The flow of investor capital to advisor tech is boosting even the smallest firms.

For fledgling financial planning software firm RightCapital, it means $1.6 million in seed funding.

Shuang Chen has quietly built the New Haven, Connecticut-based firm since he left his vice president role at Prudential to launch the startup two years ago.

Chen raised the majority of the seed round from Jersey City, New Jersey-based Camellia Venture Capital.

"This round of funding is vital to our continued rapid growth," Chen says. "It will help us reach more advisors and deliver significant product updates."

(Bloomberg News)
(Bloomberg News)

More than 800 financial advisory firms are using the software, says Chen, who co-founded RightCapital with his younger brother Song Chen, a former vice president at JPMorgan Chase.

A number of software and platform providers targeting RIAs and advisory firms have announced funding or M&A deals this year, including Addepar's $140 million fundraising effort and AdvisorEngine's acquisition of WealthMinder.

"With the success of independent advisors, a corresponding interest in the technology tools these advisors need to manage and scale their growth is happening," says Tim Welsh, head of industry consultancy Nexus Strategy.

"Wirehouses are shrinking, so all of the technology action is focused on the independent space for growth," Welsh adds. "Also, as all of the robos are pivoting towards humans, the disruption they hoped for did not and will not happen. Thus, investments now are towards making humans more productive."

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Suleman Din

Suleman Din

Suleman Din is technology editor of American Banker and Financial Planning. Follow him on Twitter at @sulemandn.