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The week in fintech: Robo-advisers know clients still value human advice

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Fintech Intelligence Digital Newsletter: April 2021


The week in fintech: Robo-advisers know clients still value human advice

This weekly recap features updates on bank technology, payments, online lending and other news in the financial technology space. Send tips, ideas and chatter to kate.garber@spglobal.com. For other recent fintech news, click here.

Consumers have access to a growing selection of digital wealth management technology, but it seems they still want the option to work with a human adviser.

U.S. robo-adviser Betterment LLC now gives clients access to a team of human advisers and financial experts in addition to its automated investing services.

Canadian online investment manager Wealthsimple, which announced its expansion into the U.S. market Jan. 31, also complements its digital service with traditional advice. The two-year-old company, backed by Power Financial Corp., manages about $750 million in assets in Canada and has global aspirations.

Founder and CEO Mike Katchen said he used to reject the term robo-adviser because the balance of human advice and automated investing has always been part of the company's business model. Giving clients the option to work with a live adviser is "comforting" for investors and important in terms of trust, he added. Wealthsimple will provide as little or as much human advice as a client wants, Katchen said.

Katchen considers the U.S. market "wide open" and he is confident in Wealthsimple's ability to compete since it has proven itself against some of Canada's largest, most profitable financial institutions. Its backing from Power Financial is also a major advantage, he said.

"The future of so many different industries is going to be this intersection of people and technology working together to deliver great outcomes," Katchen said.

Raymond James Financial Inc. released its own "connected advisor" digital advice platform, which uses robo-adviser-inspired technology and data to help advisers serve high-net-worth clients.

In the online lending space, Prosper Marketplace Inc. named a new CFO.

To build its online personal finance offerings, Social Finance Inc. inked a deal to acquire Delaware fintech firm Zenbanx.

In distributed ledger technology, American Express Co. joined Hyperledger Project, a cross-industry blockchain consortium.

Wells Fargo & Co. announced an agreement with Intuit Inc. that allows Wells Fargo customers using financial management systems like TurboTax Online to import their bank account information with an application-programming interface or API.

From Jan. 26 to Feb. 2, the SNL U.S. Financial Technology Index fell 1.41%.

SNL Image

S&P Global Market Intelligence released a fintech primer on four areas — digital lending, payments, blockchain and digital wealth management — of particular interest due to their rapid pace of growth, technological disruption, and regulatory and other risks. Click here to read the primer.