RIABlitz: Vanguard technology • Pontera rebounds • Ex-HiddenLever's exec success • BlackRock rocked • Vivek's crypto • WF dunks SF? • Betterment dry option• Vestwell poached

RIABlitz: Quick Hits

The Vanguard Group just announced it's opening a second tech campus next year, six months after it revealed its first.

Vanguard begins 2025 headed by a new CEO, Salim Ramji, who grew up in Canada with East Indian roots. He will base its new tech center in Hyderabad, India – a city often labeled India's Silicon Valley. See: Vanguard to launch first tech hub in '25.

The new campus will “enable us to directly access talent,” Global Chief Information Officer Nitin Tandon said in the release.

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Pontera is signing new business left, right, and center, despite its epic hobbling by the nation's largest 401(k) plan provider.

The New York City 401(k) account manager for RIAs just signed its fourth major deal since Fidelity, in September, banned Pontera's use of ‘credential sharing’ to scrape data from Fidelity's servers and 401(k) accounts. See: Fidelity bans Pontera, blames password-sharing business model.

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HiddenLevers co-founder Praveen Ghanta's new business just hit $10 million in annual revenue, trebling last year's total.

Ghanta, who founded Fraction.work one year after selling HiddenLevers to Orion, attributes its success to a “fractional” hiring model. It hires executives and developers on a "gig-economy" basis – with a US timezone-only policy and control of project management.

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BlackRock has quit the Net-Zero Asset Managers (NZAM) initiative, citing political and legal pressure, two years after Vanguard Group judged it was better out than in.

The New York City asset management giant also says – as Vanguard did in 2022 – that political and investor "confusion" drove its exit. Both firms have faced sustained pressure to steer clear of 'woke' politics, pro-climate protection initiatives included. See: Vanguard's epic ESG flip-flop.

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Vivek Ramaswamy's Strive Asset Management just jumped on the Bitcoin bandwagon, filing for an ETF that will invest in debt issued by companies with big exposure to the cryptocurrency. 

Based in New York City, Strive has launched an "anti-woke" ETF business, a 401(k) unit, and an RIA, since its 2022-founding. See: JD Vance joins MAGA backers, including mentor Peter Thiel, to raise $30 million for Vivek Ramaswamy's RIA rollup startup.

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BlackRock just pleaded for more time to negotiate with the Federal Deposit Insurance Corporation (FDIC) over how much oversight it will give the regulator in exchange for permission to continue holding larger than 10% stakes in US-based banks.

BlackRock is requesting a new deadline of March 31, citing the regulator's “inconsistent and uncertain requirements.” The request was contained in a Jan. 9 letter to the FDIC penned by BlackRock's head of U.S. regulatory affairs, Ben Tecmire.

The FDIC has already moved its deadline for BlackRock on three separate occasions. See: In game of chicken with the FDIC, feisty BlackRock refuses to join Vanguard's cave to passivity.

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Could Wells Fargo soon swap San Francisco for Texas? It has put its SF headquarters up for sale and next year it will open a $455 million, 850,000-square-foot “crown jewel” campus in Irving, Texas, a Dallas suburb.

The banking giant, with roughly $2 trillion in custodied assets, insists it is going nowhere. But the sale will cut its San Francisco office footprint to 681,000 square feet from 1.6 million, four years ago, the San Francisco Business News reports.

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Peak6 Investments, owner of start-up RIA custodian, Apex Fintech Solutions, has just moved its HQ to Austin, Texas.

The 28-year-old private equity firm swapped its Chicago base for Austin on Jan. 1. Apex has been based in Dallas, since 2012. See: Apex eliminates Jon Patullo's position.

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Betterment just got called out by advisors for making it harder to move money elsewhere.

The New York City robo-advisor, known for "frictionless" technology, is under fire for requiring old-fashioned “medallion signatures” before advisors and clients can move funds from a Betterment custodied IRA account.

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Charles Schwab & Co. has crossed a digital Rubicon of its own.

RIAs and clients can now digitally request checkbooks for all account types, without the need for ‘wet’ real-world signatures.

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Vestwell just lost one of its first ten employees to a JPMorgan start-up 401(k) business.

The hip New York City retirement recordkeeper for micro investors will now have to live without former head of business development John Forstater, who is now managing director at the wirehouse's 2020-founded start-up unit Everyday 401(k).

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Dynasty Financial Partners just poached a nearly 20-year Raymond James veteran to help make it easier for RIAs to get up and running on its outsourcing platform.

The Saint Petersburg, Fla. RIA services platform appointed Lindsey Strawhecker as its first director of transitions on Jan. 6. Most recently, she served as Raymond James' senior regional manager for transition management. See: Dynasty Financial rushes to boost internal goals after it grew 47%.

RIABlitz: Deep dives

The Vanguard Group is doubling down – literally – on its CEO's plan to ditch the firm's “tech-laggard” tag.

The Malvern, Pa., giant just announced it's opening a second tech campus next year, six months after it revealed its first. See: Vanguard to launch first tech hub in '25.

The move follows new CEO Salim Ramji's assertion that Vanguard will revamp its software so well that it will “match and then exceed competitors' capabilities.” See: In first 100 days, Salim Ramji sets Vanguard a bold challenge – stop being bad at IT.

Opening later this year, Vanguard will base its new tech center in Hyderabad, India – a city often labeled India's Silicon Valley. 

Vanguard's head of personal investor digital channels engineering, Venkatesh Natarajan, will run the new campus, which he expects will prove “central to Vanguard's ability to adopt new and innovative technology," according to the linked release. 

Hyderabad's reputation dovetails neatly with North Carolina's famed “Research Triangle,” anchored by Raleigh, Durham, and Chapel Hill. Vanguard previously announced it would open its first tech "hub" there. 

Its location could also help Vanguard avoid any fallout from the ongoing H-1B debate between President Trump's ‘MAGA’ base, who oppose importing cheaper skilled labor; and his oligarch backers, who want to make it easier to hire tech workers, especially from India.

The new campus will "enable us to directly access talent through a lasting Vanguard presence, and increase the proportion of technology crew in our global workforce," says Vanguard global chief information officer Nitin Tandon, in the release.

Pontera keeps signing, despite supposed Fidelity hobbling

Pontera is signing new business left, right, and center, despite Fidelity's epic hobbling, and the arrival of at least two competing start-ups – one of which has a data deal with the nation's largest 401(k) plan provider.

Pontera, the New York City 401(k) account manager for RIAs, just signed its fourth major deal since Fidelity's September ban on Pontera's data scraping of servers and 401(k) accounts through ‘credential sharing’. See: Fidelity bans Pontera, blames password-sharing business model.

But the 2012-founded firm faces new competition from start-ups Future Capital and Absolute Capital, which has a data access deal with Fidelity. See: Future Capital wins Black Diamond deal.

HighTower Advisors, the $166 billion AUM RIA roll-up, is the latest firm to use Pontera's software to manage held-away retirement assets, following a January-announced deal.

Pontera signed deals with LPL OSJ, Independent Advisor Alliance in December, Oppenheimer in November, and Commonwealth Financial Network in October.

Pontera's winning streak challenges the industry expectation that Fidelity's ban would irreparably hurt its business model.

Ghanta's tripling boost

HiddenLevers co-founder Praveen Ghanta's new business just hit $10 million of annual revenue, trebling last year's total.

Ghanta, who founded Fraction.work in 2021-- one year after selling HiddenLevers to Orion -- attributes its success to its “fractional” hiring model – it hires executives and developers on a ‘gig-economy’ basis – with a US timezone-only policy and control of project management.

Fraction has already helped develop software for more than 17 RIA industry firms, including Potomac, Advisor Brand Builder, Advice Cloud, Quik and AssetBook. See: Manish Khatta joins forces with HiddenLevers co-founder Praveen Ghanta to launch GuardRails, a risk analysis play.

“Our wealth management and wealthtech footprint has expanded,” says Ghanta, in a LinkedIn exchange.

Raj Udeshi, who co-founded HiddenLevers with Ghanta in 2009, left the financial services business to become a peanut farmer in 2022. See: The RIA world's provacateur, Raj Udeshi, left Orion to go ‘nuts’.

'Woke confusion’ leads to BlackRock NZAM exit

BlackRock has quit the Net-Zero Asset Managers (NZAM) initiative, citing political and legal pressure, two years after Vanguard Group judged it was better out than in.

The New York City asset management giant also says – as Vanguard did in 2022 – that political and investor "confusion" drove its exit. Both firms have faced sustained pressure from Republican governors to steer clear of 'woke' politics, pro-climate protection initiatives included. See: Vanguard's epic ESG flip-flop.

Of the three largest asset managers*, only State Street remains an NZAM member; it declined to comment on future membership. See: Vanguard scores quick pact with FDIC.

“State Street Global Advisors remains a member," says a spokesman, via email.

Ramaswamy's ‘anti-woke’ RIA gets into Bitcoin

Vivek Ramaswamy's Strive Asset Management just jumped on the Bitcoin bandwagon, filing for a “thematic” Bitcoin ETF that will invest in debt issued by companies with big exposure to the cryptocurrency. 

Based in New York City, Strive has launched an “anti-woke” ETF business, a 401(k) unit, and an RIA since its 2022 founding. See: JD Vance joins MAGA backers, including mentor Peter Thiel, to raise $30 million for Vivek Ramaswamy's RIA roll-up startup.

Ramaswamy recused himself from Strive's day-to-day operations in April 2023, to run for President. 

Now a key ally of President-elect, Donald Trump, who has declared himself the crypto president, Ramaswamy recently riled the ‘MAGA’ base in a dispute over H-1B Visas. See: Vivek Ramaswamy sells anti-ESG to RIAs to nab quick $1 billion of AUM.

BlackRock begs for more time in FDIC negotiations

BlackRock just pleaded for more time to negotiate with the Federal Deposit Insurance Corporation (FDIC) over how much oversight it will give the regulator. In exchange, it wants permission to hold larger than 10% stakes in US federally chartered banks.

The FDIC has already moved its deadline for BlackRock on three separate occasions. See: In game of chicken with the FDIC, feisty BlackRock refuses to join Vanguard's cave to passivity.

BlackRock is requesting a new Mar. 31 deadline, citing the regulator's “inconsistent and uncertain requirements.” It requested the delay in a Jan. 9 letter, penned by BlackRock's head of U.S. regulatory affairs, Ben Tecmire.

Should the FDIC withdraw its permission for BlackRock to hold stakes greater than 10% in multiple US banks, it would hamper BlackRock funds' ability to accurately track market indices, the company said.

Two tickets for Texas

Could Wells Fargo soon swap San Francisco for Texas? It put its SF headquarters up for sale last year, 12 months before it opens a $455 million 850,000 square foot "crown jewel" campus in Irving, Texas, a Dallas suburb.

Wells, with roughly $2 trillion of custodied assets, insists it is going nowhere, but the sale will cut its San Francisco office space to 681,000 square feet from 1.6 million square feet, four years ago, the San Francisco Business News reports.

Charles Schwab & Co. abandoned its long-time San Francisco headquarters for Westlake, Texas in 2019. See: Schwab's headquarters shift to Texas amid TD Ameritrade merger seems to please nobody -- outside the Dallas Chamber of Commerce -- Omaha feels especially omitted

Wells Fargo CEO Charlie Scharf already works from New York City, and none of the bank's 15-strong operations committee are based in San Francisco. See: Wells Fargo is 'actively' preparing RIA custody unit, it says.
 

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Meanwhile, Peak6 Investments, owner of start-up RIA custodian, Apex Fintech Solutions, has just moved its HQ to Austin, Texas.

Peak6, a 28-year-old private equity firm, swapped its Chicago base for Austin, on Jan. 1, stating that most of its staff, and the "cornerstone" of its success has been Texas-based for “over a decade.” Apex has been based in Dallas, Texas, since 2012. See: Apex eliminates Jon Patullo's position.

Digital dilemmas

Betterment just got called out by advisors for making it harder to move money elsewhere.

The New York City robo-advisor, known for ‘frictionless’ technology, is under fire for requiring old-fashioned “medallion signatures,” before advisors and clients can move funds from a Betterment-custodied IRA account.

“None of the large custodians require the Medallion. It's a relic … a tactic to hinder folks from doing what they want with their money,” says DJ Hunt, senior Financial Advisor at $1 billion of AUM RIA Moisand Fitzgerald Tamayo, in a LinkedIn post.

The “medallion process [is] used in very limited scenarios to ensure the security of our clients. It can almost always be avoided using some other method of identity verification,” says a Betterment spokesperson, via email.

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Meanwhile, Charles Schwab & co. has crossed a digital Rubicon of its own.

RIAs and clients can now digitally request checkbooks for all account types, without the need for ‘wet’ real-world signatures.

Who goes there?

Vestwell just lost one of its first ten employees to a JP Morgan start-up 401(k) business.

The hip New York City retirement recordkeeper for micro investors will now have to live without a former head of business development, John Forstater, who is now managing director at the wirehouse's 2020-founded start-up unit, Everyday 401(k).

In a LinkedIn post, Forstater says he is “forever grateful” to the 2016-founded Vestwell for “eight amazing years.” His new employer partnered with Vestwell in May 2023. See: Christmas came early at Vestwell.

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Dynasty Financial Partners just poached a nearly 20-year Raymond James veteran to help make it easier for RIAs to get up and running on its outsourcing platform.

The Saint Petersburg, Fla. RIA services platform appointed Lindsey Strawhecker as its first director of transitions, on Jan. 6. Most recently, she served as Raymond James' senior regional manager for transition management. See: Dynasty Financial rushes to boost internal goals after it grew 47%.

* The six largest US banks, including Goldman Sachs, JPMorgan, and Wells Fargo all recently quit an environmental, social and governance (ESG) banking group, which is similar to NZAM.