After what seems like an endless stream of weeks in which we extolled how busy and active the wealthtech sector was, we get a bit of a breather in this edition of Advisor Tech Talk.
There’s still plenty to talk about, but not a lot of company announcements. Many firms, perhaps wisely, decided to stay quiet during the election week. Any news being announced by U.S. wealthtechs was likely to be lost in the cacophony of a U.S. presidential election.
Of course, the results of the election are now pretty clear, with the exception of just enough races in the U.S. House of Representatives to keep which party ultimately ends up with the majority there unclear for the time being. However, as time has gone on, it looks more and more likely that Republicans will keep control there, meaning that all of the law- and policy-making branches of government will be controlled by a single party.
You’ll recall that this was my second-worst case scenario for wealthtech last week, but there is plenty of silver lining for wealth management and technology alike, the most important of which is that for the time being financial regulations will at least remain the same, if they aren’t rolled back within the next three years.
I’m not going to argue here whether we need more or less financial regulation—instead, I’ll point out that less regulation going forward means that it’s easier for entrepreneurs to start companies, for companies to grow and evolve and mature without the uncertainty of additional compliance burdens and other policy-oriented headwinds.
I think that the next most important area to watch, for wealthtech and wealth management as a whole, is probably tax policy. A lot of the marketing and strategy pushed by financial advisors (and their technology) in client meetings over the past few years has been based on the assumption that taxes are going to go up soon—in particular, the lifetime gift and estate tax exclusion, which was set to drop dramatically upon the sunset of certain provisions of the Tax Cuts and Jobs Act of 2017 next year.
If the majority in the House of Representatives holds, I would expect Congress to make the extension of these provisions, and other tax cuts, a priority. Some of them may even be made permanent. Advisors have to be prepared to pivot. Instead of shrinking or emptying estates in anticipation of a lower tax exclusion, it may now be desirable to keep those estates intact for longer.
If Democrats had won in similar margins to Republicans, advisors could very well have been working with a greatly increased capital gains tax in the near future. Some proposals would have raised the capital gains tax for the highest earners to the level of the highest income tax bracket. With Republicans in control, I’d guess that if capital gains taxes go anywhere, it’s down.
There are also implications for fiduciary regulations—I would expect the distinctions between fiduciaries and non-fiduciaries to become more ambiguous over the next four years. For the end consumer, the difference between an RIA and a broker-dealer might matter even less by the time the next president is inaugurated.
Over the past six years, so many of our assumptions in wealth management and wealthtech have been founded upon an eventual rollback of tax policy and/or a reversal of regulatory progress from president-elect Donald Trump’s first administration. We’re all going to have to pivot to face reality.
Let’s get to some headlines.
Arcons Technology
Arcons Technology, Inc. today announced their newest integration with Apex Fintech Solutions Inc. (“Apex”), an innovation launchpad for the global investment ecosystem. Firms utilizing Apex’s custodial services can use feature rich and user-friendly solutions offered by Arcons for Billing, Trading, Client and Advisor Portals, and CRM. Furthermore, Arcons is uniquely positioned to customize their solutions to meet clients’ unique needs. This gives firms the best of both worlds – a cost-effective solution that is tailored to their day-to-day usage scenarios.
Goalsetter
University of Phoenix is pleased to announce a new webinar series with Goalsetter, an award-winning financial education platform dedicated to helping individuals and families achieve financial wellness through engaging and practical resources. The ten-part series will launch with a discussion on “Managing Credit Card Debt and Fostering Good Credit Habits,” on Tuesday, November 19, at 12 p.m. MST. Featuring Tanya Van Court, Founder and CEO of Goalsetter, Kevin Soehner, Senior VP of Operations for iGrad®, and moderated by Chris Conway, Director of Financial Literacy at University of Phoenix, the discussion will focus on building good credit habits, understanding interest rates, and how credit can impact personal finance decisions. Throughout the series, participants will gain valuable insights and practical strategies to manage their finances and plan for a secure financial future, as well as have the opportunity to engage in a Q&A session during each webinar.
In addition to the webinar series with Goalsetter, University of Phoenix supports students’ financial wellness by offering a suite of resources and tools to help students manage their finances responsibly. One such resource is the iGrad® online money-management tool, which students can use to learn how to budget, save, minimize borrowing and understand future student loan payments.
Individuals interested in exploring additional opportunities to save time and money at the University may use the University’s Savings Explorer™ tool for prospective students. The Savings Explorer tool presents information about scholarship opportunities, as well as transferring college credit and earning credit for prior learning through Prior Learning Assessment, national testing programs, alternative course providers, and military service. By answering a few simple questions, prospective students can find out what other students with relevant experience have saved.
Pontera
Pontera™, the fintech company helping retirement savers receive 401(k) account management from their financial advisor, has announced the availability of Envestnet’s BillFin solution through an integration to make 401(k) account billing more efficient and seamless for financial advisors.
BillFin is a flexible and easy-to-use billing solution that has modernized how advisors and planners bill their clients by enabling advisors to calculate fees, create invoices, and calculate payouts for fee splitting. The platform offers flexible billing setup, standardized billing templates, an intuitive user experience and more. With this integration, advisors who use Pontera to manage their clients’ 401(k) accounts can offer more efficient billing.
More than 74% of Americans would like professional help managing their workplace retirement accounts, according to the Pontera 401(k) Literacy Survey, which polled more than 2,000 U.S. plan participants, half of whom also work with a financial advisor. The study found advised participants are more knowledgeable, more confident about their future in retirement and contribute more to their accounts.
SEI
Close Brothers Asset Management (CBAM) and SEI® (NASDAQ:SEIC) today announced a strategic partnership to power CBAM’s operational transformation and growth. CBAM will adopt the SEI Wealth PlatformSM (SWP) and SEI Data Cloud, which provides access to real-time data and analytics to leverage a fully integrated technology and operational outsourcing solution.
CBAM, which manages approximately £20 billion in assets, chose SEI following a comprehensive, multi-stage selection process involving several providers. The strategic partnership between CBAM and SEI Investments Europe Ltd., SEI’s wholly-owned UK subsidiary, will deliver integrated market-leading technology and services, including data integration, migration, and orchestration, which will enable CBAM to deliver on their strategic objectives.
A number of CBAM employees will also join SEI’s SWP Operations team as part of the agreement, and SEI and CBAM will work closely to ensure a smooth and successful transition.
SMA Technologies
SMA Technologies, a leading provider of automation solutions for financial services and the maker of OpCon Workload Automation & Orchestration, announced the acquisition of Encapture, an intelligent document processing and image lifecycle management company that enhances SMA’s automation solutions for financial institutions (FIs) with expanded capabilities, integration options, and expertise in loan origination and compliance.
SMA Technologies’ acquisition of Encapture combines advanced document automation with SMA’s workflow solutions, creating a powerful, unified platform for financial institutions. With machine learning and OCR, Encapture reduces costs, improves accuracy, and simplifies origination and compliance activities, empowering banks and credit unions to streamline operations and enhance efficiency in a digital-first environment.
SMArtX Advisory Solutions
SMArtX Advisory Solutions (“SMArtX”), a leading innovator in managed accounts technology, has announced the addition of 16 new strategies from eight leading asset management firms to its Manager Marketplace. SMArtX’s continuously growing platform now offers 1,518 strategies from 320 distinguished asset management firms.
Newcomers Columbia Threadneedle Investments, First Trust Direct Indexing, Innovator Capital Management, and Krilogy Portfolio Solutions added strategies spanning across multiple categories including dividend income, direct indexing, balanced alternative, growth, alpha generation, and tax-managed core balanced. Brooklyn Investment Group, Franklin Templeton, Morgan Dempsey, and Natixis Investment Managers also expanded their current offerings to respectively include tax-advantaged long/short, balanced income, micro cap, and tax-managed core balanced strategies.
TradingHub
TradingHub, a leading provider of uniquely intelligent trade surveillance software for the global financial services industry, today announces the appointment of long-time CTO Mike Coats as CEO, while former CEO Neil Walker assumes role as Executive Chair of the Board.
In his successful 14-year tenure as CEO and co-founder, Walker has led the organization to significant growth and expansion, culminating in TradingHub establishing itself as one of the world’s most trusted trade surveillance partners to the world’s prominent investment banking institutions. Walker will now assume the role of Executive Chair of the Board within the organisation.
Assuming the role of CEO is Mike Coats. With two decades of financial markets experience – including successful stints at Merrill Lynch, Dresdner Bank and Commerzbank – Mike Coats has served as CTO at TradingHub since 2012, where he has played a foremost role in directing the company’s ongoing technological and go-to-market strategy. Coats will begin as CEO effective immediately.
