Riskalyze is deepening its data integration with financial planning software RightCapital, but an acquisition isn’t on the horizon, the company says.
While the companies have had a basic integration for a number of years, now advisors can access all of Riskalyze’s model portfolios and “Risk Numbers,” which quantifies a client’s risk tolerance, from within RightCapital, and import position-level account data directly into a financial plan.
The enhanced integration with RightCapital is the second such project after Riskalyze
“We pretend, for a moment, that these two products were owned by the same company. What would we do to try to make them work together?” Klein says.
Which begs the question — why not bring the fintechs under one corporate umbrella? Redtail CEO Brian McLaughlin is
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Acquisitions just are not in Riskalyze’s plans, Klein says.
“We found our success being very, very focused, and we’ve always said we want to do a small number of things really, really well,” he says. “There’s nothing wrong with M&A and bringing companies together, but I really believe there’s a lot of innovation going on inside small companies in fintech.”
However, Riskalyze hasn’t been shy about its plans to expand beyond risk assessment. Since launching in 2011, the Auburn, California-based fintech has added automated trading, rebalancing and a marketplace of model portfolios and investment research.
It could be that Riskalyze just doesn’t have the funding to acquire any financial planning software that it chooses, suggests Chip Roame, managing partner of consulting firm Tiburon Strategic Advisors. While the private company doesn’t disclose its balance sheet, it’s likely Riskalyze doesn’t have the revenue of Fidelity, which
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However, there were affordable options on the market.
Another possibility is Riskalyze doesn’t want to create a competitive situation with the financial planning software with which it integrates by owning one itself, Roame says in an email.
“Given that eMoney and [MoneyGuide] have such big market shares, it is highly likely that Riskalyze shares more clients with each of them than any other financial planning software,” Roame says.
Or maybe the remaining technologies on the market simply aren't strong enough to purchase.
“I think RightCapital is well respected, so I do intend that comment to be directed at [them], but maybe RightCapital was not for sale, and other choices were weaker,” Roame says.
For his part, Klein did not rule that Riskalyze could become an acquirer in the future. There just are no explicit plans to do so, he says.
RightCapital declined to comment on any plans to merge or be acquired.
"Right now, the way we are currently handling things is the most effective approach to ensure we are offering our clients access to leading financial technologies and providing the best customer experience possible," says RightCapital CEO Shuang Chen in an email.
