My colleague Jeff Benjamin recently did a deep dive into the explosion of financial advisor interest in alternative investments, and I suggest you check it out.
A survey of 200 advisors and financial professions found that 43% plan to add exposure to at least one alternative asset class this year, and 46% plan to increase their average allocation to alts over the next three years.
That's driving a ton of interest in fintech companies as entrepreneurs see an opportunity to provide easier access to traditionally difficult-to-navigate markets. Companies like CAIS and iCapital are already giants in the market, but I get pitches from (no exaggeration) at least one tech startup every day.
What’s interesting to me is that a lot of the interest in alternatives stems from the disappointing returns on classic 60/40 portfolios. The 60/40 model just had its worse year since 2008, but traditional assets have done very well for most of the past decade.
When markets tick down, advisors love to talk about how their clients don’t panic because they’ve created a plan and trained investors to stick to it rather than chase short-term gains. But if one bad year has advisors rewriting their investment strategies to chase more exotic asset classes, how is that not chasing short-term gains? It sounds to me as if many advisors aren’t “eating their own dog food,” as the tech world loves to say.
Tax-optimization technology from 55ip is coming to InvestCloud’s “Financial Supermarket.” The technology uses automation to make tax-smart transitions, management and withdrawals.
The technology will integrate into InvestCloud’s core platform and will be accessible to the 400 wealth management firms that use InvestCloud. Tax optimization is quickly become a key offering for financial advisers, and this deal is a big win for 55ip.
Merchant, an advisor network with more than 60 registered investment advisors that collectively manage $140 billion, will offer Opto Investments as a tool for access private markets. Each RIA in Merchant’s network can use Opto’s portfolio construction tools and market of exclusive, pre-vetted funds, including private credit, private equity, real estate and venture capital.
It’s hard to understate how hot the marker is for alternative investments and tech platforms that allow access to them. How many of these companies are looking to thrive as independent options, and how many are looking to get bought by a big player like iCapital or CAIS?
Financial advisors using NYFIX, Broadridge’s order-routing network platform, will soon get automated reports using data, visual analytics and natural language processing from Point Focal. The reports include a premarket roundup of recent news activity and sentiment scores; earnings recaps and outlooks; a post-market report summarizing portfolio performance; and a weekly report summarizing on-and-off exchange activity.
These reports are probably helpful for active traders, but data show that an increasing number of financial advisors are moving toward outsourcing and investment automation. However, it does sounds like an interesting opportunity to provide end clients with differentiated news that's customized to their portfolio.
Benjamin F. Edwards, a wealth management firm with $38 billion in client assets and 300 financial advisors, announced that it will use Pontera to let advisors manage held-away retirement accounts.
Another week, another Pontera announcement. Last week the company partnered with Envestnet, and it seemingly can’t be stopped. Being able to manage held-away accounts is a huge opportunity for advisors and Pontera is growing quickly.
Adviser fintech company Asset-Map closed a $6 million Series B round, bringing its total funding to $7.6 million. The company plans to use the funds to scale operational resources, improve sales and partnership capabilities and “execute its product and marketing strategies.” Asset-Map's technology focuses on visualizing household assets, helping advisers to build custom presentations for clients.
After a year where venture capital got much tighter to come by, it’s good to see startups in the space continue to attract investing. See below for some additional funding news.
Canadian financial planning software company Conquest Planning has raised $24 million (CAD) in a Series A fundraising round led by Fidelity International Strategic Ventures. The company plans to use the funding to expand into the U.S. and U.K. markets.
Conquest was founded by Mark Evans, who helped build the NaviPlan financial planning software. The company says its secret sauce is a proprietary AI engine, the Strategic Advice Manager, which can help recommend plans that steer the user toward an optimized outcome. AI is all the rage right now, so we’ll see if the idea gains some traction with U.S. advisors.
Canadian stocks are on a roll in 2025 as the country prepares to name a new Prime Minister.
Two C-level leaders reveal the new time-saving tools they've implemented and what advisors are doing with their newly freed-up hours.
The RIA led by Merrill Lynch veteran John Thiel is helping its advisors take part in the growing trend toward fee-based annuities.
Driven by robust transaction activity amid market turbulence and increased focus on billion-dollar plus targets, Echelon Partners expects another all-time high in 2025.
The looming threat of federal funding cuts to state and local governments has lawmakers weighing a levy that was phased out in 1981.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
