Some big names in the wealth management industry are getting behind a collective of small fintechs.
J.P. Morgan Asset Management, Morningstar and Broadridge have invested $22.3 million in the TIFIN Group, which owns 10 technology companies targeting different aspects of the wealth and asset management industry, such as marketing, investment management or taxes. TIFIN has raised a total of $49.7 million to date,
TIFIN, which stands for “technology and intelligence for finance,” is probably best known for
The wealthtech landscape is increasingly crowded, but TIFIN can grow by providing asset managers an improved product distribution channel, says founder and CEO Vinay Nair. By better aligning asset managers with wealth management firms, advisors improve outcomes for clients and drive more organic growth, Nair says.
Of course, TIFIN isn’t the only company that sees fintech as an opportunity for product distribution. Look no further than Blackrock, which owns the retirement income calculator iRetire, the digital advice engine FutureAdvisor, and a 4.9% equity stake in Envestnet.
The strategy with TIFIN is to offer an à la carte menu of technology companies that advisory firms can select from, Nair says. Rather than building another portfolio accounting system or TAMP, TIFIN’s ultimate goal is “personalized, intelligent matching of investment products to the investors.”
“We think we are complimentary to the current [wealthtech] ecosystem,” Nair says when asked where in the market he envisions competing for business. “There is plenty of market share for us to grow without taking from anyone else at this point.”
TIFIN has potential to influence the future of the asset and wealth management industries, according to a statement from J.P. Morgan Asset Management CEO George Gatch, while Morningstar CEO Kunal Kapoor said the company can help advisors meet rising client demand for personalized experiences.
Though the company is making some noise with investments from major companies in the industry, TIFIN lacks an offering that is core to the advisor’s daily workflows — processes like portfolio management, accounting, reporting or trading, says Tim Welsh, president of consulting firm Nexus Strategy.
“That’s where the action is and where basis points are generated and where transactions are conducted, managed and reported upon; and where the asset managers want to be,” Welsh says in an email. “In the meantime, TIFIN’s core portfolio companies are only one piece of the puzzle, so until they acquire that central workflow component, they’ll just be a collection of client experience tools that anyone can replicate.”
Money from the latest investment round will be used to make additional senior hires, acquire other firms, and launch fintech companies developed internally, Nair says.
