Can Fintechs Keep Records?

TLDR: Some fintech record keepers may be viable, while others may not be. The future of fintech record keeping depends on whether these companies have a viable business model and the ability to execute. Four major fintech record keepers include Guideline, Betterment, Human Interest, and Vestwell. Of these, only Guideline is profitable. Guideline focuses on direct-to-business clients, but is making an effort to reach out to advisors. Betterment focuses on trust and custody services and has recently switched its strategy to distribute 401(k) plans through advisors. Human Interest is currently in the midst of a fundraise and Vestwell has focused on serving advisors from its inception. The DC industry should care about these fintech record keepers because they cater to a growing need and client base, driven by state mandates and group plans. Unlike the internet 401(k) record keepers of the past, today’s fintechs leverage cleaner, more robust data, better technology, and artificial intelligence. They have also collectively raised $1.5 billion in capital.