A prominent mobile banking and payments entrepreneur has joined the number of investors betting on digital wealth management, putting $2 million into an online technology startup aiming to power institutional robo platforms.

San Francisco-based Trizic had already raised $1 million from private investors when it inked its deal with Drew Sievers, former CEO of mobile banking company mFoundry and the founder and managing partner of Silicon Valley venture capital firm Operative Capital.

Sievers says that the digital wealth advisory space is following the same trajectory as online and mobile banking, and he believes Trizic’s model is well-positioned to bring change to an industry ripe for innovation.

“Digital wealth management is one of the key drivers, along with heavy fee compression, changing the way people will invest their hard-earned money,” Sievers says.

Industry analysts say the startup’s strategy of focusing on institutions potentially gives them access to a wider base of assets, and prevents them from being perceived as a threat by traditional firms.

"The digital wealth management space is starting to go mainstream," says Brad Matthews, founder and CEO of Trizic. "It will be table stakes in one year."

Trizic's main offering is its Accelerator, a digital platform tailored for broker-dealers, asset managers, banks, credit unions, trust companies and independent wealth management firms.

"We’re a white-label service provider offering a technology engine that powers a digital advisory solution, so a company could implement it without anyone knowing that it’s outsourced or powered by a third-party firm like ours," Matthews says.

In addition to a customizable client-facing front-end user interface, Accelerator offers a back-end console for advisors that automates online account opening, portfolio management, securities trading, rebalancing, compliance reporting and client billing.

The platform accommodates a range of investment products such as ETFs, mutual funds and equities. Firms can also use it to create, update and assign model portfolios that reflect each client’s unique investment strategy.

Trizic is focused on winning business from financial services firms and RIAs, unlike direct-to-investor robo advisors that also have an institutional or advisor platform. Trizic is strictly a technology vendor, as it does not offer a direct-to-investor platform and it is not a broker-dealer or an investment sub-advisor.

The firm claims to have current agreements with more than 30 wealth advisory firms to implement Trizic Accelerator. "While this has obvious appeal for RIAs, it’s not just for RIAs," Matthews adds.


Digital wealth management assets are expected to grow to between $55 billion and $60 billion by the end of 2015, up from $16 billion at the end of 2014, according to Aite Group.

That market growth is where Trizic and its investor see opportunities.

"The technology adoption curve starts with innovators, and we the industry are still in the process of crossing that chasm between early-adopters and mass adoption," Matthews says. "Robo advisors are the innovators in wealth management, and now it’s the large players that are really going to bring this to the wider market.

"They are crossing the chasm today," he says. "They can go to market quickly and cost effectively using our technology platform and launch a [robo-advisory] solution that is completely unique to their firm – they don’t have to play catch up.

"The conversation has changed [at many large financial institutions] from, ‘What is this?’ or ‘Should we do this?’ It has shifted to, ‘How do we do this quickly and cost-effectively?’ and that’s where we have a big advantage."

Sievers sees crossover appeal for a platform like Accelerator beyond wealth management firms, he adds.

"Community banks have over a trillion dollars in deposits that are a constant flight risk," Sievers says. "With a company like Trizic quietly providing the technology behind the scenes, community banks can retain the value of their deposits by offering their customers an easy way to invest and grow their savings."


Trizic does face competition as more firms enter the digital wealth management race.

Fidelity Investments’ recent acquisition, eMoney Advisor, has a similar offering. Vanguard and Schwab have rolled out their own digital offerings. Envestnet beefed up with recently acquired tech firms Upside and Finance Logix.

There are also a range of other startups targeting RIAs and other financial institutions, some with significant momentum, including Betterment Institutional, Motif Advisor and Jemstep Advisor Pro.

"Ultimately when we look at the market, many assets are sitting at these traditional brokerage firms, although there are untapped assets not invested through advisors," says Alois Pirker, research director of wealth management at Aite Group.

"Business-to-consumer robo advisors are growing fast, but from a small base – from the perspective of the wealth management industry, $2 billion in AUM is next to nothing – so B-to-C players have started to go institutional.

"If you manage to get into the established wealth management space, even if you get a fraction of that business, you’re going to get a lot more than $2 billion, and  it has the potential to grow very quickly," he says. "It makes sense that Trizic didn’t bother with the B-to-C space and went directly to institutional business model."

While the approach makes sense, it is far from a guarantee of success. Many traditional firms by nature are set in their ways, and would need awareness of newer alternatives such as Trizic. They would also need compelling reasons to change service providers or launch a robo advisory platform for the first time.

"A challenge is that many wealth management firms with a built-up SMA platform may be working with, say, Envestnet and may not be keen to engage another service provider to put a digital front end on their existing infrastructure," Pirker says. "Some firms don’t mind building up another silo but they want to own the investment management proposition, since they feel that building portfolios is their unique selling proposition.

"Many of the robo firms may have a hard time getting adoption, because they’re basically asking advisors to refer business to a startup that probably has fewer people and less experience building portfolios compared to traditional firms with experience portfolio managers and research capabilities," he says.

"Trizic was smart to go institutional, and it is better positioned than Betterment Institutional and the like because it’s flexible and isn’t viewed as a potential competitor, but Envestnet’s Finance Logix is more of the type of technology enabler that many traditional firms are looking for."


It comes down to who owns the customer, and financial services companies that decide to launch a robo advisor will want to hire service providers who will step aside and allow them to do so. That holds true whether it’s a broker-dealer, asset manager, bank, credit union, trust company or independent wealth management firm debuting a digital platform.

"It’s all about helping advisors in collaborating and planning with clients … where they offer advisor-branded portals for clients," says Mike Cogburn, senior consultant at kasina. "These portals show assets held outside of advisor accounts and also have neat features such as screen-sharing, where clients can see the advisor’s view – and vice versa – for virtual meetings."

They include Morningstar research as part of a subscription as well, although most advisors already have that. The differentiating factors for such platforms are a smooth, intuitive user experience and automation of functions that advisors previously had to do manually.

"Giving advisors control by creating model portfolios and, in essence, scaling and putting investment strategies on auto-pilot is an edge – especially for those advisors that are hybrids between the lower level service of a robo advisor, which direct consumers are latching onto, and the traditional full-service wealth managers that higher-net-worth individuals are willing to pay a premium for," Cogburn says.

"For these types of advisors it seems like less of a threat to, and more of a partnership, with Trizic’s approach," he says.

"Part of their value proposition to advisors is around making their lives easier – by freeing up time from administrative items, allowing them to do more of the things that they are best at: putting an investment plan together, in this case setting parameters and putting the trading on auto-pilot, and growing their business and client relationships."

Will having some sort of robo-advisory or digital wealth management offering eventually shift from becoming the exception to the rule or a nice-to-have to a must-have for independent broker-dealers and registered investment advisors?

"It depends on the clients that those advisors are each targeting," Cogburn says.

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