Wealthtech Roundup: SMArtX, CAIS, AssetMark, Surge Ventures And More

Aaron Wormus Of SMArtX Is Our Newest Wealthtech Leader Of The Month. Partnerships By CAPTRUST With CAIS, StratiFi With Altruist, Elements With XY Planning Network. GTCR Buys AssetMark. Surge Ventures Buys Kovair. iCapital Buys Mirador. Strategic Appointments At COMPLY, F2 Strategy, Smarsh, TIFIN. FIDX Launches Insurance Desk.
Aaron Wormus, Chief Technology Officer, SMArtX Advisory Solutions
Aaron Wormus, Chief Technology Officer, SMArtX Advisory Solutions
Chris Latham, Managing Editor, Wealth Solutions Report
Chris Latham, Managing Editor, Wealth Solutions Report

In this edition of the Wealthtech Roundup, we speak with our newest Wealthtech Leader of the Month, SMArtX Advisory Solutions Chief Technology Officer Aaron Wormus, about how advisors can enhance client portfolios with unified managed accounts (UMAs) and application programming interfaces (APIs).

Other entries this month include CAPTRUST partnering with CAIS, StratiFi integrating with Altruist, COMPLY appointing Michael Stanton as its new CEO, GTCR acquiring AssetMark, Smarsh adding new board members, Surge Ventures acquiring Kovair Software, iCapital acquiring Mirador, F2 Strategy appointing Jay Halbert as CFO, Fiduciary Exchange launching an outsourced insurance desk for advisors, TIFIN appointing a new president and TIFIN AG appointing a new COO, and Elements partnering with XY Planning Network.

Larry’s Take

Larry Roth, CEO, Wealth Solutions Report
Larry Roth, CEO, Wealth Solutions Report

The range of M&A transactions, strategic partnerships and executive appointments in this week’s edition points to the extent to which wealthtech has become essential to wealth management. Very few successful financial advisors can maintain operations, much less acquire and retain their ideal clients, without digital tools that are customized for the industry.

On a firm level, RIAs sit at the center of an independent channel ecosystem that has grown to encompass broker-dealers, custodians, traditional asset managers, alternative investment platforms and insurance companies. Wealthtech providers increasingly are developing tools that integrate with each of these types of firms in specific ways.

RIA leaders who closely follow dealmaking and key hires in the wealthtech space will be in a better position to determine which tools are truly cutting edge and the most useful for their advisors. Broker-dealers and custodians can add value here by explaining the precise relevance of this information in ways that resonate with the RIAs they serve.

If you would like to discuss this Larry’s Take further, including how these trends might impact your business, please contact me at larry.roth@rlrstrategicpartners.com.

1. SMArtX Discusses How Advisors Can Enhance Client Portfolios With UMAs And APIs

Aaron Wormus, Chief Technology Officer, SMArtX Advisory Solutions
Aaron Wormus, Chief Technology Officer, SMArtX Advisory Solutions

The SMArtX Advisory Solutions platform provides open APIs, turnkey asset management platform (TAMP) functionality, automated rebalancing, continuous trading, enterprise billing, as well as tools for wealth management and asset management firms to create customized multi-strategy portfolios.

Here is our Q&A with SMArtX Chief Technology Officer Aaron Wormus.

WSR: What are the benefits of UMAs for advisors, instead of just putting clients in individual securities and ETFs?

Wormus: Clients today want more than just a set-it-and-forget-it asset allocation strategy. SMArtX’s use of efficient modern technology empowers advisors to offer each of their clients a portfolio of professionally managed models – products, which until recently, have only been available to large and/or institutional investors.

The SMArtX rebalancer, cash management and tax tools on top of the UMA structure provides a personalized, best-in-class investment experience. Building a business on UMAs offers financial advisors the ability to manage their book of business at scale, freeing up more time for high-touch client relationships and growth initiatives.

WSR: What does the technology of APIs have to do with the investment structure of UMAs?

Wormus: A UMA signals multiple parties – model managers, overlay manager, advisor, custodian – to work together to provide clients with a unified investment experience. This is only accomplished when streamlined communication exists between each party. SMArtX was built to use APIs to ensure that data flows instantly between the parties.

When a manager reconstitutes a model, when an advisor rebalances accounts or manages taxes, the SMArtX APIs ensure that the trades are built and delivered to the custodian and then reflected to the advisor portal. A process that used to take days to complete and reconcile is accomplished in seconds with SMArtX APIs.

WSR: How does SMArtX connect these dots and fill a needed void in the industry for advisors and their firms?

Wormus: There are many TAMP and fintech options for advisors in the client onboarding, CRM, risk management, proposal/IPS space. We believe that the UMA model is the best way for advisors to provide value to their clients, and couldn’t find a modern sleeve-first portfolio accounting solution that provided the flexibility that was needed to provide a true UMA experience.

This realization sparked the development of a next-generation UMA platform. Our cloud-based solution empowers advisors to deliver sophisticated investment strategies to all clients, streamlining operations and reducing costs. By focusing on flexibility and sleeve-first design, we’re elevating the wealth management landscape.

2. CAPTRUST Selects CAIS To Centralize Alts Offerings For Advisors

Matt Brown, Founder, Chairman & CEO, CAIS
Matt Brown, Founder, Chairman & CEO, CAIS

CAPTRUST, an independent financial advisory firm with more than $800 billion in client assets under advisement, selected CAIS to consolidate its alternative investment products and processes onto a single platform with the goal of creating an enhanced, unified alts experience.

The software-as-a-service (SaaS) offering CAIS Solutions uses automated processes to centralize fund positions.

CAPTRUST’s network of advisors will have access to CAIS IQ advisor educational resources and support for structured investments. The CAIS platform will integrate into CAPTRUST’s custodians and reporting providers, such as BNY Mellon’s Pershing, Fidelity, Charles Schwab and Black Diamond.

“CAIS Solutions is creating immense value for advisory firms that have historically relied on fragmented technologies and processes to run their alternatives practice,” said Matt Brown, Founder and CEO of CAIS. “As client demand for alternatives grows at a rapid clip, we remain committed to combining our best-in-class technology and client service to support the unique needs of the independent financial advisor.”

3. Risk Management Platform StratiFi Integrates With RIA-Focused Custodian Altruist

Akhil Lodha, Co-Founder and CEO, StratiFi
Akhil Lodha, Co-Founder and CEO, StratiFi

StratiFi, a risk management platform for advisors, partnered with Altruist, an RIA-focused custodian, to enable advisors using Altruist to integrate positions, accounts and client records from Altruist into StratiFi’s platform, in order to analyze and manage risk across client portfolios.

StratiFi users also will have access to software for account opening, trading, reporting and billing. StratiFi serves financial advisors, investment managers and compliance officers at RIAs, independent broker-dealers, family offices and other institutions. Earlier this year, Altruist launched Altruist Cash, a cash management solution that offers end clients 5.10% annual percentage yield (APY) on cash held in Altruist Cash accounts.

“This strategic partnership is yet another signal that StratiFi is committed to not only advancing risk and compliance tools but also creating innovative partnerships that advance the entirety of the wealth management space,” said Akhil Lodha, CEO of StratiFi. “Together with Altruist, we will redefine how wealth managers grow their practices while averting risk and remaining compliant.”

4. COMPLY Appoints Michael Stanton As CEO, Amy Kadomatsu Becomes Board Advisor

Michael Stanton, CEO, COMPLY
Michael Stanton, CEO, COMPLY

COMPLY, a compliance software, consulting and education resource for financial services firms, appointed Michael Stanton as CEO. He succeeds Amy Kadomatsu, who will transition to the position of Board Advisor. COMPLY’s brands include ComplySci, RIA in a Box, Illumis, ComplianceGuardian and Itegria.

Stanton has over 25 years of experience leading SaaS companies. He previously served as an operating advisor at FTV Capital. Before that, Stanton was Chief Financial Officer at Diligent Corporation, a governance, risk and compliance SaaS provider that grew in revenue from $90 million to over $600 million during his tenure. Kadomatsu first joined ComplySci as Chief Operating Officer in 2018.

“I am honored to join COMPLY, a great team that has been successfully delivering solutions to meet the critical needs of global financial services clients,” Stanton said. “Our customers face an increasingly complex regulatory landscape that demands innovative solutions and COMPLY is positioned with its combination of regulatory technology, services, and education to empower compliance teams to mitigate risk and enable growth.”

5. PE Firm GTCR To Acquire AssetMark At $2.7 Billion Valuation

Michael Kim, CEO, AssetMark
Michael Kim, CEO, AssetMark

Wealthtech firm AssetMark said it signed a definitive agreement to be acquired by GTCR, a private equity firm with significant investment expertise in fintech, wealth and asset management. AssetMark has about $117 billion of assets on its TAMP. The platform serves more than 9,300 advisors and over 257,000 investor households.

As part of the agreement, GTCR will purchase a 100% interest in Concord, California-based AssetMark, whose stockholders will receive $35.25 per share in cash, representing a total equity valuation of about $2.7 billion. The transaction is expected to close in the fourth quarter. Once completed, AssetMark’s common stock will no longer be listed on any public market.

“This transaction is a testament to the support and commitment” of Huatai Securities, AssetMark’s majority owner, “over the past seven years, and the hard work of the entire AssetMark team,” according to Michael Kim, AssetMark CEO.

6. Smarsh Adds New Members To Board Of Directors

Kim Crawford Goodman, CEO, Smarsh
Kim Crawford Goodman, CEO, Smarsh

Smarsh bolstered its board of directors with two new members, Sagnik Nandy and Tim Scheve. Additionally, Lynn Danko has been appointed Chair of the Smarsh audit committee and Board Member for Smarsh’s consolidated group.

Nandy is the President and Chief Development Officer of Workforce Identity at Okta. Scheve is an experienced board director and former CEO, CFO and chief administrative officer who has been on regulatory, cybersecurity and risk management board committees. Danko has worked as a technology leader and CFO for over 25 years, and previously served at enterprise software firms ranging in size from $200 million to $1 billion in revenue.

“As Smarsh continues to grow in strategic importance for regulated industries and continues to provide critical infrastructure to the largest banks in the world, our board expansion is timely,” said Smarsh CEO Kim Crawford Goodman.

7. Surge Ventures Launches Data Integration Platform Via Kovair Acquisition

Sid Yenamandra, CEO, Surge Ventures and Kovair
Sid Yenamandra, CEO, Surge Ventures and Kovair

Wealthtech investment firm Surge Ventures acquired Kovair Software, which will allow Surge to launch an enterprise integration platform. The new platform was designed to streamline data, applications and workflow management while offering a seamless integration platform experience that is tailored to the needs of the financial services sector.

Kovair is a software developer and data integration solutions provider that seeks to offer flexible platforms that increase organizational efficiency and productivity. Sid Yenamandra, Founder, CEO and Managing Partner of Surge, has been appointed CEO of Kovair while Bipin Shah is stepping down as Kovair CEO but will continue to offer his strategic insights to Kovair by remaining on its Board of Directors.

“With this venture, we aim to tackle the problem of data management in the wealth management industry and to offer products that dramatically improve operational efficiency, data flow, and security across software applications, for wealth management firms, addressing the industry’s demand for secure and unified data integration solutions,” Yenamandra said.

8. Alts Investing Platform iCapital To Acquire Wealthtech Firm Mirador

iCapital, an alternative investments operating system provider, agreed to acquire wealthtech firm Mirador, a provider of investment data aggregation and financial reporting of alternative and traditional investments. Mirador also has a technology consulting team that offers custom wealth technology solutions.

The acquisition is intended to help iCapital expand its data management and reporting capabilities to create an enhanced technology experience for clients in the wealth management, family office, endowment and foundation segments of the financial services market. More than 180 Mirador employees are expected to join iCapital when the deal closes, which is expected to happen by early May.

Lawrence Calcano, Chairman & CEO, iCapital; Joseph Larizza, CEO & President, Mirador
Lawrence Calcano, Chairman & CEO, iCapital; Joseph Larizza, CEO & President, Mirador

“Mirador has set the industry standard for managing data with leading third-party performance reporting providers,” said Lawrence Calcano, Chairman and CEO of iCapital. “Mirador and iCapital share a commitment to provide the wealth management community with easier access to alternative investments,” said Joseph Larizza, CEO and President of Mirador.

9. F2 Strategy Appoints Jay Halbert As CFO

Jay Halbert, CFO, F2 Strategy
Jay Halbert, CFO, F2 Strategy

Wealthtech consultancy F2 Strategy appointed Jay Halbert to the newly created position of Chief Financial Officer. He will oversee the growing company’s financial operations, including accounting, financial reporting, planning and analysis, and budgeting and banking relationships.

Halbert joins F2 Strategy with more than 20 years of leadership experience across several industries. Most recently, he served as Executive Vice President at global media company Alkemy X. Before that, he served as Senior Vice President at Northeast Building Products, President and Owner of MedX Operating Company and CFO at Comcast Spectacor.

“I see this as a pivotal time to be joining F2 Strategy,” Halbert said. “I’ve been watching keenly as they’ve expanded their services through acquisition and strategic hires. Taking stock of the industry today, it’s clear that F2 is poised to capitalize on gaps in the market,” he said. “We are beginning to see these efforts unfold, and I’m positive that my prior experience will be extremely additive to an already uber-talented team.”

10. FIDX Desk OID Launches For Advisors

Scott Bowers, CEO, FIDX Desk
Scott Bowers, CEO, FIDX Desk

Fiduciary Exchange (FIDX) and its broker-dealer, FIDX Markets, launched FIDX Desk, an outsourced insurance desk (OID) that the firm said will enable RIAs and fee-based advisors to easily integrate annuity products into their offerings, regardless of their insurance licensing status.

The new OID is a comprehensive digital solution for annuity management. FIDX Desk will work closely with advisors to facilitate the creation of these accounts, according to FIDX, which Envestnet has a stake in. The OID also aims to help advisors manage investments in annuities that were previously bought through prior broker-dealers.

“The benefits annuities can add to investment portfolios are well-documented, yet their integration has been largely overlooked by independent RIAs due to the cumbersome and inefficient processes involved,” said Scott Bowers, FIDX Desk CEO.

11. TIFIN Appoints New President And TIFIN AG Appoints New COO, Both From LPL

Rob Pettman, Chief Revenue Officer and President, TIFIN
Rob Pettman, Chief Revenue Officer and President, TIFIN

Wealthech firm TIFIN appointed Rob Pettman as its Chief Revenue Officer and President. Its TIFIN AG platform appointed Jeannette Kuda as Chief Operating Officer. Pettman will report directly to TIFIN Founder and CEO Vinay Nair. TIFIN AG uses algorithms to help wealth enterprises answer specific questions to drive net new assets.

Jeannette Kuda, COO, TIFIN AG
Jeannette Kuda, COO, TIFIN AG

Pettman joins TIFIN from LPL Financial, where he worked for over 19 years in various roles, most recently as Executive Vice President, Wealth Management Solutions. Kuda also joins TIFIN AG from LPL Financial, where she served as Senior Vice President and COO of Wealth Management Solutions.

“TIFIN is on the leading edge of applying AI technology to empower financial advisors with better intelligence and to enhance client outcomes,” Pettman said. “I am passionate about leveraging technology to drive innovation and enhance the client experience in financial services. I look forward to contributing to TIFIN AG’s continued success and growth,” Kuda said.

12. Elements Partners With XY Planning Network On Data, Discounts And Training

Elements, a provider of financial assessment software designed to help financial professionals demonstrate their value and win new clients, partnered with XY Planning Network (XYPN) a turnkey advice and planning platform serving more than 1,800 fee-only independent financial planners.

Michael Kitces, Co-Founder, XY Planning Network
Michael Kitces, Co-Founder, XY Planning Network

The Elements Financial Vitals System seeks to streamline client data collection, meeting preparation and marketing content creation. The tiered pricing structure ranges from free access for advisors who are starting out to significant discounts for growing and established practices. The partnership also includes a training series led by Elements brand ambassadors Carl Richards, Reese Harper and others.

“Advice conversations are less about how assets are invested, and more about whether the household has built and is maintaining healthy financial habits around their household cash flow and still-accumulating assets,” said Michael Kitces, Co-Founder of XYPN. “Our partnership with Elements will provide XYPN advisors with a new kind of financial monitoring tool, that supports these exact financial planning needs and is in strategic alignment with XYPN’s mission to expand our members’ ability to provide equitable and accessible financial advice.”

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

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