\n As Schwab forces clients to reset credentials to curb third-party access, the 401(k) fintech Pontera maintains “Fidelity stands alone in its decision to lock out thousands of consumers from their own accounts.”\n <\/p>\n
Schwab has asked clients to reset their login credentials, a request coming shortly after Fidelity took similar action to limit third-party vendor access to 401(k) and other customer accounts.<\/p>\n
Like Fidelity, Schwab has cited protecting client data in their attempts to limit credential sharing of a client\u2019s username and password. Third party fintech firms such as Pontera have adopted credential-sharing technology to connect selected outside advisors with held-away assets such as\u00a0 401(k) accounts from retirement plan providers.<\/p>\n
\u201cAs part of our security processes, we determined that some clients provided login access to third-party data vendors which may void policies we have in place to protect clients through our Schwab security guarantee,\u201d a Charles Schwab <\/a>spokesperson said Thursday, according to Citywire<\/a>. \u201cAs part of our data security policy, we required these clients to update their account information.\u201d<\/p>\n Anticompetitive assertions Pontera previously described Fidelity\u2019s actions as “anticompetitive” in a campaign last month that included coverage in the New York Times<\/a>. In a statement to InvestmentNews on Friday following Citywire\u2019s reporting on Schwab, a spokesperson for Pontera maintained that \u201cFidelity stands alone\u201d in its reaction to clamping down on credential sharing.\u00a0<\/p>\n \u201cFidelity stands alone in its decision to lock out thousands of consumers from their own accounts. We should all care about protecting consumers \u2013 this is why Pontera took a public stance against Fidelity locking consumers out of their accounts, which actually created risk for consumers by eliminating their digital access to their own money,\u201d a Pontera spokesperson told InvestmentNews on Friday.\u00a0<\/p>\n Platforms like Pontera \u201cuse ‘screen scraping’ technology that gives them access to a lot more client information than what’s needed for the tool to perform its function,\u201d Ben Henry-Moreland, a certified financial planner with Kitces.com<\/a>, explained to\u00a0InvestmentNews.<\/p>\n Moreland warned that third-party vendors can potentially collect and monetize client data by selling it to other parties without the client\u2019s permission. He added it is problematic for Schwab and Fidelity\u2019s approach to not distinguish between “tools that have a legitimate purpose and strong data protection policies with the potential bad actors,\u201d Moreland said.<\/p>\n “Shaky account connections and frequent re-logins have long been part of screen-scraping tools, which has accelerated the push towards API connections in recent years,\u201d Moreland said. “Hence it’s frustrating that Fidelity, if reporting is true, hasn’t worked with Pontera to establish an API connection.”<\/p>\n Last month, Pontera\u2019s CEO Yoav Zurel told InvestmentNews <\/a>that his company supplied API-based integrations with 401GO, which markets itself as a \u201ctech-forward 401(k) retirement plan provider.\u201d\u00a0<\/p>\n “We have a partnership with 401GO<\/a>, which is a much smaller competitor to Fidelity. That entire partnership is all API-based,” Zurel said. “If Fidelity wants to do that, we’re open to it … It’s really up to them. [But] they’re not answering our phone calls [or suggestions for] different solutions that we’ve provided them.”<\/p>\n
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