Carson Group announced
several new products and services at its annual Excell conference, including a mobile-only banking service that advisers can offer clients.
Through a partnership with financial technology firm Galileo, the 108 firms supported by Carson Group will be able to offer accounts that mimic traditional checking and savings accounts with no monthly service fees.
[More: Indianapolis-based RIA managing $575 million affiliates with Ron Carson]
The first type of account, Galileo Money+ Spending, offers 1.24% annual interest and is intended for everyday purchases, paying bills, peer-to-peer money transfers and withdrawing money from ATMs. Galileo will custody the assets with Bancorp Bank, and up to $2.5 million will be insured by the Federal Deposit Insurance Corp., said Andrew Rogers, Carson Group adviser solutions manager.
The second type, Galileo Money+ Reserve, acts as a savings account and pays 2% interest. Mr. Rogers said Carson Group and Galileo are "exploring" exactly what these accounts will look like, and whether they are FDIC-insured savings accounts or a brokerage account invested in low-risk Treasury funds.
Mobile brokerage startup
Robinhood sparked a backlash late last year when it announced checking and savings, with critics arguing the fintech company wasn't being transparent enough about the fact that the accounts were not FDIC-insured. Mr. Rogers said Carson Group is making sure it avoids anything similar.
The opportunity is to help advisers capture a greater share of clients' wallets. According to Galileo CEO Clay Wilkes, bank deposits earning low or no interest total $10 trillion.
"Last year Americans paid billions in bank fees while getting the bare minimum rate of return on their deposits. How can that still be happening?" Mr. Wilkes said in a statement. "The average high-net-worth household keeps $450,000 in bank checking, savings and CDs, and keeping those accounts with brick-and-mortar banks is leaving money on the table."
It's also an opportunity for independent advisers to provide a service traditionally available only at wirehouses, Mr. Rogers said.
"If a client has checking or savings with
Bank of America, at a certain point you know they are having Merrill Lynch advisers reach out," he said.
Fintech companies are also expanding into banking services, so providing that "holistic offering" can help maintain relationships with Carson-affiliated advisers. "We'd like the visibility to see that wallet share rather than sending it to another party," Mr. Rogers said.
Carson Group is the first wealth management firm to use Galileo Money+, but Mr. Rogers expects adviser-offered bank accounts will become a trend, especially if banks keep their interest rates low.
The Carson Group accounts have no monthly service fees, but it's not clear how the service will fit into advisers' overall fee structure. Mr. Rogers said Carson Group is still undergoing "compliance and legal review" to determine the payment processing and fees.
Carson Group is aiming to launch the accounts in the third quarter.
(More: Your competition is cashing in on your clients. Stop them!)
