Happy Tuesday, Fellow Fintechers!
We hope our readers are enjoying the last days of August. Some weeks feel a little like deja vu all over again, don’t they, during this most unusual year, and yet the fintech industry never sleeps, and we have more news this week to report.
We start this week’s newsletter as per usual with our Wealthtech Weekly column from Vasyl Soloshchuk with news from Blockchange, Xignite and LPL Financial, among others. We have a new 3 Questions Q&A with Patrick Kelly, who has recently launched Signal Advisors, an IMO coupled with an insurtech component.
Last week brought news that Robinhood – the trading app with attitude – now has an $11.2 billion (yes, with a “b”) valuation after a fresh round of capital from D1 Capital Partners. I’ll confess, sometimes these fintech valuations defy (my) logic, but in fact, despite their numerous debacles when their trading platform has gone dark in the past with volume overload, they seem to keep bouncing back. Their user numbers and transactions have surged since the COVID pandemic, so hence, an extra $200M in pocket change comes their way from D1.
FA Mag Senior Editor Chris Robbins rounds out the week for us covering topics ranging from American superiority in utilizing fintech over Canadians in the advisor space, to word that fintech luminary Marc Butler has joined Skience (previously the Athene Group) as President and COO. Many industry insiders may know that Butler previously served as COO and managing director of BNY Mellon’s Albridge data division.
Robbins has also reported that American Express has agreed to acquire ATL-based payments firm Kabbage for an undisclosed amount. We know the firm well – it’s one of our hometown high-flyers – and they’ve always had an edgy, fun vibe, so perhaps AMEX will tap into that to reach a younger, millennial audience. The firm was founded in 2009, and according to its website, was the second-largest Paycheck Protection Program lender by volume of applications, which we found quite interesting.
Robbins recently sat in on a video session at LPL’s virtual Focus conference, featuring Andy Kalbaugh, managing director and division president for national sales and consulting, and Matt Enyedi, managing director for national sales and consulting at LPL. They noted that Americans are becoming more comfortable with subscription-based consumer services like Netflix and Peloton and advocated for the financial services industry considering the same model for financial planning advice, to meet the needs of younger generation clients.
Finally, we finish up with a story delving into recent results of a Broadridge Financial Solutions survey of 254 advisors in June. In it, 77% of advisors surveyed “said that they lost business because of not having appropriate technology tools to interact with clients. Advisors reporting losing business on average lost 21.7% of their book,” according to Robbins’ piece.
We found that percentage utterly shocking, and it clearly demonstrates that advisor who don’t have their tech stack together are clearly losing revenue – and clients – as a result. Tie that together with the recent surge in trading activity from retail traders on Robinhood – and other trading platforms – and you can see that the “DIY Investing” industry presents a clear and present danger for advisors who aren’t wealthtech-savvy.
We’ll always be here to help you by keeping you apprised of the latest trends in wealthtech! Read up and be in the know!
Yours in Fintech,
Cindy Taylor