AdvisorEngine Acquires Junxure: Combination Looks Promising for Advisors

AdvisorEngine Acquires Junxure: Combination Looks Promising for Advisors

Junxure, one of the best-known names in advisor CRM, has been acquired by AdvisorEngine. Junxure CRM is the industry’s most awarded CRM product with a 98% client satisfaction rating across 12,000 users managing over $600 billion in assets. AdvisorEngine is an innovative technology firm that develops and markets an open architecture digital platform for financial advisors. AdvisorEngine’s wealth management technology platform applies smart automation to mission-critical advisor activities, allowing firms to scale, improve efficiencies and provide a better end-client experience. The company delivers a unified experience across three core groups: client, advisor and business management personnel.

As part of the acquisition, WisdomTree—the global ETF sponsor driven by research and technology, and AdvisorEngine’s largest strategic shareholder—is loaning $30 million of capital to AdvisorEngine. A portion of the proceeds will be used to fund the acquisition. The remainder of the capital will be invested in the further development of the AdvisorEngine/Junxure product line and the staff necessary to support the technology.

Greg Friedman, Junxure’s long-serving President, will remain with AdvisorEngine as a strategic advisor. He will also continue to represent the firm at industry events. Junxure staff have also been retained.

HOW THE MARRIAGE WILL BENEFIT ADVISORS

The acquisition further enhances AdvisorEngine’s open-architecture ecosystem, continuing the company’s approach of connecting disparate technologies to provide a unified user experience across business management personnel, financial advisors and end-clients. Over the next 18 months, AdvisorEngine will invest heavily in CRM-related initiatives, committing significant capital to further enhance Junxure functionality and integrate more deeply with other leading CRM providers. Junxure users of Cloud and desktop products will see no changes in service, and will continue to be supported by their dedicated Junxure client success team.

“The next frontier of innovation within financial services is happening at the intersection of personal relationships, behavioral science and automation – which makes native CRM functionality especially powerful,” said Rich Cancro, AdvisorEngine Founder and CEO. “I am thrilled for AdvisorEngine and Junxure to come together.”

“The goal of AdvisorEngine is to deliver an amazing client experience, an amazing advisor experience, and an amazing experience for the advisor’s staff,” Cancro added. “The acquisition of Junxure accelerates our ability to achieve that goal.”

INITIAL TAKE ON THE ACQUISITION

Acquisitions within our industry have a decidedly mixed success rate, but there are indications that this one could be a big winner. Unlike some other industry combinations that seem primarily focused on consolidation and cost cutting, this one appears to be a story of synergies and growth. The synergies are rooted in the strengths and weaknesses of each of the firms.

STRENGTHS GO HAND-IN-GLOVE

Junxure has a long history of outstanding service and a laser focus on the needs of advisors, but they were slow to develop a cloud product, perhaps in part due to capital constraints. Two-thirds of Junxure’s current employees are devoted to client service while one-third of Junxure’s staff has been focused on product development. On the other hand, AdvisorEngine has always had a strong focus on product development. Two-thirds of AdvisorEngine’s current staff is devoted to developing innovative technology solutions for their clients while one-third of AdvisorEngine’s resources have – until now – been focused on client service. The combination of these two firms will likely result in the best of both worlds for advisors.

In an interview with T3, Friedman made it clear that one impetus for the sale was that Junxure would now have the capital and the developers to accelerate product development and deliver an even better value proposition for current Junxure users.

SYNERGIZES ABOUND

There are several synergies that can deliver value to current Junxure users in the near term: The first is client onboarding. “Client onboarding is the biggest challenge facing every advisor that I talk to,” Friedman said. “AdvisorEngine provides the best digital onboarding experience available to advisors today,” Cancro added.

The end-client portal is another potential early win for the combined firm. Junxure’s original ClientView portal is dated. Rather than build their own updated version, Junxure partnered with a third-party to deliver a white-labeled version of the third-party offering. Junxure advisors will soon have access to the new, state-of-the-art portal developed by AdvisorEngine. This will allow AdvisorEngine/Junxure more control over the future development roadmap, and ensure deep integration between the CRM and the rest of the AdvisorEngine ecosystem in the long run.

Yet another area of opportunity is marketing and prospecting. WealthMinder, an AdvisorEngine owned firm, matches prospects with advisors. It also serves as a data collection tool and an alerting system to help advisors stay on track. Kredible, another AdvisorEngine property, provides research-based insights to help optimize your online presence – so that you can generate more new prospects and increase your close rate on referrals. The potential of integrating the power and data collected by these two applications with Junxure CRM should be obvious. This combination is sure to energize the prospecting results for current Junxure and AdvisorEngine users.

Both Cancro and Friedman also foresee leveraging existing Junxure user groups in new ways. They plan to engage with these user groups to provide best practices and other advice to generate additional ROI from the platform. They will also gather feedback on advisor needs that will guide future product development.

POSSIBLE RISKS AND CONCERNS

Any time there is a change in ownership at firm such as Junxure, there are always risks. When a very large firm gobbles up a smaller one, the culture of the smaller firm is always at risk. In this case, I really don’t think there is much risk as AdvisorEngine is still relatively small and innovative itself. There is always a chance of a culture clash, but here, it appears at least that the two are truly complimentary.

When a firm such as AdvisorEngine buys a CRM firm like Junxure, some may be concerned that the acquiring firm will pull back from its open architecture roots. Cancro said several times in his conversation with me that AdvisorEngine is fully committed to remaining open. It seems obvious that his firm with try to make the Junxure offer overwhelmingly attractive and thus tempt AdvisorEngine clients to use Junxure CRM, by but that’s a net win for advisors, so let’s hope they succeed.

The one remaining question is will Junxure’s existing integration partners and potential new ones still be as enthusiastic about integration and collaborating with Junxure as they have been in the past? I don’t see any immediate danger signs regarding the vast majority of firms working with AdvisorEngine and Junxure, but there will no doubt be a few outliers.

Although it is always a challenge to anticipate how these acquisitions will work out, I have a good feeling about this one. I’ve known both Friedman and Cancro for years, and they both share a very similar vision regarding the future of advisor tech in general, and what needs to be done to take Junxure CRM to the next level in particular. Both are excited and energized about this deal.

To stay competitive over the next several years, Junxure CRM will need to invest more in development and grow their user base. AdvisorEngine has the money, the developers and the vision to make that happen. To me, the potential benefits to advisors far outweigh the risks.

Joel Bruckenstein
Joel Bruckenstein
Joel P. Bruckenstein, CFP®, is Publisher of the T3 Tech Hub (formerly the T3 newsletter) and the producer of the Technology Tools for Today (T3) Advisor Conference, the only annual technology conference for independent advisors, as well as the Technology Tools for Today (T3) Enterprise Conference. Bruckenstein is an internationally acclaimed expert on applied technology as it relates to the financial service industry. He is the co-author of three books: Virtual Office Tools for a High Margin Practice, Tools and Techniques of Practice Management, and Technology Tools for Today’s High Margin Practice. Joel’s monthly technology columns appear in Financial Advisor magazine and Financial Planning magazine. In addition, he compiles the annual technology survey for Financial Planning magazine. Bruckenstein has for more than twenty years advised financial service firms of all sizes on improving their technologies, processes and workflows. For more information about Joel Bruckenstein and the services his firm offers, please visit www.JoelBruckenstein.com

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