Ep. 175: February Wealthtech News

Come on in and sit back relax, you’re listening to Episode 175 of the WealthTech Today podcast. I’m your host, Craig Iskowitz, founder of Ezra Group Consulting and this is our December news roundup where we cover a curated selection of the most interesting news stories in wealth tech.  

Before we get into the interview, if you are listening now you’re an executive at a broker dealer, an asset manager or an enterprise RIA you should run not walk to a website, EzraGroupllc.com and fill out the Contact Us form on the homepage to meet with us about your technology platform issues. Our experienced team can assist with software vendor evaluations systems integrations, improving operational efficiency, software implementations and a whole lot more. You can take advantage of our free initial consultation offer by going to EzraGroupllc.com. Now, let’s kick this thing off.

Companies Mentioned

Topics Covered

  1. FNZ Expanding US Footprint With YieldX Acquisition
  2. Zoe Financial Announces Its New Innovative Wealth Platform
  3. BridgeFT Launches WealthTech API
  4. Alois Pirker Launches Pirker Partners
  5. How Advisor360’s First Acquisition Could Expand Its Reach And Offering
  6. Asset-Map Partners with Cetera to Empower Financial Professionals with the Leading Advice Engagement Experience
  7. Private Advisor Group Introduces WealthSuite Investment Platform for Advisors
  8. AdvisorTech Map Updates
  9. WealthTech Integration Score Updates

This episode is dedicated to the memory of Gavin Spitzner.

Episode Transcript

1. FNZ Expanding US Footprint With YieldX Acquisition

Our first story is FNZ expanding their US footprint with YieldX acquisition. Now some of you may not know either of these two firms that we’re starting off with, so we do a quick review. FNZ is a custodian technology provider that administers more than $1.5 trillion in assets over 20 million investors worldwide. They have 150 wealth managers, banks, insurers, asset managers, as clients in 21 countries, but mostly in the UK. And also I know we work with those in the clients in the APAC region, but have no US exposure really for the wealth manager platform or custody yet. Some of the biggest competitors in the US are Schwab, Fidelity Pershing and Northern Trust.

FNZ has made a lot of deals in the past couple of years. One of the biggest was a partnership, a joint venture with State Street, where State Street bought 20% of FNZ and they formed a JV called FNZ Trust Company, which is now working in the US. FNZ had raised $1.4 billion dollars in 2021 on a $20 billion valuation, so they’ve got a lot of money in the bank. Also in 2021, FNZ instead acquired Appway, which is a Zurich based workflow engine, new account opening tool, really big technology platform, lots of us clients, a lot of big broker dealers LPL I know was one of them using Appway’s workflow products, so that gave them a good foothold in a lot of wealth management firms. But their acquisition of YieldX is interesting.

YieldX is a startup that launched in 2019. They are in the fixed income space. I know a fair bit about the trading of fixed income and how difficult it is to manage that and to build software that can keep track of different bond portfolios with bond pricing. It’s not an easy task. YieldX has done a great job of that. They’ve got a number of different products in a suite that allows fintechs, if you want to plug into their API analytics, you can create investment savings products or on targeted yield risk parameters.

They allow wealth management firms to improve client outcomes by building on their workflows to optimize the portfolios of fixed income securities. They can deliver insights trade ideas, portfolio optimization at scale, they can build bond ladders, they’ve got a big, very strong filtering criteria capability across the fixed income landscape. A lot of very cool products here. Interesting that FNZ decided to acquire them by jumping on this, because I had expected Envestnet to acquire YieldX since in October 2021, YieldX and Envestnet formed a partnership where Envestnet was going to distribute the YieldX technology through their platform. I know they’ve been introducing a lot of their bigger clients to YieldX, so I was really expecting some announcement from Envestnet, but FNZ looks like they came in and snapped them up right out from under their nose. FNZ also announced a partnership with Envestnet so everyone’s in a big circle here. FNZ-Envestnet partnership, Envestnet-YieldX partnership, FNZ buys YieldX.

Following the acquisition, the two founders, Adam Green CEO of YieldX, now becomes the CEO of FNZ Asset Management, and Steve Gross, Head of Sales becomes Head of Asset Management Strategy. Great move for those two guys. I see this as another step in FNZ’s slow migration into the US, it’s a carefully orchestrated strategy.

I’ve seen their product a number of times and talked to them a few times about their US strategy. I imagine they’re building out their platform more towards the US market focusing on what US advisors need, whether compliance, trading capabilities and account opening, integrating halfway into their platform. They’re going to have a very competitive offering at some point. I would look for them, especially in the enterprise space, they’re not going to be going after small RIAs. They’re going to be looking at larger firms, either stealing business from existing vendors or partnering with them who knows.

FNZ has a lot of options, they’re now they’re partnering with Envestnet for custody in the US, Envestnet will be reselling their custody services, and FNZ is gonna be reselling Envestnet’s data analytics services overseas. They’re already working together there.

Staying with the Envestnet news, Pontera announced an integration with Envestnet. Pontera is in the Ezra Group-Kitces advisortech map under Rebalancing Only. They’re a retirement assets trading tool. In the past, you could only view retirement account holdings, but you couldn’t do much with it. You couldn’t trade on that data or access that data directly.

But Pontera has built technology that allows advisory firms to actually make trades in clients’ retirement accounts such as 401k accounts, 503b, other types of retirement accounts. Great tech, although not cheap. I think it’s around 30 basis points, but it enables advisors to charge their clients for the capability of managing directly managing their retirement assets versus Hey, you should trade this mutual fund in this retirement fund that you’ve gotten expecting the client to make those trades. So another capability of Envestnet. So all these firms were building out making more partnerships, making more opportunities for advisors to have better outcomes.

2. Zoe Financial Announces Its New Innovative Wealth Platform

Next up on the news, Zoe Financial announces its new wealth platform. Zoe Financial, which is a lead gen application has partnered with Apex FinTech solutions to offer custody and clearing solutions as part of the platform build out. With this partnership, Zoe now offers commission free fractional trading across most of US listed securities and 30,000. US domiciled mutual funds.

Zoe Financial is one of the most successful lead gen applications for advisors in our space, 2.5 billion in assets, transferred assets referred they call it assets under administration, but it’s really not true, as a lead gen they’re bringing the assets to these advisors, but they’re not going managing going forward. Zoe did have a $10 million Series A round led by Softbank Opportunity Fund and their their team grew 3x 2021 and 22. Zoey was listed in Fast Company’s Procedures world’s most innovative companies list. What I like about Zoe, besides the fact that they had been delivering good amount of leads to clients and building out a great a great client base. According to their statistics 70% of the investors that Zoe refers have never used a financial advisor before.

Also Zoe claims that their average age of the clients they refer is 43 which is compared to the average of 58 for wirehouse clients. Now this was kind of a surprise. We follow the market very closely, whether it’s digital marketing or lead gen or anything else in the Kitces-Ezra Group advisortech map, but I never expected a leadgen application to announce a wealth platform. Very surprised by that because it doesn’t seem to fit to me.

There’s already too many wealth platforms in the market. While they picked a great partner, we love Apex and everything they’re doing, especially as another API first custodian being able to build out these tools for quick onboarding and commission-free fractional trading. The question is not that whether it works or not. The question is, does it fit and will it sell? As a leadgen firm you really have no experience selling and managing a wealth platform. Most of the staff, the senior staff haven’t built wealth platforms before. So this is the first time for them, and it’s more than just launching it. It’s getting firms to use it and grow the client base over the long-term.

I wrote an article a couple years ago called, 50 Portfolio Management Systems Can’t All Survive, and the reason why I wrote that is because there were too many wealth management platforms. There’s more than 50 now, and they can’t all possibly get enough market share to stay in business because it’s very difficult to get firms to  change platforms.

Once you’ve implemented a portfolio management, rebalancing trading application, you’re going to probably stay on it for at least 10 years. Because it’s just too difficult to change. It’s a lot of effort. We’ve done it, one of our our businesses is helping firms convert their portfolio management platforms, and it is not a trivial task.

So forgive me if I’m skeptical that for Zoe to go in and say hey, just build this application and give us your assets. It’s not going to be that easy. Now, even if they’re proposing to just bring new assets on to the Zoe / Apex platform and keep their existing assets on their current platform. Well, that gives you two platforms to manage. You’ve got all of your clients on one platform, and now you’re building up a separate client base in a whole different wealth platform. That’s going to be confusing and difficult to manage.

Your reporting is going to be confused. There’s going to be a mess, your compliance, your billing, all of it needs to be coordinated. And we’ve done this review and research for firms that had come to us saying hey, can we launch another product offering on a different custodial platform? We had this exact same conversation with a couple of the biggest wealth players who are already out there, saying they wanted to launch a new offering that combines custody with onboarding and their wealth platform. Will that sell? We said well, no, it’s not really going to sell because you need more than those reason for most wealth firms, whether it’s an RIA, RIA aggregator, broker dealer or others to add a new custodian or new wealth platform is a hard sell.

There’s not a lot of reasons to add support for another custodian beyond bringing in some huge clients or if you’re merging. That’s the biggest reason why an RIA or the wealth firm will bring on another custodian is because they’ve merged. They bought a company with a significant portion of assets on a different custodian. They just leave those assets there.

While I’m always looking for innovative ideas, I just don’t see Zoe Financial as a leadgen firm being able to build out a wealth infrastructure or the client base already have the infrastructure through Apex but be able to attract enough clients to make it worthwhile.

Another interesting part of this story came from some sharp reporting by RIAbiz.  Last May, Zoe Financial received a substantial round of funding  without publicly disclosing it, and used the cash, in part, to build this in-house RIA platform. They don’t say how much money they raised from four of the biggest RIAs in the country, Mariner Wealth, Cap Financial, Creative Planning, and Sequoia Financial.

That’s a that’s a major seal of approval that they think Zoe is on the right track. They really like this idea. Now what’s interesting is RIAbiz discovered the raise by carefully reading the fine print of the firm’s ADV\. Now by accepting this capital from mega-RIAs, Zoe acknowledged to the SEC, that this is a conflict of interest, because their business model as a leadgen firm is to provide leads to RIAs. And if a bunch of the biggest RIAs in the country are now funding them, how can you prove that you’re not just funneling the best clients to them?

That’s going be an issue for every new client. Every existing client might say, well you got Mariner backing you, can you show whether your algorithm is going to be honest? That’s something that’s a double edged sword, one side they got great backing, a great seal of approval from these firms that their referral process works and is very successful. Versus Hey, why should we work with you?

A lot of things for Zoe to work out a lot of issues, a lot of marketing and sales and messaging that they need to work on, as well as how they’re going to sell this new RIA platform. If you want to learn more about Zoe Financial, go to the website at ZoeFin.com.

3. BridgeFT Launches WealthTech API

Our third story: BridgeFT launches wealthtech-as-a-service platform. I found this to be interesting news considering how much work we’re doing at Ezra Group on integrations, API’s, and integration scoring.

BridgeFT was launched back in 2016. They were originally called Bridge Financial Technology, and they were a portfolio management software company for small RIAs. They originally built their software on top of the Fiserv APL platform, which is now part of InvestCloud. That was their core platform and they built some user interface on top of that, they were targeting small RIAs. They got a little traction, and then they started building out some of their own technology around performance reporting and billing, which they called Atlas. And I think their goal was to be a low cost alternative to vendors like Orion. They got about 250 clients, but never really got enough traction on the platform to really make it.

In February 2022 they hired Joe Stensland as their CEO and Joe has a long history in the industry. We were working for competitors back in the 1990’s when I was working at ADP Brokerage and Joe was working at Thomson Reuters. He launched the Thomson One market data platform. I was working at ADP brokerage at the time that we had our own market data platform that competed with Thomson One.

Joe then went to Scivantage he was Head of Product and Head of Sales he was there 13 years. Scivantage had some interesting products. They had an investor trading portal it was very popular called Wealthsqope. It sold to a lot of mid sized broker dealers and regional banks. And they also had a product called MaxIt for cost basis reporting 13 years until Refinitiv bought Scivantage in 2020 then Joe became the Head of digital investor at Refinitiv and then Feb 2022, he was hired as the CEO at BridgeFT.

Joe looked at the business with a critical eye and saw that the wealth management,  the performance reporting and fee billing software really isn’t growing. There’s too much competition, but we’ve got some great API’s and let’s really go all in on becoming that type of company, which I think is a great idea. Wealthtech API’s, they’re calling it wealthtech-as-a-service platform.

According to the press release, they plan to offer a single open API combining trade-ready data from multiple custodians, as well as analytics and other applications that are powered by the data. That’s the important part for me the other applications and the analytics, because there are a lot of API’s out there. A lot of the bigger firms have API’s. But when you get to the analytics and the other applications, that’s where things start to get interesting.

And they aim to be an infrastructure provider for a variety of firms. Great. We need that. We need more companies that do that type of thing. We are seeing some of the other bigger players also announcing similar initiatives. Orion announced their partnership with Amazon, moving all their data onto their Redshift platform and opening up their data via API’s. So that’s going to be a big move for them and Envestnet also announced their own data application data analytics platform, think it’s called Wealth Data platform, which we know a lot about, and they’re partnering with FNZ, as I mentioned earlier, to launch that in overseas markets. So like there’s more and more competition around these open API’s open data platforms.

Another comment as you make this transition to enterprise beyond just the RIA market, so they’re moving beyond RIAs. We have a number of firms looking at looking at TAMPs and investment product distribution players and other large firms. That’s a great it’s a great way to do that. It’s just too much competition in the RIA market for portfolio management, reporting, billing, all these these very core applications that become commodities. It’s very hard to make money. There’s just too many firms out there. So they’re gonna be offering the trade ready, accurate data from multiple custodians through a single API, including Schwab TD Ameritrade, now the same Fidelity, Pershing, Shareholder Services Group, as well as others. Another interesting point they mentioned they’re gonna be doing integrations with account aggregation providers Plaid for other types of fees. I like to see other aggregation providers become an aggregator of aggregators. If I could connect to BridgeFT and get an aggregated feed from Plaid/Quovo, Yodlee, and ByAllAccounts and accumulate and other other types of aggregator you can bring the all that data into one place, and maybe then clean it up with it. Show me which vendors had the best data from which particular financial institutions that will be also really useful.

There’s some buzzword bingo going on in the press release. So while I do like this idea that some things we want to just cut through some of the the jargon, “this wealthtech API represents the first platform to deliver trade ready accurate data from multiple custodians to a single API”. No, it’s not the first platform doing that all the major vendors who have multi custodial wealth platforms have data from a single API. Now, they may not have all the data. In fact, they probably have a very small subset of their data, which they’re expanding, there’s more and more data being made available all the time. And we definitely have some issues with some of the vendors not offering enough of custodial data through the API’s. But not the first platform to do this. We’re happy that they’re doing it.

Let’s see another thing from the press release “removes virtually all need for manual recon”. The word virtually jumps out at me. There’s still going to be a lot of recon. Now. They can automate it. We always like automating recon out of the decades of our experience here, recon is just always a major thorn in the side of everybody when it comes to managed accounts. There’s always some issues going on with recon. Every vendor has a recon tool that tries to automate it, and there’s always problems. So maybe for basic accounts, they can automate a lot of the Recon but when you get to things like SMAs, managers want their own their own data for recon, and especially UMAs that’s a lot more complicated. You’re not going to live in all the manual recount for a UMA. You require data from the wealth platform for sleeve tagging, sleeve performance, sleeve netting, billing attribution is a problem, filtering out dividends and interests, interest when handling ACATs, money journaling and none of the counselors, so many other issues, but if they can get rid of 80% of the manual recon I’d be very happy to see that.

Providing data enrichment to deliver powerful performance calculations, insights and analytics across all accounts don’t matter the source. Also good stuff. I think this type of service, this wealthtech as a service would be great for startups. So firms that are coming into the space and need to scale quickly, and don’t want to have to build all this connectivity to custodians, especially and we’ve done this a number of times for firms, all the files that custodial files that come in the amount of data that you have to worry about not to have a security type special wedding into bonds, and preferred stock and things of that having to deal with it. And the corporate actions. Well, I mean, just looking at corporate actions, it takes a long time to just understand and build that out and make sure you’re handling it properly. So if they can do all that, that opens up a lot of opportunities for firms to jump into our space, offering innovative solutions that they can bring up and not have to worry about how the custodial data gets sent. So look to see what they’re doing at Bridge

4. Alois Pirker Launches Pirker Partners

Story number four in our news. Alois Pirker launches Pirker Partners. For those who don’t know, Alois Pirker, he is a fixture in the industry and influencer in wealth management technology. He spent 16 years eventually as the director of research for wealth management at Aite Group. He was there for 16 years and starting last month he launched his own company called Pirker Partners. You can look him up on LinkedIn but his mission is providing focused strategic advice and thought leadership on current themes relating to business and technology innovation, support decision makers of wealth management firms, wealthtech startup and PE VC firms through a flexible ongoing engagement model and act as a platform for dialogue for the various parties involved. So Alois is a good friend, I’ve followed his career we’ve we’ve met at many events and spoken on panels together. I’m always reading his stuff is very insightful. He always has a good take on the industry. You can learn more about his new company at Pirker partners as Pirkerpartners.com. And you could email him at Alois@PirkerPartners.com. Here’s to Alois, congrats on all the best on your new endeavor.

5. How Advisor360’s First Acquisition Could Expand Its Reach And Offering

Story number five is how Advisor360’s first acquisition could expand its reach and offering this article you can find in Financial Advisor Magazine, FA-mag.com. Broker dealer, Commonwealth Financial Network, built their own technology, their own wealth platform, took them many years to do so I think over 20 years they spent building that out, and it works so well for them. All their advisors and all their assets were on their own custom platform. They decided to spin it out as its own subsidiary, an independent company which they call it Advisor360 they spun it out in 2019.

The company has done reasonably well they got they signed one another big client MassMutual, who put 7,500 advisors on the platform, and they’ve recently made their first acquisition of AgreementExpress. So this is an interesting selection. It’s probably not the firm that I would have chosen. And also some of the the news on this is unusual when they’re announcing why they bought them or what the purchase was. They’re saying things like “we’re buying the assets of the firm” so that what they bought the assets of AgreementExpress I’m not sure what that means. They’re not buying the clients. Why would you word it that way? So that’s that sounds like legal ease. For something they “acquired the digital onboarding technology and related Wealth Management assets”. It’s just a strange way to word a press release. So I’m concerned about that.

Most of us are asking why they would acquire this particular company if we’re looking for onboarding technology. And we’ve done a lot of reviews of most categories in the Kitces-Ezra Group map in our research. And when it comes to account onboarding technology AgreementExpress technology never really impressed us. At the time it was built on top of Google, there was some sort of Google tech that AgreementExpress built their platform on top of and we weren’t really impressed with how they did it. They’d gotten some good traction with a lot of smaller RIAs that never really could make the leap to to larger firms.

So why Advisor360 bought them I hope they got a really good deal. I’m hoping that the they did and then maybe they can figure out some way to take advantage of this but just seems unusual selection from Advisor360 considering the breadth and depth of their platform, why they choose this particular company to buy. According to the press release, “we’re thrilled that this business is now part of one of wealth management history’s largest providers of integrated technology solutions”, said Dave O’Brien, CEO of AgreementExpress.

There’s lots of opportunities around for acquiring interesting onboarding technology and why you would do it and we’ve done a lot of RFPs for these types of things and some of the areas we look for is flexibility in the underlying technology, how usable it is, how well it integrates, of course with our as a group integration score. We always want to know how well these terms integrate. And just bringing custodial data isn’t really much of an integration because most of its flat files. So we don’t really include much of that as in terms of the strength and depth of an integration. We’d want to see their tools integrating with other platforms to be more of a workflow environment.

So when you’ve got like we were talking earlier about FNZ buying Appway, Appway a very strong workflow engine of course, they’re not in the same categories as AgreementExpress in terms of the client base where they’re looking at much much larger firms, but this same cut type of functionality, account opening workflow, moving data between different systems, in your organization. From the custodians to your would start in the CRM same data, the custodian bringing it back, setting it to compliance. There’s a whole workflow involved when you’re opening up accounts, and being able to manage that orchestration layer. We want to look for tools and technology that enable the clients to to modify that orchestration layer. Docupace has got a good product there when it comes to new account onboarding. Orchestration was supporting multiple custodians putting multiple accounts in the same envelope or so you can even open up many different kinds of accounts at the same time, so Agreement Express never really had any of those because they were really working with much smaller firms. So this is a strange one for us. We’ll wait to see how things shake out and where Advisor360 employees agreement expresses technology.

6. Asset-Map Partners with Cetera to Empower Financial Professionals with the Leading Advice Engagement Experience

So number six Asset-Map partners with Cetera to empower financial professionals with leading advice engagement experience. You can find this article a couple places. One is WealthManagement.com and their wealth stack roundup, you can find it on Barron’s. And you can also find it of course on Asset-Map’s own website. So what are we doing here? We’re talking about partnership with Cetera, one of the largest independent broker dealers in the country with over $300 billion in assets under administration. Of course Cetera also is a has an allotted number of subsidiary broker dealers that they’ve built up over the years and Asset-Map you can check them out at Asset-Map.com is what they’re calling financial advice engagement.

I’ve always been impressed with the way it was built, the CEO and founder Adam Holt built Asset-Map a data visualization tool that shows all of a client’s assets, investments, expenses, insurance, everything all on one page. So it’s really nice, of course, you could build it by hand on in PowerPoint, but the Asset-Map automates that whole process and it brings in data has integrations with a lot of other tools, CRM, financial planning tools, and allows the advisor to present this information in a much more friendly way in a visual way that I think a lot of clients appreciate. A lot of clients get right away versus 40, 50, 100 page, detailed financial plan with lots of complicated charts and graphs.

So Asset-Map has really taken off over the years. Many, many thousands of advisors are using it. I think they’ve got over some numbers. 1.25 million clients have used advisors have used it with 1.25 million clients. $1.5 trillion in financial instruments are passed through the platform. And they launched a new product called Discovery, which is data gathering. So it automates the big data gathering process and feeding that into their system. 

They also all launched into the platform called Signals, which alerts advisor advisors different risk events that occur and they have target maps that allow that brings from goal based venture conversation. So started out as a very complimentary application to financial planning tools. It’s grown over the years into almost its own pseudo financial planning tool. I still think a lot of advisors who are using it, still use it in pairing it with one of the big financial planning platforms but you can almost use it as a as a planning tool for a client who maybe have not such a complex financial life. So this this partnership with Cetera makes it makes it the one of the one of the biggest clients, maybe their biggest client. So Tara has over 8000 advisors who all have access to Asset-Map. So it’s a big it’s a big deal for Asset-Map to launch this and launch this partnership with Cetera they’ve got a lot of them. They started out very small focusing on individual RIAs and worked their way up over the years to some of the largest broker dealers like equitable X equitable uses asset map lots of bigger ones using it and esoteric so it’s definitely something you should take a look at you can check them out at Asset-Map.com.

7. Private Advisor Group Introduces WealthSuite Investment Platform for Advisors

Next up in the news, we have story number seven Private Advisor Group introduces the Wealthsuite investment platform. Private Advisor Group, one of the largest and fastest growing independent wealth management firms in the country has introduced wealth suite, a new investment management platform, exclusive to its network of over 750 financial advisors. The platform aims to drive efficiency for advisors and approved investor experience. Here at Ezra Group we are always excited when we see a new platform, broker dealer platform or RIA platform come out. So we’re very interested see wealth suite and I had a chance to chat with Private Advisor Group’s new CEO Frank Smith about it sounds like a great platform.

It is built on Orion Advisor which they signed a deal with in 2019 to be their wealth management technology. And it is a sort of blended wealth platform slash TAMP platform available for their advisors. There’s Investment Strategist from BlackRock, Fidelity, Orion of course and Wisdom Tree who are providing the strategies and investment capabilities and models and the it’s a multifactorial platform, of course as Orion is with a bespoke mutual fund ETF and blended mutual fund ETF model portfolios, along with custom indexing and tax optimized solutions delivered through an SMA structure.

Last year was a great year for Private Advisor Group, they brought in over $4.4 billion in newly affiliated AUM 2022. So it’s a good deal. So we’re looking at when we look at these types of platforms, we compare them with other platforms that are similar, usually broker dealer platforms, which are looking more like just really big RAS anyway look at our LPL ClientWorks. Cetera has their platform called AdvisorWorks. Commonwealth Financial has Advisor360, Client360, which we talked about Advisor360 earlier, Ameriprise has their own platform. And these platforms have a mix of capabilities. Usually they’re, of course full featured in end to end some of them some pull in different outside applications. Some have different levels of of capabilities that would they built proprietary from all proprietary like Commonwealth to a mix like LPL where they use vendors on the back end for things like UMA management and portfolio accounting, then they’ll build their own interfaces and other types of tools on top. Ameriprise, for example, built their own CRM, which no other firm and those other firms have done. So everyone’s trying to do it a little bit differently.

When we analyze these types of capabilities, whether it’s a broker dealer or an RIA custom platform, we usually break it down to client experience, advisor experience, and then the wealth manager the underlying wealth management technology. So we evaluate the portal client portal advisor portal, we look at digital account opening how well that works, and how well it’s integrated how well the data is collected. We look at new advisor onboarding, as well as decline onboarding we look at the practice management technology can do benchmarking, what type of other tech capabilities to the offer? How tightly integrated are they homepages, third party applications, common task workflows. These are all the things that we look at when we’re evaluating these types of platforms.

We haven’t done a full evaluation on the Private Advisor Group platform yet, but basically, this is based on Orion. We know pretty much what it’s going to be. But it’s always interesting to see how these different firms decide to do these things and decide to bring these capabilities and how slowly or build more bespoke capabilities for their teams and for their advisers. It gives them a little bit of a benefit, right? Because I’ve heard one broker dealer or one very, very large or a aggregator make these comments like we’re all trading the same advisors back and forth. So all the advisors know what the different capabilities are the technology platforms, and they becoming a bigger and bigger part of their decision making process besides just payouts and other perks. They’re looking at the technology. So if you’re looking at LPL Commonwealth, Ameriprise, some very large RIAs like a Private Advisor Group, or a Mariner or other firms are going to look at the technology and see well, is this going to help me grow? Will this help me scale? So interesting to see how private advisory group is doing and looking forward to seeing other large fast growing independent wealth management firms also launched their own bespoke platforms. 

9. Ezra Group WealthTech Integration Score Updates

Every one of our news episodes includes a quick update on the Kitces-Ezra Group advisor tech map. You can find the latest version of the map at Kitces.com/fintech map this month. We’ve got a couple of fun changes. We have a couple additions to the map company called FinCompliance.io is the website, which is an RIA, compliance consultancy and software company they’ve got a combination of compliance technology solutions for advisors. They also provide these solutions for insurance agents, solicitors, private funds and fencer vendors as well. They have a they have a compliance portal. They’ve got decent technology suite. You can check them out at FinCompliance.io And they’re in the compliance category.

Another vendor added to the map is called Think-Legacy.com, they are as the word as the name implies, they provide estate planning software. So for financial advisors that are doing estate plans, you can take a look at think dash legacy.com They’ve got some interesting tools to help you manage your clients across the generations. Do discovery, provide them with reporting. They’ve got some training as well as coaching at Think-legacy.com. So they’re in the financial planning specialized financial planning category under Legacy.

There are some removals this month we’re removing TradingFront, TradingFront has terminated operations. They weren’t around for very long, and now they’re gone. So the say goodbye to that online robo trading platform that was enabling advisors to deliver digitally enabled solutions for their clients. It just didn’t seem like there was that much available work for these firms. They keep coming up with these very generic, very commoditized platforms, and they just don’t seem to work.

In other news, if you are a vendor that provides a CRM overlay, we get a lot of calls from CRM overlay vendors and asking to be moved into the CRM category. And I don’t think it’s a good idea for you. You really want to be in the overlay category. First of all, you are an overlay if you don’t build your own CRM technology, if you’re building on top of Salesforce or Microsoft Dynamics, you’re an overlay. Doesn’t matter how much additional capabilities you build on top, you’re still an overlay, it still requires a Salesforce or Microsoft Dynamics license to use your software that means you’re an overlay and it’s good to be overlay. I’m a Salesforce, or Dynamics customer and I want additional capabilities, I’m gonna look for an overlay. I’m not gonna look for a full featured CRM that I have to replace my Salesforce or examines with so embrace the overlay. It’s good for you.

We’re always looking at different categories to try to enhance the information available as vendors change. Some come in, some are leaving on capabilities change. We’re always looking at Michael and I looking at how to make them that more useful. So we’re looking we always look to tweak the categories. So another move is category credit is the advice engagement category, which sort of was a Swiss Army Knife category or I was calling it the junk drawer category. When I interviewed Adam Holt from Asset-Map, we were just kind of putting things in there, we didn’t know where else to put them. We saw him crazy advice engagement category, but there’s more and more firms that are vendors that are bringing new capabilities that really feel like advice engagement Elements is one we’re moving it from lite financial planning into advice engagement as they have pivoted away from, lite financial planning more towards personal wellness and ways to engage clients ways to communicate better with clients. And we’re probably going to be eliminating plan monitoring category when they can’t speak and all those all those vendors are going to be going into advice engagement. I think there was only two or three vendors in plan monitoring, and Hubly was in the I don’t know why they’re not really plant monitoring. They’re more of a workflow tool. But my plan map and nudge are moving into advice engagement. And we’re getting rid of the plan monitoring category which is good because we’re running out of space on the map so the more space we can free up by getting rid of a category that actually does give us a little bit more room to expand in other areas. So that’s another change and there’s gonna be a new category in the February map called advisor data warehousing.

As you heard earlier story, a company BridgeFT, wealthtech as a service, they are going into the adviser data warehousing category, as as well as Skience which is currently in the serum overlay category. I think we’re going to add another logo for them because these are applications you can buy standalone. So if you have a separate piece of software that you sell standalone that you don’t need to buy the core platform with, we will consider putting another logo on the map for you in that category. So please let us know. So Skience will have one logo under CRM overlay because they’re built on top of Salesforce and another one in the new category advisor data warehousing and new vendor mile marker will also be an advisor, data warehousing. There was all the changes for the map.

Now the Ezra Group wealthtech integration score, which coordinates with the Kitces Ezra map because as we add new things to the map, we have to add new those same vendors to our scoring so when a new vendor comes in, like think appliance or think legacy where they’re gonna we’re gonna look at them, contact the vendor, check the website and gather all the information we can about their integration capabilities, feed that into our algorithm, and it’s going to generate a score. So we’ve got a score available for every vendor on the map at least three quarters of them on the map on our website EzraGroupllc.com, on the homepage if there’s a menu item for what we do, and you click on that and click on wealthtech integration score and you can look up any score you like.

We are also looking to make the wealthtech score more useful, more accurate. So we’re constantly tweaking it a little bit as we get also get feedback from vendors and from clients that are using the scores. And one thing we did that’s coming out this month is an update to the scoring methodology. There’ll be emailed out to go out with more details, but we’re changing slightly tweaking, breadth, depth and usability and in depth were modifying the way we calculate that score and giving more more a higher score to firms that have deeper integrations. So again, a little bit more for benefit. So if you’ve got 10 integrations and they’re all level five, you’re going to get an extra benefit. And if you attend integrations, they’re all level one. So if you have a five level fives and five level ones, you would get more benefit there. We don’t want to penalize you because you created a bunch of one integrations without acknowledging we have these five very, very deep, very robust integration. So we tweaked the scoring there. So you’re gonna see some of the scores change. I think about 100 of the scores went up about 100 scores went down some of the middle. Based on these new changes.

We also expanded our the questions we asked around usability, and there was a focused on API’s, your documentation, your authentication software. So we’re asking a lot more questions to gather more information around those capabilities, how well these vendors not just say, Oh, we’ve got API’s, okay, great. Well, how well do they work? What support do you have for developers? How much do you have sample source code? You have documentation? Is there a sandbox for developers to log into things like that? So he really can, can look at our score, and know that a higher scoring vendor has a way more robust capability than a low and scoring vendor.

10. In Memory of Gavin Spitzner

Before we wrap up, I just want to say that this episode, this News episode is dedicated to the memory of my good friend and colleague, Gavin Spitzner. Unfortunately, Gavin Spitzner lost his battle with AML leukemia just a couple of days ago, I have to say it was a huge shock. I looked it up, we met in 2011. I didn’t realize exactly what year was we’ve been known each other for quite some time. When we ran to each other a lot in the beginning at conferences and different meetings. And then when when Gavin left, he was working at Prudential where they were purchased by Envestnet and then he went off on his own have to choose an Envestnet and then we spent a lot more time interacting. Since we’re both consultants, and Gavin I collaborated on a lot of things. He worked with us on a number of projects. He was always always, obviously one of the smartest people in the industry so we loved having him on our projects, but also super nice person, and we spent a lot of time on the road together at conferences.

I shared some stuff online about some of the time we spent together. It really gives you kind of grounds you in, in realizing what life’s about when you see someone who you knew so well. And one minute they’re here and they’re there fine. Then they announced they’ve got this terrible disease. And before you know it, they’re gone. It’s just really a horrible thing. I just want to dedicate this episode to Gavin’s memory please if you knew Gavin I’m sure you’ve already done this, but if you don’t go check out RIAbiz has a great article about him, it’s a summary of his life. I think he did a really good job encapsulating what it’s like if you didn’t know Gavin reading this, I think will give you a good understanding of who he was as a person. And then Josh Brown and his website, on LinkedIn, but you also find it on The Reformed Broker. He wrote a bit of a summary about his time understanding Gavin, a couple of the media, in our industry also put out some information about Gavin so please check it out. Wherever you are we’re thinking about you, man.

Alright, so that’s the end of this episode of wealth technically podcast. Thanks for listening. Please go to our website at EzraGroupllc.com. Go to the bottom of the homepage and sign up for our newsletter. Once a month you’ll receive an email chock full of wealth management goodness news information. Analysis, you will not be disappointed. Thanks for listening and talk to you all again next time.

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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

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