AdvisorEngine: An Integrated Wealth Management Platform

Although we’ve been following developments at AdvisorEngine for a while now, this is the first time T3 has devoted an article exclusively to the firm. That’s partially because the firm has been evolving so rapidly that it was difficult to get an accurate read on it until now.

The firm began taking shape a few years ago when Vanare, a company developing a digital platform for the advisor market, acquired NestEgg, a robo-advisor firm initially focused on the direct-to-consumer model. NestEgg subsequently abandoned their efforts in the consumer space to develop digital platforms for RIAs.

In November 2016, Vanare received a substantial investment from WisdomTree, the asset manager with approximately $45 billion in assets under management, and rebranded from Vanare to AdvisorEngine.

AdvisorEngine is singularly focused on the advisor marketplace. It offers both the tools that traditional advisory firms need, as well as the type of modern client portal and related capabilities that firms need to compete with direct-to-consumer digital offerings. In addition, it is an open architecture platform, including open API’s. It is also highly scalable; its robust compliance and previsioning controls make it suitable for firms of all sizes.

NOTEWORTHY ACQUISITIONS IN 2017

So far in 2017, AdvisorEngine has made two important acquisitions: Kredible, a technology-enabled research-driven management firm that helps advisors acquire new clients; and Wealthminder, a web-based product known for goals-based financial planning and account aggregation. Both acquisitions are interesting, and both have been incorporated into the AdvisorEngine platform.

Briefly, Kredible assigns each advisor a social media score based upon their prominence on various social media platforms (blogs, LinkedIn, Twitter, Facebook, etc.). It then provides coaching on how to improve one’s score. Advisors can track their progress over time to develop a more prominent and credible online presence.

Wealthminder is a goal-based financial planning software platform that never was able to gain much of a following from advisors on its own, but its technology and intellectual property has now been enhanced and incorporated into the AdvisorEngine platform and adds value to the overall offering.

When AdvisorEngine initially acquired the two firms mentioned above, I saw a great deal of potential. However, because they did not initially function as a single application, I decided to wait a while to see if and how those products would be integrated into the AdvisorEngine platform.

I’m happy to report that the wait is over. I recently had a chance to preview the new, integrated AdvisorEngine user experience, and it looks very promising.

THE NEW ADVISORENGINE PLATFORM

The new AdvisorEngine platform has plenty for advisors to get excited about, but their new client portal is what first drew my attention. As one would expect, it is device agnostic: it can be viewed on a desktop computer, a laptop, as tablet, or a phone. This is accomplished through a fully-responsive web design.

In our industry, and in fact across all industries today, there has been a renewed interest in the client experience. Client expectations regarding technology are increasing at a rapid rate, and clients are engaging with their providers digitally at an unprecedented level. Whether you are selling widgets or financial advice, you need to be able to deliver a great digital client experience.

I’m happy to report that the new AdvisorEngine portal is up to the task.

POWERFUL CLIENT/ADVISOR PORTAL

According to Richard Cancro, CEO of AdvisorEngine: “This is the most powerful advisor portal ever delivered to advisors. It leapfrogs the B2C competition.” While I am not prepared to go quite that far, it is fair to say that it is one of the best client-facing portals that I have seen to date. In addition to the rich digital experience that direct-to-consumer offerings provide, AdvisorEngine supports a goals-based framework.

The look and feel of the portal is much improved. Navigation, on both the client and advisor portal, has been moved from the top to the left side for increased ease of use. The focus on goals is an important one. Increasingly, investment management is becoming commoditized. Furthermore, with markets at historically elevated levels, you don’t want clients focusing on short-term market performance. By engaging the client in a financial planning relationship, savvy financial advisors keep the focus on long-term outcomes rather than short-term market fluctuations.

While AdvisorEngine is not unique in its goals-based approach, the ability for a client to initiate the planning process before they engage with an advisor is commendable. When the client is ready to engage with an advisor, the client’s financial picture is available to them through AdvisorEngine. Yet another advantage of the AdvisorEngine portal is that it enables two-way communication between the advisor and the client, so notifications, and even planning recommendations, can be delivered to the client digitally.

From an advisor portal perspective, AdvisorEngine offers a great deal. It provides digital marketing help through Kredible, proposal generation, digital client onboarding, risk analytics, portfolio construction tools, goals-based financial planning, account aggregation, performance reporting, a document vault, and model portfolios provided by a third-party. It provides a lot of the functionality that advisors I meet with often request, such as a full balance sheet report, account aggregation, and a highly-customizable platform.

SMART “SOLVER ENGINE” AND CONFIGURABLE WORKFLOWS

From a planning perspective, each portfolio is assigned a goal. Multiple goals can be linked to a portfolio when appropriate. Through account aggregation, held-away assets can be included in the planning process. The application includes a “solver engine” that can automatically offer suggestions to help meet goals. It is smart enough, for example, to suggest that you scale back or eliminate a secondary goal if a primary goal cannot initially be achieved. It also allows you to create some typical scenarios and implement them with a client. Scenarios for retirement include: spend less, save more, or retire later.

AdvisorEngine offers modular, configurable prospecting workflows. As mentioned earlier, I favor a goals-based approach, but for those who lead with investment services, an investment-led prospecting workflow is available.

One thing that AdvisorEngine does not offer today is, automated opportunistic, tax-sensitive rebalancing, but this feature can be accessed through third-party integrations. CRM is also accessed through third-party integrations.

DESERVES MORE ATTENTION

I’ve looked at quite a few digital advice platforms for advisors over the last several years, and while many of them have some of the components that AdvisorEngine offers, the sum of AdvisorEngine’s parts are unique. This offering deserves more attention than it has received to date.

More information is available at www.AdvisorEngine.com.

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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