Wealthtech Under Pressure To Produce Results

Larry Roth, CEO, Wealth Solutions Report

Plus Future Proof Coverage, Weekly Recruiting News, Hiring Consultants, AmeriFlex Launches OSJ Program, Cetera To Buy Avantax, Commonwealth Reaches The Next Gen And More

To My Fellow WSR Community Members:

We’ve heard plenty in the past year about the tech industry hitting a rough patch and conducting layoffs reaching into the hundreds of thousands. That shaking in the larger industry reached wealthtech. Though wealthtech didn’t match the level of drama emanating from the Googles and Amazons, a steady and unrelenting pressure to produce more results with less cash arose.

While ratcheting interest rates tightened the taps on cash injections, nervous investors with large wealthtech holdings pointed at calendar months slipping by and demanded results. Firms cut costs and raced to grow the bottom line. In some cases, excellent leaders ran out of time.

Though layoffs have slowed and, in some cases, reversed in the broader tech industry, the pressure is still on for wealthtech. This week, I review the situation and discuss prudent steps for wealth management firms conducting due diligence on wealthtech providers.

In addition, Mirador’s President guides us on hiring consultants, our Managing Editor Chris Latham provides news and insights from the Future Proof Festival, Cetera will acquire Avantax, AmeriFlex launches a program for small OSJs, Commonwealth grows its university partnerships, Oppenheimer relaunches its brand and we bring you our latest roundup of weekly recruitment news.

Congratulations to incoming Chairman Emeritus Alex David, Chairman of the Board Christian Nwasike and the team at the Association for African American Financial Advisors on the successful conclusion of their annual V.I.S.I.O.N. Conference, which we covered previously. On a personal note, congratulations to Joe Kuo of Haven Tower Group, who accepted the Strategic Partner of the Year Award on behalf of his firm at the conference last week.

This Week’s Issue

Here’s what we have on tap for you:

Andrew Marsh, Vice Chairman, Dynasty Financial Partners
  • Who’s our newest Recruiter Of The Month? Meet Andrew Marsh, newly appointed Vice Chairman of Dynasty Financial Partners. In Newsmakers & Roundups, we also cover Ameriprise recruiting two advisors from Raymond James and Edward Jones, Commonwealth recruiting Paragon Financial from LPL, Cetera agreeing to acquire and take-private Avantax, Ashton Thomas Private Wealth agreeing to sell to the Arax Investment Partners platform of RedBird Capital Partners, Alternativ Wealth merging with Compound to form Compound Planning, AmeriFlex launching a program in support of small OSJs and Oppenheimer hiring a distressed debt team from TD Cowen.
  • My quarterly review of wealthtech in Digital Domain discusses the pressure on wealthtech companies to produce more organic growth with less cash, reflecting the challenges facing the broader tech industry. I explain signs that a company will fare better at this time and what gatekeepers should look for in their due diligence on providers.

  • What’s the newest major wealthtech M&A deal? Also in Digital Domain, San Diego, California-based FMG, a SaaS company specializing in marketing software and services for the wealth management industry, acquired MyRepChat, a client text messaging platform designed to facilitate compliant communications in the financial industry. Read comments from FMG’s Dave Christensen, Chief Product & Technology Officer and Co-Founder, and Susan Theder, Chief Marketing & Experience Officer.
  • How do you hire the right consultant? In Upmarket, Joseph Larizza, CEO and President of Mirador, gives advice for wealth management firms searching for and hiring consultants, including how to get the most out of a consultancy engagement, what to check for in due diligence and how to spot a consultant who’s trying to take shortcuts.

In case you missed it, last week we brought you:

Stephanie Bogan, Founder, Limitless Adviser Coaching
  • Our coverage of the first day of the Future Proof Festival, in Digital Domain, included finding purpose with Jamie Hopkins, the outgoing Managing Partner of Wealth Solutions at Carson Group; effective leadership with Stephanie Bogan, Founder of Limitless Adviser Coaching; Altimeter Capital Management Founder and CEO Brad Gerstner on “baby equity”; Morningstar’s latest launches with Chief Analytics Officer Lee Davidson; and Tom Rieman, Founding Partner and CEO of Practice Intelligence, on his firm’s new platform.
  • In our second day of coverage from the Future Proof Festival, also in Digital Domain, Susan Theder of FMG spoke on “Advisor Marketing in Real Life”; Richard Lofgren, Managing Director at Goldman Sachs, spoke on “Transforming Custody”; Katie Bruner, President of SkyView Partners, spoke on “Avoid These 5 M&A Mistakes”; Envestnet, Orion and VRGL announced new products and enhancements; VettaFi acquired EQM Indexes; VanEck presented the ESG-themed Pacific Forest Trust; and Broadridge Financial Solutions announced a collaboration with Salesforce.
Joe Duran, Rise Growth Partners
  • Also in Digital Domain, the Future Proof Festival wound down as rappers Method Man and Redman were live in concert; our Managing Editor moderated a panel featuring Fran Kinniry, Head of the Vanguard Investment Advisory Research Center, and Brie Williams, Head of Practice Management at SPDR Exchange Traded Funds; Joe Duran announced his new venture – Rise Growth Partners; Q Wealth Partners hosted Canadian advisors; and we covered the innovative Breakthru Meeting Zone.
  • In Newsmakers & Roundups, Cetera Financial Group announced that its holding company, Cetera Holdings, will acquire Avantax in a cash deal valued at $1.2 billion, with Avantax shareholders receiving a 30% increase over the last closing price. Avantax CEO Chris Walters and Chair of the Board Georganne Proctor provide comments, as well as Cetera Financial Group CEO Adam Antoniades and Cetera Holdings CEO Mike Durbin.

  • Who’s reaching out to OSJs? Also in Newsmakers & Roundups, The AmeriFlex Group launched The 5Twenty Group program designed to enhance growth and meet the needs of OSJs with five to 20 advisors. The firm’s Founder and CEO Thomas Goodson and COO Jesse Kurrasch provide commentary.

Joan Khoury, Managing Director & CMO, Oppenheimer & Co.
  • Which firm is relaunching its brand? Also in Newsmakers & Roundups, Oppenheimer & Co. announced a brand initiative and relaunch to include client portal improvements, an ad campaign, a new slogan, a revamped website and a new use of the “O” in its logo. Firm President Robert Lowenthal and CMO Joan Khoury provide comments.

Make your voice heard in wealthtech! The annual T3/Inside Information Software Survey is now open. Results will be revealed at the T3 Advisor Conference in January.

Share your ideas, thoughts and questions with us.

See our video interviews from the Future Proof Festival on LinkedIn! Our Managing Editor interviewed Danny Lohrfink of Wealth.com, Joel Bruckenstein of T3 Technology Tools for Today, Rob Sandrew of Integrated Partners, John Furey and Brandon Kawal of Advisor Growth Strategies, Zachary Conway of Seeds, Lee Davidson of Morningstar, Steven Schlow of Nomura, Mike Capelle of Modern Wealth Management, Tom Rieman of Practice Intelligence and Rich Aneser of Envestnet.

Cheers!

Larry Roth, CEO
Wealth Solutions Report

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