#570
Lowering the Drawbridge
Published:
Dec 14, 2024
Author:
Sarah Parsons Wolter
Share:
Vanguard and UBS, two heavyweights in asset management, are rethinking who qualifies for professional financial advice. Having typically offered personalized advice only to the wealthiest investors, both firms are now targeting a far broader swath of clients.
Vanguard’s plan to spin off its $900b wealth and advice division into a separate unit marks its most significant overhaul in more than a decade. They have also reduced their minimum holding threshold for personal adviser services to just $100 - making guidance more accessible for investors who, until now, may have felt shut out of traditional wealth services.
They’re not alone. UBS has announced a restructuring of its U.S. wealth business, splitting it into six divisions that cater to everyone from smaller balance accounts in its Wealth Advice Center to those with $50m or more in assets. By pursuing a national banking charter and expanding its offerings - such as loans, checking, and savings - UBS aims to diversify its revenue streams and catch up to larger rivals like Morgan Stanley and Merrill Lynch.
Taken together, these moves suggest that the old barriers in wealth management are shifting. By extending personalized advice to millions of retail investors and offering service tiers to match different asset levels, Vanguard and UBS are altering who - and how - wealth managers serve. For those once kept at arm’s length, the door to professional advice just got a whole lot easier to open.
Portfolio News
Gen extends its financial wellness offerings with the acquisition of MoneyLion - Congratulations to portfolio company MoneyLion on the announcement of the proposed acquisition of the company by Gen for $82.00 per share in cash payable at closing, representing a cash value of approximately $1b. In addition, for each share owned, MoneyLion shareholders will receive at closing one contingent value right ("CVR") that entitles the holder to a contingent payment of $23.00 in the form of shares of Gen common stock. Read more
OXIO connects wholesale network with AT&T to further power Telecom-as-a-Service expansion across the US - This collaboration will help expand the technology company’s TaaS solution across the U.S., enabling MVNOs and businesses to quickly build, manage, and launch mobile services while providing new technical capabilities and business intelligence. Read more
Flutterwave named to Fast Company’s fourth annual list of “Brands That Matter” - Flutterwave is recognized in the Global Brands category, for its ability to create an emotional connection with customers, whether by leading on the environment or pop culture, engaging B2B customers, or responding meaningfully to current events. The list highlights 129 brands and 10 CMOs of the Year that inspire genuine engagement and loyalty from their consumers—and influence new adopters to buy in. Read more
Lowering the Drawbridge
Vanguard to accelerate wealth management drive in restructuring - Vanguard is carving out its $900b wealth and advice business into a separate unit to speed investment and meet rising demand. Long a dominant participant in low-cost and index funds, Vanguard has been pushing into personalized advice since 2015 as a way of tapping new revenue sources and staying close to customers. The move comes as traditional asset managers fend off rising competition from fintechs, banks and alternative asset specialists and respond to client demand for help navigating an increasingly complex investment landscape. Read more
UBS extends its U.S. wealth arm to serve more than just the ultrarich - A restructuring of the wealth-management business is a key plank in the Swiss bank’s strategy to narrow the gap to its larger, more-profitable peers. UBS intends to further its reach beyond its traditional strength in the superrich by investing in technology and adding to its pipeline of new financial advisers. In doing so, the bank is following a playbook deployed by other large wealth managers. Read more
Industry News
Everybody loves FRED: How America fell for a data tool - Fans post about him on social media. Swag bearing his name sells out on the regular. College professors dedicate class sessions and textbook sections to him. Foreign government officials have been known to express jealousy over his skills, and one prominent economist refers to him as a “national treasure.” Meet FRED, a 33-year-old data tool from St. Louis, Mo., and the economics world’s most unlikely celebrity. Read more
Meet Gen G(ive) – the stars redefining modern philanthropy - Generation Z has been raised on a cocktail of climate panic, internet activism and viral celebrity. It will also be one of the recipients of what financial advisers call “the Great Wealth Transfer”, which will see retiring Boomers pass down trillions in assets over the next 20 years. With that inheritance, “younger folks are keen to give earlier in their lives”, says John Canady, CEO of National Philanthropic Trust UK. Read more
CFPB unveils overdraft fee regulations for large banks and credit unions - Nearly a week after a federal judge blocked a cap on “junk fees,” the Consumer Financial Protection Bureau is overhauling overdraft fee regulations for large financial institutions. Under the new regulations, affected institutions must choose one of three options for their overdraft programs: cap overdraft fees at $5; set fees to cover only costs and losses; or comply with standard lending laws, including interest rate disclosures, the release said. Read more
Why the coolest job in tech might actually be in a bank - For tech and AI talent, jobs at financial services companies are more desirable than they have ever been. Banks have been working hard to make it happen. Read more
Crypto industry hopes Trump can finally get them bank accounts - Donald Trump’s election win has spurred a rally in cryptocurrency prices and enthusiasm. Trump pledged to create a national bitcoin stockpile and form a council to set regulatory policy. Founders and others inside the crypto industry are hoping for new regulators who champion crypto assets at banks and a change to the policy that urges banks to consider a client’s reputation. Read more
Massive wealth transfer will give women $34t by 2030 - Women are controlling ever-greater sums of money around the world, setting the stage for major shifts in wealth management and philanthropy. In the US alone, McKinsey & Co. expects women to control $34t — or roughly 38% — of investable assets by 2030, close to double last year’s total. The figure was just $7.3t, or 29%, 10 years ago. Read more
KKR’s Nuttall presses case for private assets in 401(k) plans - KKR Co-Chief Executive Officer Scott Nuttall said the long-term nature of 401(k)s makes them a sensible vehicle for private-market investments. But plan administrators will need safe-harbor protection from lawsuits in order to be comfortable including alternative investments, according to Nuttall. It’s KKR’s “hope and expectation” that those protections will develop over time, he said. Read more
Goldman Sachs sees more larger-scale strategic deals in 2025 - Chief Financial Officer Dennis Coleman said at the Goldman Sachs Financial Services conference in New York that buyouts from private equity firms have been slow, but he expects activity to pick up next year. There are also expectations that less regulatory burden post elections could unlock more activity. Read more
Stablecoin issuer Circle expands offering with Binance - Binance will list more crypto trading pairs denominated in USDC, and offer special promotions tied to USDC-related trading. Binance also plans to hold USDC for its own corporate treasury, according to a statement. Read more
Wall Street wealth chiefs see hottest money in private markets - Morgan Stanley and Citi wealth executives are seeing private markets increasingly shape their businesses, marking a major shift from liquid assets that historically drove financial markets. Morgan Stanley has boosted offerings for rich clients investing in closely held businesses in recent years, largely as companies prolong their paths to initial public offerings. Citigroup’s rich clients typically now have more than a quarter of their portfolios allocated to private markets. Read more
Select Financings
Atlas Card - New York based members-only concierge service and charge card raised $27m in Series B funding led by Michael Gilroy. Read more
Ayan Capital - London based financing startup for the Islamic population raised £2.8m in new funding led by Cur8 Capital. Read more
CarDekho SEA - Singapore based auto financing service platform raised $60m in growth funding led by Navis Capital Partners. Read more
Finny - New York based prospecting system for wealth financial advisers raised $4.3m in new funding led by Maple VC. Read more
Haven1 - Decentralized blockchain raised $4.6m in new funding led by Animoca Brands. Read more
Interlace - Singapore based card issuance and digital asset management platform raised $10m in Series B funding led by Bitrock Capital. Read more
Jiko - San Francisco based platform for accessing U.S. Treasury bills raised $29m in Series C funding led by Upfront Ventures. Read more
Kast - Decentralized stablecoin based neobank raised $10m in Seed funding led by Peak XV. Read more
Lava - New York based Bitcoin lending platform raised $10m in Series A funding led by Khosla Ventures. Read more
Lyfegen - Switzerland based drug rebate management company raised $5.7m in Series A funding led by TX Ventures. Read more
Mynt - Sweden based corporate credit cards and spend management software provider raised €22m in new funding led by Vor Capital. Read more
Nao - Berlin based wealthtech company raised €3.4m in Seed funding led by Zeitgeist X Ventures. Read more
Relai - Switzerland based app for buying Bitcoin raised $12m in Series A funding led by Ego Death Capital. Read more
Sola Insurance - Atlanta based insurtech company using weather data to automate claims raised $3.7m in Seed funding led by Fintop Capital. Read more
Stigg - Israel based monetization platform for engineers raised $17.5m in Series A funding led by Red Dot Capital Partners. Read more
Superform - Decentralized on-chain wealth app raised $3m in new funding led by VanEck Ventures. Read more
Wafeq - UAE based accounting platform raised $7.5m in Series A funding led by 9900 Capital. Read more
Zopa - UK based digital bank raised £68m in growth funding led by A.P. Moller Holding. Read more
FinTech Collective Newsletter
Curated News with Context
Delivered every Monday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.