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These could have similar issues with gaps in FDIC protections due to money is being “managed” by intermediaries or because of the type of account. Their fine print discloses as much.

As a sibling comment points out, Fidelity is seemingly a reputable enterprise with other business that would be adversely effected by poor management of this product and the reputation harm that would come with it.

Among other features Wealthfront are trying to manage around the $250K FDIC limit for you by moving your money into multiple insured accounts - this is probably a new area with not enough regulation.

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telgareith 2 days ago | parent [-]

Any comment on what issues there are with paying somebody to open accounts for you with, I assume- a power of attorney allowing them to do explicitly that?

At that point the only thing at risk is fraudulent use of said POA, and whatever funds are held outside of actual accounts.

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sangnoir 2 days ago | parent [-]

> At that point the only thing at risk is fraudulent use of said POA, and whatever funds are held outside of actual accounts

Which exactly the reason why the FDIC didn't intervene in the article: the Fintech startup didn't deposit the unaccounted(!) millions of customer funds into FDIC-insured accounts. The law should be tightened up to prohibit claims of FDIC protection without meeting the reporting and deposit process requirements.

	▲	telgareith 2 days ago \| parent [-]
		The two scenarios: 1) handing a business your life savings to manage, a 2) authorizing a company to manage your finances so they're in FDIC insured accounts Are completely different. There's no laws to update, and the FDIC isn't skittering out of paying on a technicality. And, frankly, if anybody reading this is looking at option #2- do yourself a favor and get an accountant and a wealth manager that both have fiduciary duties. Might as well find a lawyer as well.