Here’s your Riskalyze Fintech Five for July, a focused take on what we think are the last five best stories in wealth management technology.
Direct indexing is not a new idea – but many large firms are betting big that it will make the leap from ultra-high net worth to a mainstream strategy for every client.
The key blocker is at the custodian level – for direct indexing to work, it needs the ability to perform fractional transactions in advisory accounts.
First Trust Capital Partners announced the latest acquisition in the space, buying Jim Dilworth’s Veriti Management to place a long-term bet that it can build a strong direct indexing offering that offsets any long-term shift in assets from ETFs.
First Trust is a beloved name among advisors, with AUM in excess of $200 billion. With the loyalty they command among advisors, this seems like a terrific match.
(Editor’s note: Jim Dilworth, Veriti’s co-founder and managing partner, was named one of WealthManagement.com’s Ten to Watch in 2022.)
Bento Engine, a new startup offering a predictive analytics platform to financial advisors, has assembled an Avengers-level of initial investors in its seed round of funding.
If you’ve been in the RIA space for any length of time, you’ll immediately recognize names like Marty Bicknell, Shannon Eusey, Doug Fritz, Kelly Waltrich—and the list goes on.
What attracts all this top-shelf talent to Bento Engine?
The root of it all is that counselors only have 24 hours in a day, and it is difficult to find the necessary time to know what each client needs next, and when to contact them about those needs.
Bento Engine aims to predict what the next best actions are – and help advisors take them. Can they take it off? They certainly have the right brain trust to help them figure it out.
Sanctuary Wealth is the first hybrid RIA to offer its advisors full digital access to alternative investments. Alternative assets, such as direct indexing, are having their moment in the sun right now, as technology also increases advisers’ ability to expand access to high-net-worth clients, rather than just high-net-worth investors who would invest directly.
Sanctuary’s offering puts control over finding and selecting options in the hands of each advisor, allowing them to find the right fit for their clients.
It is a move that illustrates the continued disruption of public markets. With all the downsides of going public, far more companies are creating value while remaining private, and the capture of that value is in private equity funds, hedge funds and other alternative asset classes that are increasingly available to any investor.
Government regulators don’t like to be cut out of the mix, so it will be fascinating to see how they respond to this trend.
How about some integration news?
Since joining as CEO of Docupace in 2020, David Knoch has struggled with the acquisition of PreciseFP late last year, being named one of the most innovative wealth technology companies and now the announcement of a strategic integration with Envestnet.
This upgraded integration with Envestnet’s APIs allows Docupace to customize the advisor, client and back office experiences related to proposal and account opening workflows. In layman’s terms, this is a win-win for advisor efficiency and helps bring data-driven insights on behalf of clients.
Congratulations to the teams at Docupace and Envestnet and I look forward to providing an update on the joint success both organizations will experience from this.
AssetMark has announced the acquisition of Adhesion from Vestmark. The move will embed Adhesion’s unified managed accounts and model marketplace into AssetMark’s platform and add nearly $10 billion in assets and 2,800 advisors.
It’s the latest in a clear set of signals that Natalie Wolfsen, who took over as CEO last year, is looking to invest and grow even in the face of this market downturn. Congratulations to our friends at AssetMark and Adhesion.