Welcome to the July issue of the Latest News in Financial Advisor #FinTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors and wealth management!
This month’s edition kicks off with the big release of Riskalyze’s new Autopilot platform, which has morphed from “just” a robo-onboarding tool for a TAMP, into a full trading and rebalancing solution that operates as a “Model Marketplace” allowing advisors access to third-party managers and their models for a cost of 10 – 15bps. But the real news is that Riskalyze is also launching a series of its own proprietary “Risk Number Models”, which will be made available for “free” to advisors… because their clients using those models will then be invested at least in part into a series of new Riskalyze “smart beta” proprietary ETFs charging 0.50% to 0.77% expense ratios, as Riskalyze uses its big $20M Series A round to pivot from being “just” a FinTech solution into a proprietary ETF manufacturer that uses its technology to help distribute its own asset management products.
From there, the latest highlights also include a slew of new venture capital announcements, including:
- Advizr financial planning software raises a whopping $7M Series A from Franklin Templeton and SEI, despite having only 400 independent advisory firms (and reporting another 500 firms via enterprise) and what is likely no more than $1M to $2M in estimated annual revenue after 2.5 years of growth (admirable growth for a start-up, but seemingly small for the amount of capital being raised… unless the company is planning a pivot?).
- RightCapital financial planning software raises a second $1.6M seed round, as the upstart gains momentum with 800 advisory firms, a series of new RIA enterprise deals, and positive word of mouth as it earns the top User Rating from the recent T3 Tech Hub Advisor Software survey, and also a TD Ameritrade Advisor Satisfaction Award.
- Addepar raises a monstrous $140M Series D round, as the high-net-worth portfolio accounting and performance reporting tool appears to be making a high-stakes bet that the future of high-net-worth investing will increasingly be a combination of publicly-traded securities and hard-to-value private market stocks.
- Trizic adds another $2.5M seed investment from PEAK6, the owner of Apex Clearing, as Apex secures its third robo-advisor-for-advisors platform as a distribution channel to compete for RIA custody business against Schwab, Fidelity, and TD Ameritrade.
You can view analysis of these announcements and more trends in advisor technology in this month’s column, including Morningstar’s growing focus on incorporating behavioral finance into its software, a new retirement planning software solution that allows advisors to quickly create a Withdrawal Policy Statement for clients, the use of “video performance reports” to humanize the robo-advisor experience, and the news that beginning in 2019 the CFA Institute will be incorporating a wide range of FinTech topics into its CFA exam and curriculum as FinTech begins to change the very nature of financial services jobs themselves!
I hope you’re continuing to find this new column on financial advisor technology to be helpful! Please share your comments at the end and let me know what you think!
*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to TechNews@kitces.com!