Although industry players have been using certain components to optimize existing business operations, such as CRM and rebalancing software, for some time, the niche has been in need of a major shake-up. Various firms have decided to use technology in ways that suit their business the most, putting emphasis on one of several pillars of progress—i.e., automation, integration, and innovation. Let’s look at those in detail:

What’s the difference?

First of all, let’s look at automation: this aspect is about automating business processes that are in place within financial advisory and wealth-management firms. Usually, the following processes are automated:

  • Portfolio rebalancing: This was previously done using Microsoft Access or spreadsheets in Excel. Now, numerous companies are dealing exclusively with this segment of WealthTech. Some of the well-known players in this niche are TradeWarrior, iRebal from TD Ameritrade, RedBlack, Envestnet Tamarac, and tRx.
  • Financial planning: nowadays, these tools are offered by both groundbreakers and mature businesses, such as eMoney Advisor, Financeware, and inStream, among many others.
  • Portfolio management: These solutions simplify the investment process and allow advisors to efficiently manage a great number of varied portfolios. FinFolio, for instance, offers a powerful suite of tools all within one financial engine.

Second is integration, wherein some companies choose to increase efficiency through putting certain business processes on autopilot and embracing the robo part of wealth management. Others, however, prefer to create multiple partnerships with leading players who already have solutions in place, rather than building those solutions from scratch. For example, AdvisorEngine has mastered the art of strategic partnerships by joining forces with a number of companies that have chosen to use its software to streamline their businesses:

  • Custodians: TD Ameritrade Institutional, Pershing.
  • Account aggregation: e.g., Quovo.
  • CRM integrations: e.g., Redtail, Salesforce.
  • Investment data and analytics: e.g., FinMason and HiddenLevers.
  • Trading and rebalancing: e.g., FolioDynamix.

Finally, there is innovation. This about adding new technologies or approaches to wealth management. This may refer to WealthTech solutions that start to incorporate robo aspects, rather than just using digital advising platforms, for instance—so the real digital transformation is changing the business processes, rather than just automating them. Innovative features may include:

  • Artificial intelligence (AI) and big data analytics enablement (Hedgeable, Ginmon, FutureAdvisor/BlackRock, etc.)
  • Socially responsible investment (Aspiration, Hedgeable)
  • New asset classes (cryptocurrency, ICO tokens, etc.)
  • Blockchain enablement as part of a digital transition
  • Revisiting and focusing on specific areas of financial advisory (for example, the retirement scene is being disrupted by Vestwell)

Innovation: Capitalizing on the unknown

Some companies dare to sail to unchartered waters, and thus search for a peculiar niche to tap into, bringing ideas that no one has yet explored.


Aspiration translates customers’ appetite in proper shopping choices by offering options to spend on sustainable products and services. This is also true within its investing arm: the company creates a portfolio for each client by putting its assets into eco-friendly ETFs and mutual funds:

“A real focus of our solutions is to help people both do well and do good. We want to not only provide best-in-class products to people from a financial point of view, but also ones that help them make a difference in the world.” Andrei Cherny, CEO of Aspiration.

Aspiration builds portfolios by allocating fossil fuel- and firearms-free businesses, and helps clients grow their wealth in an environmentally conscious way. Another unique feature of this market player is that it goes all-out in earning customers’ trust:

“Our business model is called ‘Pay what is fair.’ The customer decides what they want to pay us.” Andrei Cherny


Hedgeable offers customers plenty of exclusive options for investment, including digital currency such as BTC. The company is moving away from a conventional approach to asset allocation and using sophisticated algorithms, which can at times include hundreds of varied securities:

“We were the first to invest in bitcoin: some of our clients bought it when it was 200 bucks, so they are very happy with us.” Sid Sharma

Hedgeable is quite open about the broad range of investment options it offers to anyone who has at least $1 to spare towards future gains. Similar to Aspiration, Hedgeable has a number of socially responsible choices:

“Your portfolio looks a lot different than any other digital wealth manager: it would have individual stocks, and you can even customize it for socially responsible investing, which is what we call impact investing.” Sid Sharma.

This strategy is a good way to attract more millennial clients, who are conscious about the social impact of their actions.

But that’s not all: Hedgeable is also harnessing the power of AI within its focus on customer experience, investing strategies, and predictive analytics. The magic happens at Hedgeable AI Lab, which was started in 2016. Both B2C and B2B solutions offered by the company incorporate an AI module, with one of its essentials being a full natural language processing library that is used to assess sentiment, risk, and profiling for customers.

“The purpose is not to put a robot in front of somebody’s face. The purpose is to put the robot on the back so that you can build the best product for the consumer.” Sid Sharma

VestwellAfter discovering that, for the majority of employees, choosing a 401k is akin to being completely in the dark, without knowing how to secure retirement, Vestwell’s CEO, Aaron Schumm, took the matter personally and decided to change this dismal situation. He brought together experienced asset managers and skillful engineers who created a product that is clear and easy to digest, making retirement planning simple.

“We built Vestwell with the intention of changing the problems that I personally experienced and working with an advisor to establish that plan, manage that plan and [fix] everything that’s wrong with it.” Aaron Schumm

The company has created a robust platform that presents a great opportunity to build better rapport with end users—employees that are offered the 401k:

“[It’s] very clear, concise, and consumable both at a company level and an employee level.” Aaron Schumm

Vestwell enables clients to choose one of the following options: “Do it for me,”  “Help me do it,” or “I know what I am doing.” Thus, the engine’s configuration allows for several scenarios depending on how much autonomy a particular client is looking for when using this white-label solution. Vestwell acts as a subadvisor, and works hand in hand with accredited asset managers who help customers construct the portfolio, if needed:

“We have a couple of investment management partners that we work with. All of them are ETF strategists that help determine the allocations.” Aaron Schumm

Folio InstitutionalFolio Institutional has its own way of appealing to a younger generation of investors. The company considers itself to be a very tech-savvy firm that focuses on optimization in the technology environment and uses adaptive and responsive designs to appeal to its audience from any device:

“Everything is oriented to work and respond perfectly, with full functionality regardless of the environment.” Greg Vigrass

In addition, Folio’s management says they are “lucky” to have been the first brokerage firm to offer a fully functioning real-time electronic signature and accept it for the purpose of opening an account, creating a bank link, or initiating an ACAT account transfer.

Automation: Making things run smoothly

Automation equates to streamlining business processes to reduce costs that come alongside use of extensive human capital. If some tasks can be outsourced to machines via technology, why not do so? Robo components have become an essential part of many asset-management platforms, allowing RIAs to concentrate on building healthier relations with clients, instead of working on back-office routines.

DriveWealthDriveWealth supports a variety of investors regardless of budget, creating custom-tailored portfolios for everyone:

“We’re powering these different robo-managed account-type strategies because we want to incentivize people to build really specific, customized portfolios for individuals.” Bob Cortright

Concentrating on goal-based investing, DriveWealth is harnessing the power of technology to tap into a whole new generation of customers—one that may not have $100,000 to start their investing journey, but perhaps $1000 instead. DriveWealth is serving a large pool of clients, providing both an institutional style and retail-type trading on the platform:

“Our platform not only supports the smallest of individual investors, who may only have 20 or 50 dollars to invest with, but it also supports the large institutions who want to trade large block orders using algorithmic-style trading.” Harry Temkin

EvoluteSwiss company Evolute has found a way to feed market views and investment straight into the portfolio construction process: the player combines market views and scenarios with individual client preferences and investment goals. The company is a firm believer in a hybrid advisory model, and states that this is a winning business approach:

“We believe in the combination of personal relationship management with a high level of automation in the background.” Martin Polasek

Folio Institutional collaborates with many companies in the market to offer automation of key workflow components, and has enabled 80 registered investment advisors to bring the efficiencies of a robo-platform or -workflow to their business. In addition:

“We […] provide full capabilities through a set of APIs, enabling robo-advisors to create their own frontend and their own client ecosystem and engagement environment using [the] Folio platform.” Greg Vigrass

Folio is aiming to introduce to the market its next-generation robo-advisor, which is a modular-based, completely customizable and white-label platform.

Integration: Strategic partnership at core

Some companies have chosen not to embrace what’s trending, but have rather plugged into many custodians to offer more options to investors who are looking for an investment advisor. Thus, they have circumvented the hype and are relying on strong alliances with established brokers.

AdvisorEngineFor example, AdvisorEngine has integrated with a variety of industry-leading players to bring a new edge to advisors in wealth management. From the very beginning, AdvisorEngine was developing a top-tier B2B offering and integrating this with best-in-class solutions present in the market through a series of mergers and acquisitions, as well as strategic partnerships.

Having a strong belief in “the intersection of personal relationships,” the company has its own way of taking wealth management to the next level. Preceding the recent acquisition of Junxure, a CRM for RIAs, AdvisorEngine was known for its wide network of strategic partners in custodial, account aggregation, trading and rebalancing, and analytics spaces.

Focusing on large banks, advisory firms, broker-dealers, and asset managers, Invessence banks on the flexibility of its platform, which allows it to modify and configure solutions for clients globally. The company’s top management understands that many clients prefer to keep their funds in a particular custodian bank they have been with for years, so the chances they will be willing to switch to another broker are relatively low:

“Some clients are looking for a Morningstar-style portfolio, while others prefer something [like a] Blackrock- or Vanguard-type fund. So they tend to have different needs and different requirements, and we’re pretty much able to meet a lot of those due to multiple integrations.” Jigar Vyas

For example, the company partners with DriveWealth on digital planning and wealth management. Invessence has an API-based product architecture that allows for myriad integrations to suit the needs of a broader range of clients.

TrizicTrizic is an iconic success story of continuous integrations. It offers unique solutions for RIAs, brokers, asset managers, and wirehouses, as well as banks and credit unions. Fidelity and TD Ameritrade are among the organizations that use an open-API platform for registered investment advisers Trizic has created. The company’s management believes there is no need to reinvent the wheel and become just another financial planning company. Instead, Trizic sees itself as the digital center of every possible bit of connectivity that is out there, and helps clients to achieve greater operational efficiency:

“So we are a software company, we’re not a subadvisor, we won’t be. We don’t own a financial planning platform and we’ll never buy one, because there’re already winners in that market. We just integrate into those.” Drew Sievers

TD Ameritrade, APEX Clearing, Charles Schwab and its Schwab Intelligent Portfolios, Fidelity Investments, Pershing, the four trust account systems at FIS, Sales Force Juncture, Redtail, Emoney, and Moneyguidepro are just a few companies associated with Trizic:

“All these steps have been taken because a huge part of our value is connecting to everything.” Drew Sievers

Bottom Line

It’s up to each individual company to choose the most suitable path for them to reach goals. Some decide to utilize the potential of innovative technology, while others spread their wings by joining other market players to offer more choices to their clients. It is essential to experiment and try on different hats to find what works best.

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