Ep. 218: January News Roundup

Come on in and sit back and relax. You’re listening to Episode 218 of the WealthTech Today podcast. I’m your host, Craig Iskowitz, founder of Ezra Group consulting, and this podcast features interviews, news and analysis on the trends and best practices, all about Wealth Management Technology. This is our January news update, I always love the news and so do you, I know it. Got some great stories to cover today. First up, Bill Crager transitioning out as CEO of Envestnet, big news. Number two Vestwell raised as $125 million Series D round. Number three is going to be a Osaic acquires wealth management business of Lincoln Financial, number four Addepar is going to do an IPO, and then our last story is one of my favorite parts, the review of the advisor tech map and the Wealthtech Integration score.

But before we get started, let’s talk about tech stacks. At Ezra Group, we’ve seen tech stacks of hundreds of RIAs and let me tell you, most of them are loaded down with tech debt. So you shouldn’t feel too bad about yours. But let’s face it tech debt is like a giant anchor, holding back your business growth. If you want to free your firm for exponential growth, you should run, not walk to our website EzraGroup.com and fill out the Contact Us form. Our experienced team can evaluate your current tech ecosystem, deliver targeted recommendations, optimize your existing systems and operations or run an RFP and help you implement new software to take your firm to the next level. You can take advantage of our free consultation offer by going to EzraGroup.com.

Topics Covered

  1. Bill Crager to transition out as Envestnet CEO
  2. Vestwell raises $125 million in a Series D round
  3. Osaic acquires the wealth management business of Lincoln Financial
  4. Appedar is planning an IPO
  5. Advisortech Map and WealthTech Integration Score updates

1. Bill Crager to transition out as Envestnet CEO

First story just dropped today. This is big news and it’s fresh off the wire, Bill Crager to transition out as Envestnet CEO. Wow, that was not surprising but not expected, certainly didn’t expect that so soon this year. Bill took over after the death of co founder John Bergman in October 2019, as we all know. He’s been a terrific leader under trying circumstances and of course, Bill was instrumental in building the company, the market leader in wealth management technology and TAMP services that they are today.

I’m sure there are some people who are asking, did they expand too far and too fast? There’s been a lot of news about Envetsnet of course, being the market leader they have a lot of news out. Just last month, there was news that they were exploring the sale of their Yodlee arm data aggregator Yodlee which they acquired in 2015, has it been so long, eight years? In 2015 they paid $590 million for Yodlee in 2015.

A Raymond James analyst wrote in November, that persistent deterioration in the Yodlee business is a cause of real concern for Envestnet. Not good news when you’re trying to sell a component of your business that the business is deteriorating, but they’re still looking to sell it. Is that a sign of where they intend to go with the business they intend to start breaking things up to they intended to make a sale? We don’t know.

Their revenue history. If you look at annual revenue over the past number of years has been slowing 2017-2018 18% growth and it dropped in 2019-2020 to 11%, bounced back up in 2021 to almost 90%, and then sort of came back down to earth in 2022, only up 5% revenue growth was not a great sign for them. It looks like 2023 could be another down year. We don’t have fourth quarter results yet, but the third quarter results up for the nine months ending September 30, their total revenue was down 2%. Total net income is down 25%. It’s still on a loss on adjusted revenue whether adjusted EBITA is up 8% and is positive and their adjusted net income is up 5% and as positive as at about 97 million, which of course you can find on the Envestnet website. But there’s a lot to talk about here. They’re asset base recurring revenue, which would be the TAMP, PMC their outsourcing increased 9% in the third quarter, which represents 61% of the total revenue. So that’s 60/40 asset based, a 60% asset base revenue and 40% SaaS revenue.

There’s lots of options here, which way do they go I wrote a LinkedIn post today, with just some thoughts off the top of my head. So the media of course will start positioning this as another string of CEO departures that we’ve seen in the past year or so. With Eric Clarke from Orion stepping down. Aaron Klein from Nitrogen Wealth formerly Riskalyze stepping down, Eric Rapaport from SMArtX Advisory stepping down and as well as a few others.

Bill was one of the founders of Envestnet so similar to those other founders and CEOs and haven’t been a huge part of their growth. They’ve hit over 5 trillion in client, AUA plus AUM over 100,000 advisors. Clearly the largest in the space are the technology leader, especially in the enterprise area. There’s no other vendor that has that breadth and depth of offering plus service and support and a comparable client base that Envestnet has.

At Ezra Group we do a lot of conversions from different from one vendor to another and when you’re going to a certain scale when you’re talking about, over over two $50 billion in assets, there aren’t that many firms out there that have that, but those firms are almost exclusively on Envestnet. At least the ones that have recently transitioned, it’s just difficult to to move a business of that size onto any other vendor. Now that’s not to say it’s always going to be the case and other vendors are growing fast and they’re going to get there eventually. But right now, we’re in the middle of an at Ezra Group of a large broker dealer conversion to Envestnet right now, and they weren’t a lot of other options for them.

Envestnet is still in a good spot, but it’s not going to stay that way. They’ve made a lot of acquisitions that were harshly criticized. From consultants point of view, those various components that they picked up still are not as tightly integrated as we would like them to be. And they still operate as discrete businesses, especially when you talk about Tamarac, Yodlee, MoneyGuide, those are the biggest acquisitions. They’re good businesses. With the exception of the comment from Raymond James about Yodlee but Tamarac is a leader. They’ve got 40% of the RIAs with a billion more in assets are using Tamarac, MoneyGuide is still up there, although their independent RIA share may be declining, according to some surveys, but they still have a huge market share in the broker dealer space.

There was other big tech that they acquired, which may have forgotten about, remember, Folio Dynamics, which I believe Envestnet paid $200 million for and shut that business down, try to convert clients over to their core platform, had some hit or miss success there. And lots of smaller acquisitions like Harvest Wealth, Advisor Innovation Labs, which seem to have maybe disappeared we don’t really hear much about them. So a lot of people expected these different pieces to come together into a more cohesive platform. That goal may have been impossible to reach considering all the legacy tech they were trying to connect into the legacy tech they already had.

As I mentioned, Envestnet is still the leader in the both the RIA and the broker dealer spaces and has lots of competition gunning for them. Who are they going to pick? What type of person are they looking for as the new CEO? We really don’t know. There was an email that came out today, Ezra Group is worked with a number of Envestnet’s clients, either doing support for them, doing strategy, converting to their platform, converting from their platform, full disclosure, Envestnet has also hired Ezra Group in the past for product strategy, which we have done for them, though, we’re not working for them at the moment.

So an email we received from Envestnet said, I want to assure you first and foremost that Bill is not going anywhere. Alright, good to know. Bill will remain as CEO through March, at which point his official title will become Senior Advisor. Tom Sipp, Executive VP will continue to lead Envestnet’s business lines, partnering closely with Bill and board chair James Fox, who will serve as interim CEO at that time. I also want to assure you that the leadership team that Bill and Tom have put in place over the past year are committed to our clients and to continuing to execute on our strategy. I would expect that. In his new role as Senior Advisor, Bill will work closely with the operating group focused on delivering client results and executing on the major initiatives that Envestnet has undertaken in the last two years. He will be an accelerator for our teams and will help us to achieve our very ambitious goals for the next few years. As we continue to expand our product offerings, extend our market reach and foster deeper client relationships.

So what is next for Envestnet after Bill Crager? We’ve seen a lot of firms as I mentioned, change CEOs and it’s not unusual in many different industries, for the founders at some point to move on. It’s not because they there’s any issues necessary with their leadership skills or with their vision. It’s just that firms grow over time, they change, the market changes and oftentimes the person there’s a great book called, What Got You Here Won’t Get You There. So while Bill has done a great job up until this point, maybe the board decided that he wasn’t right going forward or maybe he decided he wasn’t right and wanted to take a break. After 25 years in any one business, it’s not unusual for someone to say I want to take a break. You do something else, clear your head a bit. So this could be a great move for everyone involved.

I’ve been checking with some people I know in the industry and pulling in some some comments. So these are some anonymous comments that I’ve gathered. So some people think that the board gave Bill till the end of this year to improve, numbers didn’t look good and this is why they are requesting that he move on. Again, there’s no evidence of that this is just people’s opinions. And he they think that might be with the the Yodlee rumor, they might be looking to sell off other businesses that hadn’t been sold in the past. They could here’s a crazy idea. They could sell the TAMP business and become a pure SaaS. Just because, Envestnet’s got the technology platform and they’ve got their TAMP business. They’ve got PMC they’ve got a lots of different things. And Assetmark would be a comparison as a pure TAMP. And there’s lots of interesting numbers. If you look at the comparisons if you look at just Assetmark as a TAMP versus Envestnet. Assetmark is around 100 billion in AUM. Yet their market cap is around 2.2 billion.

With Envestnet, they’ve got a much larger TAMp asset base. According to the numbers 363 billion so triple, triple Assetmark’s AUM yet their market cap is only 2.8 billion or 3 billion. So only 30% more. That’s a an issue there. There’s clearly an arbitrage somewhere in there. And there’s lots of ideas do they do they split off the TAMP business and become pure SaaS? Do they sell it? Do they sue someone come in and buy the whole company then split it up internally or spin off different pieces of it? There’s a been talking about different partners that have been announced with Envestnet such as older partner was BlackRock, Blackrock invested, I believe $125 million dollars to buy 5% of the company. They may want to buy Envestnet, and then they could take the TAMP, since they’re an asset manager anyway, that would just fit perfectly with them, and then absorb Tamarac and the Envestnet enterprise platform MoneyGuide into their Blackrock solutions unit. That’s an option that could do that.

Or maybe there’s an option there’s an idea that they get acquired by FNZ, announced a partnership with them last year where they’re going to be reselling their custodial solutions. So that could be an option and maybe that that’s very common for firms. To start, start first with a partnership and learn about each other and get a little bit familiar and then make an acquisition or merger. So that’s an option and of course FNZ is looking for US business bridgehead. So there’s there’s one idea now spinning off our splitting off the TAMP from the SaaS business and keeping them both as public companies is one option or selling to a PE firm is an option.

Just looking at the revenue multiples for a sale, a TAMP is about normally when a TAMP sold, it’s about three times revenue. But when a pure FinTech SaaS business, that’s also that’s growing, okay, you get assuming it’s growing. When they’re sold. They could be eight to 10 or 12 times revenue. So clearly, there’s there’s an arbitrage era. If someone could manage to peel off the SaaS business that’s been highly integrated with the TAMP business. I don’t know if they can even do that it’s possible. So that will be something that could unlock some hidden value in in the firm here. So there’s a lot to talk about.

Speaking of Assetmark. Just last month, a Bloomberg article came out saying Assetmark’s Chinese owner is exploring strategic options. So it sounds like they’re not happy sitting with what they’re holding. Waithai Securities is working with advisors to evaluate the possibilities to sell a full or partial sale of their holdings of Assetmark. The Chinese brokerage owns almost 70% of the company, according to securities filings, and they acquired at Cinemark in 2016. Then took a public selling off 30% in the IPO. So the story just broke today. Expect more details in the coming weeks and we’ll be following along.

2. Vestwell raises $125 million in a Series D round

Next up, Vestwell raises $125 million in a Series D round. Vestwell, the record keeper as a service and employer and individual savings platform provider has quietly become a major player in the world of government backed investment account businesses, whether the business of government backed investment accounts, accounts like of course 520s we’ve all heard of government retirement accounts. ABLE accounts, which are for people who are experiencing disabilities, as well as private sector investment accounts. They’ve been building up behind the scenes quite the business. So with 529s and ABLE accounts, it’s interesting. They both got a boost from the Secure 2.0 Act.

Now ABLE accounts I wasn’t aware of this before. Recently, ABLE stands for achieving a better life experience, and they’re established by state governments and were authorized by Congress in 2014. They allowed beneficiaries with qualifying disabilities to save in a tax advantaged account, provided the money is spent on eligible expenses, which can include higher education, as well as basic living and housing expenses. We all know what a 529 account is. It’s a tax advantaged plan, state sponsored, used for higher education, usually for children. So Vestwell has been building a business managing these types of accounts. And they’ve been raising a lot of money along with the $125 million series D round in July of 2021. They raised a $70 million Series C round.

This most recent round, has given the firm Vestwell, a valuation of a billion dollars. Impressive. They’ve raised a total of 237 million across all their funding rounds, according to data from CrunchBase. Existing investors include Fin Capital, Primary Venture Partners and Fintech Collective, as well as existing investors, Goldman Sachs, Allianz Life, Northwestern Mutual, and Vestwell’s board now includes Lightspeed.

So they’ve been expanding that nicely. The company will likely turn profitable in the next 18 months according to a press release. And IPO is a very real possibility. According to CEO Aaron Schumm. Vestwell has 350 employees and plans to use the proceeds from the latest round of funding to help boost its sales and engineering teams and bring out new products such as emergency savings accounts and health savings accounts.

The state run retirement plan market is complicated. There’s a heavy startup cost and you’ve got to get to certain scale before you can earn back those startup costs because you’re still covering your operating costs. So some industry consultants see this funding round as confirmation that there’s a lot of investors out there who believe in the Vestwell business, and it validates what they’re trying to accomplish and their position as a leading provider.

There’s an industry consultant. I was reading an article I believe this was in InvestmentNews, which says that Vestwell has won every single bid they’ve put in for a state retirement program. That’s just impressive. And states aren’t the easiest places to work with. There’s a lot of paperwork and bureaucracy and being able to navigate every state has different procurement processes, and being able to win multiple bids is certainly an accomplishment.

Vestwell is built up this is market share, they are now the record keeper for nearly half a million 529 college savings accounts, totaling nearly $15 billion at the end of the third quarter. And they also administer more than 74,000 ABLE accounts, totaling $735 million in assets, representing a 47% share of that market. You think the market will be bigger, only a billion was only 47%. Okay, so 1.5 billion total. That’s a shame. Well, it did just come out a couple of years ago, but you’d think more people would take advantage of that.

According to sources the whole retirement business, State Retirement businesses very much a relationship game. A lot of the same state agencies, or even a have this the exact same person oversees their 529 plans, the ABLE programs and the state facilitated retirement programs. So Vestwell seems to play very well together in those different arenas. And it’s why they’ve been able to pick up these wins, they they’re targeting the right people, and offering multiple options. And I’ve always recommended it’s better to have one vendor than three vendors if you have three different programs because you’re going to get better, hopefully better pricing and when something goes wrong, you’ve got one person to call it’s it’s saves a lot of time and money.

Some recent news on Vestwell in August, it was announced that Vestwell was managing the first multi state retirement program that started there using Colorado’s existing auto IRA functionality as the framework to launch a program in Maine. Vestwell has been wcharged with record keeping responsibilities for the auto IRA program in states including Oregon and Connecticut and this situation, the main retirement investment trust, opted to partner with festivals Colorado secure savings plan, and copy that program so that they will eventually offer about 40% of private sector state employees the chance to access workplace retirement accounts through an auto IRA option. Vestwell will administer the program with BNY Mellon running record keeping, custodial and admin duties for companies and employees in both states.

As it stands, it’s really incredible Vestwell is the only company that launched any state auto IRA program since 2021. And they administer more than 30 programs across numerous states, including auto IRAs, and 529 college savings plans. In just last month, Delaware announced that they were launching their own auto IRA program called Delaware Earns. And they partner with Colorado, which is run by, guess who, Vestwell. So now Delaware’s private sector employees who don’t have access to retirement savings can get into this program voluntarily and it’s fee free for employees and more. Again, Vestwell is running it and this news comes on the heels of New Jersey in September select Vestwell as their program admin for the Secure Choice savings program.

Vestwell, just cleaning up when it comes to these government run state run savings programs. And just for your edification, an auto IRA is shorthand for an automatic enrollment, individual retirement account. These programs require companies of a certain size to offer a workplace retirement plan of their own or facilitate payroll deduction into a state sponsored IRA at no cost to the employer. Now if the latter part of a worker’s paycheck would be automatically contributed, generally, three to 5% of earnings to the state plan, workers can opt out. So it’s an opt in which we all know greatly increases participation rather than an opt out rather than order rather than requiring them to manually opt in.

More than 800,000 private sector workers participate in an in an auto IRA program, which holds more than $1 billion in total savings again pretty small. Hopefully it’ll grow. There’s lots of workers out there that could use this program. And I have to tell you all the credit goes to Aaron Schumm and his team and being a visionary founder and having started a Vestwell back in 2016. And from people that people have told me that they believe he’s more accessible than the typical FinTech CEO, certainly better looking and a nicer guy. It couldn’t have happened to a nicer guy, so congrats to Aaron on all the success and and the whole team at Vestwell and to find out more information about Vestwell go to Vestwell.com.

3. Osaic Acquires the Wealth Management Business of Lincoln Financial

And the next story Osaic acquires the wealth management business of Lincoln Financial, this transaction will include sale of tools IQ of Lincoln Financial Advisors Corporation, and Lincoln Financial Securities Corporation, other companies to independent broker dealer and registered investment advisory firms. Together these entities comprise a national network of approximately 14 150 financial professionals. Additionally, Lincoln’s home office employees who support the wealth management business will transition to Osaic to continue to lead and support the business.

There’s approximately 108 billion in assets 71 billion in the AUA and 38 billion in AUM. So it’s a big deal for Osaic continuing to grow and become they’re clearly one of the leaders in the space right there with LPL in terms of number advisors, and total assets of transactions is expected to provide approximately 700 million of capital to benefit to link upon closing. And it’s anticipated to be used primarily to increase the company’s risk based capital ratio. So this is another in a long string of insurance companies, divesting themselves of their wealth management businesses. We’ve seen other firms such as Jackson, national security on Voya, MetLife, who’ve all done the same thing to the benefit of various IBDs and other wealth management firms that are now growing as they acquire those businesses.

There will be some upheaval of course, at Ezra Group we do a lot of work with broker dealers, and we often help when they’re doing acquisitions. There’s always issues with advisors moving from one broker dealer to another. Lots of complaints. What we’ve found in any conversion or any acquisition is the rule of thirds. About a third of advisors are going to love the idea, and those are your biggest fans. You want to cultivate them, make sure that they’re out there promoting the change, and about a third are going to be indifferent. So they just want to get their business done. They’re open to see what’s happening, and they’re the ones you need to focus on because they can make or break the conversion. So we want to get those third on your side spend a lot of time with communications, a lot of internal marketing, a lot of training and hand holding of those guys and women. Then there’s the last third last third are the ones who hate the idea. They’re actively opposed. They’re going to actively try to undermine the work and then deal so those guys, you want to wait for them, go after them last. Get your first two thirds under your belt and then start working on the last third and try to win over as many of those as you can.

Osaic headquartered in Phoenix has roughly 11,000 advisors and around 500 billion in total assets. And of course, the company rebranded from Advisor Group early last year, and they are backed by private equity firm reverence Capital Partners. Reference Capital Partners have recently announced that they’re seeking to sell up to 20% of their stake in Osaic, which is interesting. So kind of like reading two parts of newspaper at the same time. Here Osaic is acquiring still an acquisition mode, still still spending money, and yet their PE firm is looking to sell. So they’re clearly continuing to grow which is of scale is incredibly important in our business.

The reference Capital Partners stake in Osaic which includes Osaic Wealth, Triad Advisors, Osaic Institutions and Woodbury Financial Services is estimated to be worth 2.5 billion. It’s a nice round number. I think Woodbury is rebranding as well as of this month. Most of the IRAs and broker dealers who I’ve spoken to over the years we’ve been acquired by Osaic have had relatively smooth experiences, which is a great testament to the team at Osaic, the core internal team that does a lot of the work converting advisors over not only to their affiliation not only to their compliance and reporting, but to the tech platform.

So the tech platforms are the areas that we really focus on at Ezra Group. Now I know Lincoln Financial broker dealer clears to Fidelity, having switched from Pershing about eight or 10 years ago. Now, in 2017, Lincoln Financial Network announced that they had partnered with Fidelity to rebuild their tech platform, which is called advice next, and much of it was built on wealth scape, which is Fidelity’s proprietary tech platform, which they I know they tried to integrate Imani into that to mixed message to mixed reviews. Now related to our earlier story about Envestnet, this deal is good for Envestnet. Why? Because Osaic the former advisor group is one of Envestnet’s longest tenured and largest IBD clients. So they’ve been on the Envestnet enterprise platform for all this time. Very strong client for them, and most likely, now that they’re acquiring Lincoln Financial’s business. The advice next platform built on wealthscape will go away and they’ll transition it onto Envestnet. So another 100 billion for Envestnet so chalk that up into that category. If you’re looking for more information about Osaic, you can go to Osaic.com.

4. Addepar is Planning an IPO

Next up, Addepar is planning an IPO. Now for those of you who aren’t aware, Addepar is a wealth management tech platform that specializes in data aggregation analytics portfolio reporting, mostly for alternative investments at least that’s where they started life out, focusing on alternatives complex illiquid assets like limited partnerships and private equity. The firm was founded by Joe Lonsdale and Jason Mira back in 2009. And the firm has its origins link back to Palantir Technology which was co founded by Lonsdale in 2004.

The platform was initially developed to meet the needs of single family offices. I believe, was Lonsdale himself who had problems with his own family office and decided to build this technology figuring other family offices would have the same problem. They work with independent advisors, private banks, broker dealers, across more than 30 markets globally. They’re really focused on the family office and ultra high net worth space. They have since greatly expanded. They currently manage assets their AUM is over 5 trillion as of December 2023. And the company has a team of over 850 full time employees.

The breakdown of assets, according to the company about 40% is now in alternatives and private assets, meaning 60% is in public assets. So a bit of a shift there. According to CEO Eric Poirier, RIA assets represent more than 2 trillion of the 5 trillion of AUA. So that didn’t really making some inroads into the RIA space. They have over 1000 client firms in that wide range of companies. So they’re having them IPO makes a lot of sense considering the the state of the markets and the state of the other tech at a price always been very high end and they’ve always charged up a lot for their for the technology because they could there really wasn’t anyone with the capabilities around alternatives and others other assets and especially on data aggregation pulling the data in, that could really match at apart but now they are moving downstream to higher end alright.

Addepar is backed by investors such as HVC, which is Joe Lonsdale’s firm Formation 8, D1 Capital Partners, Panorama Point Partners, Signatures Capital, Sway Ventures Laszlo Bock, David O Sachs, Harold McPike and others. Now the latest Addepar valuation that we that we have, I think it’s been 2021 and their Series F round, which is around $2 billion. So that’s a decent amount. I’m not sure if it’s gone up or down based on the markets. There has been some news on Addepar in 2017 they acquired a company called AltX, which has machine learning technology around to describe alternative investments and incorporate reference data. So this technology identifies a normalized both structured and unstructured data. So this helps them with their reporting on alternative investments.

In May 2020 Addepar announced the launch of their own alternatives marketplace where clients could acquire illiquid assets such as hedge funds, private companies, securities, liquidity solutions for fun interests, so it’s a nice additional revenue stream for the firm. In October 2021, they made a big acquisition, buying, trading rebalancing platform advisor peak and that was a big tell that they were moving into the RIA space, although they had previously had an arrangement or rebalancing deal with RedBlack in 2017, which makes a lot of sense that they acquired AdvisorPeak since AdvisorPeak was founded by some of the alumni of RedBlack as well as Trade Warrior.

When they acquired them, that really gave them a good foothold because now they own the technology. They had started to talk to AdvisorPeak and we’re partnering with them, and as we’ve said many times a partnership is often the first step towards an acquisition, as we saw in this case, even earlier, there were some rumors that advisor peak was looking to buy the old folio dynamics business before invest in acquire them in 2017. So clearly, they’ve been working their way into the RIA space for quite some time. The total funding at Addepar is around 475 million according to CrunchBase. Again, including the Series F 150 million in June 2021 and a Series E of 117 million in November 2020. So they’ve certainly got plenty of cash to make acquisitions like they did with AdvisorPeak expanding out their teams are building out sales and marketing as well as engineering and we’ve seen a lot of job postings from Addepar specifically in their overseas location in Pune, India, looking for software engineers, data engineers, integration engineers, as well as people with experience in trading and rebalancing. So they’re clearly looking to keep building out their AdvisorPeak tools with some qualified engineers. And we could they could have an ecosystem or that have applications as well such as sort of a Salesforce AppExchange. According to CEO, Eric Poirier or something else they were also looking into. If you want more information about how to park go to Addepar.com.

5. Advisortech Map & WealthTech Integrations Score Updates

Now it’s time for my favorite part of the news. It’s the advisor tech map and Wealthtech Integration Score update. So as you know, Michael Kitces and I produce the advisor tech map every month, which you can find on Kitces.com, and we review all of the company’s products that want to be added to the map, and also talk about changes to the map or reorganizing it to make it more useful and beneficial because that’s really the point of the map is to provide value to independent advisors, wealthtech firms, investors, anybody who’s interested in technology for individual advisors. So one note if you are a product company, but you have software but you’re actually a service, you’re not actually a software company, we’re probably not going to put you on the map, the map is designed for software vendors. If you are selling software, if your primary means of generating revenue is software sales, either per seat or licensing or some other method, but you’re selling the software itself, then you’re going to get you have a very high probability of getting on the map. If you’re really a service provider that uses software as part of your service, then we’re not going to let you on the map. So just a heads up we get every month a couple of companies that have great services, fantastic services that really help advisors out, but they’re not software companies, we can’t put them on the map. Just a heads up.

So the new companies being added this month include Boosted.ai. Their website is exactly as I just said, and they are an investment research provider. Their website says supercharge your productivity with AI built for investment management, artificial intelligence software that helps investor managers save time, improve portfolio metrics and make better data driven decisions. I always question anyone who says they got AI in their technology especially when it comes to portfolio assistance. I’m always very skeptical of any AI claims. Boosted.ai uses proprietary algorithms to start winning stocks and losing ones and I’m going to call the red flag on that because today it is customizable to your specific portfolio. Okay, great. That’s important, but AI isn’t part of that. Cut hours from research by letting our large language models search tens of thousands of new sources. Okay, that’s interesting. If you providing ask me a questions about 10ks and 10 Q data and you’re going to provide results to me, that’s interesting. I’d really want to see more information about how the AI is going to start winning stocks and losing ones but you can find out more at Boosted.ai They now appear in the investment research category.

A company called Complect, that’s right that’s out spelled. We really liked their website and their tagline “make compliance suck less”. That’s what I jumped right out at you on all in one compliance solution for investment advisors. Always looking for more ideas and ways to make it easier for advisors to deliver compliant program management and manage compliance across the firm. So check out complex Complect.com.

And finally, Wealth Hawk spelled exactly it sounds. This company is interesting, in fact, it was so interesting, it pushed us to create a new category on the map. What Wealth Hawk does is find its lead site lead gen three prospecting because they are finding new prospects based on money in motion events. Then they capture background and lifestyle data as well as mutual connections and affiliations to create a prospect profile, follow that money in motion event to newly created recipients and then help you convert these deals. This is really not lead gen per se, it’s more prospecting. So it encouraged us to create a brand new category which you will find on the map. If you have an app open is the upper far right hand corner under Business Development, it’s called Prospecting and there were three firms, three vendors in that space. One is Wealth Hawk, which you can find it Wealthawk.com, as I just mentioned, another one is called Aidentified, which is another similar firm that is looking for prospects and helping advisors identify prospects and doing research on those prospects and maximizing your connections as identified as also there.

The other firm we put in that category that which does do prospecting is more prospect organization is called Catchlight. It’s a Catchlight.ai And I’ve spoken about Catchlight many times. They are they were incubated in Fidelity Labs, and they don’t find prospects, they help you organize your existing prospects. So you feed them your list of existing prospects and catch light will order them in prioritization order based on their financial complexity. And according to their proprietary algorithms, which are based on AI I did do some deep dives on catch lights underlying tech it’s really a I come back with a proprietary score for each prospect, ranking them in terms of their financial complexity, and their methodology shows that the more financially complex a prospects life is, the more likely they are to convert to using an advisor. Catchlight.ai, also one of the three vendors in the new prospecting category, welcome prospecting to the financial advisor tech solutions map we’re happy to have you.

One thing I’m not sure I mentioned earlier, was we deleted any firms any products that were enterprise have been pulled off the map. And that was a long discussion Michael and I had about the goals for this map. And it really has always been independent advisors for this particular map. So it didn’t really make sense for enterprise products to be on the map. So we’ve pulled them off. I think as of last month, certainly, I’m looking at this month’s map, and they’re not there.

What Ezra Group is doing, we’re going to be coming out with our own map of just enterprise products platforms. So look for that very soon. Another interesting aspect around the map is I’m interested to hear your feedback. If you want to email me or tweet at me @CraigIskowitz or post on LinkedIn. What do you see the differences between the following four categories? Document Management, forms management, workflow support, and digital onboarding? They all overlap in many ways. Now there are some firms that do one or the other or pitch themselves as one or the other. But they really all require very similar capabilities, features and functionality. There are some slight differences, but there’s so much overlap. So that’s something Michael and I are debating whether we have made any changes yet. We haven’t updated anything on the map yet. They’re still all separate categories. But we are considering something to reorganize that area. So just a heads up there.

Around the wealthtech integration scores, thanks for all the vendors that are being added to the map for filling out your surveys. Please go to our website and and contact us and fill out a survey if you are a new platform or if you have added new capabilities, integration capabilities to your product, please let us know and as youtube.com so we can update your wealthtech integration score. We have also recently launched a press release last month about the recognition program for the WealthTech Integration Score, where firms that have a 6.0 score or above which is excellent and then on 8.0 score or score or above which is superior are allowed to use the new as your group badges that you can use the highlight the fact that you’ve got a great score that you’ve got strong integrations, you can use this on all your marketing materials on your website and promote it.

We also have some research available as part of the program, please contact us EzraGroup.com to find out more about the Wealthtech Integration Score recognition program. All right, you’ve reached the end of another episode of love tech today podcast. Thanks for listening before you go, go to our website EzraGroup.com, scroll to the bottom of the homepage and sign up for our newsletter. Once a month you will receive an email chock full of wealth management goodness news information updates, you won’t be disappointed. Thanks again for listening and talk to you all again next time.



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