What to make of Fidelity Investments paying $250 million out of the blue for eMoney

First off, eMoney was maybe at best a $40million in revenue company. That puts the multiple much higher. Second, they were put up for sale by Guardian. They went to Investment Bankers and said send me the best deal, auction like. Third, Neesha at Schwab is correct, Fidelity is playing catch up. Fourth, Fidelity needed a client dashboard and the planning tool was a benefit. Schwab did something like 100,000 or more financial plans last year. Finally, the data is Fidelity’s now. There’s nothing unethical about them looking at all the data that they just purchased. Take it as opinion or an industry expert giving his two cents.

The best part about all of this is eventually the client will win in the end. And I believe that’s what we’re in business for, to help the client.

InvestorI,

Thanks for all of those thoughts.

When you say that Neesha is right in her assertion that Fidelity is 20 years behind, do you mean
in terms of planning software or in terms of having an eMoney-like view of assets?

Thanks,

Brooke

Brooke,
I wouldn’t agree that Fidelity is 20 years behind, I believe they are only behind on the robo feature and aggregation. They have to play catch up with Schwab and Vangaurd. The relationship with Betterment Institutional and Jemstep help, but it’s not the same. They need to turn eMoney into that robo for retail clients and offer their funds at a zero trade or lower the expense ratio. Also, I believe the Wealthfronts and others will struggle to compete long term with Schwab and Vanguard. Only time will tell. Anyone have a crystal ball?

Thanks,
Investor1