A battle is brewing between investment firms and fintech platforms over access to client 401(k) accounts, leaving customers locked out of their own retirement savings. Fidelity’s new policy restricts online access for those who enlist third-party advisors, sparking concerns over control and security of personal accounts.
Users of Pontera, a popular investment management platform, found themselves unable to access their Fidelity 401(k) accounts due to the new restrictions. Fidelity cited dangers of credential sharing as the reason for blocking access, leaving customers to rely on their financial advisors to manage their accounts.
Some customers, like Phoenix resident Kelly Havins, were blindsided by the lockout, having to work with their financial advisors to regain access to their accounts. Financial advisor John Rathnam expressed disbelief at the situation, noting the importance of open communication and better handling of the issue by companies involved.
Pontera characterized Fidelity’s actions as an anticompetitive power grab in a battle for consumer choice. Fidelity defended their actions, stating support for independent advisors while highlighting regulatory differences between companies like Absolute Capital and Pontera.
The ongoing feud raises concerns over data security and client choice in financial advising. Customers may benefit from personalized advice but should be aware of potential fees and the need for a fiduciary advisor acting in their best interest for managing retirement accounts.
Advisor fees may be offset by improved performance and personalized advice, but customers should carefully consider the need for professional guidance based on their individual financial situation. A fiduciary advisor can offer unbiased advice and ensure that clients’ best interests are always prioritized in managing their accounts. Fidelity Investments is cracking down on data sharing to protect clients’ information, sparking controversy with fintech advisors like Pontera. Schwab has joined Fidelity in the credential-sharing crackdown, citing cyber safety concerns. The clash highlights the importance of cybersecurity in retirement planning and managing 401(k) accounts. Forbes and Kiplinger offer insights on hiring financial advisors to manage your 401(k). Arizona’s Family and USA Today cover the unfolding drama.
Read more at Yahoo Finance: Fidelity customers lose 401(k) access. Some call it a ‘mind-boggling’ power grab. But the company says it’s about safety