Roboadvisors – the bain of many wealth managers existence – and yet they are also so important to a growing generation of investors. But we all know there are weaknesses in these digital investment tools, too, and those were painfully pointed out yesterday (2/5/18) during the market plunge, when two of the largest roboadvisors – Betterment and Wealthfront – temporarily crashed due to excessively high trading volume by panicked investors. The firm responded to another media outlet that client accounts were never in jeopardy and remained secure, but they sure had a BUNCH of REALLY ticked off customers who couldn’t access their accounts for a period of time, and understandably so. For better of worse, this is clearly still an emerging technology, and these firms have to do a much better job of strengthening their networks to prevent these kinds of “mishaps” in the future.
“Roboadvisor investment firm Betterment experienced service interruptions yesterday when customers flocked to its site and app after the Dow fell more than 1,500 points.
The firm has attributed these interruptions to “particularly high volume,” according to a statement the company sent Bank Innovation.
Betterment said in the emailed statement.
“Due to particularly high volume, clients experienced log-in issues for approximately thirty minutes this afternoon. Accounts were secure throughout and portfolio management activities like rebalancing and tax loss harvesting continued. These issues have been resolved.”
Betterment’s site appears to be running normally at the time of this reporting, but yesterday’s thirty-minute crash led to many frustrated customers, Twitter indicated, as Bank Innovation previously reported yesterday.
While company also notes that customer accounts were ‘secure’ during this period, that might be poor comfort for consumers who were locked out of their accounts as they watched the stock market strip money from their portfolios.
Betterment was not the only roboadvisory service to experience issues yesterday—Wealthfront customers also took to Twitter to vent their feelings…”