Running an RIA often requires striking a balance between providing personalized service to meet each client's unique needs and using standardized processes to be able to operate at a scale that's large enough for the business to sustain itself. When advisory firms are still on the smaller end of the scale, they often err towards customization: Specialized client service is typically what drives new business and revenue, which has a bigger impact on the bottom line than any efficiency gains that can be achieved through more standardized processes. But as firms get larger, standardization gets more important, as there are more people covering individual (non-revenue-generating) roles like client service, paraplanning, and trading, whose coordination is essential to keep the firm running smoothly.
The problem, however, is that not all processes are in the hands of the advisory firm. An RIA might be able to control its own data gathering or annual review meeting workflows, but for opening client accounts at a custodian, the steps are dictated by the custodian: They decide which forms need to be filled out, what client information is needed, whether the form is 'In Good Order' or not, and how many layers of verification need to be involved.
For many years, this meant that advisory firm clients literally needed to fill out paper forms with 'wet' signatures, and mail or fax them to the custodian to open their accounts. In more recent years as custodians have adopted digital account opening and allowed API access to third party providers, it's become possible to streamline the process at least somewhat: Digital onboarding tools like Skience, Docupace, and Marstone can take client information from sources like the advisor's CRM and populate it into the custodian's digital account opening interface to save the advisory team from having to populate each form manually. But the custodian still ultimately controls what the process looks like and which tools have access to it, which makes even digital account opening tools have limited value because they really just serve to patch over what is actually an issue at the custodian level. Which means ultimately, it can be hard for advisors to stomach the idea of paying separately for a tool that 'fixes' an inconvenient account opening process that really should be the custodian's – and not the advisor's – problem to deal with and improve upon in the first place.
This became clear nearly a decade ago when, after the 'robo advisor for advisors' movement fizzled (as their promises of profitably serving mass-market clients directly collapsed under the reality of high client acquisition costs), many of the original B2B robos pivoted to providing digital account opening and onboarding tools for advisors with their clients instead. But those tools continued to struggle to find adoption after the pivot, even though they solved for a real advisor pain point (especially since at that point most custodians still required paper forms and wet signatures), because advisors didn't want to buy a standalone tool to facilitate a digital onboarding process they felt the custodian should be digitizing itself.
Fast forward to today, and even though most custodians have switched to a paperless account opening process, there are still issues like manual data entry and insufficient field validation to prevent NIGOs that make the process slower than it should be. And so it's notable to see the news this month that the digital onboarding and workflow management provider Feathery has announced the completion of a $30 million Series A funding round from a consortium of venture capital firms led by Portage Ventures.
Feathery is one of a newer generation of digital onboarding solutions that now incorporates AI into features that surround a core function of opening custodial accounts via API connection. Most notably, Feathery features an AI-powered workflow builder (solving for the problem that while advisors often rely on workflows to get things done at scale, many have not actually documented those workflows and/or struggle build them out in software so they can be automated), while also including client data gathering features such as a form builder and AI document extraction to export to the advisor's CRM, portfolio management, and planning tools (as well as populate its account opening and transfer paperwork with the custodian).
But while Feathery's AI-augmented digital onboarding tools might count as an improvement in the insurance and broker-dealer channels that they first launched and built with (which remain markedly more old-fashioned in their processes and still often run on paper forms), as Feathery shifts into wealth management it's hard to see, from an RIA perspective, how what Feathery is doing at its core is much different than the generation of digital onboarding tools that preceded it. Because while on the plus side Feathery may be able to pull some users away from tools like Skience or PreciseFP with its more modern interface, it's questionable whether Feathery will convince more advisors to sign up for a new digital onboarding tool when there were already a number of such tools to choose from – none of which had particularly high adoption among advisors, because advisors continue to pressure their custodians directly to make better digital onboarding processes.
To be fair, much of the rationale for the $30 million fundraise probably had to do with the aforementioned broker-dealer and insurance channels, where Feathery's solution really does look innovative compared to the existing tools available, and there may be select opportunities in the enterprise RIA market (with existing users including Sequoia Financial Group and RFG Advisory) where the sheer size of the teams and client base make it worthwhile to have a tool to centrally manage account opening and workflows (especially as enterprise RIAs want to own more of their own data layer, and may want an onboarding tool that can integrate to custodians and their own proprietary data warehouse). But if Feathery seeks to expand further into the independent RIA market with its fresh funding, the big question will be whether it can convince advisors that features like AI-powered account opening workflows and data gathering tools add enough value to make it worth paying for a standalone account opening tool when they expect their custodians to provide it to them (and some custodians, like Altruist and Betterment, can now actually give it to them for free)?
This article first appeared on the Nerd’s Eye View at Kitces.com at https://kitc.es/advisortech-august2026, and has been reprinted here with permission.
Ben Henry-Moreland
Ben Henry-Moreland is a Senior Financial Planning Nerd at Kitces.com, where he specializes in writing and speaking on financial planning topics including tax, practice management, and technology. He also co-authors the monthly Kitces #AdvisorTech column. Drawing from his experience as a financial planner and a solo advisory firm owner, Ben is passionate about fulfilling the site’s mission of making financial advicers better and more successful.
Michael Kitces
Michael Kitces is Head of Planning Strategy at Focus Partners Wealth, which provides an evidence-based approach to private wealth management for near- and current retirees, and Focus Partners Advisor Solutions, a turnkey wealth management services provider supporting thousands of independent financial advisors through the scaling phase of growth.
In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.
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