Wealthtech Roundup: Arch, FusionIQ, Helios, Nitrogen, FMG And More

Chris Latham, Managing Editor, Wealth Solutions Report

Arch Secures $20 Million In Funding, Nitrogen Hires Dan Zitting As CEO, Helios Incorporates Machine Learning Into Investment Models, FusionIQ Partners With Valley National Bank, FMG Partners With Bento Engine, Envestnet Partners With Empower, BridgeFT Partners With Income Lab And Wealthfront Surpasses $50 Billion In Assets

In this edition of the Wealthtech Roundup, we speak with our newest Wealthtech Leader of the Month, Ryan Eisenman, Co-founder and CEO of Arch, on its $20 million Series A funding round.

Other entries this month include Nitrogen hiring Dan Zitting as CEO, Helios enhancing its rebalancing capabilities and incorporating machine learning into its investment models, FusionIQ partnering with Valley National Bank, FMG enhancing its premium website design services and partnering with Bento Engine, Envestnet partnering with Empower, BridgeFT partnering with Income Lab and Wealthfront surpassing $50 billion in client assets.

1. Arch Raises $20 Million In Series A Funding For Its Private Investments Platform

Arch, a private investment management platform for K-1 workflows, automating operations and reporting for financial professionals, raised $20 million in Series A funding. The company serves wealth managers, family offices, private banks and institutions.

Chuck Clarvit, CEO of CCFO Investments, LLC, told WSR that his firm requires tools to streamline tasks such as performance reporting, wires, KYC/AML, completing subscription documents, K-1 and 1099 tax collection, and accessing and reviewing documents from multiple sources in varying formats like capital accounts.

“Arch automates many of these activities resulting in increased quality (fewer mistakes), fewer human resources required, and more timely and accurate execution,” Clarvit says.

To learn more about Arch, here is our Q&A with Ryan Eisenman, its Co-founder and CEO.

WSR: What unmet need do you believe Arch brings to the market for family offices and RIAs that those firms can’t get elsewhere?

Ryan Eisenman, Co-founder and CEO at Arch

Eisenman: For any firms or individuals with more than a dozen private investments (which we define as LP interests across private equity, real estate, venture, hedge funds and other alternative asset managers), you experience death by a thousand digital paper cuts. These clients (or their advisors) need to access dozens – and sometimes hundreds – of unique portals, download documents, read those documents, take action based on the type of document and then often report based on the document.

By connecting to portals and other sources, downloading and categorizing documents, extracting key information and completing workflows like updating reporting systems and providing accountants with direct access to client K-1s, Arch delivers the first digital alternatives workflow for RIAs and family offices. Arch creates a centralized workflow in a single platform, saving every interested party – be it advisors, investors, accountants or admins – time while providing higher-quality data, perfect for making informed, quality decisions.

WSR: How will the new $20 million Series A funding round help Arch progress toward its strategic goals, and what are those goals?

Eisenman: Arch’s $20 million Series A will allow us to double down on product and client service. We grew to $50 billion in assets, 47 team members and 150 clients with our first $5.5 million in capital raised.

We built a sustainable business by investing in product first, client service second, and only layering in sales and marketing to support the organic inbound demand we received through referrals from happy clients and partners. We’re excited about the opportunity to use nearly four times the capital to continue to innovate as we build the next generation of investment management infrastructure for private markets.

WSR: Are private and alternative investments really adding value for advisors’ clients, and if so in what ways?

Eisenman: Private and alternative investments are generally known to deliver higher returns (11% versus 7% of the S&P 500), but carry with them a higher administrative cost alongside less liquidity. The potential to deliver a higher return, with potentially lower stock market correlation, is a valuable tool for advisors and clients, as long as they can handle the additional administrative burden.

Arch’s mission is to remove the administrative burden of alternative investments, making alternative investments scalable for investors and advisors. Our mission empowers clients and advisors to allocate capital to the managers and markets that will generate the highest returns, without having to think about scaling their organizations or expending resources to manage these investments.

2. Nitrogen Hires Dan Zitting As CEO, Aaron Klein Stays On Board

Dan Zitting, CEO, Nitrogen

Nitrogen announced the appointment of Dan Zitting as CEO, starting Dec. 4. Zitting will be the second CEO of the company after 12 years with Co-Founder Aaron Klein at the helm. Klein will continue on the board and as a strategic advisor, in addition to being the firm’s largest individual shareholder.

With a background in SaaS, risk, growth and compliance, Zitting founded three companies, including Workpapers.com, which was acquired by Galvanize. Zitting served as CEO of Galvanize, which he led to 500 employees, 50 worldwide channel partners and $100 million in annual revenue, and through its $1 billion acquisition by Diligent. After the acquisition, he became Diligent’s Chief Product and Strategy Officer.

“The opportunity to serve advisors who deliver professional advice to Americans preparing for significant milestones in their lives is incredibly special to me,” said Zitting. “Standing amidst the greatest generational wealth transfer in history, there has never been a more important moment for our Fearless Investing vision. I am excited to accelerate the expansion of our platform, adding new ways for advisors to differentiate their services, engage the next generation, drive up client satisfaction and to grow their own firms.”

3. Helios Enhances Rebalancing, Applies Machine Learning To Investment Models

Chris Shuba, Founder and CEO, Helios

Helios, a provider of the Insourced Chief Investment Officer (ICIO) model, enhanced its Helios Tools platform to allow advisors to customize the frequency of their quantitative models rebalancing. The company also separately implemented machine learning to its suite of bespoke investment models.

The new rebalancing feature seeks to improve advisor control over trading strategies, aligning asset management programs better with client needs and market conditions. The machine learning implementation is intended to help Helios rapidly analyze real-time data sets, process thousands of trading and market signals monthly, as well as enable investment models to adapt to changing conditions and reduce downside risk.

“Integrating machine learning into our models has transformed our data processing capabilities,” said Helios Founder and CEO Chris Shuba. “This allows advisors to tell a more dynamic story to clients when selecting and reviewing their investments, with the potential to drive better client retention and seek more consistent investment outcomes.”

4. FusionIQ Partners With Valley National Bank On Mobile And Web Solutions

Mark Healy, CEO, FusionIQ

Valley National Bank, a regional bank with nearly $62 billion in assets, has formed a strategic alliance with FusionIQ, a developer of cloud-based wealth management solutions, with the goal of enhancing the wealth management experience for bank customers on both the web and mobile. FusionIQ’s data analytics strives to strengthen Valley’s ability to identify customers with a predisposition to wealth management.

In making FusionIQ’s Digital Advice platform available to its customers, New Jersey-based Valley National Bank is leveraging a fully digital platform that integrates with Valley’s existing systems and infrastructure and provides access to investment options and workflows. The collaboration aims to enhance scalability, catering to Valley’s mass affluent customer base.

“We are excited to partner with Valley on their digital banking journey,” said Mark Healy, CEO of FusionIQ. “Our collaboration is rooted in a shared vision to empower Valley’s customers with new opportunities for investment, enabling Valley customers to achieve their most important financial goals.”

5. FMG Enhances Premium Website Offering, Partners With Bento Engine

Susan Theder, Chief Marketing Officer, FMG

San Diego, California-based FMG, a SaaS company specializing in marketing software and services for the wealth management industry, upgraded its premium website design service and separately partnered with Bento Engine through the launch of the Bento Collection that seeks to help advisors engage with clients during “Moments That Matter.”

The enhanced premium website design service covers three phases: discovery and alignment; collaborative development; and launch and ongoing support. The Bento Collection lets advisors choose materials related to life events such as getting married, as well as to age-related milestones such as Social Security benefits.

“Advisors struggle with not having enough time in the day to do everything they’d like to do,” said Susan Theder, Chief Marketing Officer at FMG. “By integrating Bento content into the FMG platform we enable advisors to manage campaigns from one place removing friction and creating efficiencies.”

6. Envestnet Partners With Empower On Retirement Savings Program

Sean Murray, Head of Retirement, Envestnet

Envestnet launched Envestnet Retire Complete in collaboration with retirement services provider Empower, combining Envestnet’s fiduciary guidance and investment due diligence with Empower’s personalized communications and investments, with the goal of helping employers to provide competitive 401(k) plans.

Envestnet assumes the responsibility of ERISA 3(38) fiduciary and investment manager, providing recommendations customized for plan sponsor and participant needs. It also created a preset core menu of investment options for participants. Empower provides a personalized digital experience about each participant’s financial picture, and multichannel messaging capability from the plan sponsor to participants.

“Our 3(38) fiduciary service and investment selection methodology, along with Empower’s retirement services market leadership and scale, have created an opportunity for advisors to help businesses deliver value to their employees – while minimizing fiduciary concerns and service challenges associated with running a retirement plan,” said Sean Murray, Head of Retirement at Envestnet.

7. BridgeFT Partners With Income Lab On Custodial Data Integration

Joe Stensland, CEO of BridgeFT

BridgeFT partnered with Income Lab, a provider of retirement income management software, to aggregate multi-custodial data, which helps Income Lab onboard new advisors and allows Income Lab users to access more complete client investment account data.

The partnership is designed to provide end users of Income Lab with more holistic planning, reduced manual data entry, automation to enhance advisor productivity, timelier data and accelerated plan creation. In February, Dynasty Financial Partners chose BridgeFT’s WealthTech API as its main custodial data partner, with Dynasty and some of its affiliates set to make a strategic minority investment in BridgeFT.

“Income Lab provides a truly dynamic view of retirement income that enhances the planning experience for advisors, and BridgeFT is thrilled to help fuel the growth and client experience of this WealthTech innovator,” said BridgeFT CEO Joe Stensland. “Seamless integration of custodial data into Income Lab via WealthTech API empowers advisors using their software to offer accurate and realistic planning through all stages of retirement – driving better outcomes for their clients.”

8. Wealthfront Surpasses $50 Billion In Assets, Nears 140% Revenue Growth

David Fortunato, CEO, Wealthfront

Robo-advisor Wealthfront surpassed $50 billion in assets for more than 700,000 clients, many of whom are young professionals in the U.S. The company also is on course to increase its revenue by over 140% in 2023, and has EBITDA margins above 40%.

Wealthfront currently offers clients a 5.00% APY and as much as $8 million in FDIC insurance through partnerships with more than 35 banks. It has expanded into areas such as cash management, lending, and lower-risk investments with its automated bond portfolio. The company, which went live with automated investing in 2011, estimates that it has saved retail clients over $1 billion in advisory fees that clients could have paid to human advisors.

“This milestone is a testament to our team’s relentless focus on creating value for our clients and our commitment to building a profitable company that puts clients’ interests above our bottom line,” said Wealthfront CEO David Fortunato. “Our focus on automation allows us to deliver more value to the client, and we look forward to continuing this work.”

Chris Latham, Managing Editor at Wealth Solutions Report, can be reached at clatham@wealthsolutionsreport.com

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