Displaying items by tag: fintech
You’re unlikely to see fresh faces among fintech firms.
People person? Bummer, huh?
In any event, according to a major new report, according to a new report Exploring Fintech in 2023 by Erlang Solutions, driven by the tumultuous economic climate, for the year, half of all fintech firms have nipped hiring in the bud, reported yahoo.com.
Among a number of fintech employees, the first half of last year didn’t exactly smack of a Hallmark moment. From mortgage lenders to firms processing digital payments, across 45 companies, more than 4,000 saw their roles go down the drain.
Chomping at the bit to expand and fueled by factors like low interest rates, during the dawn of the pandemic, Fintechs flourished, according to Bloomberg.com. Since then, a plummet in earnings and slumping shares fueled a drop in earnings among firms.
“After several years of sky-high venture funding and more unicorn valuations than you can count on one hand, a lot of fintechs are being forced to mature and streamline more rapidly than they planned to, and job cuts are a quick way to do so,” said Charlotte Principato, financial services analyst at Morning Consult. “This was bound to happen at some point.”
WBI and Pacer Join Forces to Personalize Model Portfolios
Fintech firm WBI and ETF provider Pacer recently announced a strategic partnership to transform how financial advisors interact with clients to personalize and implement model portfolios. WBI offers investment technology that optimizes multi-manager portfolios that target loss or return. The platform’s interactive toolkit takes inputs from the client and assistance from an advisor and establishes client benchmarks for loss and return. The imbedded invest-tech then optimizes a portfolio to meet the client’s targets. Advisors can instantly customize the portfolio to position the client for success. Pacer is a well-known ETF firm that focuses on strategy-driven, rules-based ETFs. The two firms will work together to promote the targeted loss portfolios of WBI’s technology platform. WBI and Pacer will also look for other opportunities to partner on model construction. Matt Schreiber, Co-CEO at WBI had this to say about the partnership, "WBI is excited to work with Pacer. Their rules-based ETF offerings seek to produce strong risk-adjusted returns which are favored by the platform’s optimization engine. This partnership allows both parties to build on the momentum around our innovative products and shared mission to help improve investor outcomes."
Finsum:Fintech firm WBI and ETF provider Pacer are joining forces to promote WBI’s targeted loss portfolios that advisers can construct for clients.
Direct Indexing ESG Fintech Raises $50 Million
Ethic, which is an ESG investing fintech that offers direct indexing to investment advisors, has raised $50m in a Series C funding round. Ethic is available to advisors that use the custody services of Fidelity, Charles Schwab, U.S. Bank, Northern Trust, Morgan Stanley, or Pershing. The company offers custom direct indexing portfolios that reflect a client’s values, financial goals, and tax preferences. The firm also offers impact reporting and educational materials. The asset manager, which focuses on socially responsible portfolios, currently has over $2 billion in assets. The latest funding round was led by Jordan Park Group. Other firms involved in the funding round include UBS’s venture arm, UBS Next, and existing investors such as Oak HC/FT, Nyca Partners, Sound Ventures, Urban Innovation Fund, and Kapor Capital. In an announcement, the firm stated that the new capital will “support Ethic’s ambitious growth plans, including expansion into new markets and products, and continued investments in its platform experience.”
Finsum:Direct indexing firm Ethic raised $50 million in a new funding round to expand into new markets and products.
Fintech and the Race to Direct Indexing
You have probably seen a half dozen headlines in the last six months (at least) that point to a mainstream financial firm buying out a new fintech platform for their custom/direct indexing technology. There has been extreme demand for custom, tax-efficient, solutions for portfolios that give the flexibility, formally reserved for the ultra-wealthy, for much lower initial investments. The biggest advantage is tax alpha which is generated by reducing taxable liabilities through loss harvesting. However, that was really only possible with extremely high net worth as the active management was just too costly. Firms like BlackRock, JPMorgan, and Vanguard have snatched up DI solutions for other reasons as well such as ESG which gives much more flexibility to their clients.
Finsum: The race for low fee/ low initial investment DI is on, but its shape will change as the goldilocks solution has yet to be found.
Fintech Model Portfolios coming from Principal Investors
Model portfolios are a great tool to increase flexibility, growth, and optimization, and Principal is launching almost 40 new products in response to demand. Jill Brown, director of their U.S. Wealth Platform says they will give solutions that are easy to manage and deliver results to clients. These portfolios will leverage the full power of their fintech platform to help advisors hit their goals. The end products will include mutual funds and ETFs and will allow clients to personalize their portfolios with different risk-based suites. Capital appreciation will be the main goal of the three of the core suites, while total returns will be the main goal of the last suite.
Finsum: Third-party model portfolios give tailored solutions, and make customization easier than ever.