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Fintech News – Robo-Advisor Updates, 2019 – Social Media Missteps, Wealth Building + More

Last Updated on April 15, 2019 by Barbara A. Friedberg, MBA, MS

Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t  believe is valuable

Robo-Advisor News – Betterment, Human Advisors, Wealth Building and Social Media

Fintech trends are hitting the robo advisory industry. Robo-advisors, the new-ish fintech darlings are now in their second decade. And along with the growth comes hiccups, missteps and competitive market shake ups. The recent fintech news, spans various robo-advisor news, market shifts and missteps.

Financial Technology News – Building Wealth with Robo-Advisors

While robo-advisors—and, to be fair, human financial planners—have been very focused on wealth management over the years, one of our news sources this month believes that wealth creation is the new focus.

Managing your existing finances is a good goal, as proper management will lead to fewer financial stressors throughout life. However, Franklin Tsung believes that managing wealth alone isn’t good enough anymore, particularly for millennials who were affected negatively by the 2007 through mid-2009 recession. For this reason, he sees wealth creation as the way of the future and the best option for helping millennials close the gap between their financial stability and that of other generations.

Robo-Advisors aren’t Replacing Humans

A big concern about robo-advisors is that they might overrun human financial planners, essentially pushing these professionals out of their jobs.

Our April robo-advisor news suggests that’s not something we need to be concerned about. While robos are certainly becoming more popular and there are many to choose from, savvy human financial planners can do quite well in this market.

The key to success is being tech-conscious and integrating digital tools—such as robo-advisors!—into the financial planning experience. Financial professionals who stay up-to-date on investment technology and offer their clients positive, contemporary service have nothing to worry about.

Fintech Trends – Robo-Advisors in Trouble

As social media and the internet develop, businesses are constantly finding new ways to reach potential clients. We’ve had decades to fine-tune rules and expectations for print advertising; in comparison, Twitter advertising is relatively new and its requirements aren’t always transparent.

Wealthfront got in trouble back in February for allegedly making false statements about their tax-loss harvesting strategies. While in March Wealthfront got positive attention for creating a high-interest cash account, the robo-advisor is back in hot water this month for allegedly failing to reveal conflicts of interest in testimonials they shared on Twitter.

Free Robo-Advisor Comparison Chart

Technology got Hedgeable into trouble this month, too. Hedgeable allegedly made false claims to success by reporting only higher-than-average account earnings in one of their comparison documents.

While these transgressions certainly don’t mean that your money is unsafe with either of these robo-advisors, it reemphasizes the point that you should always do your due diligence when choosing a financial product or service.

New Additions to the Robo-Advisor Market

Two additions of note appeared in the robo-advisor market this month, and Betterment is at the center of both initiatives.

Huber Financial Advisors, based out of Chicago, is using Betterment’s support to create their own robo-advisor, Beacon. Huber Financial Advisors chose Betterment because of its stability and longevity—this robo-advisor has been around for a while, and its reputation as a quality investment platform is well-earned!

Betterment continues to court financial advisors and encourage them to use their software.

Betterment is also adding new Customer Relationship Management (CRM) options which will make it easier for human financial advisors to access client information. This directly affects the Betterment for Advisors platform in an attempt to simplify the process for advisors. In particular, this change integrates Wealthbox and Redtail to the dashboard.

fintech news + fintech trends

More Robo-Advisor News

“Human Advisors Still (Relatively) Safe in Age of Robo-Advisors” by Marlene Satter at BenefitsPRO

“Financial advisors are worried about being supplanted by robo-advice, but according to a new study by MDRT, they should instead prepare to share the field with robos—since consumers want both humans and tech.

Study results find that while 88 percent of respondents want tech to complement humans, rather than replace them, 85 percent would rather deal with a human financial advisor than a robo-advisor.

However, 95 percent say that human advisors need to be tech savvy and to use tech tools in their practices—so there’s no dodging the tech bullet.

Just five percent weigh in in favor of tech-only advice, while 36 percent strongly disagree that robos can completely replace humans when it comes to financial planning…..”

“Twitter Trouble: Social Media Gets Robo-Advisors in Hot Water” by Marianna Shafir at Kiplinger

“Texting, tweeting and emailing are second nature to people these days, but financial advisers who use social media in the wrong way are getting into trouble. If you’ve gotten a personal text or seen some tweets touting great investment returns, take a closer look. They could be some pretty serious red flags.

The Securities and Exchange Commission (SEC) recently fined two robo-advisers, Wealthfront Advisers and Hedgeable, for social media pitfalls. The proceedings are the SEC’s first enforcement actions against robo-advisers, which provide automated, software-based portfolio management services. Both companies were charged with violating rules on recordkeeping, antifraud, advertising and compliance…..”

“Why Wealth Creation is the Next Frontier in Wealth Management” by Franklin Tsung at Forbes

“Of the myriad segments and niches in finance, wealth management is often the most elusive. What started out as an institutionalized endeavor has become an avenue for entrepreneurs seeking to build their own brand while providing an impactful service for families. From my perspective, wealth management has evolved dramatically, especially from the early brokerage days.

Back in 1994, digiTRADE Inc. became “the first company to bring online brokerage services to the Internet” and brought to bear the digital revolution of stock trading. I would know — my father helped build the company and sold it to Thomson Financial (now Thomson Reuters). Before becoming a household name, fintech was very visible and “in your face.”

—-For the next wave, businesses need to focus on innovating the wealth creation side of the equation. This means a stronger dive into possibly personalizing alternative investments to personal financial advice and expanding that knowledge and distribution base across all independent and institutional wealth management…..”

“Betterment Adds CRM Integrations to RIA Platform” by Ian Wenik at City Wire

“Betterment is integrating its back-end platform for RIAs, Betterment for Advisors, with two popular pieces of customer relationship management (CRM) software.

The company said Thursday that it’s integrated the platform with CRM technology providers Wealthbox and Redtail. With the integration, RIAs on the Betterment for Advisors platform won’t have to manually to look up their clients’ account balance and fund positions. Instead, they can now access that information through the CRM software.”

Bonus: Betterment vs. Vanguard Personal Advisor – Which Robo-Advisor is Best for you?

Huber Financial Advisors Launches Robo-Advisor” by Ian Wenik at City Wire

“Huber Financial Advisors is rolling out its own robo-advisor with Betterment’s backing.

The Chicago-area RIA, which manages around $1.4 billion in assets, launched its automated investing platform, ‘Beacon,’ in January. Though there are less than 20 clients on the platform as of now, Huber Financial Advisors president Rob Morrison told Citywire the firm plans to launch a digital marketing effort around the service in 2019.”

While fintech trends continue to shift, the overriding desire for financial management and wealth building remains the same. What’ varies is the methods to create and manage your finance.


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Barbara A. Friedberg, MBA, MS

Barbara Friedberg, MBA, MS brings decades of finance and investing experience to Robo-advisor Pros. She is a former investment portfolio manager and taught Finance and Investments at several universities. Barbara Friedberg's published work includes Personal Finance; An Encyclopedia of Modern Money Management (Greenwood Press), Invest and Beat the Pros-Create and Manage a Successful Investment Portfolio and How to Get Rich; Without Winning the Lottery. Follow her on twitter