Tag Archives: Envestnet

FPPad Bits and Bytes for November 18, 2016

On today’s broadcast, Wells Fargo announces a partnership with SigFig, Cetera’s computers systems suffer a two-day outage, lessons from a hack at Lincoln Financial, and more.

So get ready, FPPad Bits and Bytes begins now!

(WatchFPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by eMoney Advisor, the leading provider of digital wealth management solutions. eMoney just introduced two new Advanced Analytics products: Advisor Analytics Pro, offering advisors and support staff deeper business insights, and Office Analytics, offering never-before-seen firm-wide insights.

eMoney Advisor

Featuring a customizable Analytics dashboard, an expansive library of new and interactive data charts, and more, eMoney’s Advanced Analytics solutions will help you put your data to work and uncover more opportunities. For more information the eMoney Analytics solutions, visit fppad.com/emoneyanalytics.

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

Wells Fargo Goes Robo With SigFig Wealth Management from WSJ.com, and

Wells Fargo notice of an application for an exemption from certain requirements of rule 3a-7(a)(4)(i) under the Investment Company Act of 1940 from SEC.gov

[First up is news from Wells Fargo, as the bank, which finds itself in the middle of a very public firestorm over opening unauthorized accounts, announced this week that it is partnering with SigFig to release an automated investment service to customers of Wells Fargo Advisors sometime in the first half of 2017.

Other than the potential release date, there really wasn’t any concrete information on pricing or the types of investments to be used in the service. Will they be Wells Fargo mutual funds, or third-party ETFs? As of today, Wells Fargo doesn’t offer its own ETFs, but earlier this year, the company filed an exemptive relief request with the SEC, signaling some intent to enter the ETF space.

But that opens the door for potential problems with the Department of Labor fiduciary rule, highlighted by industry Nerd-In-Chief Michael Kitces, where automated investment services that recommend investments in proprietary products, Kitces calls out Schwab Intelligent Portfolios and BlackRock’s FutureAdvisor, do not qualify under the Level Fee Fiduciary exemption because of the variable compensation inherent in an allocation of proprietary ETFs!

So, this is all “industry” stuff, and not all that applicable to your business, but here’s my point. All the big banks, all the incumbent financial institutions are boarding the automated investment bandwagon. Sooner rather than later, your clients and prospects are going to get solicited by the very institutions they use today.

And clients are expecting an experience like Uber, but you’re still driving around a dirty taxi that has to be flagged down with a hand in the air that doesn’t have a functional credit card machine!] Wells Fargo & Co.’s brokerage arm is partnering with SigFig Wealth Management LLC to bring automated investment advice to clients, the latest example of how traditional wealth-management firms are working with startup robo advisers to offer new digital tools to investors.

Cetera Brokers Endure Two-Day Systemwide Crash from AdvisorHub

[Next up is news about Cetera Financial Group, as the independent broker dealer encountered a company-wide systems outage that affected 9,000 brokers as well as the company’s back-office and operations teams.

According to an AdvisorHub article, the outage started on Monday, and one broker with First Allied reported that he could not sign in to view emails, access performance reports, or even call Cetera using their standard phone number. Cell phone numbers were eventually sent out on Monday evening.

In a firm-wide conference call on Tuesday afternoon, Cetera Chief Executive Robert Moore apologized for the disruption and said systems had been fully restored, and added that no data had been compromised through hacking or any other unauthorized access.

So, let this be a reminder that if it’s been a while since you tested your business continuity plan, next week’s Thanksgiving break might be a good time to do so. It doesn’t matter if you manage your own systems or leverage the resources of a broker-dealer, you need to verify how you can perform the essential parts of your business in the event of a disruption.

Attackers are launching denial of service attacks every day against financial institutions, so it’s important that you know exactly what you need to do when the systems you depend aren’t available.] Just six months after emerging from bankruptcy, independent brokerage company Cetera Financial Group experienced a companywide systems outage Monday and Tuesday that walled off brokers at its seven operating broker-dealers from customer data, emails and other vital account management functions.

Lincoln Financial Unit Gets $650K Fine After Server Hack from Law360, and

LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. 2013035036601 at FINRA.org

[And speaking of attackers, my last story is about Lincoln Financial Securities, an affiliate of Lincoln Financial Group, as the company paid a $650,000 fine imposed by FINRA for failing to safeguard customer data stored on a cloud server used by one of its OSJs.

Sometime in 2012, hackers were able to access the could server configured by a third-party vendor and obtain records on approximately 5,400 customers. The FINRA Letter of Acceptance doesn’t say HOW the server was compromised, and didn’t identify what kind of server was in use. Was it an FTP server, a service like Dropbox, a proprietary server with remote access, or something else?

But more troubling to me is that FINRA goes on to say that the firm “failed to take adequate steps to monitor or audit the vendors’ performance.” Now hold on. One benefit of leveraging third-party vendors is that they bring expertise to the table that the firm doesn’t have, like, oh, I don’t know, cybersecurity expertise.

But for FINRA to say that the firm failed to test and verify the security of the cloud servers, that just doesn’t seem right. The firm doesn’t HAVE the expertise in cloud server security, which is why the firm hired the third-party vendor in the first place, but now FINRA says that the firm is the one that has to verify the security of the third-party vendor that it hired to bring security expertise to the firm? How is that even possible?

What I do know is FINRA just levied a heavy fine on a firm because their third-party vendor had a hole in their security that was exploited by hackers, and in my opinion, that’s a troubling precedent that has been set.] A Lincoln Financial Group subsidiary on Monday agreed to accept a $650,000 fine leveled by the Financial Industry Regulatory Authority and implement tighter security protocols after hackers in mid-2012 accessed its cloud server and lifted the confidential records of roughly 5,400 customers.

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

WisdomTree Makes Strategic Investment in AdvisorEngine from WisdomTree

WisdomTree Investments, Inc. announced that it has invested $20 million for a 36% equity interest in AdvisorEngine, formerly known as Vanare, an end-to-end digital wealth management platform which enables individual customization of investment philosophies.

PIEtech℠, Inc. Unveils Integration with MX for Aggregation and Personal Financial Management Functionality from PRWeb

PIEtech℠, Inc., the creator of the industry’s leading financial planning software, MoneyGuidePro®, today unveiled a new integration with MX to deepen the availability of aggregation for MoneyGuidePro® subscribers and add personal financial management (PFM) functionality via the client portal.

Combined Envestnet and Yodlee Data Offering Supports Morgan Stanley Wealth Management from PRNewswire.com

Envestnet | Yodlee and its parent company Envestnet, today announced a partnership for the combined organization, providing data aggregation, digital applications and data reconciliation solutions to Morgan Stanley, one of the largest, most established wealth management businesses in the industry.

 

Watch FPPad Bits and Bytes for November 18, 2016

Watch FPPad Bits and Bytes for November 18, 2016

FPPad Bits and Bytes for October 14, 2016

On today’s broadcast, one Wells Fargo broker loses her job after a client spoofing attack, Envestnet acquires Wheelhouse Analytics, and another day, another new robo advisor.

So get ready, FPPad Bits and Bytes begins now!

(Watch FPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by Envestnet | Tamarac, providers of Advisor Xi, an industry-leading fully integrated web-based suite for RIAs. Tamarac’s Advisor Xi unifies portfolio management, modeling, rebalancing, trading, billing, and reporting with a fully customizable client portal and enterprise-grade CRM.

envestnet-tamarac-600

On October 20th, two innovative and rapidly growing firms will share how they leveraged the Advisor Xi Suite in their business during an interactive webinar. Space is limited, so secure your spot today by visiting http://fppad.com/tamarac

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

FINRA Disciplinary Action for Kathleen Kincade (enter Kathleen Kincade in the Individual Name search field)

[Now October is National Cyber Security Awareness Month, so my first story is about an unfortunate cybersecurity incident involving a broker from Wells Fargo. According to a FINRA letter released this month, Kathleen Kincade was targeted by attackers who used spoofed client emails to submit three wire transfer requests for nearly $350,000, two of which were processed before Wells Fargo became aware of fraudulent activity.

One wire transfer for $99,000 was reversed, but the company ultimately had to make the client whole for the remaining $250,000 that was transferred.

The letter goes on to say that Kincade used Wells Fargo’s forms to falsely report that she verbally confirmed the wire disbursement instructions with the client, which was not the case. Now I know you’ve heard me say time and time again that attackers are impersonating clients and are targeting you to get you to send money where it shouldn’t go.

So take this as a reminder that you need to continue to be vigilant and suspicious with respect to sporadic requests for client withdrawals, and always, ALWAYS follow a process to authenticate the identity of your client, usually with a phone call, or else you won’t allow any fund transfers to be processed.]

Envestnet Acquires Wheelhouse Analytics from PRNewswire

[Next up is news from Envestnet, as the company announced the acquisition of Wheelhouse Analytics in a move executives said will provide more insight on key performance indicators for asset managers, enterprises, and financial advisors.

Terms of the deal were not disclosed, and I have to admit, Wheelhouse Analytics was not on my radar at all until this announcement, so I checked out their website and learned about their solutions for data analytics, online education, and document management for sales and business development. This is more business intelligence than it is financial technology, but I can see how Wheelhouse Analytics can connect to the data stored in the Envestnet platform and ultimately deliver timely insight to financial advisors.

Also, think back to Envestnet’s acquisition of Yodlee last summer, and consider how data on client spending and consumption can generate key indicators on which clients might warrant a follow up phone call, versus those who are on a steady path to meet their goals. I think this is worth watching in the near future.] Envestnet, Inc. announced today that it has acquired Wheelhouse Analytics LLC, a technology company that provides data analytics, mobile sales solutions, and online education tools to financial advisors, asset managers and enterprises

Zacks Advantage Form ADV

Merrill Egde Guided Investing Form ADV

[And I think it’s safe to say that my broadcast wouldn’t be complete without a little robo news, so up first, Zacks Investment Management announced the launch of Zacks Advantage, an automated investment service built on the Schwab Intelligent Portfolios platform that adds a bit of active management to balanced portfolio investing. The minimum account size is $5,000, and fees are 50 basis points for accounts up to $100,000, which drops to 35 basis points for accounts greater than $100,000 according to the Form ADV.

And Bank of America offered more information about Merrill Edge Guided Investing, the company’s automated service that also has a $5,000 account minimum, but charges 45 basis points no matter how much money is invested in the account.

So, I want to ask two questions about all this robo stuff. First, if all the other financial firms have a low-cost automated investing solution, why don’t you? If the solutions are so commonplace, prospects might think that your firm is behind the times because you’re not leveraging a solution that is offered pretty much everywhere else.

But second, assuming you DO provide an automated investing solution, the next question you’ll face is why should a prospect choose your business over all the others, when they appear to do the same thing? And THAT is your opportunity to communicate why your business is different, identify your value proposition, and describe all the things you do that go far beyond portfolio asset allocation and frequent rebalancing.

No robo solution can compete with that!]

 

Watch FPPad Bits and Bytes for October 14, 2016

Watch FPPad Bits and Bytes for October 14, 2016

FPPad Bits and Bytes for July 29, 2016

On today’s broadcast, it’s a robo free-for-all, so put on your best robo accessory, because FPPad Bits and Bytes begins now!

(Watch FPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by Envision Consulting, providers of IT management and support, cloud computing, and cybersecurity services to RIAs. This October, Envision is hosting a cybersecurity event with Kevin Mitnick, the World’s Most Famous Hacker, where you can find out how to leverage Kevin’s knowledge of the latest hacking techniques to protect your business from attack.

Register Today!

Space is limited, so secure your registration today by visiting topsecurityshow.com, and if you use my promo code, FPPad, you’ll save 15% off the price of your registration.

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

Fidelity Launches Automated Investment Advice Service from WSJ.com

Fidelity Go Vs. Pokemon Go: Be A Low-Cost Investor Or AR Zombie from Investor’s Business Daily

Better Together: Automated Investing with Professional Guidance from BusinessWire

TD Ameritrade Earns $240M in Quarter; Says Retail Robo Is Coming from ThinkAdvisor

TD Ameritrade Institutional, XY Planning Network Launch Program to Cultivate Next-Generation RIAs and Investors from TD Ameritrade

Wells Fargo Plans to Start Robo-Advisory in 2017, Sloan Says from Bloomberg

Big News for the Quantopian Community: Managing External Capital from Quantopian

[Get ready for the robo news, as this week’s top stories come from Fidelity Investments and TD Ameritrade, as both financial institutions recently announced online investing solutions for the retail investor. A few days ago, Fidelity officially rolled out Fidelity Go, specifically targeting digitally savvy customers in their 20s, 30s, and 40s, with investment assets in the low six figures.

When asked by Investor’s Business Daily what happens when Fidelity Go customers get older and wealthier, Rich Compson, head of managed accounts at Fidelity, responded that customers would be referred “to other services like Fidelity’s Portfolio Advisory Services.”

Ok, ok, but advisors aren’t completely left out, as Fidelity did promise details about an automated service it’s developing for financial advisers by year-end. That’s, details, by year-end.

And a few weeks ago, TD Ameritrade announced it had completed updates to its Amerivest Managed Portfolios retail offering, including a digital overhaul for better goal setting, performance tracking, and more.

In ThinkAdvisor’s interview with incoming CEO Tim Hockey, he said that the company will be using Amerivest’s tech enhancements “to launch a new robo for the self-directed client’s needs” scheduled for sometime in 2017.

When asked about referrals to RIAs who custody with TD Ameritrade Institutional, Hockey added that retail clients with $1 million dollars or more are the “target referral” for affiliated RIAs.

That comment came out at the same time the company announced a program with the XY Planning Network to provide dedicated service and no minimum asset requirement to use TD Ameritrade Institutional’s custody services. That’s good, it’s gotta be awkward knowing TD Ameritrade is going to target digitally savvy investors, aka potential XYPN clients, with their own retail robo solution.

On top of all that, Wells Fargo also announced that it, too, is entering the robo market, with a solution expected also sometime in 2017.

And if you don’t like today’s current robo solutions, you can go build your own robo algorithm with Quantopian, who just received fresh venture capital this week from hedge fund investor Steve Cohen.

That’s it, all I hear all day long is how great robos do this, or how wonderful robos do that: robo, robo, robo!]

Envestnet | Tamarac to Roll Out Client Portal 2.0 from PRNewswire

[Now in NON-robo news, how about an update from Envestnet | Tamarac, as the company released the latest version of its client portal to advisors who use the Advisor View™ application. If you watched my coverage of the Envestnet Advisor Summit earlier this year, you would have seen a preview of the updated client portal, plus the key enhancements highlighted by Brandon Rembe. So click right here so you can watch that video.] Envestnet | Tamarac has completely redesigned the client portal in its Advisor View™ portfolio management and performance reporting application. The new client portal will be implemented as part of Tamarac’s July 2016 technology release, and seeks to help RIAs create highly customizable client portal experiences to engage their clients and appeal to the next generation of investors.

MoneyGuidePro creator releases DOL fiduciary-focused software from InvestmentNews.com

[Also, MoneyGuidePro recently released a utility called Best Interest Scout, intended to gather information about client goals, expectations, and investment details in one place. This should help you from a workflow perspective, but the tool should also be helpful in identifying when you must engage in a Best Interests Contract with a client. If you’re concerned about compliance with the pending fiduciary rule from the DoL, expect more tools like Best Interest Scout to come to market.] PIEtech, the creator of financial planning software MoneyGuidePro, has built a tool to see how well clients’ portfolios are aligned with their best interests, including retirement goals and concerns, insurance needs, and health-care costs.

Now since I took a few weeks off, I just don’t have time to cover all the stories in my backlog, including news on the talent exodus at Wealthfront, the Betterment for Business 401(k) offering surpassing 200 plan sponsors and $5 billion in AUM, Quovo, Riskalyze and more, so links to those stories are below:

Talent exodus hits Wealthfront including heads of product, marketing and operations from RIABiz.com

Wealthfront, founded in 2008, is experiencing its first big talent exodus — a flurry of departures that includes some C-suite titles and a Unicorn shepherd.

Betterment for Business Surpasses 200 Plan Sponsors from PRNewswire

Betterment for Business, the only turnkey 401(k) service that includes personalized investment advice for all participants, announced today that it has successfully added 200 plan sponsors to the platform in the last six months.

Betterment Becomes First Independent Robo-Advisor to Surpass $5B of Assets Under Management from PRNewswire

Betterment announced today that it is the first independent robo-advisor to reach $5 billion in assets under management. The company now helps more than 175,000 customers intelligently manage and grow their wealth.

Apex Clearing to Offer Vanare’s Digital Advice Platform from PRNewswire

Apex Clearing Corporation will begin offering to its broker dealer and RIA clients the ability to digitally manage investments using Vanare’s digital advice platform. Vanare offers a wealth management technology platform with a highly customizable white labeled Roboadvisor.

Advisor Software, Quovo Partner to Strengthen Goals-Based Planning Capabilities for Wealth Managers from PRNewswire

Advisor Software, Inc. has teamed up with Quovo to provide wealth managers with seamless access to aggregated client financial data, which can help put together an all-encompassing financial picture for every client.

Marstone and Quovo Announce Partnership from MarketWired.com

Marstone, an innovative digital wealth company, and Quovo, a financial data science company for the wealth management industry, today announced that they have completed a partnership to enhance Marstone’s digital wealth solutions with Quovo’s industry-leading data aggregation.

Riskalyze Autopilot for Retirement Plans from Riskalyze

LastPass introduces Emergency Access from LastPass

With the Emergency Access feature, you can give trusted family and friends access to your LastPass account in the event of an emergency or crisis.

 

Watch FPPad Bits and Bytes for July 29, 2016

Watch FPPad Bits and Bytes for July 29, 2016

 

FPPad Bits and Bytes for May 20, 2016

On today’s broadcast, I’m on location at the Envestnet Advisor Summit. You’ll hear from Bill Crager about Open ENV, Stuart DePina on adding Salesforce integration to Tamarac, and hear how the Yodlee acquisition is enhancing the Envestnet platform.

So get ready, FPPad Bits and Bytes begins now!

(WatchFPPad Bits and Bytes on YouTube)

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

Envestnet Unveils Open ENV from Envestnet

Envestnet, Inc. has unveiled Open ENV to offer differentiated user experiences, accelerate integrations and extend the availability of Envestnet’s solutions.

Envestnet | Tamarac Unveils A New Version of Advisor CRM® from Envestnet

Envestnet | Tamarac has rolled out a new edition of its Advisor CRM® application, Advisor CRM, which incorporates the latest Microsoft Dynamics CRM 2016 update and is compatible with Microsoft Windows 10 and Microsoft Office 2016

 

ENV thumbnail 620

FPPad Bits and Bytes for May 13, 2016

On today’s broadcast, learn about top advisor technology from the Finovate Spring 2016, two lessons you should learn from a Salesforce database outage, hear top technology tips from industry experts, and more.

So get ready, FPPad Bits and Bytes begins now!

(Watch FPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by Riskalyze, the company that invented the Risk Number™ and twice named as one of the world’s 10 most innovative companies in finance by Fast Company Magazine.

Riskalyze

Advisors use Riskalyze to show prospects they’re invested wrong and prove to clients they’re invested right. See how Riskalyze creates fearless investors by visiting riskalyze.com/fppad to book a guided tour.

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

Client Insight for Wealth Management from IBM, and

IBM Watson-infused robo wants to help advisers, not beat them from Financial Planning

Envestnet Advisor Now demo from Finovate Europe 2016

[This week’s top story covers the Finovate Spring 2016 event held earlier this week in San Jose, California. With over 70 demos spread across two days, here are my picks for the most promising solutions for financial advisors.

First is IBM, as the company demoed its Client Insight for Wealth Management solution, designed to deliver better insights about your clients powered by, you guessed it, IBM Analytics. The Client Insight dashboard segments your clients by their behavioral profiles, predicts the likelihood of clients experiencing a significant life event, and automatically generates a list of top actions clients should take to make progress on their financial goals.

The analytics-powered insight is great, but it’s not yet clear to me if the solution is something you can buy today or if it requires an integration with the technology providers that you use, particularly with your CRM software. One third-party example I can think of is the automated investment service from Marstone, which to me, still seems to be evolving and appears to be rolling out at a very measured pace. So, if you want to start seeing some of these cognitive-powered insights in the tools you use, I think you need to prepare to spend a little bit more on your technology to make these benefits a reality.

The second demo of note came from Envestnet, as the company highlighted Advisor Now, which is now being positioned as an online financial planning tool that can be white-labeled by financial institutions or you, the independent financial advisor.

Advisor Now’s capabilities are quite a bit different than this time last year when the solution was first announced, as Envestnet is further leveraging its technology acquisitions of Upside, Yodlee, and Finance Logix.

Next week I’m headed to the Envestnet Advisor Summit in Chicago where I plan to get more details on Advisor New, but in the meantime you can watch a recent Advisor Now demo from Finovate Europe] IBM offers you a whole new level of insight to serve your customers with the most relevant offerings that helps you drive new revenue. It enables you to segment your customers quickly and analyze their behavior to deliver cross sell/ up sell offers which helps increase loyalty, retention and customer satisfaction.

Envestnet thumbnail

Salesforce outage persists across US, CEO wades in from ZDNet, and

The Burning Irony of Salesforce’s #NA14 Social Media Nightmare from Medium

[Next up is news on Salesforce, as the company unfortunately suffered a failure in one of its critical databases this week affecting several thousand of its customers in North America. The outage of the NA14 database lasted for about a day and a half, causing many users to publicly vent their frustrations on Twitter.

Closer to home, I didn’t hear from any advisors who were affected by the downtime, which is good, but there are still two lessons I want you to take away from this incident.

First, when you use any cloud-based system, especially a CRM, be absolutely certain that you have an offline backup of the critical information you need to take care of clients. Make it part of your process now to export data like names, phone numbers, and email addresses so you can stay in touch with clients if and when your online systems have extended downtime.

And second, make plans now for what you’re going to do when your firm experiences a crisis. How will you contact clients? Will you post information on your website, or provide updates on Twitter? Whatever you do, identify your process in your disaster recovery and business continuity plan, and if it’s been a while since you tested your communication in a crisis, well, you might want to do something about that.] A Salesforce database failure has left some clients unable to access their services across the United States, prompting the firm’s chief executive to step in.

2016 SSG Conference Technology Panel from YouTube

[And finally, wrapping up this week’s broadcast is news from Shareholders Service Group, as I attended their annual conference in San Diego a few weeks ago. One of the general sessions I attended was a panel discussion on technology opportunities that lie ahead for independent financial advisors, so I caught up with each of the panelists,

Greg Friedman of Private Ocean, Dave Welling of SS&C Advisory Market Group, Tim Welsh of Nexus Strategy, and Joel Bruckenstein of Technology Tools for Today, to get their main takeaways from the session and hear best advice for advisors from a technology perspective.

The full video from the event is embedded over on website along with a few additional stories that didn’t make this week’s broadcast.]

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

Docupace Closes on Management Buyback Transaction from BusinessWire

Docupace Technologies LLC, a premier digital compliance and cyber security company in the financial services industry, completed its planned repurchase of the majority interest in the company previously held by RCS Capital Corporation.

New Marketing Materials from Hidden Levers

HiddenLevers now provides pre-made marketing materials that can be used with clients. These include printable brochures, embeddable videos, website and signature plugins.

 

Watch FPPad Bits and Bytes for May 13, 2016

Watch FPPad Bits and Bytes for May 13, 2016

FPPad Bits and Bytes for August 14

On today’s broadcast, Envestnet acquires account aggregation provider Yodlee, Advizr makes two announcements to close the gap among financial planning software, and find out why automated investing services might be losing their competitive advantage.

So get ready, FPPad Bits and Bytes begins now.

(WatchFPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by eMoney Advisor, host of the eMoney Advisor Summit coming October 19th through 21st in Orlando.

emoney summit

Take a deep dive into the emX strategies that help you Connect, Engage and Win with your clients. Plus, everyone watching this show can take advantage of a one hundred dollar discount off your registration, so visit fppad.com/emoneysummit15 today and use promo code FPPAD100. That’s FPPAD100.

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

Envestnet to Acquire Yodlee from Envestnet

[This week’s top story comes from Envestnet, as the wealth management technology and service provider announced it is acquiring Yodlee in a deal valued somewhere around $660 million. Now most of you know Yodlee for account aggregation, but Yodlee really doesn’t sell services directly to advisors.

Instead, some advisors benefit from Yodlee aggregation through third-party integrations, with MoneyGuidePro being the most well know,after announcing a Yodlee integration to much fanfare last year, priced at a dollar per day. You can get more details on that in episode 120 that I linked over here.

So let’s cut to the chase: is this good or bad? If you’re an Envestnet technology user, this is really good. Aggregating clients’ held away accounts gives you better visibility on what clients actually own, how they’re allocated, and in some cases, how they manage their cash flow. This information can only make the advice you give better, and that’s a fantastic thing for everyone!

BUT, if you compete with Envestnet and/or take advantage of Yodlee aggregation today, the future isn’t so clear. It’s way too early to speculate what’s going to happen to Yodlee’s pricing and availability, but if efficient account aggregation is a cornerstone of your business, it might be time to keep alternatives like Aqumulate, ByAllAccounts, or Quovo in mind.] Envestnet, Inc. (NYSE:ENV), a leading provider of unified wealth management technology and services to financial advisors, and Yodlee, Inc. (Nasdaq: YDLE), the leading cloud-based platform driving digital financial innovation, today announced that the Boards of Directors of both companies have unanimously approved a definitive agreement under which Envestnet will acquire all of the shares of Yodlee in a cash and stock transaction valued at $18.88 per share, or approximately $660 million on a fully-diluted equity value basis.

 

Introducing: Advizr Express from Advizr

[Next up is news from Advizr, an up-and-coming financial planning software provider, who this week made two announcements. First is the introduction of a prospecting tool called Advizr Express, allowing you to attract prospects by offering a super-simple retirement readiness illustration either on your website or for use with prospects during an initial meeting. Advizr Express is in beta testing today with an official release anticipated later this month.

Advizr’s second announcement is a new integration with Orion Advisor Services to import client portfolio holdings to avoid manually entering that information by hand. This adds to an existing integration with Blueleaf, and should be a preview of what to come with connections with many of the leading custodians. Wink wink.

So while Advizr is still a ways away from offering the number of integrations found in category leaders like Advicent, eMoney, and MoneyGuidePro, updates like these should help Advizr close the gap and offer you more choice in the tools you use to deliver financial planning.]

Automation Won’t Replace People as Your Competitive Advantage from Harvard Business Review

[And finally, I want to wrap up this week’s broadcast with an article from Harvard Business Review titled Automation Won’t Replace People as Your Competitive Advantage. For two years and seventy episodes of Bits and Bytes, the chatter about automated investment services and algorithmic rebalancing has reached a fever pitch, but scroll down to the end of that article and you’ll read a striking statement:

“Once smart machines are built to solve problems in asset efficiency (or indeed any area of operations) they very rapidly spread and become pervasive across an industry. Therefore, they cease to provide a competitive advantage.”

I think this perfectly describes what’s happening today in automated investing. Sure, six years ago, Wealthfront and Betterment attracted attention because there was nothing out there like their automated services. Their exclusivity was their competitive advantage.
But fast forward to today where automated services are available from Schwab, Vanguard, Future Advisor, Blooom, and even LPL Financial having announced their own plans for an automated service. Automated investing is becoming pervasive.

But what that also says to me is that if you don’t have some kind of low-cost automated service to offer, it may actually be viewed as a disadvantage because they’re so common in the industry. It’s like telling clients you won’t communicate with them via email. It’s so pervasive, who DOESN’T use email?] Geoff Colvin’s primary argument is that there are some unique human capabilities, like empathy and storytelling, that will keep people employable even as automation chips away at the content of most jobs.

 

Watch FPPad Bits and Bytes for August 14, 2015

Watch FPPad Bits and Bytes for August 14, 2015

FPPad Bits and Bytes for May 15

On today’s broadcast, the SEC issues an alert about automated investment tools, see how Envestnet is ready to leverage its recent acquisition of Upside, and, find out which fintech buzzword has huge implications for your business.

So get ready, FPPad Bits and Bytes begins now.

(Watch FPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by Riskalyze, the company that invented the Risk Number™ and named as one of the world’s 10 most innovative companies in finance by Fast Company Magazine.

Riskalyze

Advisors use Riskalyze to show prospects they’re invested wrong and prove to clients they’re invested right. See how the Risk Number can grow your business today by visiting riskalyze.com/fppad to book a guided tour.

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

Investor Alert: Automated Investment Tools from the Securities and Exchange Commission

[This week’s top story comes from the Securities and Exchange Commission, as the industry regulator recently released an investor alert concerning automated investment tools, more commonly known as, well, you know where I’m going.

In its five-point alert, the SEC urges all investors to understand terms and conditions of any online service, know what the limits of automated tools are and assumptions that don’t apply to their situation (say, perhaps, tax illustrations for a married couple living in California who are in the highest tax bracket), be aware that when filling out questionnaires, garbage in equals garbage out, be careful not to assume goals are the same as a generic investment time horizons based on age, and to practice good security hygiene to protect financial accounts.

So how can you use this alert to make your business more appealing to prospective clients? At the very least, be as transparent as possible about your fees and your process. Next, focus on the ongoing relationships you have with clients, because the advice you provide doesn’t end the moment a client fills out a risk tolerance questionnaire.

And finally, emphasize the breadth of your services. Yes, prudent investing is important, but it’s critical to also factor in insurance needs, tax strategies, estate planning and so much more, all of which are areas largely untouched by automated investment tools. Let’s be absolutely clear, this is your value to your clients, and if you’re not broadcasting it at every opportunity you have, you’re in danger of failing to differentiate your business from the competition.] The SEC’s Office of Investor Education and Advocacy (OIEA) and the Financial Industry Regulatory Authority, Inc. (FINRA) are issuing this alert to provide investors with a general overview of automated investment tools.

Envestnet Driving Digital Advice Transformation from Envestnet.com

[Next up is more news from Envestnet in a follow up to the company’s summit held earlier this month in Chicago. Last week I covered Envestnet’s acquisition of Finance Logix, but this week the story is all about Envestnet’s new digital advice portal called Advisor Now™. So what is Advisor Now?

You start with the original Envestnet Advisor Suite™ for portfolio management, add in a serving of the Envestnet | Tamarac Advisor Xi platform for its CRM, portfolio rebalancing, and client portal features, mix in the online automated investment solution from Upside, blend them all together and out comes Advisor Now.

So clearly Envestnet is further positioning itself as a dominant custodian-agnostic all-in-one technology provider, and if you’re an existing Envestnet and/or Tamarac user, you’ll soon experience the benefits of Advisor Now as it gets updated according to the company’s 60-day release cycle.

But if your technology consists of integrations between separate best-of-breed solutions, I think you have some work ahead of you if your objective is to match the Advisor Now portal feature-for-feature.] 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.

Purge the Word ‘Frictionless’ from Banking from Bank Innovation, and

Hedgeable’s Robo Advisor 2.0 Platform Automates Risk Managed Investing,

Vanguard Debuts Diversification Visualizer,

and Trizic’s Accelerator Enables Financial Firms to Scale Investment Advice from Finovate.com

[And finally, I’ve was following the chatter on Twitter this week from the Finovate Spring 2015 conference in San Jose, and one of the buzzwords that lit up the #Finovate hashtag was “frictionless.” The majority of presenters, whether they were mobile payment solutions, peer-to-peer lending networks, or even crowdfunding services to pay off medical bills, focused on eliminating the friction in financial transactions.

In fact, “frictionless” was mentioned so much that one attendee said the word should be purged from the world of banking. But think about your business for a minute. How much friction do you create for your clients? How much paper are you pushing? Are you accessible by text and video chat in addition to phone calls and face-to-face meetings? Can clients access the information they want from a smartphone?

I think it’s time you look at your business from the client’s perspective and identify all the processes that generate friction. For each process, figure out how technology can streamline what you do and reduce the time and effort required to get something done. That sounds like a pretty useful activity for a Friday afternoon if you ask me.

Oh, and if you want to know which three companies from Finovate are worthy of attention on my radar, they are Hedgeable, for their online investment service featuring active management and alternatives, Vanguard, for their clever 3D graphs of diversification illustrations, and Trizic, yet another online investment service that can be white labeled by financial advisors.] It’s time to relegate the phrase ‘frictionless’ to the FinTech trashbin.

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

Beyond E-Signatures from Financial Advisor Magazine

As someone who has been a proponent of the paperless office for many, many years, I often feel a sense of frustration at the number of paper-driven activities still prevalent in our industry.

How Well Does Your Firm Virtually Serve Your Clients? from ThinkAdvisor

Advisors need to make sure their technology offerings are in line with their clients’ expectations

Watch Bits and Bytes for May 15, 2015

Watch Bits and Bytes for May 15, 2015

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)

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.

Croesus

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

FPPad Bits and Bytes for April 3

On today’s broadcast, Schwab Intelligent Portfolios gathers over $500 million dollars in its first few weeks, find out why Orion Advisor Services is regarded as one of the good fintech vendors, and personal dossier app Refresh gets acquired by LinkedIn.

So get ready, FPPad Bits and Bytes begins now.

(WatchFPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by Wealthbox CRM. Be the first to see the release of Wealthbox version 1.8 with a ton of new features and integrations, including one with MoneyGuidePro.

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Sign up for a free trial of Wealthbox CRM in just 15 seconds to see what the buzz is about at Wealthbox.com.

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

Exclusive: Schwab robo-adviser crosses half-billion dollar mark from InvestmentNews.com

[For the second week in a row, this week’s top story comes from Charles Schwab, as the company told InvestmentNews that it gathered “considerably over” $500 million in assets in the new Schwab Intelligent Portfolios program.

Schwab Intelligent Portfolios was released to retail investors just three weeks ago, which you heard three episodes ago, and now they have over $500 million. And just four weeks ago, my broadcast covered Wealthfront’s news that they surpassed $2 billion dollars in assets under management.

So it took Wealthfront a little over three years to get to two billion dollars, and Schwab Intelligent Portfolios is on pace to do it in about two months. NOW who’s going to be the fastest growing and most trusted automated investment service in the world? I think that title’s up for grabs.

But hold on: there’s a deeper story here. Your business is experiencing grocery store econ 101. That’s right, it’s all about shelf space. You might have the best business in the world, but if you don’t have any shelf space, you don’t even have a chance to step up to the plate.

So all of these new solutions online are taking up shelf space and they’re crowding you out of the market. Sure, investors are getting low fees, rebalancing, even tax loss harvesting, but are they getting any REAL advice that actually matters? Not from what I can tell. But what I do see is that your shelf space is slowly being eroded, so you better start doing something about that today.

You can start by sharing this broadcast to your colleagues. Go on, the button’s down there, or up in the corner. Use it.] The Charles Schwab & Co. robo-adviser has crossed a symbolic threshold in just three weeks, raising more than half a billion dollars, the San Francisco-based firm told InvestmentNews on Monday.

What Makes Orion So Special? from Financial Advisor Magazine, and

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

[Next up is news on Orion Advisor Services, as this week Joel Bruckenstein highlighted the portfolio accounting service bureau for a number of the company’s innovations in financial technology.

Here are the most relevant updates from Bruckenstein’s column. Orion now serves over 570 advisory firms who collectively process over $200 billion in assets, and the company expects to add another 280 firms this year.

Bruckenstein highlights many of Orion’s innovations, including its free private labeled mobile app for advisors, video client statements powered by Engage, and trading sleeve capabilities in its order management system.

Bruckenstein also writes that Orion exhibits a company culture of innovation, which you saw first hand from my Fuse 2014 hackathon coverage, which is an event the company will repeat once again this September.

To be fair, Orion’s competitor Envestnet | Tamarac has also recently achieved some significant milestones, as the company now serves over 800 advisory firms with over $500 billion dollars on the platform, and they also offer a custom branded iPad app for use by advisors and clients. So remember what I said about shelf space and competition? Both of these companies, plus many other technology providers, will put you in a position to differentiate yourself in a crowded market.] When pondering this month’s column, I thought it might be interesting to focus on a single firm whose story involved all of these trends, Orion Advisor Services, which offers “software as a service” and portfolio accounting services to RIAs.

Refresh Joins the LinkedIn Family from Refresh

[And finally, I’m wrapping up this broadcast by revisiting Refresh, an app I told you about way back in episode 107. Refresh is an app that creates a real-time dossier about people you’re going to meet, pulling information from a variety of sources to help you, well, refresh your memory about your connections.

This week, Refresh announced that it will be acquired by LinkedIn (probably because of the Bits and Bytes bump!), so the company will soon be sunsetting its standalone app and rolling in its dossier capabilities into LinkedIn. I’m pretty happy about this move, because Refresh has been one of my go-to apps for a while, and I’m glad to see how the technology can enhance the value of LinkedIn as all of us continue to develop meaningful relationships with clients and colleagues everywhere.] Today, I’m excited to announce that Refresh has been acquired by LinkedIn.

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

External IT Upgrade Democratizes Access to User Activity, Improving Advisors’ IT Security and Workflow from ExternalIT

External IT, a cloud-based IT outsourcing firm that focuses on RIAs and Broker Dealers, today announced a new capability to be part of its best-in-class Cloud Desktop solution. The enhancement to the recently redesigned platform creates a visual and easily readable interface to view user activity that tracks login location, IP address, time and device, along with the specific applications launched.

FPPad Bits and Bytes for April 3, 2015

Watch FPPad Bits and Bytes for April 3, 2015