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Fintech Report Card: May 2020

Below is the May edition of the Fintech Report Card, a monthly piece by Riskalyze CEO Aaron Klein originally published in 

AdvisorEngine Acquired by Franklin Templeton

What happened: Franklin Templeton acquired digital wealth platform AdvisorEngine in an undisclosed deal. AdvisorEngine also owns Junxure CRM, which is popular among a number of RIAs.

Why it matters: Congrats to our friends at AdvisorEngine, who spent a number of years pursuing their vision of a more digital, automated client onboarding experience. This acquisition, combined with the Legg Mason deal, demonstrates Franklin Templeton’s determination to both invest in digital experiences, and differentiate their offerings for advisors. I personally still think there is plenty of room for independent fintech players too, but make no mistake—a number of big asset managers are on the move.

Disclosure: Franklin Templeton is a partner in our Riskalyze Partner Store model marketplace.

Envestnet Adds Content to Its Reporting

What happened: The new Connect feature will allow advisors to send media content curated to an individual investor’s interests, alongside weekly performance reports.

Why it matters: This is an interesting feature developed by Envestnet, as more advisors are pivoting toward original content and driving client conversations in the planning process. It’s going to be really interesting to see how clients react to news interacting with the timeline of their performance reporting.

Schwab Makes Fractional Trades a Reality

What happened: Schwab announced that its retail clients would soon have access to the ability to buy fractional shares of stocks.

Why it matters: Fractional trading has existed for a while, but it appears it’s about to hit the mainstream. This is a great move by Schwab that allows smaller investors to jump in early, and larger investors to more easily diversify even with large-share-price stocks, like Berkshire Hathaway.

Of course, buying fractional trades is also an important strategy in building direct-indexed portfolios—another hot topic in wealth management. Making it easy for advisors to leverage Stock Slices in advisory accounts should be the next step for Schwab.

Plaid Creates Plaid Exchange to Manage Aggregation

What happened: Plaid Exchange will be designed to facilitate better API connections with financial institutions, as well as provide an access dashboard to make it easier for Plaid customers to see exactly what data is being transmitted.

Why it matters: Good questions have been raised as to whether consumers understand what is happening when they leverage account aggregation. This new dashboard will make it simpler for consumers to see and control where their data is going.

Disclosure: Riskalyze is a Plaid client for providing held-away account aggregation services on the Riskalyze platform.

LifeYield Updates Social Security Reporting

What happened: LifeYield added features that will allow advisors to show clients how to optimize their Social Security benefits, as well as visually display future income gaps and projected needs.

Why it matters: With the ups and downs of 2020, the retirement plans of many Americans have been thrown for a loop, so this set of tools arrives just in time. Social Security is one of the more complex planning topics and LifeYield appears to bring a simple and powerful approach to the table.

Schwab Adds Motif’s Technology and People

What happened: Schwab purchased the intellectual property, technology, and many of the staff behind Motif Investing, after the “build your own ETF” platform abruptly closed its doors in May.

Why it matters: Motif brought some innovative and unique features to market, and having its founder, Hardeep Walia, as part of the Schwab team will likely pay future dividends as the custodian looks to create more differentiation with its competitors. It’s fascinating that Schwab bought the technology and people, but didn’t acquire the assets, which went to Folio Institutional; my best guess is that there were patents on the table that could help Schwab protect its tech from patent claims.

Goldman Sachs Buys Folio Financial

What happened: Goldman Sachs will acquire Folio Financial, a niche RIA custodian and brokerage firm.

Why it matters: When Motif closed, it sent the tech and people to Schwab, but the assets to Folio, and now everything at Folio ends up as a part of Goldman Sachs. GS is clearly on a path to build a unique strategy as a wealth management firm. Is an account transfer to Goldman Sachs custody in the cards for every United Capital client? Will FinLife be bundled with custodian services? Time will tell.

TradePMR Opens Second Office Location

What happened: TradePMR, a tech-focused boutique RIA custodian, has opened its second office, an operations center in Tampa, Florida.

Why it matters: Congratulations to TradePMR on the opening of their second office. Leave it to Robb Baldwin and team to zig when others are zagging, making an investment in physical infrastructure when the conventional wisdom is that people won’t work in offices any longer. I happen to think he’s right and the death of the commercial office building has been greatly exaggerated. More people will work remotely than ever before, but plenty of people are far happier and more collaborative with an office building at their disposal.

 Aaron Klein is CEO at Riskalyze.

Editors note: The views expressed in this column are Aaron Klein’s, and do not necessarily reflect the opinions of

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