Orion Acquires Summit Wealth Systems To Become Its Next-Generation All-In-One Portal (And More Of The Latest In Financial #AdvisorTech – January 2025)

Orion Acquires Summit Wealth To Become Its Next-Generation All-In-One Portal

There are two competing theories about how to package and sell technology for financial advisors. One is that advisors would rather buy pieces of technology that each fulfill an individual use case (the "best-of-breed" approach), with a resulting tech stack comprising software from many different providers that each perform their separate functions in the best way for that particular advisor. The other theory is that advisors would prefer to buy all of their technology from the same source, which in addition to eliminating the need for advisors to individually curate each component in their tech stack, also provides reasonable assurance that all of the provider's technology will integrate and work well together (the "all-in-one" approach).

The pendulum has swung back and forth between these two schools of thought over the years. The 2000s saw a proliferation of individual AdvisorTech tools as tech entrepreneurs saw opportunities to sell to the expanding independent RIA and IBD markets and the internet made it possible to develop APIs and integrate standalone best-of-breed tools. In the 2010s, an ascendent crop of "all-in-one" providers arose which sought to build or buy multiple tools and bundle them into a single offering so advisors wouldn't have to spend so much time and effort integrating their best-of-breed tools. Among this latter group, Orion was one of the most aggressive movers in pulling together different solutions under one umbrella: Starting in 2018, they went on a private equity-backed acquisition spree that involved buying two separate TAMPs (FTJ FundChoice in 2018 and Brinker Capital in 2020), financial planning (Advizr in 2019), risk analytics (HiddenLevers in 2021), compliance (BasisCode in 2021), and CRM technology (Redtail in 2022).

Orion's wave of acquisitions represented a bet that RIAs would jump at the opportunity to buy their major technology components in all areas from investment management to financial planning to operations and compliance from one place, and that Orion could bring them together into a single well-integrated bundle. And yet, after acquiring so many solutions in rapid succession, Orion ironically found itself struggling to integrate all of its own new components, which after all were built separately from each other and from Orion's core portfolio management and reporting software – and which makes sense, given that Orion had effectively replicated the advisor experience of buying multiple technology solutions and needing to find a way to weave them together, made even greater by being on a scale of entire technology platforms instead of individual user licenses. The end result is that while all of the components technically fall under the Orion umbrella, they still represent something more like multiple distinct nodes than a single integrated whole.

And so it's notable that in December, Orion announced that it was acquiring Summit Wealth Systems, a client portal and data hub designed to consolidate a client's key financial data (investment account performance and beyond) and documents from across multiple sources into a central dashboard. Summit's founder and CEO Reed Colley – already well known in the AdvisorTech world for founding performance reporting solution Black Diamond before selling it to Advent (now SS&C) in 2011 – will join Orion with the title of President of Orion Advisor Technology, a role which had previously been occupied by Redtail founder Brian McLaughlin prior to his departure in September.

At first glance it seems clear that Orion's acquisition of Summit is as much about bringing Colley (a recognized industry visionary around AdvisorTech and an established executor) aboard at Orion as it is about the technology being acquired. Colley's experience in building platforms that pull in data from multiple sources to provide a more unified client experience – first with Black Diamond, and now with Summit – makes him a natural choice to lead Orion's push to unify all of its disparate built and acquired parts. Especially since Summit was already built to bring together data from disparate sources into a single next-generation client portal experience. Having the backing of Orion gives it more resources to improve and expand on its current offering and create would could be more of a true "wealth operating system" – as was the original vision for Summit – where it just happens to have a newfound focus of unifying the experience of Orion's existing technology in particular.

At another level, however, the deal further underscores the difficulty that providers like Orion have had in integrating together their multiple acquired pieces into the all-in-one whole that their acquisitive vision espoused. The goal now, it would seem, is for Summit to fulfill the role of the "missing link" between Orion's different systems – or rather, on top of those systems as a sort of overlay with portals for the client and advisor bringing together key information from multiple data sources. In other words, rather than integrating all the Orion properties to each other, they will "just" have to integrate each of them into Summit as a central dashboard… which is what Colley was building Summit to do in the first place already. But another way of looking at it is that Orion, after struggling to unify the various providers it acquired over the years, found that it had to acquire yet another solution (and its founder) to finally bring everything together.

Which in turn raises questions about what exactly is the role of a unified portal in an advisor's tech stack. If Orion's challenges in integrating its various tech acquisitions can be compared to an individual advisor struggling to integrate their own individual technology pieces, then Orion's solution to the problem – to bring in a portal to serve as a meta-layer on top of everything – could theoretically be applicable to advisors as well. In other words, if Orion can buy Summit to unifying the experience of the best-of-breed components (that it happens to have acquired already), then advisors could also buy a portal like Summit to unify their best-of-breed components as well (and eschew an all-in-one solution). In turn, though, while standalone client portal solutions do exist – including Summit, as well as others like CircleBlack and Kubera – advisors haven't exactly flocked to them over the years, even despite having frequent challenges with integrating their disparate technology solutions. Notably, even Summit itself, despite $20 million of venture capital backing and Colley's own reputation from building Black Diamond, had reportedly struggled to gain significant adoption among advisors in the nearly 3 years since its emergence from beta mode. All of which raises the question of, if there's enough latent demand for a meta-level unified client portal that it makes sense for Orion to acquire one to tie together its own offerings, why there hasn't been a significant level of interest in client portals on an individual advisor level up until now? If Summit is the Orion-unifying experience that advisors have been looking for, why weren't more advisors adopting Summit in the first place?

Still, at a time when advisors' issues with integrating their technology solutions continue to be a pain point – to the extent that, per the most recent Kitces Research on Advisor Technology, advisors are more satisfied on average with their individual technology solutions than with their (not-so-well-integrated) tech stack as a whole – there could be an opportunity for solutions that can lay over top of other tools and serve as the front-end for the client and advisor experience as an alternative to an infinite number of point-to-point integrations of each tech tool to one another. Although notably, that would seem to make more sense for advisors who have opted to use individual technology solutions rather than an all-in-one platform, which at least in theory is supposed to be integrated to begin with. But at least so far, it seems that advisors haven't felt a pressing need for a unifying client portal, beyond what they already have for portfolio management or financial planning alone. And so in the end, the question is whether Orion's acquisition of Summit Wealth represents a new movement towards a future where portal overlays attain significant adoption as a way to weave together key client data, or whether it represents perhaps another overestimation by Orion of the latent desire among advisors for another all-in-one solution?

SEI Acquires LifeYield To Boost Its Tax-Focused Investment Management Capabilities

When an advisor manages clients' investments, and wants to attract more clients who will give them investments to manage, they need to have some kind of fundamental value proposition – something that illustrates why they could do better at managing a client's investments than the next advisor down the road, or than the client could do by managing their portfolio themselves. Every advisor's value proposition is a little different, but over the years there have been some broad trends in how managers tend to differentiate themselves.

For example, in the 1970s and 80s, when many advisors were in the business of selling mutual funds on commission, advisors tended to differentiate themselves on their ability to pick the "best" funds: Those with the best track records, highest star ratings, biggest-name managers, etc. Which was particularly effective in an era when most funds were actively managed, and an advisor's skill was often synonymous with their ability to pick "winners" from among a vast landscape of funds. Likewise, starting in the 1990s as concepts like Modern Portfolio Theory gained wider recognition, advisors began to differentiate themselves by constructing diversified portfolios from building blocks of low-fee index funds, whose main selling point was that they could achieve returns similar to a portfolio of actively managed funds (since inevitably some of the funds would prove to be "winners" and others would turn out to be "losers", with the combined return averaging close to the overall market), with significantly lower "embedded" fees in the portfolio.

But as more and more advisors took up the mantle of diversified asset-allocated portfolios, it ceased to have much value as a differentiator: It isn't very effective for an advisor to market their low-cost diversified portfolios if every other advisor is also offering low-cost diversified portfolios.

And so over the last two decades, the next frontier of differentiation in portfolio management has been tax-savvy investing. In that time, advisors have increasingly sold themselves on their ability to add "alpha" by saving the client on taxes that they would have otherwise paid (and thereby boosting the client's returns on an after-tax basis), using strategies like asset location, tax-loss harvesting, and tax-efficient withdrawals in retirement, all while making the investments themselves more tax-efficient by increasingly switching from capital gain distribution-generating mutual funds over to ETFs.

But while tax-savvy investing makes for an effective selling point for tax-sensitive clients and really can make a material difference in how the portfolio returns on an after-tax basis – with Vanguard's Advisor's Alpha study estimating a benefit of up to 60 bps annually for asset location and up to 120bps for a tax-smart order of withdrawal – it can also be difficult to scale across an entire client base. Different clients have different tax situations, with each client's tax situation, withdrawal needs, and/or embedded gains or losses presenting different opportunities or challenges. And all those factors need to be monitored on an ongoing basis in order to provide the continuous "tax alpha" that the advisor differentiates themselves on (often in a very literal way, as the SEC has handed down sanctions on RIAs that have claimed to have processes to manage portfolios in a tax-efficient way but fail to actually follow through with those practices). And so along with the movement for advisors to differentiate themselves via tax-savvy portfolio management, there has been a growing desire for technology that can help streamline the process of monitoring and managing portfolios in a tax-focused way.

Which makes it notable that in December, the investment management technology and RIA custody provider SEI announced that it will be acquiring LifeYield, a rebalancing platform designed to streamline advisors' ability to manage multiple household accounts under a single, tax-efficient strategy.

In a way, SEI's acquisition of LifeYield is reminiscent of TDAmeritrade's acquisition of iRebal in 2007. Back then, TDAmeritrade was able to capitalize on the demand for technology that could help advisors scale their management of asset-allocated portfolios, by acquiring what was then considered the cutting-edge technology in that space and providing it for free to all advisors on its custodial platform. SEI now has the opportunity to do something similar with LifeYield (which was founded in 2008, one year after TDAmeritrade acquired iRebal) by taking one of the leading technology providers for the next generation of tax-savvy portfolio management, and integrating it within SEI's investment and custodial platform. Which enhances SEI's ability to compete with other custodial platforms like Schwab (which inherited iRebal in its acquisition of TDAmeritrade) and Altruist (which has its own in-house rebalancing platform).

For advisors on SEI's custodial platform, the LifeYield acquisition provides a new tool making it easier to streamline the tax-efficient management of multiple household accounts (including across other, non-SEI custodians, as one of LifeYield's core features has been unified household-level management regardless of custodian). And for non-SEI advisors, while LifeYield will presumably still be available for "off-platform" use (just as iRebal was available for purchase by non-TDAmeritrade advisors long after its acquisition), the fact that it will be available for free on the SEI platform, and will presumably have the most optimal data flow-through to and from SEI, could make SEI at least worth consideration as a custodial option, particularly for those who already use (and pay for) LifeYield on its own. Especially since LifeYield's technology has typically been packaged and sold primarily to enterprise firms, meaning that for many smaller RIAs, a custodial relationship with SEI might truly be the only way to get in the door for LifeYield's full tax management capabilities.

But at an industry level, the LifeYield acquisition is another sign that, just as previous forms of differentiation eventually became so widespread that they ceased to effectively make one advisor stand out from the rest, tax-smart portfolio management may be quickly moving to the point where it's no longer just a nice value-add and differentiator, and it becomes essentially a requirement for any advisor who manages investments. Once the advisor has the ability to plug their clients' multiple household accounts into an engine that will output a tax-friendly strategy to deploy across the entire household, which is free and fully integrated with their custodial platform, there's little excuse not to do so.

In other words, we may be close to a tipping point where "tax alpha", like low-cost diversified portfolios before it, loses its effectiveness as a differentiator and simply becomes the way that things are done. Which does raise interesting questions about what the "next" wave of differentiation will entail – and the growing popularity of alternatives like private equity and credit may give some hint to what that next wave will be, and what technology will evolve to help it along. But in the meantime, while there are still advisors who haven't yet scaled up their ability to providing tax-focused investment management, SEI has set itself up to compete as the custodian that will provide the technology to do so.

Range Raises $28 Million To Build Proprietary Tech To Attract And Retain At Its (Subscription-Based) RIA

Most technology used by financial advisors is "off-the-shelf", meaning it's available to any advisor who wants to pay the licensing fee, which in turn means in most cases (give or take some level of firm-level customization) it looks pretty much the same to whichever advisor is using it, and whichever clients are being served by it. Which has two important, if unintended, implications: First, for clients of financial advisors using third-party technology, it can be relatively easy to switch between two different advisory firms that happen to use the same core client-facing software, because the technology will be familiar no matter which advisor is using it – for instance, if a client's advisor uses eMoney for financial planning and they switch to a different advisor that uses eMoney, there won't be a steep learning curve for the client in familiarizing themselves with the financial planning software that generates the advisor's core deliverable.

But also, for advisors, the fact that so much technology is off-the-shelf, and that each category of software tends to have no more than 3–4 providers used by the majority of advisors, means that if an advisor switches from one advisory firm to another, they won't necessarily need to re-learn the technology they use to do their job if both firms use a similar tech stack. So if an advisor uses (and likes) eMoney and gets recruited by another firm that uses eMoney, the advisor (and potentially their clients) can switch over to the new firm without a significant switching cost in the technology they use.

If someone was building an RIA from scratch, then, with the intention of serving clients on an ongoing basis and recruiting and hiring employee advisors to serve them, one way to make the relationship "stickier" – both for clients as well as for the advisory talent itself – could be to build all of the firm's technology in-house. Because not only would the technology then be customized for the firm and the clients it aims to serve, but it would also be unique to that firm: By definition, switching away from that advisory firm (for both clients and advisors alike) would necessarily entail leaving that firm's proprietary technology behind.

Of course, there are risks to building an in-house tech platform, first and foremost of which is that it's much more expensive to develop and maintain than using third-party software, which (when the RIA itself is also starting from the ground up) often requires investing significant amounts of start-up capital to build before the firm earns its first dollar of client revenue. Also there's the need for the technology to actually be good at what it does – across multiple different software categories at once, each of which has standalone competitors all fully focused on ‘just' being in the best in that one category – since clients and advisors will only be incentivized to stay with the firm and its technology if that tech is truly an upgrade from what they would use elsewhere. And if the firm's proprietary technology ends up being a struggle to use correctly, it could actually have the opposite effect and repel the clients and advisors the firm wants to retain. Finally, regardless of how good the technology is, the firm still needs to have an effective client acquisition system: As many of those who built or bought robo-advisor technology in the 2010s learned, slick and expensive technology doesn't drive new client growth alone, especially if there's no way to ensure prospective clients will see it to begin with (financial advice is not an "if you build it, they will come" business model!).

But still, there's a viable opportunity for an RIA that can efficiently build good in-house technology and market itself to clients, which helps to explain the news that Range, a startup RIA and self-described "all-in-one WealthTech platform" (for its own employee advisors), has recently raised $28 million in Series B funding led by VC firm Cathay Innovation.

Range is the most recent in a string of "digitally-native" startup RIA firms that have raised eye-popping sums from venture capital firms as they build their technology and RIA businesses side-by-side from the ground up, a list that also includes Savvy, Farther, and Compound. With the key difference that, while firms like Savvy and Farther have poured much of their focus (and venture funds) into recruiting advisors with existing books of business to rapidly build up assets under management, Range is more focused on growing clients organically while taking an ensemble-based approach to client service (as its website proclaims, "one advisor is the old way of doing things") and charging subscription-style flat fees rather than charging on AUM. Which makes it conceptually more similar to RIAs like Facet Wealth, another VC-backed firm that has aimed to scale the business of subscription-fee planning in part by building its own proprietary technology to make itself more efficient in delivering advice to clients.

But Range's similarity to Facet does raise a note of caution, given Facet's own journey since its founding in 2016. Having raised a reported $245 million in total equity and debt financing, Facet still has yet to be profitable, and has struggled with advisor attrition and burnout with a reported target ratio of 300 clients for each advisor(!). By comparison, Range targets a moderately higher-earning clientele than Facet and charges commensurately higher fees (ranging from $2,655-$8,955 per year, versus Facet's $2,000-$6,000) – except that Range also bundles tax filing into its higher fee tiers, meaning that for some of the more complex clients the actual amount they pay Range for financial planning might be less than they would be paying someone like Facet after deducting what they would have needed to pay another firm to file their taxes.

In other words, while Range does charge higher fees than Facet, there's still a question (and perhaps a fair likelihood?) that it will need to raise its fees further in order to get to profitability (or risk that its financial planning is too ‘light touch' to actually retain clients). Because while founder Fahad Hassan has made statements in the past about how Range's AI-driven technology will eventually make human advisors obsolete (including the ones employed by Range today), by all appearances they still rely heavily on the expertise of their human advisors – which makes sense given the complex needs of the high-income clientele they aim to serve – and that expertise comes at a cost.

In turn, to the extent that Range can eventually implement technology to make its CFP professionals obsolete and provide technology to support more "do-it-yourself[-with-technology]" clients instead, those clients tend to be more price sensitive (thus why robo-advisors charged one-fourth the traditional advisory fee). Except that means Range would face significant downward pressure on its pricing, at the risk of pricing so low that clients' long-term value is no longer worth the acquisition cost (the fatal flaw of most robo-advisors a decade ago). Which when combined with the also-significant costs of building their technology, along with the cost of acquiring a base of high-income clients, means that even with cutting-edge technology they will still need to solve the problem of how to balance the needs of their clients with the capacities of their advisors, and find a level of fees that will allow them to make a profit in the end – the same challenge that faces almost every advisory firm today.

The bottom line is that while the opportunity is there to use in-house technology to help solve for the problem of scaling (subscription-style, or really any recurring-revenue) advice, the reality is that even AI technology, in its current state, can only go so far in reducing the time it takes to serve complex, high-income clients – and as noted earlier, even the best technology can only be useful insofar as there are clients to serve in the first place. And ironically, even "solving" for the technology needs with AI may not be better, as consumers have thus far shown that they expect to pay far less for a self-directed technology solution than a human-driven one. Which means that although the cost of the technology that Range is building from scratch might be justifiable in that it can streamline the delivery of its services and help retain clients and advisors who are already on board, its biggest challenge going forward may be finding a way to cost-efficiently acquire enough clients for its advisors (and technology) to serve while keeping its fees in-line with what it takes to scale those acquisition costs.

Startup FINNY AI Raises $4.2M To Automate (Human-Sounding) Outbound Outreach To Prospects

Outbound prospecting for financial advisors has always been first and foremost a challenge of quantity over quality. While advisors have long made a practice of paying services to receive "qualified" leads – e.g., those that match the advisor's asset minimums or target client profile – even the 'best' leads tend to have dismal rates of converting into clients, simply because the odds that the advisor is contacting the prospect at the exact time they happen to be in the market to hire someone, and they're receptive to speaking with someone who has contacted them more or less out of the blue, and they haven't been contacted by someone else who has also paid for the same lead, are quite limited and results in prospecting being a "Game Of Numbers" approach to sort through a high volume of "no"s to find the few "yes"s.

The upshot to this is that, no matter how good an advisor's prospect list is, they need to send a very high volume of outreach to prospective clients if they want to result in a meaningful number of meetings to try and convert them into clients. Which in turn leads to the unfortunate reality that there's often very little room for personalization in the outreach that the advisor does send, since any marginal benefit there might be in adding a few personalized words to an email or LinkedIn message would be swamped by the amount of time it would take to research each and every name on the list of leads and customize each message accordingly. And even though personalized outreach really might make a difference in terms of the number of prospects who might respond to the advisor's outreach, it wouldn't make so much of a difference as to justify the time spent in doing so when there's so much pressure to reach the sheer volume of prospects necessary to get any meaningful results.

In the past two years, however, the challenge of scaling customized written content has proven to be one of the earliest and best use cases of generative AI. Since the wide release of ChatGPT in 2022, advisors have used AI for a multitude of writing tasks ranging from blog posts to client meeting notes to follow-up emails. And while AI-generated text isn't necessarily the highest and most engaging level of writing, it can generally do a good job of putting basic information into words faster than a human can do it themselves. Which makes it at least conceivable that, for the purposes of prospect outreach, AI could be a useful tool in that if it "knows" a little bit about each prospect (e.g., from social media profiles or publicly available information) it can generate a personalized-enough outreach message to each one when the goal is just to get a meeting and conversation to actually go deeper… and that AI can initiate that outreach message without the advisor needing to research and compose every single message.

Which is the selling point behind FINNY AI, an AI-powered prospecting tool that's in the news this month after raising a $4.3 million seed round led by venture capital firms Maple VC and HNVR.

FINNY actually takes a three-tiered approach to advisor prospecting, starting with identification of prospects based on public records (capital raises, business and property sales, retirements, divorces, etc.) and filtering down the list based on specific data points like industry, city, and alma mater, and then scoring the prospect on a 0-to-100 scale based on how likely they are to be a fit for the advisor. These first two steps are similar to other prospecting tools on the market like Wealthfeed and AIdentified, but the third step that differentiates FINNY is its ability to automate the subsequent outreach step: Sending the initial message and follow-ups to the target prospects that have been identified, and scheduling the meeting with the advisor if the prospect decides to move forward. According to FINNY's co-founder Eden Ovadia, FINNY's goal with the new funding is to go even further and identify and contact prospects autonomously on an ongoing basis, based on the specific prospect criteria the advisor wants to set, to facilitate a form of continuous automated prospecting on the advisor's behalf.

Advisors might be understandably skeptical of an AI tool sending messages to prospects on their behalf, especially if the advisor doesn't always have the chance to review and edit it beforehand (which given the volume of outreach, might not be a realistic possibility anyway). But it's worth remembering that, with the high-volume and low-success game that is prospecting, even a marginal increase in response rate could result in a meaningful number of new prospects, so the outreach doesn't necessarily need to be perfect. For instance, if personalizing each outreach email results in an increase of response rate from 2% to 4%, an advisor who sends out 1,000 messages will go from 20 to 40 responses – and if just one or two of those additional 20 prospects ultimately becomes a paying client, it could easily justify the cost of a tool like FINNY that can customize each outreach. Or viewed another way, when it's already common for prospecting to not connect with 98% of prospects, it's hard to have much downside with AI-generated messages (when the advisor had no time to customize anyway), yet a relatively small improvement (where "just" 96% of prospects don't respond to the more-personalized AI-generated message) could still generate materially more growth for the advisor.

The caveat, though, is that while tools like FINNY can be useful for those in the early-adoption phase, it remains to be seen what happens when tools that automate "personalized" outreach become more widespread. After all, the whole point of doing personalized outreach is to stand out in an email inbox full of cookie-cutter mail merge templates, but if every one of those emails comes from a tool like FINNY because of widespread advisor adoption, it could once again get a lot harder to stand out – particularly as consumers get better at "sniffing out" the AI-generated messages in their inbox, as well as email tools that could detect AI-generated text and send them into a "Promotions" or "Spam" folder where they languish unread.

Still, for the time being there appears to be an opportunity for AI to improve advisors' ability to target, prioritize, and communicate with prospective client, for which FINNY is well-positioned to help advisors get through all three steps at the top of the marketing funnel. To that end, it will be interesting to see how or whether tools like FINNY can connect to other advisor marketing tools further down on the funnel, to seamlessly integrate into the advisor's drip marketing campaign or sales enablement or proposal tools. Since after all, prospecting is just one part of the process of converting a lead into a client, and if there are tools to handle each individual step automatically, it's a reasonable assumption that they can all be made to work together automatically too.

Boosted.ai Raises $15M To introduce Its AI "Portfolio Assistant" To Financial Advisors

If one were to rank the list of potential AI use cases for financial advisors from most to least likely to gain widespread adoption in the next five years, it's doubtful that AI-driven stock picking would rank especially high. For one thing, there's still a trust gap for many advisors between what they believe AI-powered tools are capable of doing well and the fiduciary standards they are held to, which helps explain why despite the proliferation of AI tools in the AdvisorTech marketplace today there are scarcely any that use AI to actually generate financial advice. And for another thing, there's the reality that many financial advisors simply don't do much (if any) stock picking to begin with: Over the past several decades, the predominant investment management philosophy among advisors has shifted broadly away from individual stocks and towards broadly diversified portfolios of mutual funds or ETFs, where the risks inherent to individual stocks are minimized by exposure to hundreds or thousands of different companies.

That said, there are some cases where an advisor's ability to manage client portfolios could be helped by AI. If an advisor has a particular investment thesis that they want to pursue, or a client has specific restrictions on what they can or want to invest in – e.g., they may want the companies they invest in to meet certain sustainability criteria – an AI tool could help research and screen for investments that meet those criteria by scanning prospectuses and company financial statements for existing companies, and by monitoring for IPOs for new companies as well. Which isn't exactly stock picking, but more along the lines of generating ideas and narrowing down the options for the advisor to choose between and ultimately decide on a recommendation themselves.

But still, the most viable use case for AI when it comes to investment management (at least for fiduciary financial advisors) is likely to be around client communication. For instance, many advisors produce regular market commentary for their client, written by themselves or their team (which can be a time-consuming process) or by an outsourced marketing or content agency (which can tend to be overly generic, since by its nature it has to apply to a broad swath of advisory clients of different ages, interests, locations, and wealth levels). An AI tool could have the ability to create more personalized content at scale – for example, an advisor could produce market commentary that convers not only the markets in general, but also the specific investments held by each client. Which isn't exactly a groundbreaking use of AI – text generation has been a core use of the technology since ChatGPT came on the market over two years ago – but could still represent a concrete way for advisors to efficiently add value on an individual level with each client.

It's notable, then, that Boosted.ai, maker of an AI-driven "portfolio assistant", has recently announced the closing of a $15 million fundraising round, as it seeks to expand its offering from its current clientele of mainly institutional investors like hedge funds to wealth management and financial advisory firms.

Boosted.ai describes itself as an "all-in-one generative AI portfolio assistant", capable of researching and rating stocks against each other, summarizing news and filings, monitoring the health and risk of a portfolio, and communicating information to clients about the overall markets and their specific portfolios. Though as leaders of the company have already acknowledged, the use case from an advisor perspective lies mainly in the client communication aspect, and the ability to instantly generate personalized commentary and analysis. Which can certainly be useful for advisors as far as it goes, since communicating with clients about what's going on in the markets and their portfolio can be a key way to build trust (especially when markets are volatile).

The question, however, is whether Boosted.ai can execute on the client communication well enough to justify the cost of the tool. Free programs like ChatGPT are already capable of producing client-friendly summaries or newsletters, which means that a provider like Boosted.ai would need to improve on that experience somehow – either by maintaining its own templates to streamline the workflow of putting the newsletter into email-ready form, or by automatically ingesting more and better market data to further enrich the commentary, or by pulling in client portfolio data to automatically create a personalized performance recap, or by simply having a better language model allowing it to write a cleaner and more engaging summary – in order to make it worth paying for, and even then some advisors will likely still prefer to go with the "free" option. Which is reminiscent of the current state of AI notetaking tools, where some advisor-specific options like Jump and Zocks have made inroads among advisors, but just as many prefer to use more "generalist" tools like Fathom or Zoom's built-in option at much lower cost.

In the end, then, the question that determines whether Boosted.ai will be a viable tool for advisors who don't engage in individual stock analysis will be what kind of resources they put towards building out the client communication side of the software. If ChatGPT can do 80% of what Boosted.ai can do, at 0% of the price, it might be hard to convince a meaningful number to sign up. But if it truly can pull together market and client data to generate a great, personalized client summary or newsletter, that could be something many advisors might find worth paying for.

Sandbox Wealth Raises $1.25M Of Pre-Seed Funding

Broadly speaking, advisor technology can fall into three different categories. First there is "pure" software, which is simply a standalone tool used to support something that the advisor wants to do on their own (e.g., financial planning software, which streamlines the calculations the advisor would have otherwise needed to do on a spreadsheet or financial calculator).

Next there are tech-supported services, which is when an advisor outsources a task that they generally wouldn't have done themselves – for example, many estate document providers, from Wealth.com to Trust&Will to EncorEstate Plans to Vanilla, are at their core providing a service (preparing estate documents) that otherwise would have been outsourced to an attorney. In this case, software might support the service to make it more streamlined and cost-effective, but at the end of the day the service is really the "product" being sold (and as such generally tends to be priced higher than "pure" software).

Finally, there are tech-enabled marketplaces, which facilitate the buying and selling of products between parties. Platforms like DPL and Flourish Annuities, for example, can be thought of as marketplaces since they exist to connect advisory clients with annuity providers for the purpose of a transaction. Again, technology is often heavily involved (since it's needed to actually facilitate the comparison and purchase of annuities), but in the end the technology isn't the thing that's actually being sold; rather, it's the annuity or other investment product at the end of the transaction.

The distinction is notable because, as advisory firms get more holistic in their planning and often move upmarket towards more affluent clients, they're increasingly expanding on the services they provide to broaden and solidify their client relationships, with technology enabling them to do so while keeping everything "in-house" rather than referring clients to a third-party service provider. As noted above, providing clients with estate planning documents, which previously required a referral to a local estate planning attorney, can now often be done via a technology platform – which not only gets it done in what is often a more cost-effective way, but also gives the advisor involvement in a greater share of the client's financial life and thereby increases the "stickiness" of the advisor-client relationship.

One of the next frontiers for advisory firms to further expand their services is to go into banking: Cash flow is the true center of most households' financial lives, and banking is where that happens. The caveat, of course, is that advisors can't directly offer any banking services like checking accounts, credit cards, or loans to their clients unless they actually work for a bank (which, given the heavy regulations and capital requirements for banks, is simply not an option for most independent advisory firms). And for many advisors, referring clients out to specific banks can feel like a double-edged sword, since many of those banks have their own wealth management arms that the advisor might ultimately find themselves competing with for any clients they refer.

And yet, advisors of high-net-worth clients can add a lot of value by finding good yields on cash accounts and connecting clients with lenders for uniquely structured loans, which means there has long been demand among advisors for access to banking solutions that they can make available to their clients, without needing to deal directly with a bank.

Which makes it notable that in December Sandbox Wealth, a self-described "turnkey banking solution" for advisory firms and other non-bank institutions, announced a $1.25 million pre-seed fundraising round.

Sandbox piggybacks off of the CFPB's recently finalized Open Banking Rule requiring banks to update their technology and data-sharing practices to allow consumers to access their data via authorized third-party platforms, which allows platforms like Sandbox to serve as a client-facing overlay while offering a multitude of banking and lending services from numerous underlying banks. And while many of Sandbox's products appear to still be in the "visionary" stage (being scheduled to roll out in early 2025 at the earliest) it aims to provide a number of services directed at a high-net-worth clientele, including checking, global payments, Treasurys, and loans structured to provide liquidity against illiquid assets like private equity investments, art, and classic cars.

The other feature being developed by Sandbox is an analytics layer that effectively serves as a portal for clients to view their banking products and comprehend their overall financial situation. The caveat here, however, is that while client portals can be useful tools (especially for high-net-worth clients with many nonstandard assets spread across numerous locations), advisors working with the types of clients who would be using Sandbox are likely to already have a client portal, either as a standalone family office portal like Strad or as part of a more comprehensive platform like Addepar.

In effect, then, Sandbox is selling two different types of technology: A marketplace (to connect advisory clients with banking solutions), and a "pure" software tool in the form of its analytics function. Which could create some challenges with selling advisors on Sandbox as a whole, because while there may be plenty of demand for banking services to offer clients (since few such services exist to begin with), advisors might not be as keen to switch to a new client portal, which can entail a significant investment in time to move client data and reset integrations. Many advisors would likely prefer to use a platform like Sandbox solely for the banking products it makes available, but would rather have the data from those solutions sent into the portal that they already use. It remains to be seen whether those advisors would be able to do so without using Sandbox's own portal, but if so it would ensure that advisors who are interested in using Sandbox solely as a marketplace would be able to do so without also being forced into buying a "pure" software solution that they might not want or need.

Ultimately, then, the question for Sandbox and other technology-supported service and marketplace providers is whether adding more "pure" software features like Sandbox's analytics tool will prove to be a selling point, or whether it causes them to inadvertently compete in segments of the marketplace (e.g., client portals) that they don't mean to. Still, given the growing demand for banking solutions among advisors of high-net worth clients, there's plenty of opportunity for success for providers like Sandbox, particularly if the implementation of the Open Banking Rule goes forward and banking data becomes more free-flowing in the years ahead, and as long as they can make it clear where their value lies as a provider of in-demand banking solutions for advisory clients!

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In the meantime, we've rolled out a beta version of our new AdvisorTech Directory, along with making updates to the latest version of our Financial AdvisorTech Solutions Map (produced in collaboration with Craig Iskowitz of Ezra Group)!

So what do you think? Will a unified portal like Summit Wealth help tie together the multiple solutions under the Orion umbrella? Does offering a tax-focused investment management tool in LifeYield make SEI worth more consideration as a custodian? Are banking services the next big way for financial advisors to deepen their client relationships? Let us know your thoughts by sharing in the comments below!