Wealthtech Solutions Continue To Evolve In Tandem With RIA Priorities
ADVISOR HUB | MARCH 28 2024 | BY Andy Kalbaugh, Founder & Managing Partner, Cassique Strategies
Four Instances Of Solutions Providers Addressing Day-To-Day RIA Needs – For as much as the term “disruption” is used in connection with the technology sector, when it comes to wealthtech solutions provides who serve the RIA channel, it is frequently about both evolution as well as revolution.
Over the past 15 years, the rapid growth of the RIA channel helped drive a proliferation of third-party wealthtech solutions providers, all competing vigorously to support this segment of the industry.
While the pace of expansion of the wealthtech segment may have slowed in certain respects, innovation – both significant and incremental – continues apace.
In many ways, consolidation trends and the relentless need to drive greater scale and cost efficiencies have made wealthtech solutions providers more essential than ever with multiple day-to-day operating functions for RIA aggregators, RIA consolidators, RIA and hybrid RIA firms.
A quick review of four mission-critical wealthtech sectors – digitally-enabled investment management, back-office solutions, workflow automation and lending solutions directed at the end clients of RIA firms – combined with specific instances of providers underscore the ways in which wealthtech as both evolution and revolution are playing out across the industry.
Digitally Enabled Investment Management and Portfolio Construction
Let’s start with leveraging technology to construct, manage and optimize client portfolios and deliver solutions to elevate the client experience, a core competency that remains at the heart of the RIA model for many financial advisors.
This is where digitally-enabled solutions can replace what would arguably be one of the most significant areas of cost in terms of manpower and resources that would otherwise need to be shouldered within an RIA firm.
Take Vestmark, for instance. The firm delivers portfolio construction, portfolio management, trading solutions and a broad range of other tech-driven investment management capabilities for wealth management enterprises and their financial advisors.
Ananya Balaram, Chief Revenue Officer at Vestmark, attributes the firm’s continued success over its past 23 years of existence – itself a differentiating feature compared to the average lifespan of most wealthtech firms – to a key foundational characteristic: “One of our biggest points of differentiation is that we are technologists…[who] happen to understand the wealth management space. This contrasts with our competitors, many of whom are…wealth management professionals trying to be technologists.”
Vestmark supports over $1.5 trillion in assets across five million accounts. Vestmark Advisory Solutions has $26.1 billion in AUA that flows through its model marketplace of over 1,000 strategies from nearly 200 asset managers.
Andy Kalbaugh is Founder and Managing Partner at Cassique Strategies, a wealth management industry-focused strategic consultancy.
