I pulled the trigger on going RIA in 2019. As part of going RIA, I had to make an entire series of equally significant decisions regarding the tech stack I wanted to construct. After a year of research, due diligence and demos, I thought I had put together the perfect stack. I was wrong.
After a year of researching my tech stack and more than six months implementing it, I soon realized that the tech stack I constructed could not do what I needed. So after tens of thousands of dollars and hundreds of work hours, my team and I had to start from scratch. I am pleased to tell you that our new stack works great, but I certainly wish I could have avoided making the initial missteps. So let me help you.
HOW CAN YOU AVOID THE MISTAKES I MADE? INTEGRATION
In the tech world, integration will not only help you “future-proof” your tech stack. but also help make any tech missteps easier to fix. The reason for this is simple: If all your tech components can easily integrate with multiple other tech providers, then you will never be beholden to one source of tech. If you outgrow one component, you can just swap that out while not having to tear down and rebuild your entire stack. It is a beautiful thing.
I will use my tech stack as an example. Our primary components include Orion, Salesforce, Riskalyze and eMoney. What I feel proves the industry’s commitment to integration is how Orion “plays so well with” our Riskalyze and eMoney – even though Orion has its own competing solutions in both of those categories with HiddenLevers and Orion Planning.
“Whenever I talk to advisers, the No. 1 issue they have is integration. They need an elegant client experience, and they need their technology to work together,” said Noreen Beaman, president at Orion. “At Orion, we offer an open-architecture solution for those firms seeking a mix and match solution with leading vendors, so at a minimum data integration is our priority and a requirement for us.”
I will say that I test-drove both HiddenLevers and Orion Planning and found that they were both excellent solutions. However, our entire team already had years of “muscle memory” with our current providers, so we opted to keep them. The good news is that Orion was able to integrate well with what we already had, which meant I did not have to start from scratch again.
HOW TO DETERMINE WHO PLAYS WELL WITH WHOM?
The short answer here is that you’ll want to spend a lot of time talking not only with vendors but more importantly, with other RIAs. I have found that the people in this space are always willing to share ideas about what has and hasn’t been working. The ideal would be to find an RIA that has a tech stack like the one you’d like to build, then just ask them about it. More often than not, they’ll be glad to share with you the good, bad and the ugly about their lineup.
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“Good integrations can save advisers a lot of time, but it is incumbent on the tech providers to really deepen and strengthen those integrations to help drive better workflows and richer data between systems,” said Aaron Klein, co-founder and CEO of Riskalyze.
HOW LONG WILL ALL THE TECH PLAYERS KEEP SINGING KUMBAYA?
I believe RIAs will demand that the Kumbaya continues for a long time. The RIA space is made up of people who are first and foremost lovers of independence. If we wanted to be told what can and can’t be in our tech stack, we would have stayed in the broker-dealer world.
“With the recent acquisitions and mergers in the adviser fintech space, some firms are trying to evolve into full ecosystems. But thanks to APIs — on which many fintechs are built — advisers and firms don’t have to choose one or the other. They can choose a fintech that executes on their priority service and add secondary services a la carte using APIs. This helps them customize the experience they want to offer,” said Ed O’Brien, CEO of eMoney.
I agree with Mr. O’Brien
Will some companies strive to deliver one-stop shopping? Yes. Is that OK? Sure, and it may even be the best option for many RIAs out there. But I’m convinced that there will always be enough demand from the “mix and match” crowd to ensure that all the big players continue to play well together in the sandbox.
Please note that the above commentary is not an endorsement for the vendors named.
Chuck Failla is principal at Sovereign Financial Group Inc.
Andrew is half-human, half-gamer. He’s also a science fiction author writing for BleeBot.