Business Development Roundtable: Tech, Compliance and Wealth Management

Janeesa Hollingshead, Contributing Editor, Wealth Solutions Report

Experts from FusionIQ, COMPLY And Kingswood U.S. Discuss Business Development Amid Rapid Change In Their Fields

In March, we brought you our inaugural Business Development Roundtable, with predictions and thoughts from business development leaders across a variety of backgrounds in wealth management about organic growth in 2023. Their insights struck a chord with you, so by popular demand, we will now bring you the Business Development Roundtable each quarter, assembling a panel of business development leaders and chief revenue and growth officers to discuss key business development trends for the quarter and beyond.

As the ancient Greek philosopher Heraclitus said, “The only constant in life is change.” This is truer now than ever as change accelerates in every corner of the wealth management industry, including regulatory and compliance, wealthtech and traditional wealth management.

Our Panel Of Business Development Experts

Business Development

To explore the rapid evolution in these areas and how it affects business development, we invited the following industry veterans to each speak to their area of expertise, based on a specific question germane to their businesses:

  • Peter Brittain, Head of Business Development at FusionIQ, a wealthtech solutions provider that offers fully digital and automated workflows for financial advisors to access traditional assets, private funds and alternative investments on an asset-agnostic and custodian-agnostic platform, as well as an innovative finTAMP platform.
  • Nate Remmes, Chief Growth Officer of COMPLY, a regtech firm that delivers compliance software and solutions to wealth management firms and alternative asset managers (including private equity and hedge funds), as well as regulatory and compliance consulting and education. COMPLY’s subsidiary firms include ComplySci, RIA in a Box and National Regulatory Services (NRS).
  • Ryan Sabet, Director of Acquisitions, Recruitment and Strategic Initiatives for Kingswood U.S., an independent wealth management firm overseeing over $3 billion in assets in America. Headquartered in New York and supporting 200 financial advisors across the country, the firm encompasses broker-dealer and RIA platforms as well as capital markets capabilities.

The questions and their replies are here:

Peter Brittain, Head of Business Development, FusionIQ:

Peter Brittain, Head of Business Development, FusionIQ

Are there specific segments within the wealth management space where you believe digital investment management platforms have a unique opportunity to grow through disruption?  If so, what are you doing to address this opportunity?

Right now at FusionIQ we have successfully implemented a solution specifically for credit unions and regional banks, so they can begin transforming their wealth management arms to be more competitive and their financial advisors amply positioned to provide a leading digital wealth investing experience for their retail customers.

As a Turnkey Asset Management (TAMP) provider, we often talk about how we can make it easy for our clients to achieve growth through disruption. Financial institutions are taking steps forward when they’re disrupting the ecosystem of outdated legacy platforms to which they’ve had to align to, for 25, 30 years. We’re helping our clients futureproof their business for what’s ahead.

Growth through disruption

One way we address the critical pain points of financial advisors, as they grow their assets under management, is by providing an end-to-end digital workflow. FusionIQ’s finTAMP is designed for increased advisor-client interaction with a platform that enables them to build their own portfolios or select from a range of vetted, digitally distributed, institutional-quality model portfolios and strategies.

A recurring theme among our clients is genuine concern about declining customer engagement. Younger end-clients are going to Robinhood, Betterment or M1 Finance, direct-to-consumer platforms where there’s this promise of democratization of investment through fractional shares.  One firm tracked roughly $260 million in outgoing ACHs to D2C platforms.

With finTAMP, firms can effortlessly onboard accounts well below their account minimums, leveraging our platform to offer a seamless experience for the high-net-worth investor, supporting the entire client life cycle. One client was able to onboard 40,000 accounts through the IQ mobile application alone. This is disruption done right – So far, the ability to facilitate front-end fractional shares has been a game changer for institutions.

Nate Remmes, Chief Growth Officer, COMPLY:

Nate Remmes, Chief Growth Officer, COMPLY

What are the regulatory and compliance trends driving the most significant challenges for wealth management firms and alternative asset managers, including private equity and hedge funds? How is COMPLY aligning its solutions to help firms across these segments of financial services address these issues?

Wealth management and investment firms, including private equity and hedge funds, face a complex and constantly evolving regulatory environment. Increased scrutiny from regulators, the need to comply with global regulations and the growing importance of data security and privacy are driving the most significant regulatory and compliance trends.

Overall, there is a greater emphasis on risk management, which requires firms to adopt a more comprehensive compliance approach to demonstrate their ability to effectively manage risk. Such demands have created a need for robust compliance programs that can adapt quickly and provide clear visibility into compliance activities.

Data security is driving change

Alternative asset managers face more unique challenges because of an absence of standardized regulations. While some regulations apply to all financial services firms, many regulations – valuation, insider trading and conflicts of interest – are specific to alternative asset companies. Compliance departments in alternative asset companies must stay abreast of these regulations to ensure compliance.

Furthermore, alternative asset companies often have unique ownership structures with multiple stakeholders and investors. This can make it challenging to identify potential conflicts of interest and ensure that the company is acting in the best interests of its investors.

COMPLY helps firms across the financial services industry efficiently manage their regulatory compliance obligations through comprehensive technology, services and education. Our solutions cover a range of compliance areas, including program management, employee code of ethics, firm compliance and managed services.

We provide firms with a centralized view of their compliance activities, allowing them to stay ahead of regulatory changes. COMPLY’s focus on innovation, technology and expertise helps financial services organizations navigate the complex and constantly evolving regulatory environment.

Ryan Sabet, Director of Acquisitions, Recruitment and Strategic Initiatives, Kingswood U.S.:

Ryan Sabet, Director of Acquisitions, Recruitment and Strategic Initiatives, Kingswood U.S.

Over the past few years, Kingswood U.S. has developed or purchased a range of additional capabilities that differentiate it from other wealth management firms, including an alts platform, credit investing and investment banking, among others. What adjacent capabilities have had the biggest impact on your business development?

The competition for talent in the wealth management industry will only continue to increase. With trillions in wealth expected to transfer from generation to generation, a shrinking advisor pool as so many reach retirement age and a highly volatile economic and financial environment, the marketplace is primed for significant competition.

Firms need to do more for advisors. As fewer advisors serve more clients during complex times, they will need programs, platforms and solutions that deliver better results.

At Kingswood U.S., we believe a holistic offering must go beyond the best technologies to deliver the best opportunities for advisors to serve clients. We continue to develop a robust alternative investment program, investment banking support, access to insurance products, and much more for our advisors. Yet no matter the offering, when building these products or aligning with a strategic partner, we aim to provide our advisors with an easy-to-use tool they need to deliver results for their clients.

For example, our user-driven alts platform provides a streamlined, transparent process that simplifies what is often a complex transaction. Kingswood U.S. worked closely with its technology partners to develop this platform, which gave us a system that delivers a uniform, standardized process for advisors considering alts for their clients. It also made the back-end operations and compliance review process easier – leading to faster completion times.

We have driven significant growth across our firm by taking an advisor-experience-centric approach to our product development and strategic partnerships.

Janeesa Hollingshead, Contributing Editor at Wealth Solutions Report, can be reached at editor@wealthsolutionsreport.com.

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