Why Keeping Up with Fintech Helps You Place Clients’ Interests First

By: Wayne Titus, CPA/PFS, AIFA
AMDG Financial

Wayne Titus, CPA/PFS, AIFA   

Wayne Titus, CPA/PFS, AIFA

It may not have happened to you yet, but believe me, this day is coming: A client will ask you about bitcoin. He may want to know what it is, whether he should accept it at his business, or even whether it would be a good investment for him. If that conversation were to happen today, would you know how to respond?

We see headlines about fintech and its potential to disrupt the financial services industry every day. But for many of us, those “disruptions” don’t seem to be tangible quite yet. So, we stick to what we know when it comes to making recommendations to clients. As a result, two things are possible: We run the risk of not being the best stewards we can be for our clients. And, we run the risk of losing clients to advisers who go beyond the headlines to truly understand the opportunities fintech offers.

Over the last five years, Americans have invested more than $30 billion in fintech. As fiduciaries, we have an obligation to do what’s best for our clients, so it behooves us to lead by educating ourselves so we can make informed recommendations. One way we do that is by fulfilling continuing professional development requirements for the certifications we hold. But another is to proactively seek, study and share information about important topics with the potential to impact our clients’ financial well-being, and work to expand our networks to include relevant subject-matter experts who we can rely on to support our clients’ needs.

I’m not telling you anything new here – most of us are good about fulfilling CPD requirements, and some of us are better than others at developing our networks (usually of tax planners, estate planners, etc.). What about when it comes to fintech, though? That might not seem as easy. Here are five suggestions to get you started:

1.     Follow the leaders. If you’re on social media, make it a point to follow these fintech influencers:

a.     Marc Andreessen, co-founder and partner at Andreessen Horowitz (@pmarca)

b.     Stephan Baasch, founder and CEO of XRM (@stbaasch)

c.     Nick Bilodeau, financial services executive and one of the top five most followed fintech leaders on Twitter (@FinMktg)

d.     David M. Brear, EMEA Digital Banking Director at Gartner (@davidbrear)

e.     Chris Gledhill, CEO and co-founder of SeccoBank (@cgledhill)

f.      Brett King, founder of Moven.com (@brettking)

g.     Bradley Leimer, Hear of Innovation at Santander Bank (@leimer)

h.     Jim Marous, co-publisher of The Financial Brand (@JimMarous)

i.       J.P. Nicols, co-founder at Bank Innovators Council (@JPNicols)

j.       Chris Skinner, founder and commentator on Finanser blog (@Chris_Skinner)

2.     Secret-shop some robo-advisors. Most don’t require more than an email address to set up an account. Answer the discovery questions and take a look at the recommendations. Do you agree with them? What does the robo-advisor leave out? Can it be a fiduciary? Some sites to try:

a.     Betterment.com

b.     Wealthfront.com

c.     Schwab.com

d.     WiseBanyan.com

e.     Vanguard.com

3.     Set up a bitcoin wallet and learn how it works with the blockchain. You can find instructions at https://bitcoin.org/en/getting-started, and there’s a great video explaining the blockchain on YouTube.

4.     Learn about the tax implications of bitcoin. The IRS issued guidance for virtual currency earlier this year, stating that it should be treated as property. Find a tax expert in your community who is knowledgeable about virtual currency and invite him or her out for coffee.

5.     Watch what regulators and professional bodies do. The International Organization of Securities Commissions (IOSCO) is the global securities regulator to which government agencies, like the SEC, and SROs, like FINRA, belong. Fintech is a major topic on IOSCO’s agenda in 2016, and Financial Planning Standards Board, owner of the CERTIFIED FINANCIAL PLANNER marks outside the U.S. is researching the use of fintech tools by CFP professionals to provide input to IOSCO later this year.

In the next year, we’ll be hearing more and more about the implications of fintech. Are you considering how you might use fintech in your fiduciary process or in discussions with your clients?