This edition of Wealthtech Roundup features LPL appointing a new Chief Data and AI Officer, Envestnet’s partnership with BlackRock, TIFIN AG’s alliance with SteelPeak Wealth, Wealth.com’s integration with Fidelity’s eMoney Advisor, BetaNXT’s debut of an SEC compliance product, an F2 Strategy report that says firms lack the technology to manage alternative assets, Zocks’ partnership with Practifi, Mercer targeting held away accounts, Snappy Kraken’s integration with Catchlight, Oasis Group’s evaluation of AI note takers, GReminders’ integration with several CRM platforms and BridgeFT’s partnership with iCapital.
Larry's Take
Wealthtech has brought many advancements to the wealth management space, but adoption sometimes lags. According to F2 Strategy’s report, about half of firms are handling alts manually, a fact that even surprised Doug Fritz. Despite multiple firms innovating the technology needed for alts, growth in alts has outpaced technology adoption.
This begs the question: Why are so many firms going about this manually? One possibility is that the rapid expansion in alts has caused many firms to begin providing alts without building a solid runway first. To expand that analogy, they hastily built a makeshift runway and are getting by in a limited sense for now but realizing that they need better as their alts business increases.
If this theory is correct, wealthtech for alts will expand rapidly in the coming years as the firms that just started offering alts catch up their tech stacks with technology to manage the complexity and variability of these investments. The development of industry standards like ILPA may relieve some of the pressure, but the timeline for those could lag by years.
If you would like to discuss this Larry’s Take further, including how these trends might impact your business, please contact me at larry.roth@rlrstrategicpartners.com.
LPL Appoints Vaughn Henry As Chief Data And AI Officer
LPL Financial names Vaughn Henry as Chief Data and AI Officer. Henry, most recently Managing Director and Head of Product and Transformation for Consumer and Community Bank Finance at JP Morgan Chase, will oversee LPL’s AI and data initiatives, including AI Advisor Solutions.
The program, launched in the fourth quarter last year, uses data and machine learning to help advisors provide more sophisticated and personalized advice to clients. LPL is also piloting an AI program to help streamline the onboarding process for new clients. San Diego-based LPL supports 29,000 financial advisors and manages $1.7 trillion in assets.
“Vaughn’s extensive experience and proven track record in leveraging AI and data to drive business outcomes make him the perfect fit for LPL as we continue to scale our offering and leadership in this space,” said Gary Carrai, chief product officer at LPL Financial. “We look forward to the significant contributions he will bring to our advisors who are looking to AI to streamline and grow their practices in a meaningful way.”
Envestnet Partners With BlackRock To Customize Portfolios
Envestnet teams up with BlackRock to allow financial advisors to create customized portfolios for their clients. Using Envestnet’s UMA technology, financial advisors can access separately managed accounts, ETFs, mutual funds, private markets and other alternative asset opportunities backed by BlackRock’s portfolio design and risk management capabilities.
Firms that allocate over 75% of their practice to model portfolios consistently generate higher valuations, according to Envestnet research. BlackRock estimates managed model portfolios to double to $10 trillion in assets in four years, compared to $5 trillion today. Based in Berywn, Pennsylvania, Envestnet helps banks, wealth management firms and brokerages manage $6.5 trillion in assets.
“We’re excited to offer advisors on our platform access to these innovative custom model solutions that reflect our shared commitment to providing scalable solutions that can help drive better client outcomes,” said Dana D’Auria, Group President of Envestnet Solutions and Co-Chief Investment Officer at Envestnet. “By offering BlackRock’s custom model portfolios on our platform, we’re equipping RIAs with the tools they need to deliver high-quality, customized portfolios with greater efficiency and scale – and without added costs.”
TIFIN AG To Help SteelPeak Wealth Boost Growth Through AI
TIFIN AG, a Boulder, Colorado-based firm that specializes in AI technology, partners with Los Angeles-based RIA SteelPeak Wealth. SteelPeak’s 24 advisors will gain access to TIFIN AG’s advisor and home office portal so the latter’s AI technology can help advisors identify growth opportunities and craft personalized strategies for clients.
The collaboration is designed to boost client engagement, enhance holistic advice and produce better wealth outcomes for investors. SteelPeak manages $3.4 billion in assets.
“As wealth management firms evolve to meet the expectations of today’s investors, we see a clear shift toward intelligent, data-driven growth strategies,” said Jeannette Kuda, President and COO of TIFIN AG. “SteelPeak’s commitment to holistic financial advisory and tailored solutions for their clients aligns with our mission at TIFIN AG—helping advisors unlock opportunities that lead to long-term financial security and peace of mind for the investors they serve.”
Wealth.com Teams With eMoney On Estate And Financial Planning
Wealth.com announces a strategic integration with Fidelity’s eMoney Advisor that the companies said will enable financial advisors on the Wealth.com platform to provide “more efficient, accurate and holistic estate and financial planning solutions to their clients.” Through the use of AI, the integration’s objectives are the elimination of duplicative data entry, ensuring data consistency and integrity and allowing a unified planning experience.
The integration has been completed and the new functionality is available. Wealth.com said its services are used by over 800 wealth management firms.
“Financial advisors have long been impeded by fragmented tools and time-consuming manual processes that have historically been part of the estate and financial planning process,” according to Danny Lohrfink, Co-Founder and Chief Product Officer at Wealth.com. “Our integration with eMoney eliminates that friction for wealth managers and will help them to deliver more accurate and timely estate planning advice to their clients.”
BetaNXT Debuts Product To Comply With New SEC Rule
New York-based BetaNXT introduces software that will help broker dealers meet a new requirement from the SEC. The product, called BetaNXT ReservePro, allows broker-dealers to comply with a SEC rule, finalized last December, that requires large firms with more than $500 million in customer credits to calculate fund reserves on a daily basis versus every week.
Regulators issued the new rule, which will go into effect on Dec. 31, to make sure brokers dealers hold enough cash in case of a financial emergency. In addition, customers can still access their money should a broker-dealer suddenly fail.
“The … calculations and reporting processes can take anywhere from 40 hours to 80 hours to complete—and the prospect of having to do this every day instead of every week is a daunting one,” said Bob Santella, CEO of BetaNXT. “The introduction of ReservePro creates a more frictionless experience by simplifying the entire workflow—reducing compliance risk while facilitating data gathering, aggregation, and calculations.”
Mismatch Between Alternative Investments And Technology: F2 Strategy Report
The rapid growth in alternative investments is outpacing wealth management firms’ technology stacks, according to a new study by F2 Strategy. Over the past three years, the average assets under management firms allocated to alts rose to $12 billion from $7.5 billion. Yet 50% of firms still rely on manual processes.
The report also stated that there is an increasing number of automated service providers for alts, the Institutional Limited Partners Association (ILPA) is advancing industry standards for limited partnerships that would reduce complexity and simplify alts, and that firms reported improvements in many areas related to alts after implementing technology.
“We would expect to see the use of technology grow at the same rate or even faster than the increase in firms using alts,” said Doug Fritz, F2’s Co-Founder and Executive Chair. “But we’re seeing only half of firms using tech which means many are doing it manually — and doing it the hard way.”
Zocks Joins Forces With Practifi
Zocks, a San Francisco-based AI platform, partners with Practifi, which provides CRM software to wealth managers. The goal is to use AI-powered insights to improve workflows and client and advisor relationships.
The alliance will allow the two firms to automatically sync data like contacts, meeting notes and tasks between the two systems. For example, advisors can access historical client data and email communications through Zocks’ “Ask Anything AI Agent.” The integration also automatically updates client records and workflow streams.
“This integration represents a significant step forward in making AI practical and accessible for wealth management firms,” said Mark Gilbert, CEO and Co-Founder of Zocks. “By combining Practifi’s robust CRM capabilities with our AI-powered conversation intelligence, we’re enabling advisors to spend less time on administrative tasks and more time delivering value to clients.”
Mercer Collaborates With Pontera To Take Aim At Held Away Investment Accounts
Mercer Advisors launches a concerted effort called Account Bridge to manage accounts that typically fall outside advisors’ purview such as certain retirement plans and college savings programs.
Mercer developed Account Bridge with fintech firm Pontera in New York to create the necessary interfaces and tools for advisors to more easily serve held away assets such as 401(k), 403(b), 457 and 529 accounts. More than half of Mercer’s advisors have now adopted the program. Based in New York and Denver, Mercer manages $70 billion in assets.
“For too long, our industry has ignored qualified accounts because of systemic barriers within the technology, account structure and workflows,” said Daniel Gourvitch, President at Mercer Advisors. “For many families, retirement and college saving accounts represent the largest portion of their assets, which means it was hard to access and benefit from holistic fiduciary advice.”
Snappy Kraken Teams Up With Catchlight To Help Advisors Prospect
Snappy Kraken, a marketing tech firm based in Ormond Beach, Florida, partners with Catchlight to create an integrated system that allows advisors to better target prospective clients.
Born out of Fidelity Labs, Catchlight is an AI-based platform that assigns a score to a prospective client that predicts whether or not the client will pay for advice. The platform uses up to 2,000 data points, including estimated investible assets and income, age range and estimated home value. Advisors who use Snappy Kraken can identify and gain insights into the most promising clients and then craft messages that are the most relevant to them.
“Our technology simplifies advisor growth, providing data-driven insights that help prioritize leads that are most likely to convert and deliver meaningful engagement at scale,” said Wilbur Swan, CEO and Co-Founder of Catchlight. “Through our integration with Snappy Kraken, we’re combining the power of AI with a proven marketing platform to help advisors meet today’s demand for efficiency and personalization.”
AI Note Takers Help Wealth Managers: Oasis Group Study
AI note takers have rapidly emerged as effective tools for wealth managers, despite being relatively new to the industry, according to a report by consulting firm Oasis Group. The study evaluated how six programs – FinMate, GReminders, Jump, Mili, Zeplyn and Zocks – covered a simulated conversation between an advisor and a married couple discussing issues like income and expenses, life insurance, college and retirement planning.
Oasis found that all six AI note takers specifically catered to the needs of advisor, compliance and client relationship management teams. All but one produced a transcription and were compatible with both Windows and Mac operating systems.
“The rapid adoption of AI in wealth management has been driven by a need for greater automation, compliance, and client engagement,” said John O’Connell, Founder and CEO of The Oasis Group. “AI Note Takers have emerged as a critical tool, promising to reduce administrative burdens while ensuring accurate and actionable meeting documentation.”
GReminders Partners With Several CRM Firms To Help Advisors
GReminders, a Los Angeles-based company that provides an AI-based end-to-end meeting and automation management platform, announced new integrations with software providers that focus on customer relationship management (CRM). The group includes XLR8, Quivr, Smart Office, Envestnet Tamarac and SS&C Salentica.
The integrations aim to allow advisors to better manage their calendars and meetings, receive automated next-best-actions and leverage client-level intelligence within their existing CRM systems. Advisors can automate emails and text messages, book meetings, generate pre-meeting briefs based on existing CRM notes, and log post-meeting summaries and tasks.
“We understand the strong preference advisors have for the CRMs they already use,” said Arnulf Hsu, Founder and CEO of GReminders. “In many cases, they’ve been using these tools for years and are hesitant to change. Our goal is to deeply integrate our technology within their systems to operate intuitively with these platforms, and effectively be a powerful upgrade to their daily workflows, accelerating efficiencies within their firms.”
BridgeFT And iCapital Join Forces To Streamline Portfolio Management
Chicago-based AI software firm BridgeFT partners with New York City-based iCapital, which provides investors access to alternative assets, including the private markets. The alliance allows advisors to view client portfolios across multiple asset classes via thousands of positions on and off iCapital’s platform.
By working together, BridgeFT and iCapital are creating a standardized way for advisors to analyze and manage complex portfolios that span various assets, including public securities, private market investments, structured investments and annuities, as well as direct, off-platform investments.
“Increased appetite for alternative investments is driving demand for a comprehensive view of client investments,” said Dave Hagen, BridgeFT’s Chief Commercial Officer. “We are thrilled to be partnering with the iCapital team on this data initiative. Our work together emphasizes our commitment to being a true technology enabler for advisors, making it easier for them to gain access to critical total wealth data to further enable differentiation and accelerate growth.”
Wealth Solutions Report can be reached at info@wealthsolutionsreport.com.
