Throughout his 30+ year financial services career, AdvizorStack CEO Paul DeMaio never considered himself a disruptor. All that changed in 2022, when Paul, along with his son, Nico – a 10-year industry veteran himself, who serves as the firm’s President – launched AdvizorStack, a fintech technology platform offering Registered Investment Advisors (RIAs) turnkey access to a curated assortment of third-party solutions providers.
What’s revolutionary about that? The answer lies in AdvizorStack’s client base: the under $250 million RIA segment – breakaway advisors, large OSJs and established RIAs all looking for cost-effective, integrated tech and back-office support.
In the wealth management industry, where consolidation and aggregation have increasingly become the norm for smaller firms, a seemingly irreversible trend was gaining momentum among small- to midsized RIA players not large enough (read not profitable enough) to garner the interest of service providers offering the services needed to operate – custodial, regulatory, technological, etc. Since these small and midsized RIAs were finding it increasingly difficult to compete effectively in the marketplace as stand-alone entities, many were forced to surrender their registrations and tuck in as fee-only or dual-registrant IAR businesses.
The DeMaio duo saw a void and decided to fill it. Based out of Fort Lauderdale, AdvizorStack allows RIAs of all sizes to buck the trend, simplify their operations and maintain autonomy by offering an integrated, customizable suite of fintech tools under a single contract and fee structure. Importantly, clients can integrate their existing tech systems with the AdvizorStack dashboard thanks to a Salesforce overlay allowing plug-in access to an array of curated service providers. Available solutions include Billing and Reporting, Trade & Order Management, Financial Planning, Research & Analytics and CRM technology.
The AdvizorStack offering has the potential to reconstitute and invigorate the small- and midsized RIA segment and revitalize the space – actions that may very well reverberate throughout the wealth management industry. The firm completed its first Minimum Viable Product (MVP) in June 2023 and currently works with clients with representing approximately $300 million in AUM, with a goal of $1 billion by the end of 2024. Digital Wealth News sat down with the DeMaios to learn more about their business, goals and outlook.
DWN: Obviously, there’s been considerable industry chatter about the intensifying trend of small- to midsized RIA firms surrendering their registrations and becoming IARs with RIA aggregators or hybrid IARs with dual registrant enterprises. How big of a role are technology considerations playing in this trend, and why?
Paul DeMaio: In today’s competitive landscape, technology is not only the differentiator that attracts top advisor talent, but it also enables smaller firms to compete. Without a robust platform and adept in-house support, advisors risk dissatisfaction during transitions and may lack the ability to deliver the kind of investment solutions clients of all sizes demand. We believe technology proficiency is paramount; the next generation of advisors prioritizes it. Our commitment to cutting-edge solutions ensures seamless transitions and smooth client experiences throughout an engagement without sacrificing total independence. We’re dedicated to providing the tools and expertise necessary for success in the modern financial advisory landscape.
DWN: How is AdvizorStack positively disrupting the RIA channel by making small- to midsized RIA firms sustainable over the long term once more, and what are the broader effects this could have on the RIA channel as well as the broader wealth management industry?
Nico DeMaio: We offer advisors a comprehensive solution to address all their RIA requirements under one roof – put simply we are their outsourced CTO and all-in-one technology and operations consultant. Partnering with a diverse range of IT providers, law firms and CPAs/concierge services, we enable advisors to offer a complete suite of services to their clients. Our objective is to seamlessly integrate into advisors’ firms, freeing them to concentrate on business growth. Leveraging our pricing power, we’ve developed enterprise-grade pricing structures accessible to RIAs, even those starting from zero. By becoming an integral part of their operations, we empower advisors to deliver unparalleled value and enhance client satisfaction, setting new standards of excellence in the industry.
DWN: Looking ahead, what are the top tech stack priorities that small- to midsized RIA firms should be focused on addressing in order to drive success this year and beyond?
ND: At AdvizorStack, we recognize the critical importance of seamless data integration across various vendors. Our proprietary database is designed to absorb and instantly populate data between platforms. Data is the linchpin of our strategy, and we’ve invested in proprietary data storage capabilities, empowering firms to retain ownership and effortlessly transfer data between sources.
Our ultimate aim is to deliver a unified experience for RIAs, streamlining operations and enhancing efficiency. By facilitating seamless data exchange, we enable RIAs to leverage their tech ecosystem fully while continuously enhancing our platform to meet evolving needs. With AdvizorStack, advisors can trust in a cohesive, data-driven solution that optimizes their workflow and empowers business growth.
DWN: Do you see your solutions potentially clearing a path forward for wirehouse breakaways who have books of business with below $250 million in client assets and were previously told they should join RIA aggregators or dual registrant enterprises as IAR businesses?
ND: Absolutely. In fact AdvizorStack was primarily set up just for these advisors. We want to give them the opportunity to enjoy institutional vendor pricing – that just isn’t available to a firm of this size –to enable them to grow their business the way they want, not how the wirehouses or broker-dealers make them. We give smaller firms the chance to focus on growth and client service and not the responsibilities of a chief technology officer or back office team. If they want to grow into a larger OSJ, we can assist them at all stages of their growth plans and ensure we continue to evolve to allow scale for these firms.
DWN: Family dynamics within a business can make things more complicated. What made you decide to work together, and what advice would you have for other parents with adult children who are thinking of launching a wealth management-industry-related business together?
PD: My best advice for a family-operated wealth management business is allow each member to do what they do best. Respect that you may not initially agree or understand but have enough belief that the other team member knows their space better than you do. Have clear-cut rules within the organizational structure but have an open forum to discuss anything that may work. Our structure has been a perfect fit for our client base. We have so many RIAs that are transitioning their business to a child or two, and Nico works great with the younger generation while I handle the older generation.
