Retiring With Robinhood, Zoom Call Compliance, A Substitute for High Yield Accounts, Crypto Funds, Cybersecurity and More
Senior Contributing Editor, Wealth Solutions Report
As wealthtech continues to develop its capabilities and firms seek technology-based solutions to cope with increased regulation, streamline the back office, allow improved interaction between advisors and clients, provide better investment opportunities and reduce the clutter and friction of paperwork, we bring you a roundup of the latest wealthtech news.
Today’s Wealthtech World column explores innovation from a variety of angles. One trend is compliance – as Reg BI, Form CRS and other increased obligations put the onus on firms to enhance compliance tracking and paperwork, wealthtech firms stepped up with solutions.
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Cryptoassets also made the news recently as a Canadian firm launched a global fund with mixed holdings of bitcoins, ether and altcoins that incorporates cryptocurrency index tracking.
Robinhood set its disruptive sights on retirement plans, which could mean significant shifts if the firm forces the industry to follow its lead as with past initiatives.
We also cover cybersecurity, automated back-office workflows and tech-enabled product support and innovation in the form of enhanced risk assessment tools and new types of targeted yield accounts.
Upcoming Technology Conference
Technology is filling wealth management news headlines as we rocket towards T3 Technology Hub’s flagship T3 Advisor Conference in the first week of May.
T3 Advisor Conference
According to Joel Bruckenstein, Publisher of T3 Technology Hub and Producer of the T3 Advisor Conference, “many of the premier wealthtech firms in the industry plan product releases in conjunction with the T3 Conference, and this year will be no exception. Coming out of the pandemic, it seems obvious that the business is changing and that advisors need to embrace technology as never before in order to stay competitive.”
Bruckenstein advises us to expect a strong stream of wealthtech news between now and mid-May and that “some of the larger themes in wealthtech for the remainder of the year will be digital transformation, cybersecurity, data management, reimagining the client experience, ESG technology, alternative investment platforms and digital marketing.”
1. Robinhood Nears Debut of Retirement Accounts Within App
Evidence found on Robinhood Market’s iPhone app indicates the company is gearing up to service retirement accounts, including traditional and Roth IRAs and pension accounts. This follows a previous statement by Robinhood’s CEO that the firm intends to provide retirement accounts by mid-2022.
Why it matters: Robinhood’s no-fee stock trades shaped the industry before, causing the competition to fall in line, and the company continuously searches for new innovations, including its crypto wallet service and its recent launch of a cash card. With inexpensive or free services and a millennial-friendly approach, Robinhood’s move into the retirement space could disrupt how the rest of the industry approaches retirement accounts.
To learn more, see the story by Mark Gurman and Annie Massa on Bloomberg.
2. Rize and YieldX Partner to Reimagine High Yield Savings
Fintech platform provider Rize Money, and investment solutions platform provider YieldX announced a strategic partnership to create an account backed by a basket of liquid fixed-income ETFs in fiat currency, providing a range of targeted yields from 1% to 8% as an alternative to traditional high-yield accounts and cryptocurrency accounts.
Why it matters: In this partnership, the firms’ technological innovation gave rise to a new product that solves for the high volatility typical of crypto accounts and the relatively low yield of more traditional accounts during this time of high inflation, demonstrating the responsiveness of technology-based product evolution.
For more information, see the press release.
3. Riskalyze Substantially Increases Bond Coverage, Elevates Its Methodology
In an initiative led by Dr. Shari Hensrud, the recently appointed Vice President of Risk & Analytics of Riskalyze and predicted by WSR, the firm announced it will cover 800,000 more bonds by year end and enhance its bond review methodology, including increased accuracy, customization for bond types and detailed credit risk assessment. In addition, the firm has expanded its analytic capabilities for various investments such as stocks, ETFs, separately managed accounts, REITs and UITs.
Why it matters: Product risk is among the most fundamental yet complex subjects in portfolio construction. Riskalyze’s successes and plans to advance risk assessment technology and coverage demonstrate how technology continues to raise its influence over portfolio construction and maintenance.
To learn more, view the press release.
4. Smarsh Enables Enterprise Organizations to Unlock More Compliance Capabilities for Zoom Meetings
Smarsh developed its strategic relationship with Zoom Video Communications to enhance the capabilities of its “Capture” service for clients, which allows clients to record and supervise Zoom meetings of employees for compliance with regulations and mitigation of risk in legal matters. The upgraded service allows clients to record content for up to 250,000 Zoom users.
Why it matters: As the press release explains, a majority of American workers now work remotely, communicating over the internet via applications such as Zoom, exposing firms to legal and compliance risks for unmonitored communications. This move by Smarsh and Zoom to bring those communications under monitoring underlines the permanent post-pandemic landscape shift to remote and online communications for wealth management.
For more information, view the press release.
5. 3iQ Corp. Launches New Cryptoasset Fund to Provide Exposure to Altcoins
For Canadian investors, 3iQ recently launched the 3iQ Global Asset Fund by merging a former fund invested in Bitcoin and Ethereum with new investments in altcoins such as Algorand, Avalanche, Cardano, Chainlink, FTX Token, Polkadot, Polygon, Stellar, Tezos and Solana, with the weights of the altcoins based on their weighting in the MVIS CryptoCompare Optimum Global Cryptoasset Index.
Why it matters: Though 3iQ bubble wrapped the press release in legalese to prevent any offers into the U.S., our northern neighbors have taken another step towards the normalization of crypto, an inevitable trend as the markets mature and technology enhances the usefulness of cryptocurrency and blockchain technology.
To learn more, see the press release.
6. Vestech Securities Selects Entreda As Cybersecurity Technology, Service Provider
Independent broker-dealer Vestech Securities and its affiliated RIA Vestech Asset Management selected Entreda’s cybersecurity platform, including penetration testing, network vulnerability assessment service, vendor due diligence, cybersecurity threat remediation and anti-phishing training.
Why it matters: Cybercrime presents an ever-present danger to the wealth management industry, which by its very nature involves large sums of money transferrable at the click of a mouse. Entreda leads a very competitive market for cybersecurity wealthtech and enhances its lead with the Vestech partnership.
For more information, read the press release.
7. Docupace Announces Three New Firms Using its Services
Recently three firms began using Docupace’s services, including financial services provider D.A. Davidson, which will utilize the firm’s compliance solutions to meet with rising disclosure delivery requirements, wealth management provider GLP Financial Group, which will use the firm’s back office platform, and independent broker-dealer and RIA Pinnacle Investments, which will utilize both services.
Why it matters: Rising compliance costs continue to squeeze wealth management firms, often driving them to technology-based solutions. At the same time, advances in wealthtech provide more workflow automation solutions to firms seeking to streamline the back office.
To learn more, see the press releases here, here and here.
8. Skience Augments New Account Opening Features Through Partnership With Electronic Verification Systems
Digital strategies and solutions provider Skience partnered with Electronic Verification Systems (EVS), a provider of fraud prevention and identity verification solutions, enabling advisors to perform compliance checks more effectively as part of Skience’s account opening process by providing Office of Foreign Assets Control (OFAC) verification at the time of account opening, a process that typically occurs after account opening through the firm’s custodian or by performing manual checks.
Why it matters: In another instance of technology solving compliance problems and reducing advisor and staff workload, Skience incorporates EVS’ OFAC verification tools into the application process, saving the mistakes and employee hours of manual processing and the risk of onboarding a client with compliance questions pending.
Check out Skience’s press release for more details.
9. d1g1t, Inc. Expands Leadership Team with Executive Hires from NASDAQ, Envestnet, Arch Systems and Altera
Enterprise wealth management platform provider that offers institutional-grade analytics and risk management tools d1g1t, Inc. has brought aboard three senior executives to join its organization.
Tate Haymond, formerly of Nasdaq Asset Owner Solutions, is d1g1t’s new Chief Revenue Officer; Arch Systems and Altera veteran David Karchmer has been named Chief Technology Officer; and former Envestnet executive Dianna Heideman is now Vice President of Client Experience at d1g1t.
Why it matters: Headquartered in Toronto, d1g1t has remained tightly focused since the company’s launch on supporting high net worth and ultra-high net worth RIA firms as well as family offices across North America. The company’s ability to attract seasoned leaders from very well-known financial services, technology and wealthtech enterprises underscores the appeal for industry insiders of aligning with businesses that are targeting this particular segment of the wealth management marketplace.
For more information, view the press release.
Julius Buchanan, Senior Contributing Editor at Wealth Solutions Report, can be reached at jbuchanan@wealthsolutionsreport.com
