Refinitiv takes next step on quest for the ‘Holy Grail’ of wealth management

Refinitiv is continuing its march into the wealth management industry, combining its market data with recent acquisitions to offer what it calls the “Holy Grail” of advisor technology.

The firm has launched a suite of digital tools for wealth management firms to develop new technology using its data, news and analytics capabilities.

Though Refinitiv is best known for working with banks and institutional investors —the company says it serves 40,000 institutions across 190 countries — the launch of its Digital Investor suite is its latest step towards the realm of retail financial advisors.

Refinitiv partnered with SigFig in October on a white-label robo advisor for its custody and clearing platform. In March, Refinitiv acquired Scivantage, a brokerage technology developer, to boost its advisory and tax management capabilities.

Datasets like Refinitiv’s ESG scores and fund comparisons are “highly relevant” to advisors, making wealth management a natural expansion for the company, says Joe Mrak, Refinitiv’s global head of wealth management. The goal is to make data more relevant to each individual investor, he says.

“We already have a huge base of advisor desktops,” Mrak says. “We are investing heavily to connect the back to the front office and see this as the Holy Grail of wealth management.”

Refinitiv isn’t the only company searching for that elusive chalice. Envestnet’s quest led it to spend $660 million to buy data aggregation firm Yodlee in 2015, while Visa spent nearly $5 billion in January to acquire Plaid.

In May, Plaid launched its own suite of APIs for wealth management firms.

Mrak says Refinitiv’s new offering will stand out, citing the flexibility of its data and the ease in which it can be integrated. However, it faces competition from other data firms with existing ties to the large advisory firms Refinitiv hopes to work with.

Besides Plaid, which acquired Quovo to establish a foothold in wealth management, and Envestnet, there is also MX, a data startup out of Utah, and Akoya, an independent company spun out of Fidelity Investments.

The coronavirus pandemic has highlighted the need to improve digital client capabilities, and firms are re-evaluating decisions to build, buy or partner with new technology. This is creating opportunities for data firms who can facilitate product development.

“The acceleration of the digital learning curve in the wake of the pandemic has increased client expectations for service and portfolio advice,” said Will Trout, head of wealth management at research firm Celent, in a statement at the time. “Investment in workflow, analytics, trading and other lifecycle technology can help invigorate the client-advisor relationship and break tradeoffs between customization and scale.”