Aggregation Archives

Guide Financial to shut down operations on October 11

Posted on August 25, 2016 by Bill Winterberg in Technology

guide header

Guide Financial, the financial planning startup acquired by John Hancock in June 2015, told its users via email this week that the company plans to discontinue operations on October 11.

Intuit Aggregation Wake

Guide Financial is the first financial adviser technology provider that I know of that has decided to close its operations in the wake of Intuit’s announcement that it is discontinuing its Financial Data APIs for account aggregation. Those APIs will be maintained only for current production developers until November 15, 2016, Intuit said in an email to developers.

In a phone call with Guide Financial, I learned that the company first attempted to contact as many advisers as possible by phone to communicate the news, and those who were not able to be reached received an email with the details of the shutdown on Thursday.

In the email, the company noted that Intuit had recently announced the discontinuation of the account aggregation services that powered the Guide Financial Service. But in my post from March 2015, How Intuit’s account aggregation shutdown may impact the fintech solutions you use, Intuit told developers that Finicity would be providing façade APIs to facilitate the transition from Intuit to Finicity for aggregation services. Guide Financial did not comment on the option to transition to aggregation provided by Finicity.

No Data Exports

In the weeks prior to the shutdown, Guide Financial users will not have the ability to request an export of their data contained in the system. Generally, data on clients is limited to basic demographic information and is likely to be found in other systems used by advisers, such as CRM and portfolio management software, so an export of that data would not be useful in most circumstances. Guide Financial said that transaction data aggregated from financial institutions will not be made available.

Guide Financial has offered a brief FAQ on its website regarding the transition, and additional questions can be directed to support@guidefinancial.com

Alternatives

For alternatives to Guide Financial, I can think of a few financial planning and financial dashboard solutions that perform account aggregation to update financial plans. The list of the solutions are below:

eMoney Advisor, $1,944 to $3,888/year depending on features, including aggregation and an online client dashboard
Right Capital, under $1,000/year including aggregation
MoneyGuidePro, $1,295/year (I think aggregation is an additional $365/year, but I’m not 100% sure, and clients do not see an online dashboard for their outside accounts)

Note: I originally listed Balance Financial in the list of alternatives above, but I have not been able to connect with them for any updates. Also, their website’s terms and conditions have not been updated for two-and-a-half years (last updated January 28, 2014). Until I connect with someone at Balance, I’ll keep them listed in this note and not as a viable alternative to Guide Financial.

There are other solutions that perform aggregation (ByAllAccounts, Aqumulate, Quovo, Blueleaf, Wealth Access, etc.), but they generally don’t also have financial planning capabilities built directly in to the program.

If you can think of other solutions that should be on this list, contact me (or tweet me @billwinterberg) and I will update this list.

Last updated: August 30, 2016 at 11:54 AM ET

How Intuit’s account aggregation shutdown may impact the fintech solutions you use

Posted on March 24, 2016 by Bill Winterberg in Technology

Intuit’s Financial Data API looming shut down will have a ripple effect across popular account aggregation providers

Intuit’s looming Financial Data API shut down will have a ripple effect across popular account aggregation providers

Quick Take:

Intuit is discontinuing its Financial Data APIs widely used for financial institution account aggregation
Account aggregation providers using Intuit feeds (e.g. Blueleaf, Quovo, Wealth Access, Plaid and more) may need to transition to an alternate account aggregation provider
Intuit identified Finicity as a suitable account aggregation provider, but Finicity has issues around its business that raise concern for me
For advisors, your clients will have to reauthorize any accounts aggregated using the Intuit APIs as various companies phase out their use of the Intuit data feed

On March 15, 2016, Intuit announced they have decided to discontinue the Financial Data APIs (formerly CAD). No new direct Financial Data API (CAD) developers will be allowed to move into production.

The API will be maintained only for current production developers until November 15, 2016 to enable time for migration.

In the wake of Intuit’s decision, Guide Financial became the first adviser fintech provider to announce they are shutting down their service later this year. See Guide Financial to shut down operations on October 11.

Intuit identified Finicity as a solution that will provide a “façade” API interface that translates Intuit-structured API calls into Finicity-structured API calls.

Financial Data API Backstory

The Financial Data APIs from Intuit allow developers to link to end-users’ banking accounts from within their application.

In September of 2012, Intuit announced that it was opening up the technology that powered Intuit products like Mint.com, Quicken, and QuickBooks to the developer community via a library of APIs that it called Customer Account Data (CAD).

Customer Account Data, which was rebranded Financial Data APIs, is composed of two separate products: the Transactions API and the Identification API Beta.

The Transactions API offered connections to roughly 20,000 US and Canadian financial institutions, enabling third-party developers to quickly and cost-effectively deploy aggregation functionality to a wide array of financial sources.

The Identification API Beta facilitated customer’s identity and banking account verification using banking credentials. Developers were able to configure ACH connections via the API instead of relying on microdeposits (a series of deposits under $1 that the customer verifies) and a process called “fatfingering.”

FinTech Floodgates

The general availability of the Intuit Financial Data APIs opened the floodgates of all sorts of new B2C fintech startups that featured the aggregation of users’ financial accounts. These startups included popular names such as LearnVest, SaveUp, Hello Digit, BillGuard, and more.

A similar increase has taken place among B2B account aggregation providers, with companies like Blueleaf, Wealth Access, Quovo, Plaid, and Right Capital all appearing with some type of advisor aggregation fintech solution over the last four years.

Prior to the new wave of account aggregation providers, advisor solutions were dominated by four key players:

Yodlee, acquired by Envestnet, completed in November 2015 for $538 million
Cash Edge, acquired by Fiserv in June 2011 for $465 million and available to advisors through partnerships such as Aqumulate
ByAllAccounts, acquired by Morningstar in April 2014 for $28 million
eMoney Advisor, acquired by Fidelity in February 2015 for a reported $250 million

Intuit Gave, Intuit Hath Taken Away

So now that Intuit is going to shut down access to its APIs, several fintech aggregators should find themselves scrambling for a suitable replacement before November.

Based on my research, many companies I mentioned earlier are going to have to fill the gap left by Intuit’s hole in the marketplace. They include:

Guide Financial (which will shut down later this year, see Guide Financial to shut down operations on October 11)
Blueleaf
Wealth Access
Quovo
Plaid
Betterment (retail and Institutional, based on their use of both Plaid and Quovo)

Note: Prior to August 30, 2016, I had Right Capital in the list above. After connecting the Right Capital co-founder Shuang Chen, I learned the company had considered Intuit’s API for aggregation at one time, but ultimately decided to engage Yodlee for account aggregation. Therefore, Right Capital will not be affected by the Intuit API shutdown.

In its press release, Intuit identified Finicity as an alternate provider of aggregation services.

We have identified a new aggregation partner, Finicity, for whom this service is a core part of their business. Finicity can offer long-term benefits and service for our aggregation customers. To minimize developers’ engineering work to switch APIs, Finicity will provide a façade API interface that translates Intuit-structured API calls into Finicity-structured API calls.

The “façade API interface” means that developers with existing code that calls on Intuit APIs will not need to change their codebase. Instead, Finicity will publish an API interface that is 100% compatible with existing calls to the legacy Intuit APIs and return data to the developer’s application as if Intuit’s APIs never went away.

Who is Finicity?

For me, Finicity is a newer name in aggregation that came to my attention last year while monitoring Quora for details on Yodlee despite founding the business in September 2000.

While the Finicity compatibility endorsed by Intuit sounds good for existing developers, there are certainly other issues to consider before building a business on top of Finicity services, and that absolutely should factor into the due diligence process of advisors.

Finicity has a relatively unremarkable profile in CrunchBase, but a few more details about adoption and marketshare come from Finicity co-founder Nicholas Thomas from this Quora question:

2015 has been a good year for Finicity. We’ve signed hundreds of Fintech and Financial Institutions to build their solutions on our API, have quietly launched over a dozen partners, and are launching dozens more in 2016. Our partners tell us that our broad native data source coverage and our fanatical agg support teams are the primary reasons why they love us.

-Nicholas Thomas

So with relatively little marketing (e.g. as I published this, their most recent tweet was on October 27, 2015), Finicity managed to sign up “hundreds” of customers, launched “over a dozen” partners, with more on tap in 2016.

Is account aggregation Finicity’s only play in the industry? No.

To see what other lines of business Finicity offers in addition to their aggregation services, their website lists two other divisions: Mvelopes and Money 4 Life Coaching

Mvelopes from Finicity

Mvelopes is a software application for personal budgeting and has extremely high ratings for its apps in the app stores. Surprisingly high, actually (more on this later).

Mvelopes allows users to create virtual envelopes for different spending categories and allocate money to them accordingly. The idea is that throughout the month, users refer to the amount of money left over in each envelope after paying bills in order to preventing overspending. Transactions are aggregated from connected accounts, and transactions are automatically deducted from applicable virtual envelopes of available cash.

The service is free to use with a limit of four aggregated cash flow and credit accounts (here’s the Finicity aggregation connection). To access unlimited accounts, users subscribe to the Mvelopes Premier plan for $95/year.

Money 4 Life™ Coaching

Where things get more controversial for me is Finicity’s division called Money 4 Life™ Coaching. The Mvelopes pricing page makes the first mention of coaching services and describes how customers can benefit from one-on-one coaching customized for individual needs.

Finicity coaching snapshot

So I looked into this coaching services with a quick Google search and came across quite a few consumer complaints (36 to be exact) about the services on the Better Business Bureau website.

Most of the complaints seem to be centered around the Money4Life coaching including allegations of no contact by coaches for months at a time and allegations of cancellation difficulties.

Most complaints listed on the BBB site appear to reach a satisfactory conclusion once customers initiate the dispute process (which results in an overall BBB rating for Finicity of A+) , but it is surprising that many customers feel that they need to involve BBB in the first place in order to reach a resolution.

Also, the Mvelopes mobile app ratings are overwhelmingly positive, but many of the five-star reviews have no details in the description or come from users with no other app reviews other than Mvelopes. It’s eyebrow raising.

Critical Mvelopes app reviews such as the one below from iTunes are enlightening:

mvelopes app review

I contacted Finicity for comments and have not yet heard back from the company, so I will update this post accordingly.

What’s Next?

So what’s next? Given Finicity’s connection to awkward customer experiences under the Money4Life coaching program, how likely are the younger aggregation providers to migrate their API calls to the Finicity API? Or will there be a trend to simply abandon the aggregation of financial institutions currently covered by Intuit?

No matter what, as the aggregation vendors make their decisions behind the scenes, advisors’ clients will need to reauthenticate their usernames and passwords once a migration to a new aggregation service is implemented.

For some firms that have a handful of aggregation accounts, this may be a non event, but for larger firms with thousands of aggregated accounts, the issue could take weeks or months to resolve as all clients work through their accounts to reauthenticate their login credentials.

Envestnet acquires Yodlee

Posted on August 10, 2015 by Bill Winterberg in Technology

envestnet acquires yodlee

Fast Facts:

Yodlee, known by financial advisers mainly for its data aggregation services, agreed to be acquired by Envestnet, the wealth management services and technology provider to financial advisers.
The deal is valued around $660 million.
Yodlee raised $75 million in an October 2014 IPO after approximately 15 years as a private company, valuing the company around $340 million.
Financial advisers do not directly use Yodlee products or services, but many of the technology services they do use employ Yodlee account aggregation services (see below).
Current competitors to Yodlee include Aqumulate, ByAllAccounts (acquired by Morningstar for $28 million in April 2014), Intuit’s Customer Account Data (CAD) API, Plaid, Quovo, and OpenFinance.
Fiserv’s CashEdge also performs account aggregation and the company sells an advisor-facing aggregation product called AllData Advisor®.
MoneyGuidePro has offered discounted pricing for Yodlee, but now is presented with a conflict given that Yodlee’s new owner also recently acquired Finance Logix, a competing financial planning software solution.

Who Uses Yodlee?

Noteworthy adviser technology vendors who use Yodlee include Blueleaf, CircleBlack, MoneyGuidePro (see MoneyGuidePro to integrate Yodlee for account aggregation), Orion Advisor Services, Wealthminder, Wealth Access, and Wells Fagro.

The MoneyGuidePro relationship presents an interesting conflict, as the financial planning software provider competes with financial planning solutions from Finance Logix, a company that Envestnet also acquired earlier this year (see Envestnet Acquires FinanceLogix As The Integrated Financial Planning And PFM Buying Frenzy Continues from Kitces.com).

The Yodlee acquisition by Envestnet, now owner of Finance Logix, can’t be sitting well with PIETech, Inc. executives (the creators of MoneyGuidePro).

Outside of adviser-specific tools, Personal Capital is also a Yodlee subscriber, and so is Blooom, Future Advisor, LearnVest, and Openfolio.

Who Doesn’t Use Yodlee?

Interestingly enough, eMoney (see Fidelity Investments acquires eMoney Advisor) uses its own proprietary connections for roughly 90% of all data feeds and rounds out the rest using Fiserv’s CashEdge. NaviPlan had once used Yodlee more than ten years ago, but I cannot confirm today whether or not aggregation by Yodlee is in use today. I suspect it is not, given Advicent’s recent acquisition of Figlo.

Good or Bad?

So is this good or bad for financial advisers?

If you’re Envestnet, or if you use Envestnet products and services in your business, this acquisition is good. Very good. Envestnet now has a very broad portfolio of services that helps financial advisers run efficient businesses.

What services, you ask? They offer CRM, portfolio management and reporting, client portals, business intelligence, and mobile apps from Envestnet|Tamarac, financial planning software from Finance Logix, and now account aggregation from Yodlee.

If you’re a vendor who competes with Envestnet AND offers account aggregation to your financial adviser users, it could be bad. One of your product’s competitive differentiators, account aggregation, just got acquired by a leading vendor of financial technology and portfolio management solutions to advisers. Now what do you do?

And if you’re an adviser who doesn’t use Envestnet, your choices for an independent account aggregation solution are now smaller. Who’s left? Aqumulate, Intuit, Quovo, and Openfinance.

ByAllAccounts is owned by Morningstar (but an important note is that Morningstar doesn’t sell investment products or portfolio services, but rather adviser technology and investment research).

And Intuit is a special case, too, as once again, advisers can’t directly purchase or subscribe to Intuit aggregation. Aggregation from Intuit must be integrated by a third-party technology provider.

Openfinance is one to watch, as I was told recently that First Rate, SunGard’s main performance reporting partner, teamed up with OpenFinance to provide aggregation solutions for First Rate integration partners (e.g. Grendel CRM from Big Brain Works).

Plaid is out there too, but as far as I can tell, their bread-and-butter customers are consumer-oriented financial apps like Acorns and robinhood.

So overall, are the limited choices among aggregation solutions good or bad? I’m not entirely sure.

Some advisers choose not to offer account aggregation at all. Some do. It largely depends on how the business is structured and whether or not account aggregation boosts the overall value proposition of the firm.

A Yodlee Backstory

One of the Achilles’ heel of financial services is the forced fragmentation of where all of us keep our money.

Your monthly income and spending flows through a bank checking account.
Want a savings account that actually has an annual interest rate that isn’t zero? You’ll probably open an online savings account.
Want to invest in low-cost mutual funds? You’ll likely open an account directly with the fund company.
Want to own a few stocks? You’ll need a brokerage account for that.
Want to save for retirement? Your employer requires you to use certain retirement plan providers. Time to open another account.
Want to save for college? Again, your state might have a specific plan sponsor if you want to take advantage of state tax deductions. Boom, another account!

Seriously, why must the industry be so fragmented that consumers have no choice but to open so many discrete accounts across so many financial institutions?!?

So if you’re like most people who live on planet Earth and use money, it’s nearly impossible to see what you have one place AND keep that report up to date as your spending fluctuates and your investments rise and fall.

Enter Yodlee.

Yodlee seized the opportunity among this fragmentation to facilitate all-in-one reporting. As online financial account access became mainstream, Yodlee allows consumers to grant permission to read data from each financial account and aggregate all that disparate data into one dashboard, the Yodlee MoneyCenter. To build a buisness, Yodlee charges third-party companies (e.g. banks, insurance companies, trust companies, broker-dealers, financial apps like Personal Capital and LearnVest) to be on the receiving end of the aggregated data.

Fast forward to today and Yodlee’s market value for its business is in the neighborhood of $660 million.

And now you know the Yodlee backstory (well, as I tell it. There’s a lot more to the story, but this is what matters for you, the financial adviser).

Note: An earlier version of this post suggested that rumors indicated the Fiserv adviser-facing product AllData Advisor® was being phased out. A company spokeswoman for Fiserv wrote, “At this time, Fiserv has no plans to phase out the referenced advisor-facing product.”

FPPad Bits and Bytes for March 8

Posted on March 8, 2013 by Bill Winterberg in Bits & Bytes

The Mobile Adviser, debuting at FPA Business Solutions 2013, March 7-9, Chicago

I’m in Chicago to wrap up the week, debuting my latest presentation The Mobile Adviser: Everything financial advisers need to stay safe, connected, and productive in the Mobile Age at FPA Business Solutions 2013. Follow the conference hashtag on Twitter, #FPASolutions.

But I still managed to take time to assemble this week’s top stories in financial adviser technology:

Newly Affluent Unimpressed With Advisors’ Use of Tech and Investment Strategy from AdvisorOne.com

[Guess what: if you haven’t upgraded your technology in the last 2-3 years, new clients will likely opt to work with a firm other than yours. Here’s what prospects are looking for: they’re checking out your “social cred,” or your presence on the web, including a compelling bio, video content about what makes you an ideal adviser for certain clients, social media interaction, and more. Then when prospects engage your firm, they want to work through digital channels, view reports on a tablet, exchange text messages with you, and sign documents electronically. So if you push pens and paper in front of them, they’ll likely be turned off by your “archaic” processes.] A large portion of up-and-coming affluent people around the world, though generally satisfied with their wealth managers’ use of technology, are unimpressed with the way advisors use that technology to show them how to invest their money, according to a new study.

How Black Diamond is working out — or not — as Advent’s agent of deliberate cannibalization from RIABiz.com

[While Orion has not-so-quietly surpassed $100 billion in assets managed under its platform (see: TD Ameritrade’s open technology helps push Orion Advisor Services over the $100 billion in platform assets mark), Black Diamond has been relatively quiet since its acquisition by Advent back in 2011. Why is that? RIABiz’s Brooke Southall gets some candid feedback from Advent chief executive Peter Hess about the company’s languishing growth. Want my opinion? Maybe it’s because Black Diamond hasn’t yet nailed down its data quality and customer service concerns expressed by advisers.] In one respect, Black Diamond Performance Reporting has not lived up to the expectations of executives of Advent Software Inc., which acquired it in 2011.

Review: AssetBook’s Radar Gets Stronger from Financial-Planning.com

[This is a very good review from Joel Bruckenstein about web-based portfolio management software provider AssetBook. If you’re in the market for a system that allows you to ditch your local servers and on-premises software, AssetBook is definitely worth a look now that it has rolled out Radar.] Radar, AssetBook’s new software as a service portfolio management system, was built to address [some existing] weaknesses. And it includes some new features that advisors are sure to like.

NerdWallet’s lead generation website has 20 Bay area advisors in beta, MIT, Wharton, Brown and Stanford folks running things and a Silicon Valley confidence from RIABiz.com

[Kudos to RIABiz’s freelance contributor Kelly O’Mara for highlighting NerdWallet. So if you are terrible at generating your own leads and prospects with your online marketing materials, maybe there’s a chance you can attract some new business with NerdWallet’s lead generation tools. Guess what: If you’re an adviser in Atlanta, GA (i.e. FPPad headquarters), there are zero, that’s right, ZERO advisers currently showing up in NerdWallet’s “Find an Advisor” search engine. Talk about a blue ocean!!] Acquiring useful leads that can be converted into actual clients — without spending too much money or wasting too much time — is a holy grail of the RIA business.

New from Balance: Digital Office & Solution Templates from BalanceFinancial.com

[Buried deep on my “companies-with-whom-I-should-connect” list is Balance Financial. So here’s a quick look at how they’re continually developing their product, now releasing Digital Office that is aimed to clean up problems with client portals. Again, my take: client portals will soon be dead, replaced by access to files and information via apps and desktop sync tools like Box and ShareFile.] Balance is excited to announce that today we … are launching a new suite of capabilities we are calling our Digital Office.

Erado Achieves the Largest Growth in Company History from Erado.com

[Remember Erado, the social media archiving provider for financial advisers (see: Six More Designate Erado as Their Social Media Compliance Provider)? Well they’ve evidently been on a tear with respect to growth, experiencing “the largest growth in their history” and being named “Cool Vendor” in Gartner’s Cool Vendors section. If you recall, they’re the preferred archiving provider for most of LPL’s reps using social media. How about that for a boring social media archiving company!] Erado, the nation’s leading compliance and archiving firm in electronic communication, announced their company milestone report for 2012.

Advisors Want Clarity On SEC Custody Complaints from FA-Mag.com

[While not specifically technology related, oh boy did the SEC just step up its rhetoric on custody. The problem is that custody continues to be an ambiguous term for compliance officers. Look, clients deserve to receive a complete picture of their wealth from their financial adviser, not just a slice that happens to be held with the adviser’s custodian of choice. So in comes held-away account monitoring and aggregation. Well often the easiest way to monitor held-away assets is to obtain client login credentials for those external assets and do some data gathering a dozen or so times a year. Whoops, turns out obtaining those credentials might (or might not, nobody has a definitive position) trigger custody! It’s a tangled web to navigate, and in many cases, not worth the hassle for advisers. So they give up and return to giving clients just a limited view of their overall wealth. Who is best served by that?] Leading figures in the financial advisor industry are asking the Securities and Exchange Commission for more clarity in the wake of new SEC complaints Monday about custody of client funds.

Webinar to Discuss Risks of Custody and Client Credentials

Posted on April 7, 2009 by Bill Winterberg in Practice Management

An increasing number of advisers have asked me about using client login credentials to obtain price, transaction, and balance information for assets held in captive accounts (e.g. a client’s active 401(k) plan that cannot be rolled over until termination from service).

As a benefit to clients, advisers are using client credentials to log in to captive accounts to copy the asset information into portfolio management software (such as PortfolioCenter, Advent, or dbCAMS).

This allows the adviser to generate a consolidated report for the client featuring all of his/her assets. In addition, advisers can include the captive account assets in fee calculations if management of those assets is included in the asset advisory agreement with the client.

Get the Financial Planning 2008 Software Survey

Posted on December 4, 2008 by Bill Winterberg in Technology

Financial Planning magazine conducts an annual survey of its readers to gauge the different types of technology in use by financial planners and advisers. 2008 marks the second year of the survey, and Joel P. Bruckenstein published an overview of the results and a comparison to last year’s survey information.

Click here to view Bruckenstein’s review of Financial Planning’s 2008 Software Survey.

Here’s my 30-second take if you don’t have time to read the entire review:

Mint.com Adds Investment Tracking

Posted on May 16, 2008 by Bill Winterberg in Software, Technology

Mint! Lifehacker.com recently announced Mint.com has added investment tracking to its list of features. A highly requested and attractive feature, investment tracking should dramatically increase this service provider’s already rapid adoption in the market.

Mint.com is a free online personal finance management application that users can configure to track expenses by aggregating transactions from checking, savings, and credit card accounts. Now that investment accounts have been added, Mint.com is getting closer to a complete personal finance product to compete with the likes of computer-based (as opposed to web-based) Quicken and Microsoft Money. Note that Quicken does have an ASP-based product of Quicken Online, free for 30 days, then $2.99/month thereafter.

FPPad