Top Ten WMToday Posts from 2015
Another exciting year in wealth management has passed and it seemed like a whirlwind of activity right up until December 31st. We covered a wide range of topics from risk tolerance and financial planning software to robo-advisors and the biggest M&A deals. But what are the top ten WMToday posts from 2015? These are the ten most popular posts as decided by our readers.
Riskalyze seemed to be everywhere in the news last year, launching a new product to help advisors building their own digital channels as well as integrations with over a dozen other vendors including eMoney, Morningstar and RetireUp. They are challenging established firms like Finmetrica and expanding the definition of risk tolerance as part of the wealth management platform.
As more RIA’s have been moving their business to fee-based, regular rebalancing has become a critical component of their advice. Industry vendors are well-aware of this trend and have been acquiring technology to enhance their offerings. Morningstar’s recent purchase of Total Rebalance Expert was last year’s example.
They will need Morningstar’s balance sheet to help them compete against TD Ameritrade’s iRebal, Envestnet’s Tamarac and currently stand-alone TradeWarrior.
Advisors who insist on only providing investment management services are a dying breed. The advice industry has to compete against retirement calculators and other free tools since advisors are using them on the side anyway. Planning software should not only identify opportunities but also help coordinate them to keep advisors from having to go to a third party system, according to InStream CEO Alex Murguia.
For more articles on financial planning software, see Financial Planning in 10 Minutes or Less with goalgamiPro and Is WealthTrace the Right Financial Planning Software for You?
Another conference summary describes the strengths and weaknesses of four robo-advisor platforms. What’s the best way for RIA’s to integrate digital advice into their existing business model?
Advisors have been launching online delivery channels for one of two reasons: 1) they do not support smaller account sizes and have no way to handle inbound requests from these prospects; 2) part of their existing book of business is smaller accounts and they are looking for a place to “park them” in a low-touch engagement model until they grow to a size that can support traditional advisory fees.
Robo-advisors and platform providers were definitely hot topics for 2015. WMToday readers couldn’t get enough information and analysis on the robo-advisors trend. (See Smart and Agile: Riskalyze and Quovo Help Advisors Stay Ahead of Robos and Jemstep Advisor Pro Helps Convert Prospects into Clients)
Shelling out $600 million for a company that has never made a profit is a risky proposition. Paying that much when your market cap is only twice as high and you have acquired four other companies over the previous two years can be downright dangerous. While there is tremendous potential in Yodlee’s technology and vast data archives, we must wait until Envestnet’s first combined product announcement to get a better idea as to whether this was money well spent. (See Envestnet Advisor Summit 2015 Fast Twitter Recap – Day 1)
An article in InvestmentNews reported that Betterment reached $2.5 billion in AUM, catching up to competitor Wealthfront, who reached the milestone just a month or so earlier. But both of these firms, as well as other stand-alone B2C robo-advisor Personal Capital are just small fish when compared with Vanguard’s $17 billion online advisory service.
Continuous innovation will be required for smaller firms to separate from the robo pack. Last year, Betterment launched a new feature they call Smart Deposit, which acts like a sweep account. You create a pre-set balance amount for your checking account. Any cash above this amount gets automatically transferred to your investment account.
Excellent content can always be found at the Technology Tools for Today conferences and last year’s advisor version was no exception. In this session, advisory technology expert Bill Winterberg reviewed products he likes in a number of different areas. These included tools for social media, compliance, website development, email marketing, scheduling and managing electronic signatures.
The high level of interest in this acquisition explains why two articles about it made our top ten list. More readers were on the side of Envestnet having made a great strategic play by purchasing Yodlee instead of simply partnering with them.
Which aspect of their new subsidiary was the most attractive? Their data aggregation technology? Their vast database of consumer financial transactions? Their blue chip client list? If one or more of these can be integrated into the Envestnet ecosystem and properly leveraged, this could turn out to be one of the most successful financial services acquisitions of the decade.
Comparing and contrasting the leading software rebalancing products came in the second slot in our top ten WMToday posts for 2015. Improving operational efficiency by increasing the number of accounts that an RIA can support while reducing the staff required to maintain them is one of the main strengths of this software.
The most popular products support multiple custodians, offer various levels of tax management functionality and cost between $5,000 and $50,000 per year, depending on the number of accounts or assets under management.
But portfolio rebalancing was only the second most popular post. The #1 post for 2015 was…
Our shoot-out between the two top financial planning software applications was far and away the most-read post for 2015. The in-depth comparison of functionality between these two industry heavyweights generated tremendous interest as well as a steady stream of comments. Both vendors have been expanding from point solutions into technology hubs by adding integrations and connectivity to dozens of third party applications and data sources.
This post was followed up by the review of a new comer to the North American market, Figlo. (See Figlo Swings for the Fences Against Financial Planning Software Heavyweights) Do continued popularity, we plan to review a number of other financial planning tools in 2016.
Top Ten WMToday Posts
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