Advisor Tech Talk (Week of 7/9/24)

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Another summer holiday week is in the books, but there’s still plenty to discuss in advisor technology—including two potentially industry-changing announcements. 

One, from last week’s Advisor Tech Talk, deserves some discussion today, as the world’s largest asset manager, BlackRock, acquired Preqin, a provider of private markets data. The other, featured in our AI & Finance column last week, is also of interest, as Robinhood has acquired Pluto, an “AI-driven investment advice platform.” 

We’ll start with BlackRock. The company, based on statements from CEO Larry Fink and other executives, intends to bring indexing to private markets investments using Preqin’s technology. 

Applying indexing to private markets investment has a few implications—most important for advisors is that, in the future, access to private markets is going to become even more democratized than it is today.  

It’s likely that, over time, private markets will gradually become more rational and efficient and some of the premium associated with investing in private markets versus public markets will disappear. 

A rather large feather in the cap of traditional financial advice firms, guided access to private markets, will shrink, if not disappear entirely, if BlackRock’s dreams are brought to fruition. 

On the other side of the industry, Robinhood, a fast-growing, immensely popular but often maligned low-cost digital brokerage, is buying technology that will allow it to offer its clients access to advice. 

Remember that over the past decade, Robinhood and its competitors used commission-free trading and fractional shares to introduce millions of consumers, many of them well down the wealth spectrum, to stock, ETF and cryptocurrency ownership for the first time. 

Now, Robinhood will be the channel through which many of these consumers, who skew young, will experience financial planning and investment advice for the first time. 

While this isn’t quite the industry-shaking news that an entry into financial services from a mega-cap technology company, like an Amazon or a Google, would create, it’s still a shot across the bow of traditional financial services.  

The apps are growing in depth, sophistication and personalization, and they will continue to target the value proposition of traditional financial advisors, even as that value proposition changes. 

Let’s get to some headlines... 


Abra 

Abra, a global platform for digital asset prime services and wealth management, announced the launch of Abra Treasury, a service operated by Abra Capital Management, an SEC-registered investment advisor, which provides corporates, family offices and non-profits with an integrated suite of digital asset treasury management and optimization solutions. Abra Treasury’s integrated offering combines custody, trading, borrowing and yield services through separately managed accounts where clients retain title and ownership over their assets, and they are independently verifiable on-chain. 

Abra Treasury’s solutions are customized to client’s specific requirements. For corporates, Abra Treasury primarily provides treasury management services to optimize cash or crypto assets held on companies’ balance sheets with the goal of maximizing a firm’s treasury through yield, mitigating inflation risks and/or gaining liquidity through borrowing. Notably, Abra Treasury works with crypto-native companies to manage employee bonus programs where employees receive BTC and ETH that vest over time, as an alternative to traditional company stock options. 

Family offices utilize Abra Treasury to generate a yield on their BTC, ETH, SOL and stablecoins, borrow against their holdings, and create customized digital assets strategies for enhancing long-term wealth preservation. One client segment that Abra expects may have more uptake for treasury services over the medium to long-term is philanthropies, as forward-thinking ones may allocate to crypto to maximize their donations and longevity. 

Broadridge Financial Solutions 

Broadridge Financial Solutions announced that it has acquired CompSci Resources, a provider of cloud-based financial technology software for the preparation and processing of SEC filings for public companies and funds. CompSci’s technology platform Transform will be integrated with Broadridge’s regulatory filings and disclosure capabilities to provide public companies and funds with a full-suite of collaborative, web-based solutions to simplify and enhance SEC regulatory disclosure preparation, XBRL tagging and EDGAR filing.  

The CompSci web-based regulatory disclosure and filing platform enhances Broadridge’s portfolio of end-to-end governance and communication capabilities, which includes solutions for shareholder meetings and proxy, corporate governance and shareholder engagement, and stock transfer agency. The platform automates the disclosure preparation process, features AI-assisted XBRL tagging, and enables seamless collaboration among geographically dispersed work teams. Further, the technology allows the process to move from Word and Excel documents to web-enabled and self-serve methods. It can be leveraged to manage filings independently using a self-service approach or can be used as a hybrid solution with support from Broadridge’s expert service teams. 

Broadridge’s Investor Communication Solutions business, which includes Broadridge Issuer Solutions, sits at the center of a global network that connects hundreds of broker-dealers and wealth managers, thousands of public companies, tens of thousands of funds, more than 100 million individual investors and 800 million equity positions.  Broadridge’s investment in this connected network creates real benefit for clients and the broader industry by enabling better corporate governance, enhancing the investor experience, and driving improved business outcomes. 

Morgan Stanley Wealth Management 

Morgan Stanley Wealth Management announced the next innovation milestone in its AI @ Morgan Stanley suite of GenAI tools for Financial Advisors (FAs). The new AI @ Morgan Stanley Debrief is an OpenAI-powered tool that, with client consent, generates notes on a Financial Advisors’ behalf in client meetings and surfaces action items. 

After the meeting, it summarizes key points, creates an email for an Advisor to edit and send at their discretion, and saves a note into Salesforce. 

AI @ Morgan Stanley Debrief comes after Morgan Stanley Wealth Management announced its relationship with OpenAI as its only wealth management strategic partner in March 2023 and fully rolled out the AI @ Morgan Stanley Assistant in September 2023—an award-winning2 GenAI powered chatbot offering FAs quick access to all of Morgan Stanley’s intellectual capital. To date, 98% of Financial Advisor teams have adopted the Assistant. 

Norm Ai 

Norm Ai raised a fresh round of capital. The company has secured a $27 million Series A led by Coatue, with participation from Bain Capital Ventures, Blackstone Innovations Investments, New York Life Ventures, Citi Ventures, TIAA Ventures, and Jefferson River Capital, the family office of Tony James, the former President and COO of Blackstone. Over the past 11 months, Norm has raised more than $38 million from leading firms. 

Norm has built the first AI platform for converting regulations into computer code. The team of AI engineers and legal engineers developed a proprietary language to represent government regulations and corporate policies as decision trees that become executable computer programs by leveraging powerful large language models. These programs, called Regulatory AI Agents, automate compliance analyses to make them more efficient, comprehensive, and accurate. The Norm approach also sets the foundation for integrating AI more deeply into businesses by ensuring that AI-driven actions and content from generative systems adhere to policies through a Regulatory AI agent overlay. 

Fortune 100 companies deploy Norm Ai for critical regulatory assessments. For example, insurance companies and asset managers accelerate their publication of highly regulated content while freeing large amounts of bandwidth for other tasks. By automatically providing clear, actionable explanations for proactive compliance findings, Norm Ai empowers business users to self-serve initial rounds of regulatory compliance reviews. By producing actionable feedback across all regulatory parameters, Norm Ai enables in-the-weeds compliance users to evaluate and finalize content against regulatory requirements in minutes, not days. 

RISR 

RISR, the first comprehensive business owner engagement platform for financial advisors, announced the successful closure of a $1.5 million capital raise. This seed round, which saw participation from financial services industry titans including Kane Brenan, Angelo Grecco, Kevin Lucey, Scott Hildenbrand, Frank Coates and David Henkin, will primarily fund strategic hires, service enhancements and platform development. 

Built to deepen relationships between advisors and their business owner clients, RISR unlocks the data and insights required to enable more personalized engagement. Business owners face critical decisions that directly inform succession planning, capital structure, estate planning, tax planning, investments, insurance and more. As private business data is notoriously disorganized and difficult to analyze, advisors lack the tools needed to help their clients optimize and protect their most valuable asset. To fill this gap, RISR seamlessly aggregates and analyzes key financial and business data to provide personalized insights that launch advisors into more meaningful conversations. 

RISR has already begun assembling an elite team of industry experts. Early customers have benefited from the talent accrued, including Chief Operating Officer Cory Siegfried, formerly of eMoney, Apprise Labs and Envestnet. Buoyed by its growing team, the company is focused on expanding its data capture and insights generation capabilities by leveraging key integrations, artificial intelligence and deep industry expertise. 

Robinhood 

Pluto was acquired by Robinhood, the investing app. Pluto’s former owner, Raido Capital Partners, said thaht the acquisition marks a significant milestone and underscores the growing importance of AI in the realm of personal finance and wealth management. 

Pluto is an AI-driven investment advice platform. Its technology offers real-time data analysis, customizable dashboards, automated trading rules, and AI-generated data visualizations. These capabilities are set to be integrated into Robinhood’s existing suite of financial tools, enhancing the user experience and providing more personalized and insightful investment strategies. 
 
This acquisition is not just a strategic move for Robinhood, but also a testament to the expanding role of AI within personal finance and wealth management. According to Raido Capital Partners. 

SMArtX Advisory Solutions 

SMArtX Advisory Solutions announced the hiring of Courtney Robertiello and Jacquie Burke. These strategic hires signify SMArtX’s dedication to fortifying its leadership team and enhancing service capabilities. 

Robertiello steps in as Senior Vice President of Enterprise Consulting with a focus on supporting, growing, expanding and managing relationships with SMArtX’s Enterprise and RIA clients while Burke takes on the role of Vice President, Asset Manager Solutions leading the initiative around the firm’s data analytics platform along with working with asset management partners to grow their distribution footprint. Their appointments come on the heels of Dave Robinson’s recent arrival as EVP, Head of Strategic Relationships, and Dan Phillips’ appointment as Chief Investment Officer, underscoring SMArtX’s commitment to growth and innovation. 

Before joining SMArtX, Robertiello spent over twenty-one years at Envestnet in multiple key client relationship management roles, including Vice President, Senior Enterprise Consultant. Burke also joins SMArtX after a nearly eight-year tenure at Envestnet, where she served as Director of Data & Analytics Sales. 

ViewTrade 

Global investment and trading technology solutions provider ViewTrade Holding Corporation has launched in Australia in a bid to deliver enhanced global market access, reduce inefficiencies caused by legacy infrastructure, and create investment avenues for the $9 trillion of superannuation assets expected to amass by 2041. 

ViewTrade has also calculated that its technology and operational solutions, particularly for crossborder investing, could bring efficiencies not currently available to the Australian wealth industry, creating savings of nearly USD $160 million annually given the scale of wealth under management. 

Unlocking more efficient and broader access to global markets would also enable Australian investors to capitalise on new opportunities for diversification and returns. 

Webull 

Webull, a low cost trading platform announced a partnership with Apex Fintech Solutions Inc. (“Apex”) and Moment Technology, Inc. (“Moment”). Through the partnership, Webull users will be able to trade fixed income securities and have access to an asset class traditionally reserved for institutional investors. 

Webull customers will have access to fractional bond investing for the first time ever. With Apex and Moment’s technology, Webull users can buy fixed income instruments for as little as $100, significantly less than today’s industry par minimums of $1,000 and $5,000. 

Webull users will be able to view reference data and analytics on bonds, arming investors with necessary information to help them make better trading decisions. This data includes information like price, yield, the bond’s coupon (interest payment), and more.   

401GO 

401GO, a leading provider of retirement planning financial technologies, announced the public release of its highly anticipated mobile app. Designed to meet the evolving needs of its users, the app represents a significant advancement in accessibility and user-friendly technology, reinforcing 401GO’s commitment to customer-centric innovation. 

The app, available for both iOS and Android devices, empowers users to manage their retirement plans from the convenience of their smartphones. With a sleek, intuitive interface, the app provides a seamless experience for tracking contributions, monitoring investment performance, and accessing important account information on the go. 

401GO has consistently been at the forefront of leveraging technology to simplify retirement planning. The mobile app builds on this legacy, offering a suite of features designed to make retirement planning more accessible and less daunting. Users can now enjoy account monitoring, the dashboard provides information on account balances, contributions, and deferral amounts; investment tracking, where they can monitor the performance of investments with detailed insights, select new funds or adjust balance ratios; secure access, where they benefit from security features, including 2FA login and encryption, to safeguard personal information; and financial wellness resources, where the app provides access to free tools designed to improve users’ day-to-day finances.