Industry money continues to flow into big data as wealth management realizes its potential. The latest recipient is a startup buoyed by Envestnet's recent multimillion-dollar deal for financial account aggregator Yodlee.

Even before that $660 million deal helped get the word out about Quovo, the two-year-old analytics firm managed to close on $4.75 million in its latest round of funding, says Lowell Putnam, the co-founder and CEO of the New York-based  firm.

Quovo initially expected a smaller round of funding, but investor demand was sparked by the happenings in the data space, Putnam says. "We were oversubscribed all the way through. It was a fantastic result for us."

The firm's latest round attracted investments from names such as Steve Lockshin, founder and former CEO of Convergent and current partner at Betterment Institutional, Ron Carson, Founder and CEO of Carson Wealth, and Marty Bicknell, CEO of Mariner Wealth.

"Advisors need to be better equipped with smarter data and analytics to compete in today’s marketplace and survive in tomorrow’s industry," Lockshin said in a statement. "In the next decade, everything in the wealth advisory industry will be about data.”

The funding will allow the young firm to make some changes, Putnam says, including expanding its workforce and relocating to larger office space in Midtown. "We need to invest in business development so we can spend time growing the business in other ways," adds Putnam, whose great grandfather George Putnam founded Putnam Investments in 1937.

More importantly, he says the firm can continue its work refining its product -- including developing an advisor dashboard for its platform. The firm building what he says is an intuitive interface to view a client's financial health and to deliver data in a form that is practical to use and easily understood.

"Data not easy to work with," Putnam says, noting the big challenge is blending streams of information from multiple sources. "In this industry, raw data itself doesn’t hold insights in it."

The ultimate goal is to take the mass of data set at its disposal and create what Putnam calls a "magic mirror capability."

"It's not just a reflection of what your clients are like," he says. "But you can ask a question and it will give you an answer."


Quovo currently has access to financial accounts from over 10,000 institutions, including banks, credit cards, retirement accounts and mortgages, Putnam says, giving the platform an eye on over $700B in assets. He expects that to reach $1 trillion by end of the year, and the firm's payroll to double to 30 people as well, having already added two operations members and two technology hires.

"I've been pleasantly surprised by the Wall Street professionals willing to take a leap of faith and a pay cut to join a startup," Putnam says.

The Envestnet deal naturally stirred interest in Quovo, Putnam acknowledges, billing his company as the only independent data aggregator in the market.

But Putnam's desire to maintain autonomy extends even to funding partnerships -- money was available from bigger wealth management firms, he says, but turned it down because "we didn’t want to lock ourselves into a monogamous relationship with any of the big guys."

There are two trends that will push further investment into big data capabilities, Putnam predicts, and affect advisors directly.

One is the need for aggregation at the home office level, he says. Tracking multiple advisor accounts will require spending on data architecture. "That's more important than acquiring new FAs or spending on more relationship marketing," he says.

The other is the need for advisors in the future to be able to service clients at multiple levels of wealth, Putnam says, as robos force them to expand their client base.

"Advisors sooner than you think will have clients with negative net worth and seven-figures net worth in same book of business," Putnam says. "The market is heading such a way that you will need to be on top of and command both data sets, and you will need data tools for that diversity."

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