InvestCloud updates NaviPlan, Goldman completes NextCapital deal
Are there any advisers out there who still think digital advice is just a fad?
The global robo-advice market is expected to reach $41.83 billion by 2030, a compound annual growth rate of 29.7%, according to a new study by Grand View Research.
Smartphones and the increased use of chatbots are expected to increase the use of robo-advice, and “pure robo-advice” – all-digital platforms without human advisors – is expected to grow the fastest, countering the narrative offered by many in the advice industry. Grand View also expects banks to be the fastest growing sector, driven by the increasing digitization of the banking industry.
I recently dove into the growing ecosystem at SoFi, which is doing an impressive job of integrating a wide range of financial services into a single digital offering. That’s the goal many firms strive for, but few, if any, have as compelling a proposition as the San Francisco-based fintech.
Robo-advice isn’t going anywhere, and there’s an appeal to the idea of an algorithm that manages investments without the personal biases or conflicts of interest that people can often bring. The real value of advisors is to offer what computers cannot, and this is where companies should invest in the future.
For your Labor Day weekend reading, here are some other fintech updates from the week.
INVESTCLOUD ROLLS OUT 80 NEW NAVIPLAN FEATURES
Fintech and asset management outsourcing firm InvestCloud announced a significant upgrade to NaviPlan, the financial planning software it acquired in 2021. The new features further integrate NaviPlan into InvestCloud’s digital warehouse, bringing together client financial data in one place and expanding the software’s capabilities across complex planning scenarios.
NaviPlan was one of the earliest players in the digital financial planning game, but lost ground to new players such as eMoney and MoneyGuide. InvestCloud has aggressively expanded its digital offer for advisers, but has not said much about how NaviPlan fits into the plan. It should be reassuring for NaviPlan users to see that the company is putting resources behind the software.
GOLDMAN ACQUIRES NEXTCAPITAL
Goldman Sachs has closed its deal to acquire automated retirement planning software NextCapital, which it first announced in March. The product will be included in Goldman Sachs Asset Management’s multi-asset solutions business, expanding the firm’s presence in the defined benefit pension market.
The purchase is another notable milestone for the investment bank’s progress into the wider wealth management arena. Along with consumer-facing products like Marcus and its partnership with Apple Wallet, NextCapital gives Goldman a digital tool to connect with mass affluent investors. The traditional consultancy industry should follow developments closely.
MARSTONE announces MAP
White-label digital advisory company Marstone has a new product to help financial institutions offer financial planning to investors. Marstone Maps offers financial tips and simulated life scenarios, aggregation of workplace benefits and retained accounts, and a timeline of goals to show investors how they are progressing.
Marstone has worked with large firms such as Interactive Brokers, HSBC Bank USA and most recently, American Century Investment. Companies across the industry are looking to expand their ability to provide financial wellness tools to investors, so a product like Maps helps Marstone become even more valuable to its institutional clients.
COMPLYSCI PARTNERS WITH APEX
Digital custodian Apex Clearing Corp. has a new agreement to provide direct brokerage to financial advisors using compliance fintech ComplySci. The data stream sends brokerage account data files to the compliance system to track, detect and report employee trading.
Apex is best known for working with robo-advisors — for example, it’s the custody and clearing platform behind SoFi — but the company has been working to expand its presence among traditional RIAs. Smaller managers like Apex see an opportunity to win business in the wake of the Schwab-TD merger, and integrations like this increase supply.
VRGL RAISES 15 MILLION
Dallas-based data analytics startup VRGL announced a $15 million Series A funding round led by venture capital firms MissionOG and Fintop Capital. The company hopes to speed up adoption among registered investment advisers.
Dynasty Financial Partners also participated in the fundraising, and a spokesperson told CityWire that the firms plan to integrate the technology with Dynasty’s referral program. That’s a pretty impressive endorsement for a startup, as Dynasty has around 300 advisors on its Dynasty Connect platform.
EQUISOFT LAUNCHES DUE DILIGENCE PRODUCT
Fintech company Equisoft has a new module built to help wealth management firms comply with regulatory requirements to perform due diligence on investment products. Fund Compare automatically compares metrics such as historical performance, volatility, product risk, fees and asset allocation without requiring the adviser to manually enter data about the investments.
The idea of a digital tool to compare investment products is not new, but the automation behind Equisoft’s Fund Compare helps it stand out from the crowd. The company started in Canada and has been working on expanding in the US since it bought Grendel CRM in 2019. We’ll see if this new product is enough to make it into the broker and dealer market.
[More: Riskalyze wants to turn compliance into growth engine with latest product]
