According to InvestmentNews, several fintech startups are buying books of business and hoping that "an advanced in-house tech stack is enough to lure financial advisers, and their clients, away from more established wealth managers."
A recent study found that 63 percent of wealth platforms show significant digital capability gaps in comparison to investor expectations. The study also showed that only 37 percent of investors give their platforms top scores for the digital experience. Fintech startups are working to solve the technology problem.
For example, Savvy, a fintech startup, intends to acquire existing RIA firms and wealth managers and then pair them with proprietary software that advisors and clients can use to manage their finances. The company also has begun to recruit wirehouse breakaways.
Similarly, Farther Finance is hiring advisors from RIAs to work for their company as employee advisors. Farther Finance is fee-only and provides advisors with proprietary technology, also built in-house, to manage clients' investments. The startup employs 20 advisors and serves wealthy professionals.
Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.
