Ep. 119: December WealthTech News Roundup

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Come on in, sit back, relax and enjoy episode 119 of the WealthTech Today podcast. I’m your host, Craig Iskowitz, the founder and CEO of Ezra Group Consulting. Over the past 16 years, we’ve worked with hundreds of FinTech vendors and enterprise wealth management firms to guide them towards making better business and technology decisions.

The WealthTech Today podcast features interviews news and analysis on the trends and best practices in technology for wealth management, asset management, and other areas of financial services.

This is our December News Roundup, and we are covering five stories. We are coordinating with our partners at Kitces.com, so please check out The Latest In Financial #AdvisorTech (December 2021) and their Advisor Tech Map, which we work with Michael Kitces to produce.

Click here and schedule a Discovery Session to find out how Ezra Group can help your fintech firm growrevenue in the wealth management space.

December News Stories

• Envestnet and YieldX Announce Strategic Partnership, Expanding Access to Solutions for Simplifying Investment in Income and Protection Products
• Entreda Acquires Privva, an Innovative Provider of Cloud-Based Supply Chain Risk Management Software for Regulated Industries
• GeoWealth Secures $19 million in Series B Funding
• SMArtX Advisory Solutions Establishes Strategic and Commercial Relationship with Morningstar Investment Management
• Ritholtz Wealth Management and WisdomTree Launch New Crypto Index

Companies Mentioned

• Adhesion Wealth [30:04]
• Advisor Group [16:37]
• AdvisorPeak [38:02]
• BitRIA.io [37:00]
• Cetera [14:24]
• Dynasty Finance Partners [29:40]
• Entreda [13:16]
• Envestnet [02:25]
• FIDx [09:23]
• GeoWealth [18:35]
• Halo Investing [04:32]
• Hightower Advisors [29:40]
• iCapital [06:39]
• Luma Financial Technologies [04:29]
• Onramp Invest [36:00]
• Privva [13:17]
• Ritholtz Wealth Management [35:22]
• Sawtooth Solutions [24:26]
• SMArtX Advisory Solutions [24:26]
• Smarsh [15:44]
• Simon Markets [04:03]
• Thrivent Advisor Network [34:20]
• Vestmark [12:13]
• WisdomTree Investments [35:24]
• YieldX [08:15]

Complete Episode Transcript

Envestnet and YieldX Announce Strategic Partnership, Expanding Access to Solutions for Simplifying Investment in Income and Protection Products

Craig: Our first two stories, well I’ve combined them into one, but they’re really two stories about Envestnet and both related to them expanding their wealth management ecosystem. I’ve written a lot about Envestnet on our blog, you can check it out at EzraGroupllc.com, over a dozen articles about Envestnet, what they’re doing, what they’re not doing, where they’re going with things. And we’ll probably be writing more, but this is an example of two acquisitions and partnerships that Envestnet has done to help expand their service offerings.

You know, it’s hard when you are the leader like Envestnet is it’s hard to get more market share. Every additional percentage, point of market share is increasingly harder and harder to get because you’re just running out of the perfect clients and you’re starting to dig into other firms’ core business and they fight harder for it, and those clients may not be the best fit for you. So it’s more and more difficult to gain market share to your core competency. So Envestnet’s been building out lots of other things to sell to grab more wallet share specifically around marketplaces.

So it seems as though investment really wants to become a transactional vendor similar to how Alibaba works or Amazon. I think I wrote that in one of my articles that Envestnet is becoming the Alibaba of wealth management, where they’re getting a piece of the action, a piece of all these different marketplaces, whether you’re buying annuities or insurance or trust products or credit products lending, they want to get a piece. They want to be a one-stop shop like the Amazon, the superstore for advisors.

So in the couple stories we’re covering this month, Envestnet adds structured products, teaming up with the Goldman spinoff Simon Markets. So investments teaming up with Simon Markets and we’ve covered them all the podcast, I believe we had Jason Broder, the CEO of Simon Markets on the podcast that was episode 102, so you can take a listen to what he had to say. And Simon competes with a number of other independent marketplaces for structured products, Luma, and there’s a couple of other ones out there as well, Halo Investing. So they’re all sort of in the same business of democratizing structured products and making it easier for advisors to buy these investments. And they’re pitching them as risk management

tools that much more wealthy clients had these tools available to them to protect against downside risk. And now they are democratizing it, automating a lot of the manual processes and making it cheaper to deliver these products so that advisors can use them for smaller accounts.

So what they’ve done is working with Simon to build out the ecosystem around financial wellness and unified managed accounts to offer structured investments as a fee based solution. Whereas in the past structured investments were always commission-based. Now they’re going to be fee-based so they can be built into the existing managed account infrastructure that is the core of Envestnet’s business.

Simon Markets also announced a new tool to launch an alternative investment fund marketplace for wealth managers called +Subscribe.Why’s the plus in front of the word subscribe? Well, it says here +Subscribe is a leading order management system and electronic subscription document technology for alternative product transactions.

There’s a lot going on with alternative products. There’s lots of paperwork involved, lots of different ways

to pay, lots of ways for cashflow to be spun off from these products. So making it easier is always welcome. And it’s also difficult, you can’t put these products through your traditional order management systems that handle equities, fixed income and other securities, so having a separate order management system is required. This +Subscribe product allows allocators, sponsors,

and service providers to digitize the entire onboarding investment and reporting process for alternate investments. There’s a lot of firms trying to make alternative investments easier for advisors. So Simon is trying to get in on that business, something iCapital does a very good job of, now Simon wants to do the same thing. They’re calling it a fund marketplace, they’re also delivering product analytics, education, investment life cycle management for private and registered funds from a range of leading asset managers.

All right. So we think about Simon today not as a platform for structured investments, but as a platform to deliver risk managed solutions is how they’re pitching it to the advisor community from a holistic standpoint. So some things

they say about their platform that they believe it’s more customization of the profile of the payout being very tailored to the client’s specific situations, whether the comfortable taking more risks or not comfortable taking any risks. So they believe that they can do that by making it easier to build and customize these structured products. So again, they’re building protection features on the downside, which I think is a good thing now with the market reaching all time, all time, all time highs, eventually we’re going to see some downsides. So having these kind of products in client portfolios will help protect them.

The fund marketplace will expand the investment options available to wealth advisors, including leading private equity, private credit, real estate, venture capital, hedge funds and registered alternative funds. So I think the education part is really important because a lot of clients don’t really understand the difference between private equity, private credit, and these other types of investment. So important to educate not only the advisors, but their clients.

Simon Markets was the first part of the Envestnet story, the second part is Envestnet and YieldX announce a strategic partnership, expanding access to solutions for simplifying investment income and protection products. So again, talking about protection products. YieldX is really a fixed income portfolio management platform. Now fixed income isn’t doing so good, but it’ll come back. So getting these tools out, getting them integrated into the Envestnet ecosystem is a good thing. They’re prepping for the future when bonds and other fixed income investments come back and favor, and it’s only a matter of time. So this is a strategic relationship. Envestnet’s going to distribute the YieldX technology through its platform, helping advisors deliver or achieve better fixed income, investment outcomes, and Envestnet invested in YieldX’s Series A round of funding.

So this is again, part of Envestnet’s new strategy, where they are really outsourcing a lot of the infrastructure as they expand, rather than building themselves or necessarily buying the companies and trying to integrate them, they’re keeping them separate. You know, they’ve got a partnership with FIDx on the annuity side for their insurance exchange, letting FIDx build the pipes to all the providers and hold the paper and have the insurance desk that way Envestnet doesn’t have to deal with that, they just plug it in and it’s available to their advisors. It looks like they’re doing the same thing with YieldX, although they have taken an equity position, a funding position with them. So it makes it even a tighter integration.

Now the company YieldX is interestingly led by Adam Green, the CEO, who was one of the co-founders of MoneyLion, which is an app that I really like, and I’ve written about before they started out as a lending app and then added features like micro investing, and then full blown wealth management features. So they came at things from a very different viewpoint, but now they’re a full wealth management platform all on an app. And let’s say President Chief Information Officer Steve Gross, formerly founder and CIO at Alpha Parody, which was acquired by Franklin Templeton.

I think this tool is going to be helpful for Envestnet clients once it is still building end to end bond portfolios. They’ve got some tools for analytics, for fixed income, for screening and filtering to find specific things, it is not so easy. Many years ago I was running a project to build out a fixed income matching service, finding liquidity sources and helping advisors to match up fixed income that they’re looking for with the liquidity sources. So this stuff is not easy to do, very complicated on the backend. Especially when you’re trying to do the searches for different maturity weights, different other factors to find the characteristics. And we used to call that characteristic based models. So it looks like YieldX has a tool called Best Fit that allows the advisor to input specific conditions, such as maturity waiting ESG factors, and then it spits out the bonds that you will need that are available in the inventory of the different connections and networks you have connected to, to build your portfolios.

Now on the management accounts side, we call that characteristic based models. So I guess they’re just calling it something else because fixed income doesn’t really fit in a UMA model base because of the infinite number of bonds that are out there. You know, there’s only one IBM equity, but there’s a hundred different IBM bonds. So using characteristic based models, you can put in a number of different types of bonds, whether they’re corporates or government bonds or whatever type they are, as long as they match the characteristics you’re looking for. They’re not doing munies, so that’s going to be that’s out the door. I know Vestmark had some support for characteristic based fixed income models, using duration ladder stats and fixed income trade tools. They were really one of the only ones.

So it’s interesting if Envestnet and YieldX can can put this characteristic based modeling tool into Envestnet or somehow integrate it. I think that’d be a really interesting. YieldX claims they’re not designed to replace any existing equity portfolio management systems, ETFs mutual funds, equities but to compliment so interesting to see how this is going to turn out. And I’m not surprised that Envestnet’s building out the ecosystem even more looking for every angle and aspect, everything that advisors are either investing in or building or working with their clients. I think Envestnet wants to get a piece of it.

Entreda Acquires Privva, an Innovative Provider of Cloud-Based Supply Chain Risk Management Software for Regulated Industries

Craig: I hope you’re enjoying the news so far. Our next story is Entreda acquires Privva for cyber risk assessments. I’m really interested in this story because at Ezra Group we’ve been expanding our cyber risk assessments capabilities. We do a lot of due diligence work for firms, especially acquisitions of advisory firms, whether they’re very large, multi-billion tens of billion dollars worth of assets at RIAs or broker dealers. And one of the things we’ve been building out is the cyber risk assessments of our due diligence. So our due diligence is mainly focused on the technology platforms. Can their platform scale if the $10 billion RIA can the existing platform scale to $20 billion, those are the kinds of questions that PE firms want to know. Are there any giant gaping holes in their platform or things that they’re going to have to pump in millions of dollars to fix?

That’s what we’re looking for. And cybersecurity is a big issue for them. It’s also a big issue for the SEC. There was a recent story back in August, SEC fined three firms for cybersecurity failures. And it was I think it was eight or

nine entities across three broker dealers Cetera, Cambridge, and KMS, and they paid hundreds of thousands of dollars in fines, $300,000, $250,000, $200,000. So SEC was not messing around when it came to these cyber security fines.

Some of the things they were fined on were not using multi-factor authentication. Others are not having policies implemented properly or having policies and not following them failure to detect breaches, hackers breaching your network. Failures to implement additional features, following the breaches and also placing customer information at risk. So all those things are on our standard cyber risk assessment. We look for all this we check out the platform, we check out all the different components and devices on the network, we look all the procedures. So it’s sort of a pre SEC audit. So if you pass our audit, you’re most likely not going to get fined by the SEC, not a guarantee, but we are covering all of these things.

Now you could also go to a product like Privva, which has the ability to search across your network and find gaps, which is probably a reason why Entreda has bought them. Now Entreda is a wholly owned subsidiary of Smarsh, which is one of the leading electronic communication archiving solutions. Many of our clients use it to archive social media, texting, other client communication and Privva, cloud-based platform, helping companies conduct cyber risk assessments. They’re going to put me out of a job, man, but these kind of tools are great for firms because they’re constantly monitoring. They’re constantly checking and they should be alerting you if there’s any issues, things might be breaking. You might have a someone on staff who’s implanting something incorrectly or turning something off that they shouldn’t and Privva would catch it right away if it’s working the way it’s supposed to work.

Entreda is integrating Privva into their unified platform, which is a core of a lot of broker dealers programs. For example, one of the broker dealers that uses Entreda is Advisor Group and their cyber guard program. They’re one of the nation’s largest network of independent wealth management firms, and they use Entreda’s platform to manage their cybersecurity. One of the things I like about Privva’s tools is they have a proprietary risk scoring methodology. I love scoring. And if any way you can boil down very complex reporting into a number, even though it’s an abstraction, it still gives clients an idea of where they stand on on a scale. So if you can say, look, you want to be an 80 and above. I’m just picking a random number. I don’t know if that’s real or not, and you’re a 60, you realize you’ve got a problem. So it’s an easy way to point out to clients, maybe who aren’t experts in cybersecurity that, Hey, you’ve got a problem here.

Entreda’s unified platform monitors end points, meaning any thing that’s touching a human really, or touching an outside system on the client networks that automatically remediates vulnerabilities, advanced safeguard features, does vulnerability scanning, penetration testing. That’s also something on our cybersecurity assessment, do you have penetration testing capabilities either internally or outsourced? When was the last time you ran a penetration test? What were the results? We’re always checking those kinds of things. So now adding Privva into Entreda’s unify platform, we’ll just make it that much more secure and provide a lot more information to firms as to the status of their cybersecurity and looking for gaps. You should still call us, we can still offer some help, but having these tools will really help clients manage their cyber risks and keep it under control for the longterm.

GeoWealth Secures $19 million in Series B Funding

Craig: All right. Time’s just flying by in this episode, we’re up to story number three, and this is a fun one, GeoWealth secures $19 million in Series B funding. What is GeoWealth? Well, they’re a FinTech plus TAMP platform. We’ve been following them for a while because this is what we do. We follow all the tech platforms, all the tech players, all the TAMPs. We stay up to date on all these guys, and we want to know everything about them so you don’t have to, so we can help you understand who the players are and what you need to know about them.

So the TAMP market has seen tremendous change over the past decade from M&A to PE funding, the biggest players getting bigger new entrants coming in and looking to grab a piece of the pie. I talked about the leading TAMP, Envestnet, earlier in the program, so we’re going to talk about an up and coming TAMP, which is GeoWealth. GeoWealth was founded around 2010 or 2011. Colin Falls is the CEO and I think we started following GeoWealth in 2017 is when we first got a demo, and they popped up on our radar and I remember being impressed with it. You know, it seems like they really had a lot of good tech built and they were coming at it from an interesting point of view, definitely they saw Envestnet as someone they wanted to emulate. Envestnet was a tech platform first, although they’d been a TAMP for so long and you forget, they were just a tech platform at one point before they bought into the TAMP world.

So GeoWealth has built their own. So they’ve got a very strong tech platform as well as the TAMP capabilities. So one thing that I wanted to say, I do a lot of reading of course on the TAMP market, looking at other research, if you see a graphic or a report, or if anybody tells you the TAMP market has over $4 trillion in assets, just take the report or whatever the graphic is and just delete it. It’s totally wrong, worthless. These crazy numbers I see going around about the TAMP market have been floating around for years, it’s from people that just don’t understand what a TAMP is or how advisors use TAMPs.

The TAMP market is between $750M and $1T. That’s it, that’s the real TAMP market. Everything else is not TAMP. Those are just phantom assets. I’ll get off my soap box now. So GeoWealth has been executing well from what we’ve seen some of their strengths that differentiate them from other platform TAMPs, they have their own portfolio accounting system. They offer low fees to trade on them. Now they only support mutual fund and ETF models, but they’ll probably expand with this funding round and add other securities. There’s some good advertising I’ve seen on LinkedIn. And one other vendor I spoke to who knows them said they punch above their weight. So that’s a high praise from another vendor, another TAMP vendor about GeoWealth. And they’ve also hired some good distribution people to help push out their models and TAMP services. They’ve quietly built impressive business and doing some good work.

The funding round $19 million Series B led by Kanye Partners Fund and a follow investment by JP Morgan asset management, who has been a strategic investor in GeoWealth since 2018.

Now GeoWealth has hit $7.3 billion in AUM, according to the press release and $16.7 billion in AUA, assets under administration, which also is a bit of a squishy number because what does that mean? Assets under administration. What does administration mean? I mean, if you’re just doing reporting on an asset, you’re not really administering anything you’re reporting on it. If you’re displaying data on your portal, you’re not administering it, you’re just displaying it. So I find these AUA numbers to be kind of squishy and not a real useful.

However, that doesn’t take anything away from the platform that GeoWealth has built. It’s interesting to see JP Morgan investing in GeoWealth since they recently purchased 55ip, which we always had in the TAMP category, even though they were not a full service TAMP, they were sort of a pseudo TAMP, mainly focusing on tax management, tax transitions, automated tax management, automated tax loss, harvesting, implementing models. So they were sort of the delivery mechanism for a lot of firms and then JP Morgan bought them. But I guess they’re looking for a more of a full service TAMP offering to eventually buy or integrate by investing in GeoWealth.

A couple of the things we liked about GeoWealth’s platform they’ve got basically end to end tools that most firms need from prop gen, risk tolerance, portfolio management, order management, they have an advisor dashboard. Here’s an interesting thing you don’t hear a lot about customizable security masters for each client. That’s a big thing. I’ve built those in the past. It’s hard to do. It’s hard to build out your technology to make it customizable for every client. Every one of your clients can have their own security master, but this is not like a big thing, but when you’re working with a lot of broker dealers, they’re picky about the security master is what we have found. So kudos to GeoWealth for having that.

We do a lot of competitive analysis in for the broker dealer technology, enterprise technology or AI technology and TAMPs. We normally compare GeoWealth with firms like Adhesion, owned by Vestmark, Sawtooth, and SMArtX that’s really where we put GeoWealth. GeoWealth’s client base, they claim 65 enterprise clients with 2000 advisors and 120,000 total accounts, not a bad client base. I’m looking forward to seeing where they deploy this capital, how they grow, who they hire, what features they’re building and where they are at the end of next year.

SMArtX Advisory Solutions Establishes Strategic and Commercial Relationship with Morningstar Investment Management

Craig: Next up is SMArtX advisory solutions establishes a strategic and commercial relationship with Morningstar Investment Management. Morningstar will use SMArtX’s software to run it’s $31 billion AUM managed portfolio business. Now Morningstar is in the top 10 in terms of AUM in the TAMP market, and this new service will go live in 2022. Over the last 13 months SMArtX’s AUM has increased approximately 785% huge, just the last 13 months to up to almost $19 billion. Client accounts have grown, I can even say this number it’s huge 800%, 79,000, quite the growth spurt over the COVID time.

So SMArtX will be powering Morningstar’s TAMP. They’re replacing the old, what we used to call APL, which then became Fiserv APL, which then became Tegra118, which then quickly became InvestCloud. So that deal is going away and SMArtX is taking their place.

Morningstar’s used Fiserv APL, InvestCloud’s software to run their TAMP for quite some time. I think it was 10 years. So it’s a big move for them to make this change. None of this stuff is easy. Changing out your core tech platform is not a simple task, but it should be made easier with the way that has built their business. We followed the TAMP market, of course, at Ezra Group, very closely, like we follow everything in wealth management and we keep tabs on everyone. We speak to everyone at least bi-annually, but I speak to Evan Rappaport, the CEO of SMArtX, much more than that. Very interesting guy, very smart guy, built a really good team hired Jonathan Pincus as a President and COO from Northern Trust. Another good guy. I believe this is his first big deal since he started there. Congratulations, John. And this software that SMArtX runs, we really like it. Again, we’ve watched them for quite some time and seeing them grow from a very small operator, building some tools and technologies to really a full featured platform. We like the scalability of their platform. We like their portfolio rebalancer. We like their UMA functionality. Everything seems to be pretty good. They’ve got the one trading desks so they’re full they’re full on RIA, TAMP can outsource execution, recon portfolio reporting, recon billing. They’ve only got the soup to nuts technology and services available as a white label TAMP provider. They were founded in 2013 by CEO Evan Rappaport. It’s really an API focused technology platform, which makes it much easier to build on top of, as compared to some other tools.

Now, their big break came in 2017 when they signed the partnership deal with Black Diamond, which I believe has ended. So that deal’s over. That was an exclusive deal where they can only work with them. They couldn’t build out any tools or partner with any any of Black Diamond’s direct competitors that worked great for both sides. Black Diamond didn’t have their own rebalancer for many years. They started out as performance reporting only until they were purchased by SS&C or purchased by Advent, then SS&C purchased Advent and now Black Diamond has been building out since then a full end-to-end platform for RIAs as well as their own rebalancer. So once the rebalancer came out, the SMArtX technology, sort of became redundant. I still think it’s better overall, but it became redundant so that there was allowed to expire. And now Evan and his team are allowed to engage in any of the competitors and work with them, including Morningstar.

One of the things I like about what Evan has done, they’ve really expanded the number of strategies and managers on the platform. It seems as though something that most firms wouldn’t need, you know, how many managers could you possibly use in the program, SMA or UMA program, or how many strategies could you possibly use? That’s only the point. The point is if you have a large number of strategies, it makes it easier for firms to attract advisors from other firms because you don’t have to liquidate assets if you don’t have that manager strategy. By having a large selection, a large universe of managers and strategies, it makes it easier to attract advisors. So that’s really helpful for some of SMArtX’s clients like Dynasty, Hightower, the firms that really go after the wirehouse advisors, breakaway advisors, and they are really big on SMAs, and UMA’s and other products. The fact that they have this large universe of managers makes it easier for their clients to attract business.

So SMArtX, we look at them in terms of the TAMPs such as Adhesion, GeoWealth and Sawtooth is really where we put them in terms of competition, although they are growing. So they could outgrow that category at some point, but right now they’re in that group. It’s a good deal for both sides. You know, Morningstar has a huge footprint in the industry, both on the broker dealer side and the RIA side, they have roughly 180,000 advisors. That’s an absurdly large number, no one else has that type of a footprint investment. The closest, I think they’re at 120,000 advisors use any kind of, any part of the platform at all. That includes office, Morningstar Office, Advisor Workstation, Morningstar Direct, and all the tools and technology that they have across their ecosystem.

One thing people don’t realize is Morningstar is one of the largest fintechs in our space. Normally they think of Morningstar as a data provider, and that’s 60% of their income. I believe they have over a billion dollars in income about 60% is data and 40% or 400 million is tech, that makes them one of the largest tech players in the space. So something to be aware of.

SMArtX’s growth they believe is driven by two main applications of off the shelf TAMP offering, and the proprietary UMA that can be accessed completely through APIs. This is something we also follow a lot of the movement towards fully APIs and not just integrations, not just closed APIs or one-off application interfaces that really aren’t fully documented exposed APIs, but truly well documented APIs that the firm itself uses. So we call it eating your own dog food. We build the APIs and you use them as well, as well as offering them out to other vendors and your clients. Those are the ones that we really like.

This this deal gives Morningstar a UMA program, which they didn’t have before, even though the Fiserv APL / InvestCloud platform from does have UMA, they were one of the first providers of UMA over 20 years ago, but Morningstar wasn’t able to get up off the ground with that so that could be a sign as why they would maybe frustrated a bit with their current provider. So moving to SMArtX will allow them to get up and running in 2022 with a UMA offering.

Now we’ve been tracking these guys for awhile. I mean, back in 2017, looking at my notes, talking to my first phone call with Evan Rappaport when he was still CEO of HedgeCo, which was the first iteration that eventually morphed into SMArtX was this like a pseudo model management tool for hedge funds that you can track the hedge fund trades in near real time to mirror them. Cool technology, sort of laid the groundwork for what became SMArtX.

Other things we like about the SMArtX platform, real-time model updates and trading is something that Evan really likes to dig other TAMPs on, that some TAMPs lock up their orders and only trade twice a day where as SMArtX trading desk trades real time. So if a model update comes in at 9:00 AM, it gets traded at 9:30, as soon as the market opens, it comes in at noon, it gets traded at noon rather than waiting till 2:00 whatever the next block order trades are going off. So that’s a good offering for them. They also built out their own proposal tool, a portfolio builder / proposal generation tool. And there’s lots of them out there, and we, we like to look at these as an application that really pulls in clients. If you’ve got a good proposal tool, that’s going to make advisors really take notice because it’s something that hasn’t been done really well by a lot of firms. They’re usually clunky. They don’t integrate well, there’s still some manual steps. So we like whatSMArtX has done with the proposal tool.

They also have their own risk reward profile, not a risk tolerance questionnaire, but they’ve got some risk reward profile and some risk tools built in there. So over and overall, a terrific move for both sides, for Morningstar to get a partner with a TAMP platform running on relatively new technology with a strong track record of success. I didn’t list a couple of the other deals, public deals that SMArtX has announced. We said Hightower, Dynasty, American Portfolios, Thrivent Advisor Network. Some big firms coming over to the SMArtX platform. So that’s a strong track record for Morningstar, they’re not going with a small firm as the only big client, nobody wants to be first. On the SMArtX side, they gain a marquee main client and also an investor who can help them get their foot in the door. So they could walk into a lot of other Morningstar’s clients and offer their TAMP services to them as well. So we expect Morningstar to leverage SMArtX as part of their new integration strategy. We’re looking for Morningstar to connect the TAMP with Morningstar Office things like Goalbridge, their financial planning tools and their new risk ecosystem. It should build a very attractive offering for RIAs, as well as small to midsize enterprise firms.

Ritholtz Wealth Management and WisdomTree Launch New Crypto Index

Craig: I want to lead into our next story, which is Ritholtz Wealth Management and WisdomTree launch a crypto index aimed at advisors. I think this is a great idea. They’ve built what’s called the WRM WisdomTree crypto index. It’s made up of 37% Bitcoin, 20% of Ethereum and 4% each of 11 other crypto assets that provides exposure to the broader crypto ecosystem. That’s great news. We need more tools and more, more securities and more funds that easily provide exposure to a diversified mix of digital assets, and what we’ll do that. WisdomTree has licensed the index to Onramp Investing, an integration platform that provides access to crypto assets for RIAs, great news for them.

I’m a big fan of Barry Ritholtz and Josh brown, and Ritholtz Wealth Management also super impressed with what Tyrone Ross has built at Onramp Investing. So this new index Onramp is providing the technology for the SMA part, the rebalancing technology and customer support and Gemini, one of the biggest digital asset custodians, is serving as the trading platform and custodian.

So this is designed to provide retail investors via a financial advisor, access to a diversified exposure to crypto assets. It’s really going to be great to have this it’s something that is long overdue. I’ve seen and watched the space for quite some time, but have been waiting for other competitors to appear that are offering crypto services, crypto conductivity, crypto technology, and I’ve been monitoring it and working in the space since 2018, and I joined the advisory board of a company that had the first SMA infrastructure and the first portfolio rebalancer for cryptocurrencies it was, was originally called Blockchange.ai. It’s now called BitRIA.io. You can check out their website. They had the first SMA infrastructure to connect digital wealth managers or digital asset managers with wealth managers, RIAs, and broker dealers and such.

So I’m glad that Onramp investing has reached that point where they can offer some more services because we need more competition in the space. Just because I’m on the advisory board doesn’t mean we don’t want more competition. You want RIAs to have choices, we want broker dealers to have choices when it comes to digital assets and it needs to be more accepted. It shouldn’t be a one-off, it shouldn’t be something that people are just thinking about dipping their toe in the water. It’s going to become mainstream. There’s going to be a point where every I platform every enterprise platform will have these types of tools. Either they’ll license them from bit RIA or licensing from Onramp or build their own like we have AdvisorPeak that built their own connectivity, their own Bitcoin rebalancing. So we’re going to see more of that as digital assets become more mainstream. So please take a look at the Onramp Investing , OnrampInvest.com, BitRIA.io, you can check out the story on ThinkAdvisor.com.

That’s the end of the news, thanks for listening. Before I forget, please go to our website EzraGroupllc.com and scroll to the bottom of the homepage and sign up for our newsletter. Once a month, you’ll get an email chock full of wealth management goodness, news, updates, trends, information links, you’ll like it, and you will not be disappointed. And thanks again for listening. And I’ll talk to everyone again, next time.

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