Another partnership was struck in the adviser fintech space, this time between two digital-first firms launched by former financial planners.

Digital platform provider Oranj announced its acquisition of TradeWarrior Software, a developer of portfolio rebalancing and account management tools. Terms of the deal were not disclosed.

Oranj CEO David Lyon and TradeWarrior President Damon Deru say the deal was a culmination of a year-long discussion about serving advisers, and an acknowledgment that custodians such as Schwab and TD Ameritrade are expanding their own platform offerings to RIAs.

Oranj serves nearly 500 firms, representing 1800 advisers, while TradeWarrior counts 150 firms representing 450 advisers as clients, the firm heads say.

Oranj CEO David Lyon says his platform currently serves 1800 advisers.
Oranj CEO David Lyon says his platform currently serves 1800 advisers.

Lyon says his firm wasn't actively looking to acquire a company, but wanted to capitalize on a renewed focus on account rebalancing and increased competition for advisers from hybrid robo platforms.

"While the market is still trying to sift through the noise created by robo advisers and other tech providers, trading and rebalancing functions can provide traditional adviser the benefit of scaling without having to change their business," Lyon says.

Advisers need to implement more technology to automate back office functions, Lyons says, but adds he sees a wide gap between demand and adoption of digital tools.

Deru chalks it up to education and hesitancy on the part of advisers, noting that rebalancing software is relatively new in comparison to accounting and CRM tools.

"It still baffles us when we come across multi-billion dollar RIA firms using Excel for their trading," Deru says. "It's mind boggling."

Another factor, Deru says, is that many advisers start out with rebalancing tools in custodian packages. "They are often missing a lot of customization; you're not able to perform tax efficiency, and you can't do true household rebalancing."

Lyon acknowledged the increasing number of tech options available in the tech market.

"Advisers are trying to understand the differences between tech providers," he says.
"Advisers are more educated now about the front office opportunities they have."

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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.