Ep. 241: May Wealthtech News

Come on in. Sit back and relax. You’re listening to episode 241 of the WealthTech Today podcast. I’m your host, Craig Iskowitz, founder of Ezra Group Consulting. This podcast is all about the news, information, updates, and technology around wealth management. This is our May news roundup, we have a bunch of interesting stories for you and two special guests. I recorded some of this while I was traveling, last week and the week before at conferences, I was at the Envestnet conference out in Phoenix and then last week, I was at a client meeting in Texas so you might hear a different microphones. I didn’t I didn’t pack my big microphone that I’m talking on now. I apologize for the sound differences in some of the stories. The content is there isn’t what it’s all about the content. We have a bunch of stories, I’ll introduce them all and our special guests. But before I do that, let’s talk a bit about RIA 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. Envestnet Elevate Conference
  2. RightCapital Launches Integrated Risk Tolerance Tool
  3. Ex BlackRock Executive Salim Ramji is Named Vanguard CEO
  4. Advice Pay Promotes Kelsey Lewis to President
  5. AdvisorTech Map & WealthTech Integration Score Updates

Episode Transcript

Envestnet Conference 2024

Craig: All right, here we are with the news and I want to introduce our special guest contributor or a regular contributor to the news, joining me is Kristin Schmidt, founder and CEO of RIA Oasis consulting firm. Hey, Kristin.

Kristen: Hi, how are you?

Craig: Fantastic. So I noticed no one can see because we’re on a podcast, but I can see you here that you got a nice tan. How’d you get that in Wisconsin? I don’t understand.

Kristen: Honestly, it was a total fluke. Never gonna happen again in May, but we did get a little bit of good weather here in the Midwest. So we take advantage of it when we can.

Craig: If I can understand the logic, hey, you went out ice fishing last weekend, and it was so sunny that you got a tan.

Kristen: Exactly. And then at the end of the night after my day, I turned my heat on because it got cold again. So yes, all of the above.

Craig: As it should be in Wisconsin. I get it. So what we’re going to talk about is conferences. And you had a couple questions for me about conferences, so shoot.

Kristen: The past year or so I have taken a break from going to conferences so you know that I always love to hear your feedback, and I think you and I often have feedback coming from different perspectives. What are the takeaways in general but also you and I have takeaways in a sense of being a network and networking opportunity, right and knowing so many people in the industry for so long, versus what is it like being at these conferences in today’s world, being the owner or operator or very important person at an RIA so I wanted to ask you, first of all, you were at the Envestnet conference, correct?

Craig: I was.

Kristen: Give us the give us the cliff note version. What did you think about it and its impact?

Craig: I’ve been going to the Envestnet conference for many years. This is more than 10 years I’ve been going and it gets better every year. Obviously they they build out their platform more every year. They get a wider group of clients and they’re unique in that they both got a very large market share in enterprise broker dealers and national RIAs as well as smaller RIAs or one office RIAs as well as billion dollar and up RIAs. So the Tamarac platform and then there we used to call ENV2 which they now call Unified Wealth Platform. It’s a nice mix of firms that attend the Envestnet conference, their focus this year, they’ve always got a mission or a tagline. And it had in the past been “financial wellness”, where they were focusing a lot on their wellness platform and their budgeting and other financial planning and other tools. And they’re still doing something like that, but they just switch the positioning a bit to a more what they’re calling Holistic Wealth Management, which is a common phrase, common jargon in our industry. We hear holistic a lot. But I think out of all the companies that claim to be holistic, Envestnet’s probably the closest to being that looking at their wide range of capabilities.

Craig: They’re one of the vendors that have both technology and turnkey asset management platform and outsource middle office services that can scale to some of the very largest firms out there. We do conversions to and from Envestnet and to and from all the big vendors and Envestnet is one of the ones we’ve been getting calls for most mostly in the last couple of years. I think most firms are still going to Envestnet. At least from what we’re seeing in the work that we do. And this this conference, they were focusing on six areas one is user experience. Two is UMA/UMH which has been going on for many years, three portfolio management, they’re expanding and building out more tools and capabilities around portfolio management, specifically around trading actionable data, we liked that we were digging in deep into their data insights. And they’ve been building out a data platform and then they launched data platform last year. And we liked some of the things I’ll go into that later. Fifth is hosted proposal and six is custodial connectivity and their own custodial services. That’s where we’re seeing the focus from Envestnet this year.

Kristen: I think that Envestnet has had a challenge in the past years. For a couple of reasons, in my opinion. And obviously with me working directly in the independent RIA space. I see more of Tamarac where you see more of Envestnet, which is why I wanted to bring this up today because I think it’s a good mix. On the Tamarac side of things, it has always been evolving and growing and modernizing obviously with their long time ago purchase of Yodlee then their purchase of MoneyGuide. It makes sense where all these pieces are fitting.

Kristen: On the Envestnet side. I think they’ve had more of a challenge because of their legacy systems that have needed to modernize and also connect with these newer systems. For example, when you have a firm that needs the enterprise version and Tamarac, they’re opening up some tamp accounts, and then they’re also using Tamarac or their managed assets. Envestnet has still been trying to close the gap of all of that technology talking well to each other while still giving it a good advisor experience. I think it’s awesome that they created kind of those six pillars, if you will, to kind of show where they’re going. Would you agree that I think it’s these conferences are helpful for firms who are trying to figure out where these large companies are going. And if especially if you’re using them and following with them.

Craig: I think they’re helpful a number of ways. One is, when we go to the conference, a lot of our clients are there, but also prospective clients. It helps if you’re kicking the tires, to go to the conference and hear from the vendor, see what’s on the roadmap, see what they’re releasing, get demos of their different products because there’s always a million demo stations around as you can get reviews of anything. It’s good for hands on understanding or asking some questions. Maybe you didn’t get a chance to ask and other interactions with the vendor and also to talk to other clients who were there.

Craig: If you network with other wealth management firms, you can hear from them. Hey, why did you pick Envestnet? What do you like about it? What don’t you like about it? Because they’re not perfect. They’ve got issues as all vendors have issues. And sometimes salespeople will take liberties with what is available and what works and doesn’t work and then you don’t find out until after you sign the contract that oh, yeah, the sales guy promised us but that’s not working yet. Well, it doesn’t work the way you think it works. And that’s where we come in a lot. We get called in to make things work or to help with integrations or help with maybe building out some capabilities. Exactly.

Kristen: You and I obviously talked with a lot of people in the industry. And I always feel like there are so many conferences now all the vendors have them there’s always different takes different personas of conferences and advisors now need to choose which ones are right for them. I do think that there’s a challenge for conferences of always keeping the panels fresh and modern, into what’s interesting and valuable. We can talk all day long with these advisors and planners are looking for tactical things I can take that what I heard what I learned and I can bring it back to my firm. A lot of what we do when we work together, right is kind of bringing it to life. What did you think about the panels and I understand you might be biased about one specific panel possibly?

Craig: I don’t know what you’re talking about Kristen. Oh right. Thanks. Of course my panel was the best. I liked the panels. I think it goes man as I wanted to. There was I find the panels where there are the RIA aggregators or the national national wide nationwide RIAs that are talking about their strategies, how they’re attracting advisors, how they’re building their tech platforms. Those are often the most interesting to me. And there was there was those as well. There was a good panel on RIA trends and research by those moderated by Phil Robertson, who’s head of RIA strategy at Envestnet and he put out a number that I’ve heard similar, which is the concentration of assets at the top RIA firms where I always thought it was like 15 and 85 or something where 15% of the of the largest RIAs had 85% of the assets but Phil was quoting Cerulli at 6% of RIA firms manage 70% of the assets, which is some pretty serious consolidation at the top.

Craig: The rest of the other 94% of all A’s are fighting for that remaining 30% of assets. And when it comes to a lot of these firms, we get calls from RIA aggregators help us build their platform help us improve because they’ve they need great technology and operations if they’re going to attract these advisors because all the advisors talking they know who’s got the best and you’re moving downstream to a younger cohort now that expect better technology and better scalability. So that’s something we work on a lot. So I liked Phil’s panel another statistic this month threw out, was 26% of high net worth households are self directed. So requires determined effort marketing, to target those households and get them to transfer that those assets over and get that wallet share over to that to the advisors firm. Talent Management is a big motivator, understanding how to attract the best advisors to your firm is important.

Kristen: Wow. It’s interesting. I was having a conversation with one of my clients recently and it was mentioned that a lot of times back in the day we used to go to conferences, because that’s when all the announcements happen. Right? You got to learn all the new and I like to call that the bling talk, right? Kind of like when Apple does their annual release and we all get excited about the new releases. And my clients said to me that’s not much a thing anymore, is it? And I said, Well, no releases happen any time and that can be done through media spots and podcasts and all the other things, but also, there’s not much more to do. There’s not a lot of big announcements anymore. Now it’s more getting people adopted to this type of technology and running your business through it. And you’re seeing these conferences starting to shift about how you do things, not what you should use as much. Especially when it is the vendor putting on the conference. Of course they want you using Envestnet in Tamarac.

Kristen: I think that that’s where we’re shifting is a lot of the announcements we’ve been seeing in the news lately or how releases are coming out. They’re small but valuable. But most of these announcements are more about the people at the companies that are shifting rather than the tech itself having a big overhaul. And that’s actually because the tech is at the level that it’s sufficient. And it’s doing what it was intended to do. It’s just now all of these firms have to take the time to write their processes around it which takes long time.

Craig: I’m going to disagree with you. There’s still announcements at conferences, especially T3, Joel’s done a good job in getting sponsors to save their announcements for his conference so they do have a fair number. And each vendor’s conference, I was at Orion’s conference last month was two months ago, they save their announcements for their own conference and Envestnet does the same. There are still some still a fair number.

Kristen: Agreed. They’re not as impactful as they used to be those changes in the things that they’re announcing most of these companies if you build it, they will come they have built it. What they’re announcing are more enhancements and optimizations to things rather than big builds, big releases. Sometimes you and I were actually at a conference years ago where there was a purchase that was told directly at a conference. When a company buys another company, that’s an always a big one. Correct. But there is a lot of the larger companies, there’s not much more to build. There’s a lot more to optimize and enhance.

Craig: I would agree. That’s just the nature of as you mentioned earlier legacy vendors when you become as successful as an Envestnet or Orion, by definition, they become a legacy vendor and their tech is going to get old because they’ve been around long enough. They’ve they’ve shown that they are capable. They’ve gathered enough market share their tech is going to become legacy. And that’s the difficult part is how do you keep modernizing? You know, you’re jumping off the cliff and how are you building the Porsche engine as you or the airplane as you’re flying down? These these firms have to do the same thing. They can’t disrupt their current clients yet they have to keep modernizing the back end.

Kristen: That’s exactly the challenge. And also it brings around that theory of you can be good at a lot of things instead of great at a few things right. And so being good at a lot of things. There’s nothing wrong with it, but it is a challenge of Gosh, we’ve got a lot of things to work on. How do we prioritize that? And that’s happening a lot. I think Envestnet and Tamarac have been trudging through that for a very long time and they’ve gotten very good at balancing that. And I think to your point, Orion’s just learning how to do that as kind of the the newer all and platform if you will, having all those pieces and aligning them.

Craig: Let me throw out a couple other notes I have here from the conference. And again, Envestnet has is unique in in some respects in that they serve a wide range of firms, including RIAs are you aggregators. broker dealers bank/trust, they’ve got a retirement business, a corporate retirement that they they work with other FinTech firms, as well as asset managers. That’s a very wide range of client segments to have to provide services and capabilities to because there’s a there’s a while there’s a lot of overlap. There’s also some unique requirements, and all the different solutions as well as their tamp as well as their proprietary models. One of the things we were dinging Envestnet on the last couple of years was their proposal, and that it wasn’t integrated very well across the platform. There was a lot of task switching.

Craig: And they’ve done a good job, at least what we saw at this at this conference of finally getting that going. So there was a couple of fits and starts and they made some promises. They didn’t deliver it but now they finally have gotten that going. Their proposal is integrated now. You can do it from multiple places. You can go to MoneyGuide, directly find a plan from there or run a proposal you can do from Tamarac, you’ve got integration with totally so I think their digital delivery of the proposal plus MoneyGuide, plus account opening is finally to the point where they’re taking advantage of those acquisitions, and it’s becoming more there appears more to be a seamless, non task switched experience.

Kristen: And that’s where it’s an impact to current clients and new prospective clients. won’t even know what the old experience was right? They get to be a part of the new one. But you and I also know what it took for Envestnet to get to that point.

Craig: Yes it took a long time. And so there was a lot of bitching and moaning on our part as their existing clients but that’s what happens when you have this type of company when you’re this large. It’s just difficult to connect all these pieces together because of all the issues you run into and also a lot of your roadmap and a lot of your development resources are sucked up with your existing clients and things that they want. Being able to build innovative stuff, the amount of time you have available for that is squeezed. Great.

Kristen: And I think the last piece I would add to that is this is the challenge that all hybrid firms have whether you’re a hybrid because you have some assets on a TAMP and some that you manage them yourself or whether you are truly working with a broker dealer and also have you know independent RIA assets. Oftentimes you are forced or required to use different systems depending upon where those assets are and what systems like Envestnet or Tamarac might support them. And so I think it’s this combination of the vendors, making changes and adapting but also these firms where they have different business models, all under one umbrella. And that can be a challenge when you’re talking about tech for sure.

Craig: You are correct. Everyone listening if you want to catch my commentary on the conference, you can go to Twitter, or X @Craig Iskowitz. You can scroll through my timeline and see my tweets from the conference last week. I also posted a couple of posts on LinkedIn about the conference summary review of the Head of Development, Molly Weiss, when she was talking about facts not figma their EVP of business lines, Tom Sipp he gave a great overview of their new functionality and some of the things they’re working on. So I did a summary of that on LinkedIn so you can check those out. I’ll have a couple of more articles on our blog about those presentations and about on my panel as Kristen happily reminded me that’ll be on our blog as well in a week or two. Kristen, thanks a lot for being here and interviewing me about conferences.

Kristen: Of course.

RightCapital Launches Integrated Risk Tolerance Tool

Craig: Next up, we’re back with Kristen who is going to announce what story we’ll be talking about now.

Kristen: I thought it would be interesting to go over as WealthManagement.com and other outlets reported that RightCapital is launching their own proprietary integrated risk tolerance tool. So to set the stage in the background as everyone knows RightCapital, the fastest growing financial planning tool in the industry and very well used and dominated in the financial planning space Craig, your team and my team when we work together, we often say it’s part of the big three right? You’ve got eMoney, Envestnet Money Guide and RightCapital they’re up and coming considering the short time that it has been on the market and how much it has dominated and been adopted by advisors.

Kristen: RightCapital has recently released a workflow and tasking tool within their software. And we talked about that a couple of months ago, and very quietly, but surprisingly has now also released their own risk tolerance tool. So as it mentions, as the article mentioned, obviously, it’s their first iteration of offering risk within the financial planning space. None of the other competitors are doing that so far. So I think it’s an interesting take to talk about is this where financial planning is going? We have the other risk competitors in the space especially the one we all know and love Nitrogen, aka used to be Riskalyze. But what do you think about a financial planning tool releasing this, I’m going to say extra tool but obviously at a compliance level, very much needed and required. But it’s within a financial planning tool. What do you think about that?

Craig: I think it’s a natural progression. I mean, all financial planning tools have some element of risk, they just don’t have a full blown risk tolerance questionnaire.

Kristen: I completely agree there and what I call that is risk tolerance on a napkin which the SEC isn’t very fond of us doing but if you can prove that you’ve had the conversation to identify a client’s risk and then match that identifier to the way that you’re investing in modeling your clients assets, you’re good, but the way that that needs to be documented, and also updated, is I agree, a very natural progression of financial planning and the financial planning process where there’s challenges in the risk space is that how risk is calculated and the questions you asked to gain that information are all very controversial in our industry. You have the conversation of risk being a score versus risk being a stress tester you have financial wellness, how do you feel about these changes that could happen to you in the world, versus what would you do if these changes happen, right? How would you feel if you lost a million dollars or what would you want to do if you lost a million dollars are different questions and different ways that risk is approached in the industry?

Kristen: I feel like risk is the natural progression, but I also believe that you can’t do risk without some type of investment policy statement or proposal. And so I feel like when companies or vendors step into the risk space, you have to finish it off with a proposal. Financial planning tools do scenario based planning and give scenarios or proposed plan options, which I think is great, that needs to be matched with the risk and then the advisor and client need to make the decision of what are we doing? So sometimes when you walk into risk, I feel like the IPs or that proposal space gets a little lost.

Craig: Well, that’s one thing I like about what Envestnet’s doing and that they’ve always had a proposal. It used to be you couldn’t open an account without a proposal on Envestnet, they refused, right? Right. They forced you to whether you want it to or not. They have since changed that but the capabilities where they now integrated it into MoneyGuide so you can run through that starter proposal go into money got do the plan, bring it back in their proposal, open the account, all this nice workflow, that’s where the future is going. Because that way you have an integrated experience.

Kristen: I agree. The challenge is that most independent RIAs are not exclusively or even 50% of them are not using Envetsnet primarily and even if you’re using Tamarac, that option isn’t available. It lives on the other side of the enterprise space, which is the challenge and then you have what’s left which is Nitrogen and then you also have the old Hidden Levers now named Orion Risk on the Orion side that a lot of firms have the opportunity to use. That is the difference between scoring versus risks, stress testing in and I think that there’s a difference there. Orion will tell you as fact that 75% or more of firms that are using the Hidden Levers version of Orion Risk, the firms that are using that are using it because of the proposal tool. They’re using it because they want that outcome and to present it because that’s how they run their business.

Craig: That was interesting when we found that out.

Kristen: Yes, yes.

Craig: You wouldn’t expect that, you’d think they were using it for stress testing. Oh, no. They’re using it for proposal.

Kristen: There’s a means to an end and that’s the end what we’re all looking for. At a compliant level and then also at a client relationship communication level, setting the stage for that new client experience and also opening up an account and investing them going back to the RightCapital piece. This is huge, because eMoney and MoneyGuide are not doing this and even as supportive financial planning tools they stay away from risk because there are independent tools. RightCapital definitely has the upper hand. I think that firms need to begin using it and tell us what they think, there’s a little testing that needs to happen. But I think it’s a definitely a smart next choice for RightCapital to gain more of the industry, support and adoption of their tool. We’ve talked about this before you and I and I think it has to be said, If a firm wants to convert to a new financial planning tool, there is no conversion like you would take your data to a new CRM or to a new portfolio management system. It’s there is no apples to apples conversion for financial planning tools. So you have to recreate all that data in the new system. And so oftentimes firms struggle to convert will this bring new firms to use RightCapital, in your opinion, that’s the question.

Craig: I think so. I think it’s only going to help the more features they add, the more they become more capable. And the more firms that maybe we’re holding back, might decide to jump in. And if you can plug in like we’re deploying these capabilities to clients right now. For example, Nitrogen has a proposal generation system, as well as model management and their own investment analytics. So we’re working with a firm that is heavy on the investment strategy side, they build their own models, they liked the way Nitrogen does it because they can plug their models in, get them analyzed, and then feed that into the proposal generation. All at once, all with one place, right? Whereas other firms can’t do that because they only have one or the other. They don’t have those those things connect that risk. There’s a lot of risk firms. There’s over a dozen risk firms on the Kitces-Ezra Group advisor tech map, but none of them have proposal gen. They’re just standalone risk.

Kristen: It used to be a standalone area of that tech map years ago, there was proposal generation tools, those have all been eaten up and bought out or built out and added into other tools. And so you’re right. It’s a gap in the industry. Nitrogen is filling up well even Orion Risk is filling it well. They do the same by then allowing that proposal to be generated and that feeding into the model generation as well as their Eclipse trading and rebalancing tools. So it’s all there. That’s kind of my point with this Right Capital piece. I think that’s a great start for them. Advisors themselves are not doing a great job of risk if they’re being honest. They are doing risk on the back of the napkin sometimes I know my client, I talked to Jim, I think he’s a conservative growth guy, but they didn’t ask the questions. And they didn’t put it through a proposal tool. They didn’t run scenarios. So at a compliant level, this is smart, but it does I think require the next iteration of this to be leaning towards a proposal tool because that is the next piece of it. But for now does it get advisors to document ask the questions and keep the information along with to be fair, RightCapital can also hold the models and do a lot of that for you as you go to invest. It gives another option for advisors to choose from. So I think that’s also part of the predicament but it’s just another thing that another company is doing that adds an element of question to advisors as to what should I be using.

Craig: If you are an RIA a broker dealer listening to this and you have questions about financial planning, give us a call at Ezra Group go to our website, fill out the contact us form. We also do a lot of research if you’re a vendor. In the financial planning space. We do a lot of research in all these areas. Financial Planning one of our main areas of focus we do a very, very deep analysis of financial planning features functionality for roadmapping as well as comparison in that competitive analysis there. Kristen, thanks a lot. This was fun as always.

Ex BlackRock Executive Salim Ramji is Named Vanguard CEO

Craig: Next up in the news, we have multiple special guests on this episode, my guest to talk about some news stories here is none other than Aaron Klein.

Aaron: It’s great to be with you.

Craig: Industry legend, Aaron Klein.

Aaron: I don’t know about that. It’s great to be with you.

Craig: Co-founder, former CEO of Riskalyze / Nitrogen Wealth. Now, free man about town.

Aaron: There you go.

Craig: Executive in Residence at Ezra Group.

Aaron: That’s true. We’re going to do some projects together, man.

Craig: We are, but in the meantime, we’re going to do some news.

Aaron: All right.

Craig: So the story that you’re talking about is ex BlackRock executive Salim Ramji is named Vanguard CEO the story was on RIAbiz. So quickly, Salim Ramji is now the new CEO of $7 trillion. Vanguard. He was formerly head of their ETFs and indexing index investing he’s replacing Tim Buckley as CEO. So what are your thoughts?

Aaron: Well first of all, it was a huge surprise that Tim Buckley was retiring. He’s not retirement age yet. But I guess that is I’m sure an intense job and one that thoughtful decision on his part, but it was a little bit of a surprise when they said he was retiring but clearly planned because they decided to go out and do a search and he wanted to communicate it and so they did that. And it was interesting to me, because at the time, I didn’t immediately connected with Vanguard, it was roughly about the same time that Salim decided to step away from BlackRock and I’ve met him a few times at BlackRock, inspirational. Guy, inspirational leader, great leader for the iShares business did amazing things while he was there. And one of those people that you’re like, this is an empathetic leader who people like to work for. He was rumored to be looking at a number of different opportunities.

Aaron: And then this announcement came across the wire to be named the new CEO of Vanguard, and I think it’s going to be interesting. I think that he clearly has the pedigree from the index investing space, I think the Bogle heads who are a little bit nervous about an outsider coming into Vanguard. Probably have nothing to fear because what did he do with Blackrock but invest in the index investing business and drive down the cost of ETFs. So I think it’s going to be interesting to see how that plays. One thing I will say is he always loved the idea of tech enabled services at BlackRock, it is going to be interesting to see if any of that strategy starts to work its way into Vanguards plans as well.

Craig: I like Ramji because he’s a former consultant.

Aaron: There you go. I mean, former McKinsey guy how can you go wrong?

Craig: You can’t but big shoes to step into in Tim Buckley had been adding something like $750 billion in assets per year at Vanguard.

Aaron: It’s an incredible franchise. Vanguard is just, I you can go out there and talk to civilians who know nothing about the wealth management industry, and they will know the name Vanguard, and it is synonymous with accessible and affordable, not necessarily innovative. And so that to me, is going to be like the interesting question is does Salim feel like that’s the real key to accelerating that growth is to is to make Vanguard a little bit known for innovation and what will he do in that regard? I’m going to get that. It’s always interesting to me when you take a space like asset management, very strong market, very strong space with a lot of very strong companies, but not very differentiated products. That’s the great challenge Asset Management in what he did at Blackrock was try to use technology as a differentiator. It would be interesting to see, what strategy formulates for Vanguard?

Craig: Certainly will. And that article by the way, RIAbiz written by my good friend Brooke Southall, who lives on a houseboat. Next story up is TradePMR hires John Patullo as Chief Product Officer. Also RIAbiz by Brooke Southall.

Aaron: Breaking all kinds of news.

Craig: Breaking news, John Patullo, now Chief Operating Officer, previously at stints at Apex Clearing, Schwab Advisor Services and TD Ameritrade. So he’s been bouncing around a lot and he lands at TradePMR.

Aaron: This was a shocker, right? Because, first of all, we all know what John accomplished at TD Ameritrade.

Craig: No we don’t know, for the people who don’t know, what did he accomplish?

Aaron: knows what John did but most people know what John did at TD Ameritrade me he built the TD Veo platform that was the gold standard for how our RIAs operated on a day to day basis in their custody platform. It was very integration first. And the ecosystem that he helped to form at TD Ameritrade was was very powerful in one. I mean, it was it was it was very interesting to have a custodian be like our I want to say was second or third most popular integration at Riskalyze. That was not common for custodians was usually the CRM sort of financial planning tools or things like that that were our top integrations or the portfolio, accounting wealth platforms like Orion and Black Diamond, and so on, and so forth. And so, to get a custodian in there, I think was interesting and spoke to the work that John did, and he created a real competitive advantage for TD.

Aaron: Schwab, I would argue, has done a pretty good job of the transition, but they obviously have been under a lot of interesting pressure this year with everything that’s been going on with the first the regional banks and and the similar contagion that was happening with bonds and bank balances and in the interest rate environment and how that was putting pressure on different companies finances, including Schwab, so they had the cost pressure, and to be honest, no knock on Schwab as a firm but I kind of scratched my head at some of the franchise names that they let out the door. There are some alumni of Schwab that are now off working in a variety of different spaces across the industry. And John, of course, is one of those. And he took a good chunk of his team over to Apex.

Aaron: I have not talked to any friends over at Apex yet so I can’t speak to why they why they made the set of decisions they made but I have not heard any reason to believe that this marks Apex stepping back from trying to serve RIAs. But I would say, Boy, what a coup for our friend Rob over at TradePMR to be able to bring in a talent like John at TradePMR. TradePMR has always been working very hard to take what has been a small RIA custody business and put it in a good position. And they’ve done a lot of product innovation over that time, and boy, this is just going to put that on steroids. And I’m pretty excited to see what what John can accomplish at TradePMR.

Craig: Let’s roll it back to Apex. Apex is very similar to TradePMR in some respects that they’re both the next tier of custodians, they’re in different positions, but they’re still both custodians. They both want to break into the RIA space, right. So going to Apex and then leaving after a year without moving the needle there, Apex did launch their own advisor workstation product.

Aaron: I don’t know and wouldn’t want to speculate as to why they made the decision that they made, I wouldn’t note that you’re right, that they’re in the same tier, but they come at it from two very different places. So Apex, right is the clearing firm for so many different FinTech innovation providers. And RIA was like a new market that they were trying to enter and they had a few fits and starts on that like, I like Bill Capuzzi over there. I just an awesome like A+ individual, hard working guy, but they’ve had some fits and starts trying to get the RIA business going there. My good friend and fellow managing board member Trish Rothschild was there as a part of one of the first efforts there and and then now let’s jump on to other things. So I don’t know what those super high quality people are running up against but entering RIA custody is not for the faint of heart. Exhibit B Goldman Sachs, still not full fledged the RIA custody business despite throwing a lot of money and a lot of people at the problem they’re getting there.

Aaron: TradePMR though, they have been kind of methodically call it tortoise and a hare but they’ve been methodically building towards being a full fledged RIA custodian for some time and they’ve been serving the market for some time, held back, perhaps only by the fact that they’re clearing firm is First Clearing owned by Wells Fargo so they don’t get the benefit of being able to bring assets over without repapering. The breadth and depth of their advisor platform is going to take a big leap forward with John there. I mean, that’s pretty clearly what he’s planning on doing and he is, I’ll put it this way, I feel like he’s at least now starting on second base around the building from scratch. So it’s going to be interesting to see how it plays out.

Craig: What do you think of TradePMR versus Apex versus Altruist versus Goldman versus the other players in the space. How is this going to shake up?

Aaron: First of all shows you the breadth and diversity of of the industry. Custody is hard. It’s a hard business. I probably 10% of what you need to know to actually be successful in custody business, but I’ve looked at it and tried to learn more about it from time to time and and it’s a super interesting business. You’ve got these very dominant players with Schwab and Pershing and Fidelity. It used to be that there were four dominant players and now it’s down to three and so everybody’s sitting there going well, okay, it’s going to go back to four and I want to be one of those four in the top tier. You got TradePMR, Altruist, Goldman Sachs, and Apex all vying for that fourth spot let’s say, and if you want to think about it that way, it’ll be interesting to see how that shakes out.

Aaron: Goldman is, I would argue coming at it from a brand perspective like what brand do you want on the client statements? Going out to the client and you want to say that you have this affiliation with Goldman Sachs that can be positive for you as an RIA. It’s interesting. Apex, I think is trying to go at it from a hey, we’re a big clearing firm, but we’re very digital and forward on tech, but they need the advisor platform and capabilities to match that, which is what they’ve been trying to work towards for some time.

Aaron: I think that Altruist is the pure technology company that started as a technology company, and then focused on building custody from scratch. It has a huge number of advantages because you can move faster and innovation and it has its drawbacks, too because there’s so many things that you have to build out to be good at custody. So like the RIAs that that that use Altruist love Altruist from everything that I’ve heard, but there’s just a number of them that can’t consider it yet because oh, they can’t do fixed income or oh, they can’t do this or do that. So that leaves TradePMR which is a bit more mature as an RIA custodian. Again, it’s been kind of a tortoise and a hare story. And they’ve been systematically and methodically working and nobody knows more people than Rob and I didn’t notice, they actually are doing television advertising on CNBC, I have it on my office and Rob comes up on my screen every hour or so. It is an interesting story. And I think bringing John aboard is just a good positive signal. I’d be taking a look at it if I was an RIA.

Craig: Okay, so real quick, in the next 60 seconds how does TradePMR, Apex, Goldman, the rest of these next tier custodians. How does that they get impacted by Envestnet’s announcement of integrated custody being available by the end of the year?

Aaron: That’s an extreme question because now Envestnet comes in and says no wait, I think will be the fourth layer in the top tier. The biggest thing that Envestnet has going for it is massive built in distribution. The real question is how they execute the custody product, if they make it very simple and seamless and you have a compelling reason to leverage their custody and it’s one click easy and the experience is better, Envestnet is not going to rip out their Fidelity or Pershing or Schwab rails, but if they have the one click easy button and the pricing is competitive, they’re just going to get a bunch of custody assets by virtue of being the one click easy button. And it’s going to be interesting to see how it plays out whether it leaves space for that second tier to make it into the first tier.

Craig: There you go. I know you got to run, thanks for your insights always.

Aaron: Thanks for having me.

AdvicePay Promotes Kelsey Lewis to President

Next up on the news, I’m going to bunch up a couple of stories here that are related. So first up, we have AdvicePay appoints Kelsey Lewis as President. I’m going to combine the story with a story on XYPN because they are both related companies owned by the partners, Alan Moore and Michael Kitces. So we’re grouping the stories in this part of the news. But starting with Advice Pay appointing Kelsey Lewis as President. Now, of course, Advice Pay founded by Alan Moore and Michael Kitces, with Alan Moore being the CEO of that firm as well as CEO of XYPN. So he was a dual CEO sort of like Elon Musk except not a trillion billionaire, but still hardworking, brilliant guy, and Advice Pay has grown extraordinarily fast from the time that they founded it just a few years ago. I believe they are approaching 15,000 paying advisors on Advice Pay, including many enterprise deals with some of the largest broker dealers in the country.

Alan realized that was too much for him as a part time CEO or dual CEO. So they announced a search for a “rockstar CEO”, I love the headlines in RIAbiz with my friend Brooke Southall coming up with these incredible headlines. So last year, in February when they announced they were doing the search for new CEO, the headline read and RIAbiz, Alan Moore is the number two busiest man in the RIA business and he just convinced the number one busiest man who would be Michael Kitces to budget $200,000 to hire a rockstar CEO to replace him. And that’s true. Michael Kitces is the number one busiest and Alan Moore is most likely the number two busiest man in the RIA business and bringing in a CEO seemed like a great idea since the company was growing so quickly.

In July 2023 they brought in Alex Sauickie, who’s the former CEO of CircleBlack and also coincidentally in New Jersey State Legislature, which I happen to know because I live in New Jersey. However he did not last long, only seven months. He departed the company in March 2024. According to Michael Kitces wasn’t the right fit so they parted ways makes perfect sense. This happens all the time with companies especially growing ones that are going up converting from the founders to an outside CEO. It’s hard to find that right fit. So they tried it didn’t work.

Now they decided to hire from within, Kelsey Lewis who had been at Advice Pay over two years and was their Head of Customer Success is now being promoted to President with CEO like duties, according to the firm. Before Advice Pay, she was Director of Business Operations at a packaged food company. She’s based in Montana, Director of Client Experience for a company that built a learning management system and also on the client experience side for an ecommerce live chat application. So she’s got tremendous experience in the client experience area.

We’ve worked with her a bit. We are some of our clients use Advice Pay, and we’ve done a number of Advice Pay deployments at broker dealers so we interact with with Kelsey quite a bit and I think is a great hire. From what I seen her building out the customer success organization from scratch, building division, the strategy, the tactics, from what I can see from the client side, doing good job, they’re their clients success and client support teams are incredibly responsive and things just don’t fall through the cracks with those guys. I was impressed and we work with a lot of vendors. We’ve seen a lot of customer support teams where stuff falls through the cracks where they get people who don’t know what they’re doing. There’s turnover, they hire people don’t train them well. Haven’t seen that at Advice Pay. They’ve done a great job with that and it’s to Kelsey’s hard work and efforts.

Some statistics also in this article, they report a 36% increase in transaction volume since Kelsey took over customer success at Advice Pay and they’ve maintained 100% enterprise customer retention rate, which is incredible in our industry, because enterprise firms can be a little picky and they don’t like the way something’s working. They might just throw it right out. So the fact that they’ve had 100% retention rate is a testament to the whole team. Alan Moore being stopped and then Kelsey and the rest of the Advice Pay team there so kudos to them from hiring within and all the best to Kelsey in her new role.

Moving on to a related company XYPN, XY Planning Network is announced their advice tech competition and applications are open. So if you’re familiar with XY Planning Network is it’s for fee only financial planners, and again started by Alan Moore and Michael Kitces, grown tremendously I believe they announced they have over 1700 advisors that are part of the network that will make them one of the top 10 broker dealers in the country are top 20 broker dealers in the country at 1700. Advisors if they were a broker dealer, which they are not, but they do provide a lot of services similar to broker dealers in that they offer practice management they offer a tech platform is still in two things like compliance and, and those types of things. I think that’s in the works. They don’t have a corporate RIA, things like that, but they do a lot of the other areas of support for fee only financial planners and tech is a big part of that.

They’ve done this advisor tech competition advice tech competition since 2016. And a couple other noted winners of the advice tech competition XYPN and include Snappy Kraken great company. They won the 2016 edition. And they are now the number two ranked digital marketing platform in 2023 Kitces advisor tech study. 2017 Vestwell, that builds out a sort of what they call a robo 401k or a robo retirement planning tool, that was a 2017 winner. And they recently raised $125 million series D in last year. So kudos to them. They’re killing it 300,000 businesses on their platform. Another explosive company seeing tremendous growth as a startup was Holistiplan won the competition back then. And they’ve gone from dozens of users in 2019 to almost 30,000 advisors using the platform today and turned it from tax management tax planning from a backwaters category of less than 5% adoption to over 45% or 50% adoption rate across advisors, and in 2022 of which at the XYPN conference, Income Lab won and I was the moderator of the advice tech competition that year. So kudos to Income Lab for winning that event.

If you are a startup and you meet specific criteria, I’m going to list them right now – you can enter in this competition if you are focused on fee only financial planners, if your firm has launched in the last 12 months, you have to have less than a million dollars in revenue, you have to have an actual product that you believe is differentiated from existing solutions, and it’s independently priced. So it can’t be part of a giant suite of other tools. If you meet those requirements, contact XY Planning network.com and sign up for the advice tech competition. I’m not monitoring this year but it should be someone fun and it’s great publicity for even if you don’t win, just getting in the competition is great publicity and it’s great event. I’ll be I will be at the XYPN conferences here. So hopefully I’ll see some brand new tech that we can review at the conference. Looking forward to it.

AdvisorTech Map + Wealthtech Integration Score Updates

It’s time for my favorite part of the news every month. It is the AdvisorTech map and integration scoring. So in this segment I’m just going to go over the new applications that Michael Kitces and I added to the AdvisorTech map. You can find the AdvisorTech map on Kitces.com. You can search for it there, it’s all fall off the main menu, we’re going to Kitces.com/FinTechmap. There’s an existing application called OnPointe, which was already on the map. Their website is OnPointeSoftware but they wanted to be changed. We added them to specialty planning retirement. I think they were they were also risk analytics, because they have two separate product offerings. So I believe they are on the map twice, which is a boon and a bonus, since very few firms get that opportunity. Let’s see do we have risk tolerance? We have OnPointe. And we have OnPointe and specialty retirement because they have a specialty retirement solution. So they got to another another logo on the map. Congratulations OnPointe, you can find them at OnPointeSoftware.com.

Next up Investipal. It is a digital onboarding solution. We don’t that’s another area where we were looking at the category, possibly combining it with another area because you look at digital onboarding, as well as we used to have a section for robo advisors which we converted into digital onboarding, but workflow support is also very similar to digital onboarding. Since some of those workflow support applications also do onboarding. There’s a fair amount of overlap there. And of course, every portfolio management application has some sort of onboarding. So you should be able to see that in the advisor tech directory. If we look at onboarding, you would see a lot more applications but there is a fair amount of overlap, as well as document management and workflow those also overlap. So digital onboarding is a new area. We have Investipal was added there and you can find them at Investipal, investipal.co. Their website to me looks a lot like a direct to consumer website, but they also have an a separate part of the website for financial advisors. It’s sort of a robo solution as well.

I think Michael and I are going to be looking at this digital onboarding since a lot of these firms have expanded their capabilities beyond just onboarding into full fledged wealth management platforms that also are digital and also offer digital advice like a robot. Michael are talking about that what to do with the with the digital onboarding category, but for now, it stays as digital onboarding.

Next up, Archive Intel, a new application, which is now in the communications archiving category. We used to have just a compliance category. But we added communications archiving, since it had gotten so large for companies like Smarsh and global relay and others Redtail that just handle archiving of social media texting emails, and the like. Archive Intel is interesting. It was launched by various members, who is the founder and CEO. He was the CEO of a company called pre salts, which is also a communications archiving application vendor. And he left there and launched a competitive firm called Archive Intel, ArchiveIntel.com, just as it is spelled seamless compliance, intelligent archiving, one solution with AI precision. I don’t like all this AI talk about things that don’t seem to require AI. If you’re archiving my communications, I don’t care that you’re using AI to do it. I just want to know you’re doing it properly and according to the regulations that will keep me from getting audited by the SEC. Whether you use AI or not, doesn’t make it any better for me personally, and I’m not sure how they’re using it. But to me, that doesn’t seem very useful for archiving communications using AI, but ArchiveIntel.co.

Next up, Countercyclical. This is a new application in the growing investment data analytics category, which I think at last count had 48 applications squeezed into that little box and more keep coming every month, Countercyclical, using the unusual .io domain extension, which previously had been the focus of crypto companies, I know was very popular with the crypto fad was was hot, counter cyclical cyclical, decided to jump on the .io. You can check them out Investment Research reimagined, Countercyclical is your centralized platform for performing extensive value oriented analysis. I don’t understand why we keep getting more applications in this category, but they keep coming and coming Countercyclical.

Next up, this is an application we’re going to talk about, which did not get on the map and I’m going to tell you why it’s from a company which I respect greatly called Intention.ly founded by my good friend Kelly Waltrich, and it’s a marketing company and they have a very interesting product called Advisor Brand Builder, which you can check out at AdvisorBrandBuilder.com. However, we did not add it to the map, the reason being is that Advisor Brand Builder is not itself, a software application that advisors can buy and use on their own. It’s a very cool tool that intentionally is using to complement their marketing capabilities and website development, brand development capabilities. Nothing wrong with the software. I’ve gotten demos of it. It’s very cool. I would check it out. But we have strict rules about the map that an application to get on the map has to be software, that standalone. It’s not part of a service offering, or sold as a package was something else as the standalone software. That’s just the way that the map was developed. And the design of the map is to help independent advisors choose software. I believe Michael is starting to work on a services map. So Advisor Brand Builder, as well as Intention.ly’s marketing services will go on that map. But we couldn’t put Advisor Brand Builder on the advisor tech software map just doesn’t qualify but still check them out. AdvisorBrandBuilder.com.

I’m not going to mention the name of the next application because if you’re emailing Michael and I about adding your application to the map, make sure you actually have an application. Vaporware will not get on the map. So a company whose name I’m going to censor, hopefully they’ll actually we’ll build some software. I don’t want to embarrass them, but they sent us an email, please add our application. And we’re going to look into it. There isn’t any application. It’s just vaporware. So that’s another way you’re not going to get on the map, vaporware. Okay, so that’s all the the new applications we had for this month. There was one other application called Water Lily, specialized planning healthcare, we didn’t add Waterlily, because it’s not available yet. We didn’t put it on the map, when it’s actually available to be purchased. It will be added to the map under specialized planning healthcare. So that’s all the applications we added.

We did make some changes. So things do change on the map. We change categories as needed. We move applications around. If they change their focus or they get acquired or other things. So for example, Albridge was under performance reporting. And we that that application has been merged into Pershing Wove the former Pershing X Project new wealth management multi custodial platform called Wove has been merged, all bridge merged, merged into that so we we removed the offer is two separate applications and she can no longer according to Pershing you can no longer buy Albridge separately, it’s now part of Wove.

Now the change Objectway was is a company based in Italy that has some portfolio management software, but they’re more an enterprise a platform, not for independent advisors, and based in Italy, they don’t sell into the US so we took them out of portfolio management, but they acquired a company called Nest Wealth, a Canadian based tech firm that does onboarding and they are on the map. So I think we changed a little bit to object way because they were acquired, but we deleted object way from portfolio management.

Another change was TIFIN Wealth, they have pivoted, they were planning light, and they changed their focus to more of a sales enablement proposal generation. So they move TIFIN wealth into sales enablement from planning light. And finally, we deleted Wealthcare GDX. That’s an application. That’s why part of a TAMP Wealthcare’s TAMP does do financial planning but it’s not sold standalone. And again as I mentioned earlier, the map is designed for standalone software applications that applications that are part of other offerings, so Wealthcare GTX got deleted. That’s the summary for the advisor tech map again, check it out at Kitces.com, Michael and my work.

Now moving on to integration scoring, all the applications you just heard that were added will get into our scoring cue and will be scored and added to EzraGroup.com. And if you go to our website, EzraGroup.com, tou can find all the integration scores off the menu that says what we do. And then Wealthtech Integration Scores. And on that page, you can see the score for any application on the map either individually or by category.

If you wanted to go into communications are copying as an example, you would see Presults, and eventually you’ll see and you’ll see Irata which is the number one score of 8.81 MyRepChat right behind it. 4.57, Presults 4.53 Retail Speak behind that 4.38 Then XY archive, a bunch of other ones. So in a couple of weeks, you will see Archive Intel show up on this page, the communications archiving category on the Ezra Group WealthTech Integration score page.

One thing I want to talk about if you are a vendor on the map, you have an application for advisors and you’re on the Kitces-Ezra Group map, you should and you have a good score. So if your score is 6.0 or above, you should talk to us give us a call. Go to website EzraGroup.com and use the Contact Us page and asked about our Wealthtech Integration Score Recognition Program. What this does is allows you to use the coveted as your group badge integration badge either a badge that says your score is excellent if you have a 6.0 to a 7.9 or superior. If you have a score of an 8.0 to a 10.0. You can use the the badge corresponding to your score. And that badge gives you some major benefits. You can put that on your website. You can put on your marketing materials into email and show your clients and prospects that hey, your integrations have been validated by Ezra Group and they have been seen as being good or at least excellent or superior. And there’s also some of the benefits. We have a quarterly private webinar with research on integrations and other technology and wealth tech trends that only Recognition Program members have access to. And plus, you get four hours of meetings with our integrations team where they can help you understand the integration score help you increase your score by building out or deciding which integrations to build that gives you the most benefits are most bang for your buck. When it comes to integrations and any other questions you want to ask our crack integration team. So please go check out EzraGroup.com and go to the homepage and use the contact us form and ask the integration score recognition program.

All right, you’ve made it to the end of another episode of the WealthTech Today podcast. Thanks for listening. But before you go, please head to our website as groov.com scroll to the bottom of the homepage and sign up for our newsletter. Once a month you receive email chock full of wealth management goodness news information updates, you will not be disappointed. Thanks again 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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