But Hernandez Revelli does believe that fintech companies should be held to a fiduciary standard similar to the one applied to independent advisors.
“We consider ourselves to be part of the team servicing the client, and everyone on that team should be held to a fiduciary standard,” she said. “Though this might cause roadblocks down the road, there should be some sort of oversight because all the financial technology today could go off the rails, especially with the rise of robo-advisors.
“There has to be a way to make sure that digital advice is in the client’s best interest, and to track that an advisor is not manipulating their software to produce the appearance of a specific outcome for their clients,” she continued. “It almost has to be called out at this point, but we’re in the introductory phase, still learning about how to track reasonable care and competency and proficiency, and how to demonstrate that technology was used appropriately.”
Hernandez Revelli also believes that, at some point, regulators may require advisors to be able to demonstrate competence in the technology they use to serve clients. Even under the CFP Board’s new standard, they should be prepared to show that they’re well trained in the technology they use to work with clients.
That’s one reason that eMoney provides training for its users and certifications—so that they can demonstrate their proficiency, said Hernandez Revelli.
“Fintech companies will start to follow suit to show that someone has cleared all of their main training aspects and are well-versed enough in the technology to use it with their clients,” she said. “This is something we’ve brought up to the CFP Board. They haven’t said that fintech needs to offer certification programs, but they have started to accept technology training for continuing education credits.”
Over time, the standard is likely to evolve, said Hernandez Revelli, and technology—and the way fintech and wealthtech firms conduct business—could be reshaped as regulators begin to target tech more specifically.
“Even though tech has become such a big part of the client relationship, at this stage everyone is still just trying to track its use,” she said. “There’s a lot of talk around data privacy, security and cybersecurity and understanding that from a financial services perspective, but right now I think that all the national and state regulators are trying to catch up and understand how technology plays a role. If technology firms are seen as part of the team servicing the client, it will be interesting to see how that plays out. Firms like ours already put features in place for data privacy and cybersecurity, but there’s not anything widespread as a standard to say that this is how firms should operate. But there probably will be.”