Thoughts on the WisdomTree Investment in AdvisorEngine (formerly Vanare)

Today’s announcement of WisdomTree’s investment in AdvisorEngine, and the name change from Vanare to AdvisorEngine, are net positives for a number of reasons.

Let’s start with the name change. The firm’s excellent product has often been overshadowed by confusion surrounding the name. To this day, most people familiar with the firm are not sure how to pronounce Vanare. Secondly Vanare, which from the outset was an advisor platform, merged some time ago with NestEgg, a consumer facing robo. The result was confusion over both the mission and the branding. The firm’s new name, AdvisorEngine, makes it clear to one and all that the firm is focused on providing a digital wealth management technology platform built specifically for advisors that includes an integrated white labeled digital advice (robo) solution that advisors can use with clients and prospects.

AdvisorEngine will continue to offer products that provide advisors with advanced client prospecting tools, online client onboarding, institutional grade analytics, trading, performance reporting and billing. Its technology is distinctive in that it provides these features from an advisor-centric point of view, allowing advisors to deepen their engagement with clients and demonstrate the value of the advisory relationship.

We anticipate that AdvisorEngine will continue to build out and enhance its platform in the coming months now that it has sufficient capital to do so. The performance engine and the billing module are already areas of strength, as are the client onboarding and analytics.  In my discussions with Rich Cancro, AdvisorEngine Founder and Chief Executive Officer, he has consistently indicated his desire to offer the ultimate client experience for both advisors and their end clients, so further investment in the user interface, which is already quite good, seems likely.

STRATEGIC AGREEMENT

I also like the fact that AdvisorEngine has partnered with WisdomTree. Like AdvisorEngine, WisdomTree is an innovative company. It has created a distinct, innovative line of ETF products based upon their own proprietary methodologies (disclosure: the author has invested in one or more WisdomTree ETFs).  The firm has existing relationships with financial services firms of all sizes.

AdvisorEngine has entered into a strategic agreement whereby WisdomTree’s asset allocation models will be made available through AdvisorEngine’s open architecture platform and WisdomTree will actively introduce the platform to its distribution network. Exposure to the WisdomTree worldwide network should greatly enhance AdvisorEngine’s marketing capabilities; and the ability to leverage the AdvisorEngine platform should open up a new distribution channel for WisdomTree.

Bottom line: The AdvisorEngine / WisdomTree combo is one that strategically makes a great deal of sense. The cash infusion as well as WisdomTree’s connections and reputation should open doors for AdvisorEngine. AdvisorEngine’s technology should allow WisdomTree to expand the reach and use of their ETF products. That sounds like a win/win for both firms, as well as for the financial advisory firms that they serve.

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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