Riskalyze Conference

25 Things I Learned at the Riskalyze #FISummit

Conference season is upon us and as someone who is a regular attendee at numerous events, I thought I had become jaded and that no conference could really excite me.

That was before I attended Riskalyze’s inaugural conference, which they dubbed the “Fearless Investing Summit” #FISummit.  Riskalyze’s CEO, Aaron Klein, graciously invited me to attend and participate in a panel discussion on “Wrangling RIA’s Technology Stack”.

FISummit was definitely one of the most well-planned and executed events I have been to.  It was not only a jammed-packed schedule of speakers, discussion panels and breakout sessions, but held at a gorgeous location at the Hyatt Regency Resort right on shores of Lake Tahoe.

Jason makes an excellent point here about the breadth of geographic locations that advisors traveled from in order to attend this conference.  And this is for a software firm that only launched their flagship product four years ago and now claims over 22,000 financial advisors as customers. Impressive!

Disclaimer: Before we get started, I’d like to state Riskalyze has never been a client of my consulting firm, Ezra Group, and I have no business relationship with them.  Anything I write here is my unbiased opinion.

This post covers the parts of the conference listed below.  I’ve intentionally left out my panel discussion on RIA technology, the Women’s Advisor Panel and the Vestwell partnership announcement, all of which will I will be covering in future posts.

  • Behavioral Finance – Dr. Daniel Crosby
  • Redtail Speaks – new compliant, text messaging feature in CRM
  • Aaron Klein’s Keynote & Many Announcements

Behavioral Finance

Dr. Daniel Crosby is an engaging speaker on how the brain works and how it impacts financial decisions.  All interesting points that puts your own and your clients’ decisions in a different light when you consider how the human brain operates and processes information.


Crosby uses a bit of humor and great analogies that stick with you, like the one in the tweet above. He pointed out that our brains are analog devices trying to make sense of the increasingly digital world around us.

As Crosby was saying this, it didn’t sound quite right to me since I always thought of the brain as digital, although more aptly described by author Scott Adams as a “moist computer system you can program”.

However, according to Paul King, formerly of the UC Berkeley Redwood Center for Theoretical Neuroscience, who is more qualified to answer this question that myself, Adams or Crosby, makes the case that the brain operates in ways that are both digital and analog: 

…the signals sent around the brain are “either-or” states that are similar to binary. A neuron fires or it does not. These all-or-nothing pulses are the basic language of the brain. So in this sense, the brain is computing using something like binary signals. Instead of 1s and 0s, or “on” and “off”, the brain uses “spike” or “no spike” (referring to the firing of a neuron).

Internal to the neuron, everything works via biochemical pathways, which are somewhat similar to analog. Neurons also perform internal electrical signal integration in an analog fashion. Analogously, the digital logic gates used by computers are implemented internally using transistors and resistors, which are also analog.

A number of points he raised reminded me of Thinking, Fast and Slow by Daniel Kahneman.  if you’re not big on reading, you can watch this video for a quick overview of the different sections of your mind that Kahneman dubs System 1 and System 2.

Another fantastic Crosby quote that I think everyone can relate to. I’m sure a lot of lottery winners feel this way.

I didn’t catch the source of this research, but if it is true, it’s an overwhelmingly positive stat that should be broadly disseminated.  People should be running, not walking, to their nearest financial advisor.

Redtail Speaks

Not wanting to belabor the point, but they had a LOT of advisors here for their very first conference.

This sounds like a game-changer to me. Another communication channel to connect advisors with their clients. Might be too late to entice Millennials, who have mostly switched to messaging apps such as WhatsApp, Viber or Line.

These are two of the reasons why I think this is so important.  (Almost) everyone texts.  Certainly a huge percentage of every advisor’s clients do.  And they are increasing their texting and reducing other forms including phone and email.  So, why not give people what they want?  And with a 99% open rate, you’re guaranteed that your client is reading your message almost immediately.

This is a HUGE red flag and probably one of the drivers behind Redtail’s launch.

I’m not surprised they’re begging for a solution considering the statistic on lack of compliance above.

I’m not sure how he did this, but Ryan managed to get someone to deliver a taco to him in the middle of the conference.

Aaron Klein’s Keynote

Klein’s keynote was filled with product announcements, as would be expected at a software company conference.  But just to put things in context, when Riskalyze launched in 2013 they just had a risk profiling tool. Over the next three years they added a host of other products and services, including:

  • Lead capture
  • Stress tests
  • Retirement maps
  • Investor Policy Statements
  • Meetings
  • Check-ins
  • Numerous third party Integrations
  • Premier level client engagement tools:
    • Client Dashboard
    • Retirement Plans – matching participants with retirement plan elections
    • Electronic Account Opening – TD Ameritrade and Trust Company of America
    • Asset sync – Through data aggregation provided by Quovo
    • Data sharing – For multi-advisor firms

“Fearless Investing” was the theme for this conference.  Excellent messaging that promotes their product as well as positions them as a must-have tool to enable advisors to protect their clients.

Klein’s comment on behavioral finance.  Vanguard published an excellent white paper on this topic and discussed how framing can help investors deal with short-term risk:

… human beings tend to focus overwhelmingly on the behaviour of individual investments or securities. As a result, in reviewing portfolios investors tend to fret over the poor performance of a specific asset class or security or mutual fund. These ‘narrow’ frames tend to increase investor sensitivity to loss. By contrast, by evaluating investments and performance at the aggregate level, with a ‘wide’ frame, investors tend to exhibit a greater tendency to accept short-term losses and their effects.

Klein made a terrific analogy that I had never heard used before.  When building a house, you never hear the contractor give instructions like, “this foyer should be moderately conservative and connected to a balanced hallway leading into the aggressive growth dining room.”  (or something like that, I’m paraphrasing)

The point of the analogy was to compare the Riskalyze Risk Number to the blueprint used to design a building.  While a blueprint contains a lot more information than a Risk Number, the analogy is apt, since the Risk Number can be used as a framework to guide many of the downstream choices made by and for the client.

The new Scenarios product will allow advisors to create market scenarios to highlight how specific market conditions would impact a client’s portfolio.  As seen in the screenshot above, the client can see the effects that multiple markets would have on multiple portfolios.

This functionality is similar to a small part of what Hidden Levers provides and certainly will assist advisors in making good portfolio management decisions. (See Risk Management for Financial Advisors Made Easy)

We didn’t get a full demo of Scenarios, but the screens Klein did show looked highly useful and intuitive.  Typical Riskalyze U/X we have come to expect.

Klein also announced a portfolio analytics tool called, simply, Stats. (Not wanting to get too creative with the product names)  This is another building block in what I believe to be their long-term goal of building an end-to-end wealth management platform for advisors.  I expect additional portfolio management tools to appear on their 2018 roadmap.

Klein and his team are doing everything they can to keep advisors spending more and more of their time inside the Riskalyze ecosystem.

One area that my consulting firm, Ezra Group, has recently done a lot of research into is Application Programming Interfaces (APIs).  As part of our Partnership Integration Strategy work, we evaluate the API maturity of fintech firms to help our clients understand which ones would have an advantage integrating with other applications.

The above example is an impressive demonstration of how far Riskalyze has progressed in developing their own APIs at the same time they are launching new products and creating one of the largest partnership networks we have ever seen.

The above screens were developed by a Riskalyze RIA client who incorporated the Risk Number into their proprietary wealth management platform.  It looks like it might have been built on top of Salesforce, from the looks of the screen in the back, but I can’t tell for sure. Whatever the technology, it’s a nice piece of work.

Besides the Scenarios and Stats products, Klein also had a few other announcements up his sleeve:

  • Added American Funds as a partner in the AutoPilot Store, which is a nice addition; American Funds is the third largest US mutual fund company with over $1.3 trillion in assets and has some very attractive investment products with single digit expense ratios that many advisors love as a small account solution;
  • Added Dorsey Wright as a AutoPilot Store partner as well; their research platform focuses on relative strength analysis and makes extensive use of point & figure charting; they are great for advisors who use tactical analysis and value-based strategies; it will be interesting to see how they integrate the many Dorsey Wright analytics, like Quadrant Analysis and Dynamic Asset Level Investing, into the Riskalyze platform;
  • Advisors can now schedule periodic withdrawals for clients and AutoPilot will handle generating the necessary cash;
  • New fixed pricing for AutoPilot for advisors with over $20 million on the platform;
  • Support for multi-strategy accounts – I need to get more details on this, but it sounds like an advisor can assign multiple models to a single account;
  • Additional account workflows – I need more details on this one, too.

Riskalyze Conference

I predict the 2018 FISummit will have 1,000+ advisors attending, no matter where they hold it.  Aaron, Mike and the rest of the Riskalyze team knocked this year’s conference out of the park. Word of mouth alone should guarantee a huge crowd next year.  And that’s before their usual marketing, messaging and rumored announcements.

I’m excited for the next three articles that we’ll be writing from this conference.  My panel, which was called “Wrangling the RIA Tech Stack” and was moderated by the great Joel Bruckenstein, will be next up.  Right after that we’ll cover the Women Advisor’s Panel and finally the Vestwell-Riskalyze partnership.  So much to look forward to, here at WMToday!

Do You Have Questions About Your RIA’s Technology?

Contact us at Ezra Group.  We have the experience and expertise you need to get your technology house in order. Your firm will be running smoothly and ready for exponential growth after you work with us.  E-mail us today at Consulting@EzraGroupLLC.com.

One Response

  1. The application Aaron referenced in his keynote is called Advisor Metrix. You can learn more at AdvisorMetrix.com – it’s a native application, not built on Salesforce, but we appreciate the compliment. It’s designed to help advisors with the business of running their business, where so many apps are only focused on the client information.



The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at craig@ezragroupllc.com