Who will have access to my personal information, and what will they do with it? Even if I trust Wells Fargo and Blackstone, they may spin off my personal data to some other company.
Envestnet is a “turnkey asset management platform,” providing tools to help investors manage their money. Wells Fargo’s deal means they’ll now provide their customers with Envestnet apps for spending, saving and planning.
Granted, tools like these are invaluable for keeping track of personal budget and investments, helping small investors become more financially literate. However, Envestnet also sells its data to third party brokers who then may provide the data to other financial entities and investors.
The apps are “free,” but not without cost: we are paying by sharing our financial data. What’s worrisome is the thought of being turned down for a loan or insurance or a job because of what your data may predict about your profile.
If you want to protect your financial data from being shared by your bank, you’ll have to look further than Wells Fargo. Envestnet has made deals in the last two years with Schwab, Citi, and J.P. Morgan as well.
Investment News warns: “[The] industry needs to determine sooner rather than later the best ways to ensure that sensitive consumer information remains protected and that consumers are aware of how data is being used and sold.”
Blackstone’s purchase of Ancestry.com is another case in point. Blackstone Group Inc is arguably the leader in private equity placement. It buys and sells private companies using investor money and debt.
“They own health care companies. They own insurance companies. They own retail companies,” explains Michael Roberts, Wharton finance professor. “So they can identify spending behavior, health care expenses, actual health outcomes for individuals.”
Blackstone sees big dollar signs in genetic data, having paid $4.7 billion for Ancestry. The same month Blackstone acquired Ancestry.com, l revealed a U.S. Securities and Exchange Commission (SEC) filing showing Blackstone would begin to “package and sell data” from the companies it acquires as a fresh revenue stream.
A Blackstone spokesperson pledges Ancestry’s data won’t be accessible to Blackstone, its stakeholders, or other companies owned by them.
An email to Neo.Life’s Matthew Ponsford said the company is “deeply committed to ensuring that Ancestry has world-class consumer privacy” and the data will “never be part of the effort detailed in the SEC filings. Not just the initial sale.”
Customers can pull their data off the site if they don’t feel secure. How customers can verify their data is deleted, I don’t know. HIPAA, the Health Insurance Portability and Accountability Act, has been working to protect our medical privacy since 1996. However, HIPAA does not apply to companies like Blackstone or Ancestry.
Further, Ancestry isn’t the only company finding profit in genetic information. The other big player 23andMe negotiated a four-year deal with GlaxoSmithKline in 2018 to tackle diseases and work on new drugs. After giving customers the opportunity to opt out, 23andMe is sharing de-identified data.
Nevertheless, “DNA data, by its very nature, cannot be anonymized,” according to Pam Dixon, executive director of the World Privacy Forum. “It is always going to maintain some semblance of identifiability.”
Best practice is to check the privacy settings on any site with whom you share information: your bank or brokerage, an ancestry company, your medical clinic and insurance company. Choose the strictest privacy allowed.
For-profit companies are in business for a profit, not to debate the ethics of sharing your genetic and personal data with companies who may use it to your detriment.
— Karen Telleen-Lawton serves seniors and pre-seniors as the principal of Decisive Path Fee-Only Financial Advisory in Santa Barbara. You can reach her with your financial planning questions at [email protected]. Click here to read previous columns. The opinions expressed are her own.