Investments in fintech hit an all-time high last year. Companies like Wealthfront are now managing assets north of $2B and reached these heights in just three years time. It’s clear the confidence in startup financial services companies is growing.

If traditional investment firms want to compete and maintain their stong asset bases, they’ll need to start integrating, acquiring, or building fintech capabilities into their current offerings. However, it’s surprising to see — at this point — how far behind their services lag compared to what smaller fintech firms provide.

Since the launch of Etrade, traditional wealth management firms like Morgan Stanley, Merrill Lynch, and even the more consumer friendly Fidelity and Schwab have been either too resistant or too slow to provide similar capabilities that disruptive startups have brought to consumers. Automated investment management’s rise in popularity but stagnation in traditional companies is yet another example of what they could and should provide through digital.

I’ve been investing in the stock market since the pre-online trading days. I have used every firm from all the variations of Smith Barney — now integrated into Morgan Stanley — to Etrade and even the early social investing platform Covestor. Ultimately, I found most services’ best practices lagged behind what was possible in digital experience and capabilities.



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