Advisor Tech Talk (Week of 4/29/24)

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Advisor technology continued to progress this week with a squall of people moves as fintechs and traditional wealth management firms made a series of hires and promotions. 

We have the advantage of having covered financial advisor technology for many years now, and it seems like every week brings a new wave of news from the wealth tech space, and that gradually, month by month, the amount of activity in wealth tech accelerates. At the same time, the daily news—breaking news, new information—from traditional wealth management is also accelerating, but at a slower pace. If the trend persists, wealth tech inevitably at some point in the future comes to eclipse the industry it was designed to serve. 

How can this be? 

Because wealth tech is a flavor of fintech—technology that links an end user with financial information and activity. Of course, most fintech is not built with a financial advisor in mind as an end user—fintech usually seeks sustainable scale by appealing to the greater investing public. Public-facing fintechs, because of their tremendous economies of scale, have the potential to serve more people and assets more efficiently than even the largest and best managed traditional wealth management firms and banks. Larger, more incumbent fintechs—the Robinhoods and Chimes and SoFis and Revoluts and PayPals of the world—are on a non-stop cycle of diversifying their businesses. 

These larger, diverse fintech firms—and smaller ones as well—should gradually become builders, acquirers or clients of wealthtech firms. Think of companies like Betterment and Wealthfront, whose primary business as low-cost, client-facing robo-advisors are now growing concurrently with thriving RIA custody and wealthtech businesses. 

Now think of the great wealth transfer. Because traditional wealth management has struggled to pivot to the next generation of investors—including many heirs of the great wealth transfer—successive generational cohorts of clients will be increasingly native to managing their money using technology.  

To this point in time, prospective and current clients have been traditional wealth management natives, and technological options have had low rates of success at peeling them away from incumbent firms.  

Maybe it won’t be the millennials, who are now firmly in middle age, but Generation Z and its successors will not only open their first accounts and make their first investments by themselves, with technology, but they will also receive their first financial recommendations and financial plans from the same technological platforms via AI assistants. 

Fintechs likely will be the incumbents to future generations of clients, and traditional wealth management will have to compete to pry clients away from technology—and it’s clear already that traditional wealth management is not going to be able to compete on price. 

Let’s get to this week’s headlines… 


Advisor360° 

Advisor360°, a provider of integrated software for enterprise wealth management firms announced that Mike Fanning, the former Head of Mass Mutual U.S., will succeed Richard Napolitano as Chief Executive Officer upon Napolitano’s retirement, effective May 1. 

Fanning has held numerous leadership roles driving technology strategy and enterprise-wide innovation throughout his career, which spans more than three decades in wealth management. During his 17-year tenure at MassMutual, he oversaw an unprecedented period of growth and digital transformation at the company, most recently leading the company’s domestic insurance business as Head of MassMutual U.S. 

Napolitano joined Advisor360° as CEO in 2020, leading the company through its transformation from early-stage spin-out of a financial services company to one of the leading providers of award-winning technology solutions for the wealth management industry. Through his stewardship, Advisor360° now stands as an independent and profitable software company with 700+ professionals working across the United States, Canada, India and Northern Ireland. Upon his retirement, Napolitano will serve as a strategic advisor to Advisor360°. 

Aspida 

Aspida, a life insurance and annuity company, announced the appointment of two strategic hires, welcoming Jason Pedone as Chief Technology Officer and Derek Clinton as Director of Digital Product Management. These new hires will play a pivotal role in the continued development and advancement of the company’s in-house technology stack and unified data architecture. The news follows the appointment of Alex Seidita as Chief Information Officer 

Having developed its technology stack entirely in-house, Aspida is unencumbered by legacy systems and technical debt. By cutting full dependence on external systems, this enables the company to innovate and adapt quickly to changing market conditions and consumer needs, bridging the gap between customer expectations, available products, and providing self-service technology. 

Pedone brings to the team a wealth of experience as an engaged and hands-on technical leader with a proven track record in platform development and establishing modern and flexible technology architecture. Prior to joining Aspida, he served as the SVP and Head of Digital and Consumer Channels Engineering Division at Truist Financial, where he led 40 agile development teams responsible for the engineering and delivery of digital product portfolios supporting over 10 million customers. As Chief Technology Officer, his expertise in aligning product, business, and technology will enable Aspida to further cement its position as a digital leader in the insurance industry. 

AssetMark 

AssetMark Financial Holdings announced that it has signed a definitive agreement to be acquired by GTCR, a leading private equity firm with substantial investment expertise in financial technology, wealth and asset management. 

AssetMark stockholders will receive $35.25 per share in cash, which represents a total equity valuation of approximately $2.7 billion. Under the terms of the agreement, GTCR will acquire a 100% interest in the Company. 

AssetMark’s Board of Directors has unanimously approved the transaction and recommended the transaction to its stockholders. After AssetMark’s Board of Directors approved the transaction, the definitive agreement was signed, and the transaction was approved by written consent of stockholders representing a majority of the outstanding voting interests of the Company. 

CAIS 

CAIS announced it has been selected by CAPTRUST, one of the nation’s largest independent financial advisory firms with more than $800 billion in client assets under advisement, to consolidate their alternative investment products and processes onto a single platform, creating an enhanced, unified alts experience. 

The SaaS offering, CAIS Solutions, is powered by CAIS’ technology and enables independent financial advisors to centralize their fund positions – no matter where they are sourced – through automated processes across the entire alternative investment lifecycle. CAPTRUST’s network of advisors will also have access to integrated advisor education via CAIS IQ, expanded support for structured investments, and dedicated coverage through CAIS’ 70+ advisor-facing professionals. The CAIS platform will also provide seamless integrations into CAPTRUST’s custodians and reporting providers, including BNY Mellon’s Pershing, Fidelity, Charles Schwab, and Black Diamond, for more efficient data management and reporting. 

CapIntel 

CapIntel announced its strategic partnership with Desjardins Financial Security Investments (DFSI), a mutual fund dealer to enhance client experience and simplify CFR compliance. This collaboration aims to empower nearly 1,400 independent advisors affiliated with the Desjardins Financial Security Independent Network, Desjardins Financial Security Investments and SFL Wealth Management distribution networks across Canada with the tools and resources necessary to deliver superior interactions to their clients. 

The primary objective for DFSI is to support advisors in their client conversations with materials that educate and build trust. By leveraging CapIntel’s innovative platform, advisors can combine educational materials with product information to help their customers understand how they’re investing and why. 

DFSI wanted to simplify the process to complete the key checkpoints to satisfy Client Focused Reforms (CFR) requirements. These checkpoints include KYP, KYC and suitability, and they can be completed while building client-friendly presentations that aid advisors in building trust during client and prospect conversations. 

Carson Group 

Carson Group announced that Daniel Applegarth has joined the company as Chief Financial Officer. In addition, Eric Vrba has joined the firm as Controller. 

Applegarth comes to Carson after an 18-year tenure at Orion Advisor Solutions, where he oversaw financial operations across the firm’s advisory technology and wealth management business lines. Under his leadership, Orion grew into an industry-leading fintech company with over $3 trillion in advisory assets on its platform. 

Vrba joins Carson from City+Ventures where he served as controller. Before that, Vrba spent five years working with Applegarth as the assistant controller at Orion, leading the accounting and financial operations for the wealth management business segment. 

Fiduciary Exchange 

Fiduciary Exchange LLC (FIDX) and its broker dealer, FIDX Markets, announced the launch of FIDX Desk, a new outsourced insurance desk (OID). FIDX Desk will enable RIAs and fee-based financial professionals to effortlessly integrate annuity products into their offerings, regardless of their insurance licensing status. 

FIDX Desk is a comprehensive digital solution for annuity management. It tackles the obstacles Registered Investment Advisors face, enabling them to present the potential advantages of annuity solutions—such as income and legacy planning—to their clients.* Working closely with financial professionals, FIDX Desk facilitates the establishment of these accounts. Additionally, it assists them in managing investments in annuities that were previously purchased through former broker dealers. Importantly, there is no additional fee to financial professionals for the use of the FIDX Desk.  

FIDX Desk is now available to all advisors. Users on the Envestnet | Tamarac platform will have access to an integration with the Tamarac reporting system. 

Franklin Templeton 

Franklin Templeton announced that shares of the Franklin OnChain U.S. Government Money Fund (FOBXX) are available for transfer from one shareholder to another shareholder (“peer-to-peer”) on the public blockchain. 

The Franklin OnChain U.S. Government Money Fund was launched in 2021 and is the first U.S.-registered fund to use a public blockchain to process transactions and record share ownership. One share of the Fund is represented by one BENJI token and the Fund’s transfer agent maintains the official record of share ownership via a proprietary blockchain-integrated system that utilizes blockchain technology for transaction activity. As of March 31, 2024, the Fund held over $360 million in assets under management. 

The Fund offers a competitive yield and is a regulated 1940 Act fund that invests at least 99.5 percent of its total assets in government securities, cash and repurchase agreements collateralized fully by government securities or cash. The Fund’s investment objective is to provide investors with as high a level of current income as is consistent with the preservation of shareholders’ capital and liquidity and aims to maintain a stable $1.00 share price. 

iPipeline 

iPipeline announced the appointment of Adam Boone as Chief Financial Officer, who will lead the financial management activities for the growing global business. Boone will play a critical role in advancing the company’s strategic operating initiatives, including spearheading plans for sustained financial growth. 

In his 17-year-plus career, Boone has built an impressive track record of building and managing global finance functions and cultivating high-performing teams at high-growth technology companies. As a top financial executive, he drove efforts to secure strategic investments from industry leaders at data solutions provider Sight Machine; and built the corporate finance and strategy functions at software platform LeafLink. Previously, Boone built and scaled the global financial planning and analysis (FP&A) function for one of the largest technology investors in the world, OLX Group/Naspers Limited, as its operations expanded to over 40 countries and scaled to more than $1 billion in annual revenue. 

Northern Trust 

Northern Trust announced the successful upgrade of its SAP Financial Asset Management application to SAP S/4HANA, which further enhances its Insurance Investment Accounting and Analytics Services solution, developed to support the full spectrum of investment accounting and regulatory reporting needs for U.S. insurance companies and corporate and endowment markets. 

The upgrade incorporates Northern Trust’s interactive digital interface with the power of SAP S/4HANA to provide an end-to-end solution covering all investment types and reporting needs. 

The advanced cloud-based interface automates and streamlines insurance accounting and reporting processes, enabling faster processing and reporting. One of the most significant innovations of SAP S/4HANA is its ability to perform in-memory computing. The redesign of database storage to prioritize transactions in a timely and accurate manner means that stakeholders can survey more data in less time. This means business decisions can be made with a more holistic dataset, answering the accounting needs of insurers as they face both heightened regulatory reporting requirements and an industry-wide push for digital transformation. 

Shaping Wealth 

Shaping Wealth announced the appointment of Dr. Meghaan Lurtz as Partner. Dr. Lurtz, a leading global expert on the psychology of financial planning and an esteemed educator, will play a pivotal role in supporting Shaping Wealth’s vision to enable funded contentment—the ability to underwrite a meaningful life—for everyone. 

Shaping Wealth, led by experts in applied behavioral finance, emotional intelligence, and positive psychology, trains financial advisors in the psychology of financial planning. Through its content, coaching, and technology, the firm delivers modern, evidence-based research combined with timeless wisdom on a life well-lived to guide and inspire the global wealth management industry and beyond. 

Dr. Lurtz will serve as learning and development specialist at Shaping Wealth, and join the firm’s distinguished leadership team under the direction of Dr. Brian Portnoy and his co-founders Neil Bage, behavioral science expert, and Dr. Joy Lere, licensed clinical psychologist. Together, the team will continue to advance Shaping Wealth’s mission to build the world’s leading engagement platform—encompassing content, coaching, and community—to help people understand, navigate, and improve the human experience of money. 

TIFIN 

TIFIN announced the appointment of Jeannette Kuda as Chief Operating Officer of its TIFIN AG platform. She will be responsible for overseeing the day-to-day business management of the company as well as defining and implementing new growth strategies. 

Kuda joins TIFIN AG from LPL Financial where she served as Senior Vice President and COO of Wealth Management Solutions. In this capacity, she oversaw product distribution and provided strategic oversight across all areas of LPL’s Wealth Management Platform. This included managing the team responsible for the revenue relationships across the wealth management space, the product consulting team which helped advisors navigate the product shelves, a data analytics team that pulled through business insights and turned them into actionable ideas, and the support teams that executed projects to build new capabilities.  She also spent nearly a decade at TIAA, where she spearheaded initiatives across the Trust Company and Private Asset Management divisions.