Advisor Tech Talk (Week of 1/15/24)

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We’ve known it was coming for weeks now, but last week’s clearance from the U.S. Securities and Exchange Commission for spot bitcoin exchange-traded funds was still a landmark announcement in the evolution of digital assets, and therefore wealth tech itself. Over the past few business days, over a dozen bitcoin-linked exchange-traded products have launched, and a slate of ethereum-linked spot products are probably not far behind. 

Now advisors and retail investors have simple, secure, low-cost access to the world’s largest cryptocurrency. Following the announcement, trading volumes of the biggest crypto tokens jumped, and, perhaps surprisingly, the value of bitcoin itself declined after a short spike. Perhaps the new ETFs won’t be the launching pads needed to get the value of one bitcoin token to $100,000 or beyond—but it’s still early and time will tell. 

What does need to change immediately is the way the financial industry talks about cryptocurrencies, and I think it needs to change in two ways. One, we all need to just go ahead talk about crypto and digital assets. They’re definitely not going to just go away, and even bitcoin, a token with few practical applications beyond just being a digital currency, appears to have long-term utility at least as a store of value. There’s no point in staying on the sidelines waiting for this whole thing to blow over, because it won’t and people—even already wealth investors—surely aren’t going to ignore these assets. 

Two, I think these ETFs simplify the discussions we have about cryptocurrency for most clients, as most people are interested in the plain investment prospects of cryptocurrencies as part of their holistic portfolio. Specialist advisors, hired as third-party consultants, can appease the tech-conscious and more speculative clients who want a much deeper dive into crypto and who want a diverse portfolio of alt-coins attached to decentralized finance projects that may have long-term promise. Everyone else’s crypto appetite will likely be easily sated with an ETF. 

In other words, it’s time to re-think all of the resources we’re putting into crypto education for advisors, because in a general wealth management setting, only a fraction of the knowledge these resources now offer will be relevant moving forward. So while digital assets themselves will probably be mostly unchanged by the SEC’s decision, the way we talk about and use digital assets in wealth management should be altered by the new ETFs. 

We have plenty of other good wealth tech news to get to this week: 


Dispatch 

OneAdvisory, the first wealthtech solution enabling effortless client data management for registered investment advisors (RIAs), announced that it has raised $8 million in seed funding and will rebrand as Dispatch. The funding round was led by global venture capital firm F-Prime Capital, with participation from existing investors Fika Ventures, Great Oaks and Twelve Below. Also joining the round were new investors CoFound Partners; The Compound Capital Fund I, LP, a qualifying venture capital fund established through Ritholtz Wealth Management; Flyover Capital, the affiliated venture capital fund of Mariner Wealth Advisors; and Valor Equity Partners.  

The capital raise comes at a formative time for the company as it rebrands from OneAdvisory to Dispatch. Co-founders Madalyn Armijo, Rafi Lurie and Rob Nance refreshed the brand to better align with the company’s expertise. RIAs work with Dispatch because they want client data to seamlessly flow across their tech stack. Dispatch operates silently behind the various software products that firms use. It acts as a coordinator, “dispatching” data across systems in real time. This means that firms can instantly onboard clients to their entire tech stack, eliminating the need to re-enter and maintain data across applications. Any changes made in one application are updated across the tech stack. Additionally, Dispatch’s API provides technology companies with integration access to the industry’s most popular wealthtech products.   

Elements 

Elements, a platform that helps financial advisors save time serving clients, announced the successful completion of its second cohort of advisors who are trained to launch their own subscription models. All of the participating advisors, as a result of Elements, now have a new way to serve clients they never anticipated they could reach.  

As the year begins and advisors explore ways to attract additional clients, Elements offers comprehensive training and resources that enable them to effectively serve clients with limited assets under management (AUM), all while saving time and resources. A key feature of this program is the Elements Financial Vitals System, which allows clients to input their financial data into a user-friendly mobile application and generate a scorecard. This scorecard provides a standardized, objective way to define, measure, and monitor financial health, equipping advisors to dramatically reduce time spent preparing for meetings and helping clients understand their finances. By utilizing the Elements app, clients can actively monitor their financial well-being, while advisors can promptly respond to client queries and proactively identify potential financial concerns in addition to showing client progress beyond investment returns. 

InvestCloud 

InvestCloud (or “the Company”), a global provider of wealth and asset management solutions, announced the appointment of Jeffery W. Yabuki (“Jeff”) as Chairman and CEO. In this role, Jeff will lead InvestCloud’s strategy and operations, with a key focus on excellence of client delivery. Jeff’s leadership will further empower InvestCloud’s clients and partners with its scalable technology platform. The Company is backed by Clearlake Capital Group, L.P. (together with certain of its affiliates, “Clearlake”) and Motive Capital Management, LLC (together with certain of its affiliates, “Motive Partners”), which together recapitalized the business in 2021. 

InvestCloud is a wealth technology platform that supports over 550 wealth and asset managers globally with more than $6.4 trillion in assets across its platforms in services such as UMA/SMA portfolio management, trade execution, accounting, model management and performance measurement. 

Jeff was previously the CEO of Fiserv (NYSE:FI), a Fortune 200 company and global leader in payments and financial technology, a role he held from December 2005 through June 2020. He also served as Chairman of Fiserv from 2019 to December 2020. During Jeff’s tenure with Fiserv, he led the company through a strategic transformation with significant acquisitions and divestitures, including the $22 billion acquisition of First Data Corporation. During Jeff’s leadership, Fiserv nearly tripled revenue, increased operating margin and earnings, and achieved a total shareholder return of 969% through the end of 2019. 

Qraft Technologies 

Qraft Technologies, an invest-tech company developing artificial intelligence (AI) solutions, has announced the hiring of Rita Lin, a senior financial services executive, who will serve as Director of Business Development. 

As veteran in the industry with 15 years in finance, Lin brings a wealth of expertise, particularly from her over decade-long focus in prime brokerage at industry-leading institutions including Citigroup and Bank of America Merrill Lynch. During her career Lin has played important roles in prime brokerage and collaborated with hedge funds at these institutions. As Director of Business Development, Lin will continue working closely with hedge funds, which positions her as an invaluable asset to Qraft. 

SMArtX Advisory Solutions 

SMArtX Advisory Solutions (“SMArtX”), a trailblazer in managed accounts technology, announced the appointment of Jim Hays as Strategic Advisor. Hays, a 35-year industry veteran, brings unparalleled expertise to SMArtX, having served as President and Chief Executive Officer of Wells Fargo Advisors and leading Wells Fargo’s Wealth and Investment Management Client Relationship Group. His previous roles include heading the Private Banking & Investment Group at Merrill Lynch. Currently, Hays also serves as a strategic advisor at BridgeFT. 

Hays will work closely with SMArtX Chief Executive Officer, Jonathan Pincus and the SMArtX executive leadership team, using his deep knowledge of the financial technology landscape to help the company amplify its position as a groundbreaking technology to improve the digital experience of the wealth management ecosystem. His experience and guidance will be key in the company’s strategic planning, execution, client and prospect development and messaging. 

Snappy Kraken 

Snappy Kraken, the marketing technology (martech) innovator serving financial advisors, announced a deepening of its exclusive relationship with The New York Times “Sketch Guy” columnist Carl Richards’ firm Behavior Gap to generate a 10-part email-based course. Starting this month, the Behavior Gap: Audience Builder educational email series will feature original illustrations complete with bite-sized money lessons — creating strategic opportunities for advisors to attract leads, start conversations and build trust.  

Created by Richards, a best-selling author and featured artist, the illustrations focus on emotions, goals and practical strategies. The emails incorporate topics such as fear and greed’s impact on financial returns and how budgeting creates financial awareness. The content provides consistent prospect touchpoints over 10 days to help advisors create strong relationships. 

Snappy Kraken believes that a key part of the prospecting period is not just selling products and services but also building trust and credibility; this email series enables advisors to do so without sacrificing their client service. The series nature of the Behavior Gap: Audience Builder provides consistent contact to nurture prospects over time and at scale. 

SS&C Technologies 

SS&C Technologies Holdings, Inc. announced the appointment of Debra Walton-Ruskin as a new independent director to its Board of Directors. Debra is a seasoned global business leader, having spent her career in financial data, data operations and executive leadership roles. 

Prior to joining SS&C, Debra served as the Chief Revenue Officer at the London Stock Exchange Group (LSEG), following LSEG’s acquisition of Refinitiv. Her leadership was instrumental in successfully selling Refinitiv to LSEG, marking the culmination of nearly two decades at Refinitiv, Thomson Reuters, and Thomson Financial. She has held numerous C-suite roles, including Global Head of Market Development, Chief Data Officer, Chief Product Officer, and Chief Revenue Officer. She was also President & CEO of Nucleus Financial, a VC-backed startup, a Partner at Cantor Fitzgerald, and a founding Board Member of the Cantor Fitzgerald Futures Exchange. Debra began her career in financial services as head of sales for Australian-based Giltnet Limited, and was part of the team that took Giltnet public on the Australian Stock Exchange. 

TradeStation Securities 

TradeStation Securities, Inc. (“TradeStation Securities”), an award-winning,* self-clearing online brokerage for trading stocks, ETFs, options and futures, has announced that CQG, a global provider of high-performance technology solutions for traders, brokers, commercial hedgers and exchanges, has integrated with TradeStation Securities’ brokerage services. This arrangement further expands CQG’s multi-broker network and gives TradeStation Securities clients an array of additional functionality for trading futures and equities. 

TradeStation Securities clients will be able to harness advanced CQG features with the speed and reliability of TradeStation Securities’ brokerage services. They will also be able to leverage multi-asset capabilities—futures and equities—all in one destination through CQG’s Integrated Client platform. In addition, TradeStation Securities clients will gain access to CQG’s tools, such as its auto spreader and aggregation capabilities. Additionally, this integration allows new and existing CQG customers to gain access to TradeStation Securities’ powerful tools and competitive pricing for analyzing markets and executing trades.