A busy week in Wealthtech kicked off with Financial Planning’s virtual InvestConnect conference on Monday. If you were unable to attend, we’ve got you covered with on-demand videos and written recaps. Some sessions, such as my fireside chat with Fidelity Investments head of integration solutions Tricia Haskins, will soon be available in our ongoing Leaders series.
Beyond the Wealthtech conference, some trouble is brewing in robo-land. First, the SEC issued a risk alert that most digital advisors — both startups and tech used by traditional financial services firms — are falling short of compliance requirements. Then there was a report that Wealthfront is exploring a sale for $1.5 billion, and our friends over at Citywire broke the news that Capital One is looking to offload its hybrid digital advice business, formerly known as United Income, after just two years.
The obvious question is: Who even wants to buy them? Much has been written about the high cost of client acquisition for robo startups, but if a company with as big of a built-in customer base as Capital One can’t make it work, who can? And with most financial institutions already owning a digital advisor, who is going to pay $1.5 billion for Wealthfront? My bet is some large brokerage will absorb the assets and use the technology to leap ahead what they currently have, though some are guessing it could be a chance for a big tech firm (Alphabet/Google? Facebook/Meta?) to leap into the investing business.
I’m skeptical of that — Big Tech has enough issues with Congress before getting financial regulators involved — but this all shows that the digital advice game truly isn’t a Field of Dreams exercise. You can’t just build it and expect investors will come. It makes Betterment’s years-ago decision to work with advisors — rather than against them — and get into 401(k) recordkeeping seem even smarter.
Direct-to-consumer tech is challenging, but the for-advisors Wealthtech market continues to boom. For example, InvestCloud, a rapidly growing advisor tech platform, began pursuing an IPO that could value it as high as $10 billion.

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