for February 27, 2015

Watch FPPad Bits and Bytes for February 27, 2015

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FPPad Bits and Bytes for February 20

On today’s broadcast, I have explosive news from eMoney, Riskalyze, Betterment, Schwab and Orion.

So buckle your seat belt, FPPad Bits and Bytes begins now!

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

eMoney Reveals New emX Select Dashboard At 2015 T3 Conference from WealthManagement.com

[Now you probably know that the Super Bowl of advisor technology, a.k.a. the T3 conference, was held in Dallas last week. By last count, there were over 40 press releases made at the event, but since this is just a five minute show, here are my picks for the most important stories.

First up is eMoney Advisor, as their CEO Edmund Walters took the stage with no slide deck, no apologies, and proceeded to shock the audience with a preview of emX Select, completed by a video filled with explosions.

Awesome, right?!? On everyone’s mind was the Fidelity acquisition, so Walters told the packed ballroom eMoney “had to sell” because “this tech is expensive” and he wants to “kick the crap out of the B2C” robo advisors (implosion!).

I told you, ! No apologies.

From what I’ve seen so far, emX Select resembles the Veo One™ dashboard recently announced by TD Ameritrade Institutional (you did watch my Veo One coverage, right?) but eMoney aims to have 28 integrations by September, which beats the 11 integrations planned for Veo One, one of which includes eMoney Advisor. Interesting!] On Friday at the 2015 T3 Conference in Dallas, eMoney Advisor, recently acquired by Fidelity for $250 million, gave advisors the first look at its new emX Select platform.

CLS Investments and Riskalyze Join Forces to Launch Autopilot, Arming Advisors With the Digital Tools Needed to Neutralize Robo-Threat from Riskalzye, and

Riskalyze Reinvents the Client Meeting from Riskalyze

[Next up is Riskalyze, as CEO Aaron Klein announced a new partnership with Omaha-based CLS Investments to provide an end-to-end online investment service called Autopilot. At a high level, Autopilot is similar to Betterment Institutional, Upside, JemStep and others where clients answer an online questionnaire and can then invest directly in a recommended portfolio allocation based on their answers.

Klein also demonstrated a new tool called Meetings, a simple way advisors can conduct screen sharing with remote clients without exposing private data, embarrassing cat videos, or the random Godzilla attack (woah!) that might pop up on an advisor’s screen. Meetings comes out February 23rd, so make sure you give it a try.] Autopilot Will Offer Automated Asset Management and Risk Measurement, Embedded Into an Advisory Firm’s Existing Website.

Betterment Valued At Nearly $500 Million In New Round from the Wall St. Journal

[And let’s crush this broadcast (woah!) with a quick roundup of other news: Betterment just raised another $60 million in venture capital for a total of $105 million. What are they going to do with the cash? Betterment CEO Jon Stein says they’re going to refine algorithms to answer questions like “Am I saving enough relative to my goals?” Warning: financial planning algorithms ahead!] New York-based Betterment is closing a new $60 million round, the company is set to announce on Thursday.

Schwab tells the SEC its robo-advisor has a 30 basis-point fee and big-time cash allocations held by Schwab Bank from RIABiz.com, and

Schwab Wealth Investment Advisory, Inc. Schwab Intelligent Portfolios™ Disclosure Brochure from SEC.gov

[Schwab’s Form ADV for their Intelligent Portfolios robo-solution revealed the service is “technically” free, but they will use client cash, aka the “sweep allocation” for Schwab Bank activity where Schwab earns income on the spread, so Intelligent Portfolios discloses that most strategies maintain a higher sweep allocation than other providers designed to fully invest client cash. But hey, it’s “free” and consumers LOVE free!] The Charles Schwab Corp. will charge a fee of 30 basis points to clients of its robo-advisor, but those investors will not pay it out of pocket because Schwab affiliates will reimburse the client behind the scenes, according to SEC documents relating to Schwab Intelligent Portfolios.

TA Associates to acquire majority interest in NorthStar from Orion Advisor Services

[And finally, private equity firm TA Associates recently signed an agreement to acquire a majority interest in NorthStar Financial Services Group, the parent company of Orion Advisor Services, CLS Investments, Gemini Fund Services and six other sister companies. So you’ve been asking me, is this good or bad, specifically for Orion. I believe it’s good, and here’s why: Orion has a strong track record of growth, Orion’s leadership will remain in place, the company remains privately held, and now there’s extra cash available for strategic opportunities.] TA Associates, a leading global growth private equity firm, today announced it has signed a definitive agreement to acquire a majority interest in NorthStar Financial Services Group, LLC, and its nine subsidiary wealth management industry service providers.

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

Advicent Unveils Narrator™, a Tool for Advisors to Fight Commoditization, at T3 Conference from Advicent.com

Advicent Solutions announced at the 2015 T3 (Technology Tools for Today) Conference at the Hilton Anatole in Dallas, Texas, that it is launching a new product for the North American market—the Narrator™ application builder. The product is available to buy immediately.

Watch FPPad Bits and Bytes for February 20, 2015

Watch FPPad Bits and Bytes for February 20, 2015

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Orion Advisor Services parent company Northstar to be acquired by private equity firm TA Associates

TA Associates to acquire NorthStar Financial Services Group, parent company of Orion Advisor Services

Hot off the wires this morning (thank you FiComm) is news of another acquisition in the advisor fintech space.

Today, private equity firm TA Associates announced an agreement to acquire a majority interest in NorthStar Financial Services Group, LLC.

Orion Advisor Services included in the deal

Orion Advisor Services

NorthStar has nine subsidiaries under the company, with Orion Advisor Services, LLC being the most recognizable to advisers interested in financial technology solutions for their business. Collectively, NorthStar and its subsidiaries manage and administer roughly $275 billion in assets, with Orion making up at least $180 billion of that amount (see: Orion Celebrates Fifteen Years of Serving Advisors With Record Growth from Marketwired.com)

Terms of the deal were not disclosed.

This comes on the heels of two acquisitions announced last week. First, Fidelity announced a deal to acquire eMoney for a rumored amount of $250 million according to sources close to the deal, followed by an announcement by SS&C Technologies to acquire Advent Software for $2.7 billion.

With three M&A deals in one week, financial technology service providers are proving to be attractive targets for acquisition.

The Future of FinTech M&A

Looking to the future, these deals seem to validate two trends in the industry. First, independent advisory firms continue to seek ways to scale their operational efficiency, and trusted third party providers offer attractive solutions to achieve such goals. Outsourced portfolio management (Orion Advisor Services and Advent Software) and account aggregation, client portals, and streamlined financial planning (eMoney Advisor) give advisers the leverage they need to growth their business without having to add significant overhead or add to the headcount of the firm.

Second, independent advisory firms are poised to continue to attract business from clients and investors dissatisfied with traditional wirehouse and brokerage providers, which may lead to a significant shift in asset flows away from transaction- and product-oriented businesses to fiduciary advice offered by independent RIAs.

Since M&A activity has dramatically picked up in 2015, here’s my question to you:

Who’s next?

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FPPad Bits and Bytes for February 6

On today’s broadcast, the rumors are true: eMoney gets acquired by Fidelity Investments, Advent Software gets acquired by SS&C Technologies, and the SEC reveals troubling cybersecurity issues after its first round of broker-dealer and adviser examinations.

So get ready, FPPad Bits and Bytes begins now!

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Today’s episode is brought to you by Wealthbox CRM.  Version 1.7 just released with delectable features like two-way Google Calendar synchronization, support for popular email newsletter services, an integrated Facebook feed, and more!

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Here are this week’s stories of interest:

Fidelity Investments® Acquires eMoney Advisor from BusinessWire, and

Fidelity Acquires eMoney Advisor PFM Dashboard, Gets Financial Planning Software Thrown In? from Kitces.com

[This week’s top story that EVERYONE is talking about is eMoney’s acquisition by Fidelity Investments. Sources close to the deal cited a purchase price “north of $250 million” with a valuation around four times eMoney’s revenue. This deal marks the first time I can recall an institutional custodian taking ownership of a financial planning software provider. Nearly a dozen others that I listed on FPPad are all privately held with no custodial affiliation.

So the burning question is: What’s the future of eMoney? Executives from eMoney and Fidelity reaffirmed that the company will continue to operate independently, but have the financial backing of Fidelity to accelerate product development and growth. Now for me, eMoney seemed to be doing just fine on its own, always having a top spot in advisor technology surveys and having just released a big emX update two months ago, so did they really need to make a deal?

But on the other hand, if you read Michael Kitces’ take on Nerd’s Eye View, he believes Fidelity purchased eMoney primarily for its client-facing personal financial management tool, or PFM, that works a lot like Mint.com, and just happened to get eMoney’s financial planning software along with the deal. Robo-investment allocators are raising the stakes on client-facing dashboards, but buying eMoney for its PFM solution just doesn’t add up to me.

There are many other PFM options and client-facing dashboards out there like Aqumulate, Blueleaf, MoneyDesktop (MX), and even Personal Capital, who built their own, probably for a lot less than $250 million. So really, nobody knows what the future holds now that eMoney is under Fidelity’s ownership, and you can add me to the list of speculators that can only guess how this deal will influence your decision on what financial planning software you choose to use.] Fidelity Investments® announced today that it has agreed to acquire eMoney Advisor, a leading wealth planning software company, as part of Fidelity’s commitment to deliver an industry leading suite of innovative and meaningful tools and technology to its customers.

SS&C acquires rival Advent Software for $2.7 billion from IBS Intelligence

[Next up is news of another deal, as Advent Software is going to be acquired by SS&C Technologies for $2.7 billion. SS and who? I had never heard of them either until this week, because SS&C is primarily focused on institutions and enterprises, not independent RIAs.

So on the institutional side, the deal makes sense because SS&C is already the largest user of Advent’s Geneva solution, with around 2,400 internal users. But what about the Axys and Black Diamond solutions used by you, the independent adviser?

Bill Stone, SS&C’s chairman and CEO, said in a conference call that the company “did not see anything in Advent’s portfolio that we’d want to rationalise” and “killing a product is the last thing you want to do.”

Cough, TechFi.

So, Advent users, you’re in a little bit of limbo, too until we see this deal pan out, but I suspect not a whole lot will change in the near term. These are well-established companies with mature products that collectively have very high user retention.] The acquisitive US-based firm, SS&C, has expanded its presence in the wealth management software market with the all-cash acquisition of rival Advent Software.

Cybersecurity Examination Sweep Summary from SEC.gov

[And finally, the SEC released its first Cybersecurity Examination Sweep Summary this week, outlining key findings from over a hundred broker-dealer and RIA examinations. Here are my most important takeaways:

3 out of 4 advisers have been the target of cyber attacks, only 1 out of 5 advisers actually have cybersecurity insurance, and very few advisers know where to identify best practices on cybersecurity. Here’s a hint: THIS SHOW is one of them!

Clearly I should dedicate a show in the future exclusively to cybersecurity, but in the meantime, download my free guide on security at fppad.com/security and connect a vendor that specializes in RIA best practices like Itegria, Envision RIA, External IT, True North Networks, Right Size Solutions, and others.] OCIE’s National Examination Program staff, recently examined 57 registered broker-dealers and 49 registered investment advisers to better understand how broker-dealers and advisers address the legal, regulatory, and compliance issues associated with cybersecurity.

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

Wealthbox 1.7 – New Integrations & Enhancements from Wealthbox

Today we’re releasing Wealthbox CRM version 1.7 with a flavorful assortment of new add-ons and enhancements.

Advizr Announces Strategic Partnership with Blueleaf Portfolio Management and Reporting Software from BusinessWire

Advizr, a next generation financial planning software, today announced a strategic partnership with Blueleaf, a leading client engagement, data automation and reporting platform for advisors and clients.

Cambridge to have robo offering for advisers in 2016 from InvestmentNews.com

Independent broker-dealer Cambridge Investment Research Inc. plans to have a competitive robo-type offering that works in sync with its 3,000 advisers’ practices in 2016.

 

Watch FPPad Bits and Bytes for February 6, 2015

Watch FPPad Bits and Bytes for February 6, 2015

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