Practice Management

Michael Kitces, Alan Moore to sell payment tool for hybrid advisers

New version of AdvicePay focused on businesses with large number of advisers

Jan 23, 2019 @ 4:18 pm

By Ryan W. Neal

Alan Moore and Michael Kitces are bringing their adviser payment processing tool to hybrid broker-dealers and large registered investment advisers.

Mr. Moore and Mr. Kitces, who also co-founded the XY Planning Network, launched AdvicePay in January 2018 as a compliant tool for fee-based financial planners to bill clients and collect payment through a credit card, bank or brokerage account.

After the first year, 700 advisory firms are using the tool, Mr. Moore said. After introducing a less expensive version of AdvicePay for firms with less than 10 clients, the two are turning their sights on the other side of the adviser market with AdvicePay Enterprise.

The new version of the tool has expanded features, functionality and tools built specifically for firms with a large number of advisers, such independent broker-dealers with a corporate RIA.

"[These firms] have a unique pain point," Mr. Moore said.

(More:XY Planning Network leads charge to help furloughed workers during shutdown)

While solo RIAs can always accept a check from clients, broker-dealers have a complicated workflow between the client, the home office and the financial adviser. For example, the enterprise version of the payment software has a dedicated portal for home offices to centrally manage and control billing, while allowing for some flexibility at the adviser level.

"For an adviser to get paid to do financial planning, it can take 45 to 60 days to see their money," Mr. Moore said. "But a lot of these corporate RIAs attached to broker-dealers are doing a ton of financial planning work. Some are doing several million dollars worth."

The struggle to collect fees is a major obstacle preventing broker-dealers from embracing fee-for-service compensation models, he said. Older advisers may not care about changing their fee structures, but firms interested in hiring younger advisers, they need to be able to support this model.

To build AdvicePay Enterprise, Mr. Moore and Mr. Kitces eschewed traditional venture capital and instead they crowdfunded $2 million from other financial advisers. This allowed the company to focus on building a product that is "for advisers, by advisers," Mr. Moore said.

(More:Want to attract millennial investors? Time to rethink AUM pricing)

The duo turned to Mr. Kitces' "Nerd's Eye View" blog to get the message out and the pair reports it gathered the funds in less than two months.

"We chose the innovative approach of crowdfunding with advisers versus going the traditional venture capital route to ensure that we would be able to stay focused on serving the needs of our core target market of financial advisors," Mr. Kitces said in a statement.


What do you think?

View comments

Most watched


How advisers can be a gamechanger for women investors

Why women defer to men when it comes to finances and how advisers can combat this phenomenon and make a difference for female investors, according to Heather Ettinger, founder and CEO Luma Wealth Advisors.


How the 2020 elections could impact ESG investing

Joseph Keefe, president of Impax Asset Management, on the elections and how advisers can build a bridge to the next generation of clients with ESG investing.

Latest news & opinion

Charles Schwab reportedly in talks to buy USAA brokerage, wealth management business

The deal would net Schwab roughly $100 billion in new assets.

Advisers scramble to help retirees navigate looming Fed rate cut

The Fed's first interest-rate cut in a decade has advisers warning against chasing the bait of risk over safety.

CFP Board to announce possible delay of new fiduciary standard

Organization's CEO confirms meeting with Edward Jones, says broker-dealer still considering how to move forward.

Departure of Alexander Acosta could slow DOL effort to revise fiduciary rule

Acting secretary Patrick Pizzella will have to make political decision to move ahead.

SEC member Peirce to brokers: Talk to us early, often about Reg BI implementation problems

She's willing to advocate for additional compliance time if firms have made a good faith effort.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print