Ho! Ho! Ho! While wealthtech news does not take a holiday, we definitely do! Thus, this week, we’re going to give you the first half of a top 10 of sorts, the 10 biggest financial advisory technology stories of 2024.
Some of the five stories listed below are quite specific, discussing key moves by individual companies, while others bundle a number of stories into trends that dominated our wealthtech headlines throughout the year.
While we believe that many of these trends are self-evident to outside observers of the financial services industry, they’re not always easy to recognize for day-to-day wealth management practitioners during the year until someone like ourselves turns around and looks at how far we’ve all come over the past 12 months.
For me, your Advisor Tech Talk editor, it’s been one of the best 12 months of my life. At the end of 2024, I find myself happier, healthier and wealthier than I have been in nearly a decade, and I hope that all of our readers can say the same.
If not, let’s all try together to make 2025 a year of joy and positivity.
Let’s get to the first five of our top 10 wealthtech stories of 2024.
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Envestnet Goes Private
We’re going to get to more deals later—both in this week’s feature and in our New Year’s week follow up—but some of the bigger deals merit their own mention, and that would include Envestnet being taken private by Bain Capital.
In a $4.5 billion transaction which closed shortly before Thanksgiving 2024, the TAMP and wealthtech giant with $6.5 trillion in platform assets was acquired by Bain, funds advised by Bain, as well as Franklin Templeton, State Street, BlackRock and Fidelity, and taken off of the New York Stock Exchange.
The transaction follows more than a decade of rapid growth through acquisition for Envestnet, which left many shareholders—and stakeholders—concerned about whether the firm could successfully integrate all of its disparate parts.
First up on Bain’s list? Finding a CEO. Since co-founder Bill Crager left the firm in April, Envestnet has been under the auspices of interim CEO James L. Fox, whose contract runs through the end of January. Envestnet’s new leadership seems likely to be the first truly big piece of wealthtech news of 2025.
Big Acquisitions Stack Up
Bain wasn’t the only big buyer in the wealthtech space in 2024. In fact, a number of eye-catching acquisitions occurred throughout the year, and we’ll review a sample of them here.
Some of the best was saved for very late in the year—SEI announced its acquisition of LifeYield earlier in December, adding automated unified managed household capabilities to its core TAMP services and growing list of wealthtech solutions.
Also in December, Orion bought Summit Wealth Systems and brought Summit CEO Reed Colley on as president of Orion Advisor Technology. Summit’s software further augments Orion’s portfolio management and reporting offerings.
In March, Apex Fintech Solutions bought AdvisorArch, bolstering its RIA custody solutions with automated portfolio and model management technology and enabling it to offer direct indexing services to accounts of any size.
AlphaTrAI bought Anchor Advisory Services, marrying sales enablement and scheduling to its artificial intelligence wealthtech services. AlphaTrAI would then later rebrand to Praxis Solutions.
In April, Tradeweb acquired money market specialists Institutional Cash Distributors. The acquisition gave Tradeweb not only access to ICD’s institutional money market portal, but its artificial intelligence (there will be much more on AI to come) portfolio analytiics capabilities.
Also in April, but in the alts world (and, like, AI, we’re going to talk a lot more about alts in this feature), iCapital bought Mirador, marrying its alternative investments platform with a provider of reporting and data aggregation for alts.
Open Wealth Strikes a Chord
Integration continues to be a problem in wealthtech—advisors seem to all want both bundled, all-in-one solutions and access to best-in-class technology in specific areas, and that’s coming through in a lot of the 2024 technology news.
This year saw widespread adoption of technology like Black Diamond and, in particular, Pontera, which specializes in giving advisors insight—if not access—to a client’s workplace retirement accounts via password-sharing arrangements; and concepts like the unified managed account (UMA), which can bring all of a household’s investments into a single account for easier management. If advisors can’t get the kind of integration they want, they at least want to see all of their clients’ financial information on a single screen.
Thus, the idea of open wealth is born. Like open banking, open wealth describes a world where a client’s or client household’s wealth data flows freely between different service providers, platforms and software.
Unfortunately, not every incumbent financial services company is on the same page with advisors and their clients, who are increasingly demanding open wealth. 2024 also saw significant pushback against the open wealth concept.
Fidelity, in particular, seems reluctant to share data from its $4.5 trillion retirement account recordkeeping business with wealth management platforms and data aggregators like Pontera. Fidelity closed its platform to Pontera and other similar services in September.
Outsource, Outsource, Outsource
At Digital Wealth News, we firmly believe that technology is going to make the financial advisor of the future more efficient and drastically lower the headcount in the financial services industry, but firms aren’t waiting for technology to permit their reductions in force—thus there is a noticeable acceleration towards outsourcing more of the work of a financial advisor.
As the breadth of services offered by financial advisors expands, the only way for smaller firms to remain competitive is to outsource. Due to the shift in advisor value propositions away from investment performance, the first place many firms look to outsource is in their investment and portfolio management.
According to a Fidelity study earlier this year, outsourcing investment management frees up to a week of advisors’ time every month. In investment management, outsourced model portfolios are beginning to grow at a faster clip than in-house strategies, according to reporting this year from Cerulli Associates.
Outsourcing goes far beyond investment management, however, with firms outsourcing marketing, IT, operations, compliance, reporting and even financial planning itself.
Everyone Offers Alts—Even Fintechs
In a rush to find new ways to differentiate themselves, members of the wealth management and wealthtech industries have destroyed one potential path towards differentiation. Alternatives are everywhere, and nearly everyone who should access them now has access to them.
A number of studies illustrates the saturation of access to alternatives within wealth management—a report released in June by Escalent found that 70% of advisors responding to a survey had adopted alternatives in their client portfolios. Six months later, a December report from CAIS and Mercer found that 92% of advisor respondents were already incorporating alternatives into their investment offerings.
The biggest technological purveyors of alternatives, iCapital and CAIS, announced a number of big partnerships this year. iCapital with huge brokers like Kestra, Commonwealth. CAIS with MassMutual and wealthtechs like Orion and Advyzon. ICapital launched new alts-related tools and a distributed ledger (which translates to us as blockchain-like)-oriented fund. CAIS, for its part, launched an entire division dedicated to helping advisors manage alternatives.
In addition, independent efforts were launched by the likes of BNY and Axxcess Wealth Management. Smaller entrants into the alts space include S64, Opto Investments and Arete Wealth.
However, the DIY investor is also enjoying increased access to alternatives. SoFi, which cut its teeth as a student loan platform, partnered with private markets tech provider Templum to start democratizing access to alternatives. Fintechs like Linqto have expanded rapidly with an aim of bringing more private markets opportunities to the masses—and the public’s growing distrust for established institutions, even among the investing class, plays into technology’s hands, accelerating us towards a future where alternatives are for everyone.
