Riskalyze: Much More than a Risk Number

From a humble beginning five years ago, Riskalyze has grown rapidly to become the industry leader among third party risk assessment software (Source: 2017 Software Survey and Analysis from Inside Information, Advisor Perspectives/AP Vewpoint and T3). The firm has prospered to a large degree through its unwavering focus on the client experience. In the case of risk assessment, Riskalyze’s primary innovation was boiling down an investor’s risk tolerance to a single number on a scale of 1-100 that is simple and easy for clients to understand. Initially, Riskalyze combined the risk assessment with a portfolio evaluation and construction tool. The idea was simple: you assess an investor’s risk to arrive at their risk number. Then, you assess the risk number of the investor’s portfolio. Not surprisingly, in the case of prospects, the portfolio is often out of alignment with the investor’s risk number. The advisor then has an opportunity to convert the prospect to a client and construct a portfolio that matches the investor’s risk score.

Since 2012, the scope of the Riskalyze platform has expanded on a regular basis, as have the firm’s ambitions. According to Riskalyze CEO Aaron Klein, the firm’s mission now is to help advisors “empower the world to invest fearlessly.” The core belief here is that when clients are invested in the proper portfolio that aligns with their risk number, they will stay the course during periods of market volatility and they will achieve their long-term goals. Riskalyze can also help investors avoid inertia which can be detrimental to their financial wellbeing. “When advisors aren’t afraid to talk about risk, investors aren’t afraid to make decisions,” says Klein.

Riskalyze Premier

The new Riskalyze Premier level of premium service significantly expands the scope of the Riskalyze platform. It includes six features:

  • A Client Dashboard
  • Digital Account Opening
  • Asset Sync, an account aggregation service
  • Stats data analytics
  • Retirement Plans
  • Data Sharing, allowing multiple employees within a firm to access a client’s Riskalyze data

Each of these features is significant, but, as we shall discuss, the Retirement Plan solution is truly revolutionary.

With the mass proliferation of dashboards across the industry today, one obvious question is: Do we need another dashboard? The answer is: Maybe. If you are a Riskalyze-centric firm that has an ongoing client workflow process built upon the Riskalyze methodology, the client portal is a welcome addition to the Riskalyze suite of products, providing clients with a risk-centric view of their financial situation. Clients can update their risk number, view portfolio balances, monitor progress towards financial goals, and monitor their AutoPilot goals/asset allocations all in one place. For those who are less Riskalyze-centric, the buildout of the Riskalyze portal may still be important, provided that the applicable data can be displayed in another portal of the advisor’s choice through the Riskalyze API.

Digital account opening is what it sounds like: a fully digital client onboarding process with automated form filling. It is currently available through several custodians including TD Ameritrade and Trust Company of America, with more on the way.

Asset Sync, an account aggregation service, allows advisors to provide more holistic advice by applying the Risk Number and asset allocation decisions across all a client’s assets.

Stats provides data analytics to advisors, which can be customized to meet their needs. When analyzing a client portfolio, or a proposed portfolio, advisors can compare asset weights, sector breakdowns, and security level analytics. They can also view a correlation matrix and other analytical tools. The data can be displayed in various chart, graph and table formats.

Data Sharing makes it possible for all the advisors in a firm to share clients and portfolios, while maintaining the firm’s ownership of its critical data and history of client engagement, even when advisors leave.


While all of the above features are impressive, they are evolutionary. Retirement Plans, a service that combines features from Riskalyze and Vestwell, just might be revolutionary. It is a very competitively priced end-to-end retirement solution designed around the Risk Number.   The platform allows an advisor to gather and enter all the relevant plan data, create a cover letter, design a plan, create a plan illustration, and provide the necessary paperwork for the employer to authorize the plan. Plan participants are then notified to log on and enroll.

If the plan offers a default employee contribution rate and a default asset allocation, the employee simply needs to accept the defaults and specify one or more beneficiaries, however, they are encouraged to determine their Risk Number, select a portfolio that aligns with their Risk Number, and create a retirement goal (e.g., withdraw $6,000 per month during retirement). The program will then run a Monte Carlo simulation to arrive at a probability that the goal can be met. If the projected probability of success is too low, the participant can choose to increase savings or make other changes to improve the probability of success. This whole participant exercise is highly intuitive, and it can be completed in a matter of minutes, even on a smartphone.

The pricing is highly competitive. According to Riskalyze, the typical small business plan charges 120-250 bp for the plan fee and advisors typically charge around 50 bp for a total cost of 170-300 bp.  Riskalyze Retirement costs just 65 bp for a far superior experience. Advisors can maintain their margins and provide plans to employers and their employees are a very attractive price point.


Riskalyze has made other improvements to their platform. They have added Scenarios, something Klein calls “the next generation of stress testing.” Advisors can now run a portfolio through any timeline to indicate how the portfolio would have fared under a set of conditions. Riskalyze includes four default scenarios: oil bust, interest rate spike, 2013 bull market and 2008 bear market. Advisors can create and save as many scenarios as they like. While Scenarios does not possess the power of standalone macro-risk tools such as Hidden Levers, some advisors may find the capabilities sufficient for their needs. Furthermore, given the Riskalyze culture of innovation, it is likely that the capabilities of Scenarios will expand over time.

AutoPilot has seen some enhancements as well. They include a new account workflow, that makes onboarding new clients much more seamless, cash management features, and a trading dashboard. They have added new investment options, including American Funds to the platform, and they now support multi-strategy accounts.

While features and functionality are of course important, what really sets Riskalyze apart is their focus on the user experience, for both advisors and the end client. The screens are well designed and the workflows are well thought out. The platform is, from a user experience, among the best in the industry.

If you are an advisor, and you have not looked at Riskalyze lately, you should. If you are an advisor who provides 401(k) plans to employers, you would be doing yourself and your clients a disservice if you did not check out Riskalyze Retirement today.

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. He also hosts other technology summits in partnership with thought leaders in the financial services industry (e.g., Brian Hamburger of MarketCounsel) and his own by-invitation-only fintech summit every summer. In 2020, Bruckenstein will produce for the first time a new one-day intensive called T3 Cyber University. 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. Bruckenstein’s monthly technology columns appeared in Financial Advisor magazine and Financial Planning magazine for many years. In addition, he works in tandem with industry influential Bob Veres, publisher of Inside Information, to produce an annual technology survey for the financial planning community. Bruckenstein accepted the fifth annual Leadership Award bestowed by Bob Veres' Insider's Forum, a conference that brings together the leading figures of the financial planning profession during a main stage presentation at the Insider's Forum held September 6-8, 2017 in Nashville, TN. 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.

Leave a Reply