Betterment suspends trading post Brexit, TD Ameritrade Institutional Tech Summit, and more

One take.

Boom! On today’s broadcast, Betterment takes heatfor suspending customer trades, TD Ameritrade Institutional hosts its annual technologysummit, and more.

So get ready, FPPad Bits and Bytes beginsnow! Hey everyone, I’m Bill Winterberg, thankyou for joining me for this week’s advisor technology news broadcast.

Today's episode is brought to you by OrionAdvisor Services, the industry’s premier portfolio accounting service provider foradvisors.

Orion integrates with several automated investment platforms, but you’re not sureif now the right time to add a robo element to your firm.

Find out if you’re ready,or not, to add your own solution by downloading a free copy of the Orion pre-robo checklisttoday by visiting fppad.


This week’s top story is all about Betterment,because in the wake of last week’s Brexit vote, the company notified financial advisorson the Betterment Institutional platform that it had suspended trading from 10am to 12pmEastern on June 24th, citing their expectation of “highly unpredictable volatility,”a decision which has triggered all sorts of discussions across the investment community.

First, a primer.

Betterment uses ETFs forall customer portfolios, and when trading gets volatile, ETF pricing can get significantlydisconnected from the value of the ETF’s underlying securities.

Remember the flashcrash of August 2015? ETF pricing was all over the map, especially for lightly tradedand illiquid ETFs.

So, when Betterment’s team identified undesirabletrading conditions, they suspend all trading.

And as a discretionary advisor to retail customers,they can totally do that.

It’s disclosed right there on page 65 of the retail agreement,which every customer acknowledges they read by checking the I agree box next to the SignUp button.

But the exact same language is on page 70of the Institutional Agreement, and I couldn’t find anything that said trading *authorizedby the Advisor* would be treated any differently.

In the RIABiz coverage of the event, MichaelKitces said that treating financial advisors the same as clients “creates operationalchannel conflicts.

” And there’s the rub.

If you’re an advisorusing Betterment Institutional for your clients, when you authorize trades, you need to knowwhether those trades will be subject to Betterment’s suspension criteria.

But that’s one risk of using ETFs in BettermentInstitutional, or any automated investment service for that matter.

Sometimes the pricinggets out of whack, and you won’t always know in advance when that happens.

So on a volatile day, you need to understandthat, as of today, your trade authorizations might not be processed right away, and yourtrades will be in limbo for who knows how long until Betterment decides it’s ok toresume trading.

I suspect that policy might soon be changing for Betterment Institutionalusers.

Also, be sure to watch Betterment CEO JonStein’s recent interview with CNBC that I embedded on the website, along with linksto several stories covering the trading suspension, so be sure to get all the details over atfppad.


My next story highlights TD Ameritrade Institutional,as I attended the custodian’s 7th annual technology summit in Dallas, and I made avlog about it so you can get a glimpse of what the event is like, so be sure to checkit out.

At the summit, executives offered updateson Veo Open Access, which now features 104 integrated solution providers, announced theintroduction of Veo Advanced Alerts, and reiterated the pending release of the Veo One platformfor late fall of this year.

There weren’t very many advisor dashboardsavailable when Veo One was first announced in January of last year, but recently severaltech providers have invested heavily in their own all-in-one dashboards, with notable nameslike Envestnet|Tamarac, supported by Envestnet’s acquisitions of Finance Logix and Yodlee,Salesforce, with its rollout of Financial Services Cloud happening now, and Fidelity’sWealthscape platform anticipated by the end of this year, which will include technologyfrom the eMoney acquisition.

So Veo One will go up against some stiff competitionwhen it is rolled out later this year, so I recommend you make plans now to refreshwhat you know about the dashboard options for your business in the second half of thisyear.

I’ve linked to the press release about VeoOne on the website, along with stories on Riskalyze, Junxure, Vestorly, and more thatdidn’t make this week’s broadcast, so visit fppad.

Com/190 to stay caught up on thelatest financial technology news.

Remember, Bits and Bytes exists because ofthe support of our sponsors, so be sure to visit Orion Advisor Services and downloadtheir free pre-robo checklist.

Find out if your business is ready to add its own robosolution by visiting fppad.


Now for this week’s poll: Would you usea technology dashboard provided by your custodian, or would you rather use one from a third partytechnology provider? Let me know by choosing an answer embeddedright over here if you’re watching this video on YouTube.

Thank you so much for watching, I'm Bill Winterberg,see you next time!.

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Betterment suspends trading post Brexit, TD Ameritrade Institutional Tech Summit, and more

Visit for all the links to this week's top stories.

On today’s broadcast, Betterment takes heat for suspending customer trades, TD Ameritrade Institutional hosts its annual technology summit, and more.

So get ready, FPPad Bits and Bytes begins now!