Now that robo-advisor platforms are well established in Canada’s financial services sector, fintech companies are expected to build out their offerings and strike up more partnerships with traditional financial advisory businesses in 2018.
“There’s no going back,” says Kendra Thompson, managing director and head of global wealth management with Accenture LLP in Toronto. “As organizations [such as] banks and insurance firms add these capabilities, [fintech firms] are going to be gaining access to scale – and we expect that to be a priority [for these companies].”
Several incumbent financial services firms established partnerships with robo-advisor firms in 2017. For example, both Montreal-based National Bank of Canada and Vancouver-based Credential Financial Inc. now partner with Toronto-based Nest Wealth Asset Management Inc. National Bank’s and Credential’s financial advisors can use Nest Wealth’s business-to-business (B2B) fintech platform, Nest Wealth Pro.
Nest Wealth’s trend of establishing partnerships is expected to continue. New partnerships are anticipated in 2018, including deals with companies outside Canada.
Similarly, Toronto-based Wealthsimple Inc. intends to build on its recent partnership with Lake Success, N.Y.-based Broadridge Financial Solutions Inc. This partnership will enable the two firms to offer a B2B turnkey solution to financial services firms that desire to set up their own online advice platforms – including a digital onboarding process, automated investment management and mobile access – that can be integrated into an advisor’s business or set up as a direct-to-consumer offering.
In addition to partnerships, fintech firms aim to become a more integral part of advisors’ day-to-day investment-management business through the use of data analytics.
“You’ll continue to see [our B2B platform, Wealthsimple for Advisors] evolve,” says Dave Nugent, Wealthsimple’s chief investment officer, “and begin providing real advice within the application to augment the advisor experience by using data and leveraging the data that the technology provides to advisors to better inform the discussions advisors have with their clients.”
Specifically, fintech platforms use data analytics to send out emails to all or a segment of an advisor’s clients, based on specific events or account activity. For example, an advisor might arrange to send out communications during times of market volatility, when clients open a new account or if clients are checking their accounts more than usual.
“[For advisors to do that] for each of their clients, and to stay on top of that, is a monumental task,” says Randy Cass, founder and CEO of Nest Wealth, which also plans to offer data analytics to advisors.
Also coming in 2018 are new fintech firms that are introducing new features and capabilities. Toronto-based PW Portfolio Analytics Inc. (PWPA) provides Wealthscope.ca, an online portfolio analysis tool that could help advisors in explaining the ins and outs of a client’s portfolio.
“We’re trying to fill a niche in the robo wealth-management [market],” says Pauline Shum Nolan, CEO and co-founder of PWPA and professor of finance with York University’s Schulich School of Business. “[We want] to provide investors and advisors with more information to help both parties better understand, [provide] better advice about and be better informed about their investments and their retirement plans.”
Wealthscope.ca, expected to launch in March, is designed to provide more detailed analysis of a client’s investment portfolio, such as how investment sectors’ risks or client longevity may affect a portfolio. Free basic tools will be available on the website, but financial services firms may purchase a more in-depth, customized version via an annual subscription.
Another emerging fintech startup filling a unique niche is Toronto-based Viviplan. That platform, which launched in November, is a “robo-planner” that provides financial plans online, directly to consumers. Still, Rona Birenbaum, Viviplan’s co-founder and CEO, doesn’t rule out the possibility of advisors using the platform one day.
(Viviplan is not the first fintech platform to offer financial plans. Toronto-based Planswell Inc., which has been operating Planswell.com since November 2016, offers free financial plans to clients. The difference is that developing financial plans is Viviplan’s sole focus and source of revenue, whereas Planswell’s revenue comes from its investment, insurance and mortgage divisions.)
Viviplan offers three pricing tiers, from a basic plan that deals with specific goals to a full, comprehensive plan. Individual investors sign up and answer questions online, but the plans are developed manually.
However, Viviplan’s process should be completely digital later this year, Birenbaum says: “Our next phase of development is that the data we collect will be directly connected to the financial planning software engine.”