Financial planning software firm RightCapital's market share has tripled since 2020, with 15% of advisors who use the technology choosing its platform, according to a recent
The company's growth comes as industry leaders eMoney Advisor and Envestnet work to maintain their controlling market share. After a respective 11% and 14% increase in market share for Envestnet and eMoney in 2021, the "big two" have lost between 2% and 5% of their respective market shares over the past two years.
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The Kitces market share survey, which differs slightly from the one conducted by T3 and Inside Information, still found RightCapital to be the fastest-growing financial planning software from 2020 to 2022.
"RightCapital has capitalized on its ability to generate a one-page financial plan (the fad of
the moment that could become a trend), and reportedly offers better tax planning than its competitors," according to survey authors Joel Bruckenstein, president of T3 Technology, and Bob Veres, owner of Inside Information.
One-page financial plans have emerged as a controversial new offering from some advisory firms.
Some criticize the plans both for their brevity — leaving little room for context and details — and for overloading clients with too much in too little space.
"Our clients don't care about the number of pages in their financial plan, but they do care about reaching their goals," said William Parrott, founder of Parrott Wealth Management in Austin, Texas. "Our focus is to help clients retire on their terms, not reduce the number of pages in their financial plan."
Still, other advisors say one-page plans are here to stay.
"Clients often have busy schedules and limited time to review lengthy financial plan documents, making it more convenient for them to have concise one-to-two page summary documents," said Sean Lovison, a financial advisor at WJL Financial Advisors in Philadelphia who uses RightCapital. "These summaries provide a quick overview of their financial situation and goals, allowing clients to grasp the key points and engage in meaningful discussions with their financial professionals without getting overwhelmed by excessive information."
RightCapital's Snapshot feature is just one example of what Founder and CEO Shuang Chen calls the firm's "client-centric approach."
"When I started RightCapital, I was like, 'If I'm a consumer, how do I want you to see a financial plan from my financial advisor?'" Chen said. "We're [ensuring] that the application is really designed for the end consumers, customers and clients so they can understand what they're looking at, they can understand the value the financial advisor delivered to them and they can really appreciate . . . the financial planning process with their financial advisors."
RightCapital is popular with "solo firms, teams with less than $250,000 of revenue and practices under four years old," according to the Kitces report. This focus on smaller, younger firms is likely a result of RightCapital's own age, with 2023 marking the company's eighth year in business.
RIAs are historically resistant to switching their financial planning software due to time-intensive data transfers.
While experts do not foresee RightCapital poaching many long-standing users from eMoney or Envestnet, the company's approach leaves them "well positioned for growth if it can continue to capture the bulk of new advisory firms while its high satisfaction ratings and word-of-mouth accolades win harder-to-achieve defections from competitors," according to the Kitces report.
In 2022, RightCapital had 23% of the total market share, Envestnet had 32% and eMoney had 39%, according to the report.
"At eMoney, we view the market holistically and remain focused not only on meeting the needs of independent advisors and larger enterprise clients, but also making sure that our users are highly satisfied," said Rachel Eccles, senior vice president of marketing at eMoney.
Eccles said that T3's survey did not include eMoney Premier, the company's "most robust solution," likely undercounting eMoney's total market share as a result.
A spokesperson from Envestnet said that the company is "working to empower and engage clients and transform how they view their financial future."
"To that end we've expanded our platform's capabilities to address the needs of advisors and their clients by adding new prospecting tools such as the ability for advisors to embed planning features into their website, new MyBlocks functionality and expanded integrations," the spokesperson said.
RightCapital's growing market share is also likely a result of its strategic partnership with the XY Planning Network, which allows members to access the software at a discounted price.
Among CRM software applications,
"Redtail wasn't appealing to me at the old pricing when I could buy Wealthbox discounted for $12 per month," said Ron Strobel, an XYPN member and founder of Retire Sensibly in Meridian, Idaho.
