Tag: WealthTech

Robo News: April 2019

Posted on May 30, 2019

SoFi has been making headlines this month, as they have recently introduced two proprietary ETFs.  The funds are as follows:

  • SoFi Select 500 (SFY) tracks the performance of 500 of the largest U.S.-listed companies weighted based on a proprietary mix of their market capitalization and fundamental factors
  • SoFi Next 500 (SFYX) tracks the performance of the 500 smallest of the 1,000 largest U.S.-listed companies weighted based on a proprietary mix of their market capitalization and fundamental factors.

SoFi continues to diversify their offerings, as they have also recently announced a partnership with two fintech insurance firms.  SoFi now plans to offer homeowners and renters insurance through Lemonade and auto insurance through Root. This has been a busy month for Sofi, as they are rumored to be working on an additional round of funding, estimated as $500M.  This funding round, reportedly led by the Qatar Investment Authority, is expected to be at a similar valuation to their last round in February 2017.

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Robo Regulatory Missteps and B2B Industry Growth

Posted on May 28, 2019

“The SEC announced in December that it reached a settlement agreement with two robo advice providers.”

As robo advice grows rapidly and reaches widespread adoption, they are also catching the attention of regulators.  The first SEC action against providers occurred at the end of 2018, as the SEC announced in December that it reached a settlement agreement with two robo advice providers. The SEC order stated that Wealthfront claimed to be monitoring outside accounts for wash sales related to their tax-loss harvesting product when, in fact, they were not. The SEC announcement reported that 31% of accounts enrolled in tax-loss harvesting experienced a wash sale in the more than three years that Wealthfront made this claim. Other findings included re-tweeting prohibited client testimonials and paying bloggers for client referrals without the proper disclosures and documentation.

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Industry Insights: Investing at Wealthsimple

Posted on May 26, 2019

We recently spoke with Dave Nugent, Head of Investments and part of the founding team at Wealthsimple, a Canada-based robo that has expanded to the U.S. and U.K. markets. Dave provided us with great insight into who the typical Wealthsimple client is and where he sees the future of digital advice.

“Over the past two years, we have seen a trend in the robo advice industry away from digital-only offerings toward offering access to live advisors at some level of service”

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1Q2019 Investment Performance and Commentary

Posted on May 23, 2019

Cash management products spread across direct-to-consumer fintech platforms

The digital advice industry continues to evolve in 2019. Cash management apps, linked debit cards, and high-yield savings accounts are sweeping across direct-to-consumer fintech companies. Wealthfront announced their high-yield savings account this quarter, following Betterment’s cash management program announcement late last year.  Meanwhile, Robinhood released their high interest account last December, although it was quickly shelved after regulagatory pushback.

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Robo News: Q1 2019

Posted on May 18, 2019

Robos expand into banking and cash management, as high yield account options have proliferated among direct to-consumer fintech platforms

Wealthfront joined the growing trend of fintech companies that offer high-yield accounts designed for cash savings. Betterment announced their cash management program late last year, as did trading app Robinhood. Robinhood launched its product with an aggressive 3% interest rate, but made a regulatory miscalculation and quickly pulled their product offline to reconfigure. Although these savings vehicles often appear very similar, there can be important differences. For example, Wealthfront places funds in FDIC insured bank accounts, while Betterment’s product invests funds in a conservative fixed income portfolio.

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Industry Insights: A conversation with U.S. Bank

Posted on May 8, 2019

Although initially seen as a disruptor to the financial services industry, digital investing and robo advisors continue to expand markets, engage previously underserved clients, and encourage traditional wealth managers to embrace technology.

This past quarter we spoke with Karen Wimbish, Head of Product for U.S. Bancorp Investments and Financial Planning, about her experience with Automated Investor, U.S. Bank’s digital investing platform.

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