|Clients:||Registered investment advisors (RIAs) and Independent financial advisers|
|Value proposition:||Free comprehensive wealth management platform with a built-in model marketplace that provides access to nearly 60 models and more than 550 funds|
|The executive team:||David Lyon, CEO
Perry Moutzouros, CTO
Lauri Hofherr, Head of Product
Michael Vaynerman, Marketing Director
Oranj is the world’s first free wealth management platform for advisers and the investors they serve. It provides an efficient and engaging experience for clients with robust client-facing tools for investors and robust back-office tools for the advisers that serve them. The Oranj platform is custodian agnostic, providing advisers with digital onboarding capabilities and account aggregation from numerous institutions. With Oranj, advisers can now communicate and collaborate with client tools such as digital account opening and client dashboards that provide latest account balance and information.
I had the opportunity to meet with the Oranj’s top brass at their Chicago office. I was pleasantly surprised to see that Oranj’s corporate culture is very upbeat, creative, and electric. Their meeting area happened to be a hidden room accessed only through a built-in bookcase, which whisked me back to the imaginative and exciting world of Indiana Jones.
David Lyon is the founder and CEO of Oranj. Prior to starting Oranj, David ran his own RIA (a multi-family office) for more than 10 years. Lyon grew his business to oversee more than $300 Million in AUM. After having troubles finding the right tech for his firm, he decided to build his own, customized to his needs. In 2014, David had enough interest in his technology project that it was time to expand. He sold his advisory business and formally launched Oranj.
Perry Moutzouros, CTO of Oranj, has a long history of working in FinTech. The bulk of this experience came from building technology for hedge funds, investment bankers, wealth managers, and RIAs. At Oranj, Perry is focused on building a platform with the advisor’s needs top mind. He wants to empower advisors to efficiently manage their business and workloads in an efficient manner.
Michael Vaynerman is the marketing director for Oranj. Michael was previously at Morningstar, starting his career as an advertising sales intern, eventually elevating to become a senior marketing manager in the span of seven years. He is an industry expert with a deep knowledge of marketing in the advisor technology and institutional segments. At Oranj, he is responsible for the overall marketing strategy, including digital and brand. Michael works every day to tell the Oranj story to financial advisors and explain how they are different from their competitors.
The golden egg
There is no doubt that the FinTech marketplace is crowded. However, players like Oranj are coming onto the scene with a truly unique approach to providing services for advisors.
Michael shared some of Oranj’s philosophy that drives the development of their platform, “investors today want to log in and see all of their investment accounts and held-away accounts (such as checking, credit cards, loans, and insurance) in order to obtain a holistic picture. Consumers expect to be able to monitor their investments live and have the opportunity to communicate with their advisor at any time. From the advisor’s angle, no enterprise-level software can go without back-office tools like rebalancing, trading, model and portfolio creation, and implementation management.”
So what makes Oranj different from its competitors? The answer is two-fold. First, Oranj has embraced a pricing model that has never been seen before in the financial technology space—free.
“Oranj is free for advisors to use. We believe that’s important because technology costs within the advisor technology industry are out of control. A lot of our competitors now, their pricing model is really putting the strain on advisors by pricing based on advisor AUM [assets under management] or how many clients they serve, or even overlaying additional fees onto the portfolios that they’re providing to their clients. We believe that it makes the most sense to offer the technology for free.” —Michael
The second unique feature of Oranj is their model marketplace, where advisors can utilize strategic models from large firms like BlackRock, WisdomTree, PIMCO, OppenheimerFunds, and more. The models created by these giants from the asset-management industry are available to advisors for no additional overlay costs. Michael is confident that the strength and diversity of this model marketplace gives advisors greater flexibility and diverse products that they can incorporate based on the risk tolerances or objectives that their clients have.
“By eliminating those additional overlay fees, the advisor can save their clients around $1,400 dollars a year on average and when you carry that across—an advisor’s, let’s say, serving around 400 clients—they’re saving their entire clientbase around $550,000 dollars a year.” —Michael
The Oranj free business model
Free is not a model that you normally see in FinTech software. Oranj manages to leverage this model to bring their clients a great service, no strings attached. Michael showcased exactly how Oranj does all of this without sacrificing data security, which many people using free software may be concerned with.
“Free to use does not mean that we don’t take security and infrastructure and reliability seriously. Those things are paramount to us. Every day, we’re working to overcome those misconceptions and we feel that the best way [to do so] is to get people in the platform and to show them that this is a high-quality product that you can integrate into your practice as an advisor and not have to worry about reliability or security.” —Michael
From what Michael told me, Oranj aims to build a community of advisors that do not have to pinch costs to use their platform. Michael feels that there is a huge segment in the finance industry that can benefit from low-overheads costs without sacrificing the tools and features that the advisors need to run a successful business and provide top-notch services to their clients.
“People assume that because it’s free, it’s not great. And so as a marketer or a communicator, the two points that I make to people are, free really is free, and free doesn’t equal cheap. There’s no strings attached. You can pay if you want more functionality, but it is truly free—we’re not going to nickel and dime you.” —Michael
Integrate and then integrate some more
One of the biggest assets that the Oranj platform has is an acquired company called TradeWarrior. This robust platform covers all applications within the trading industry. Since acquiring TradeWarrior, Oranj has slowly started to modernize it by transferring some services to the cloud.
David highlighted that Oranj has an API-heavy integration model. Oranj is currently integrated with DocuSign for digital transaction management, Zolo and Zillow for all things real estate, and they very recently completed a Redtail CRM integration.
Michael explained that Oranj is a young company with big ambitions, and good street cred among RIAs. To accomplish their goals, Oranj has grown rapidly over the past few years, with the size of the company growing 2.5x since the beginning of 2017. The development team is broken up into four agile squads that handle the different components of Oranj and TradeWarrior. These developers work using a lean and agile approach, with releases on a weekly basis. Oranj is also active within the local tech community, and have developed an innovative internship program.
Product management and priorities
The free model that Oranj uses is arguably the best way to get a very tight feedback loop. This allows the Oranj team to assess and prioritize tasks at lightning-quick speeds. Perry told me that the super-lean and agile development group releases very small changes every five days. He also praised the tight-knit team at Oranj for contributing to the success and speed at which new features are released.
“There are also processes that we have where we will absolutely get on the phone and talk to customers and I think that’s probably the most important takeaway that you do the best you can not to make assumptions. And if you do make an assumption you try to make it as small as possible and you do the best you can to actually ship something that’s feature complete, that can either prove the assumption or allow you to correct in a quick fashion.” —Perry
The balance of tech and financial knowledge
Perry expressed gratitude to David for building the business along with his own wealth management practice. One of the basic staples and simplest things that Oranj does to keep their staff up-to-date on finance is the monthly “lunch and learn.” At these lunches, an RIA comes in to talk to the Oranj team, providing their services and answering questions. Perry said that these meetings are invaluable because they discuss the best practices within the industry so that the engineers that are writing software understand the financial space better.
Apart from actively learning from an experienced advisor, David mentioned that Perry and the team have built an internal knowledge center or wiki. But this wiki is not only for developers. People on the product team also populate the Confluence knowledge base, making it an important tool for existing staff to reference, as well as a powerful onboarding tool for new hires.
Current and future challenges
David said that perhaps the biggest challenge that Oranj faces is getting advisors to devote time to take a dive into the platform to see what Oranj is really about. This can be addressed by optimizing how initial meetings are set up and identifying what is important to advisors.
“I think something that we really embrace here are those challenges because if a challenge is presented to us, that just means that there’s an opportunity. That’s how we look at it and it means that we have to work twice as hard to overcome it and to develop a solution to the challenge. But the things that we have really going for us is being able to move fast, being able to pivot quickly.” —David
From the technical side, Perry highlighted these challenges: the amount of data and hiring the right engineers to carry on the traditions and company culture that Oranj have cultivated:
“Our data, and the ability to distribute data accurately and safely, has always been one of the biggest technical challenges that we have—something that we’re always focused on. And I think the second thing for us is probably no different than any other young company that’s growing, is the ability to get the right engineers to be able to join the organization.” —Perry
WealthTech Club takeaways
Oranj is the world’s first free wealth-management platform, but that does not mean that it lacks features. Their robust account aggregation was recently recognized as one of the best in the industry at the 2018 WealthManagement.com Awards. Their new model marketplace is rapidly adding additional managers, most recently Vestmark. Oranj is a young company with mature ambitions—a precious gem in the vastness of the FinTech