Willing Fiduciary

With whom do you work?

Category: FinTech

A Robo-advisor is not a Fiduciary

A robo-advisor cannot put “its client’s interests before their own” because it has no interests.

Goals are determined by a series of questions and responses are driven by algorithms. It is algorithmic suitability.

There is no subject master expertise, insights or wisdom, and there is certainly nothing proactively propulsive with regards to future market activities and/or change preemption.  There is no behavioral coaching.

Trust is a perception based on rational reflections about the future. Can a Robo-advisor have rational reflections about the future or just statistic generalities?

There is nothing wrong with a Robo-advisor.  However, before getting what you pay for you have to know what to pay for.


Fiduciary Modeling

Somewhere along the line, our society became more impressed with mathematical rigor and modeling than actually accomplishing goals. Most people would rather spend time choosing and maintaining a comfortable lifestyle during their goal journey than deciphering a methodology.

Are the assumptions true or were they necessary to get a solution? Whose solution? Did those 20 pages of disclaimers materialize for the benefit of the client or the firm that produced it?

Fiduciary Modeling includes giving the client the ability to learn how to apply more subjectivity with regards to what they want to accomplish in their life. The path is personal and must be visible not trapped in someone else’s algorithm.

The FinTech Fiduciary

Many participants in the financial services industry utilize FinTech for financial planning, analytics, client reporting, portfolio management, etc. All technology, however, leaves a footprint of evidence as to how it’s being applied. If one is in the business of giving impartial and transparent advice, then there is no better median of making the evidence visible than FinTech.

Being committed to providing advice in a client’s best interest is one facet of having the legal responsibility of a Fiduciary. Often overlooked is the matter of oversight of service providers. The supervision of partners in the Fiduciary process can be evident if financial technology is properly applied to the process. Insofar as applying technology to satisfy the DOL’s Fiduciary Duty Rule, that may mean identifying the roles, actions, and strategies of Record-keepers, Administrators, Auditors, Investment Advisors, and Attorneys by ledgering all interactions.

A FinTech Fiduciary with optimized FinTech has an elevated cognizance of oversight.

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