Riskalyze adds fintech veterans to leadership team with eye on aggressive growth

With Lori Hardwick and Drew DiMarino, Riskalyze wants to expand among enterprise firms and possibly take the company public

Jun 11, 2019 @ 12:55 pm

By Ryan W. Neal

Riskalyze is boosting its leadership with a couple of well-known industry veterans in an effort to grow the technology's presence among larger wealth management firms.

Lori Hardwick, best known for being one of the original partners of Envestnet, will become chairwoman of Riskalyze's board of directors. She's currently a member of the board. Drew DiMarino, a former head of sales for eMoney Advisor, will join Riskalyze as its executive vice president of sales next month.

Although Riskalyze began as a digital client risk assessment tool, the company now offers portfolio analytics, automated trading and a model marketplace. It has grown primarily via one-off deals with individual advisers to date, but the new leadership is meant to bring the entire Riskalyze solution to firms supporting dozens, hundreds or even thousands of advisers, said Aaron Klein, Riskalyze CEO.

"We see a bit of an enterprise shift in our business. We're inundated with the large wealth management enterprises who want to engage with us and help us deliver platform capabilities," Mr. Klein said. "I think that adding these great industry veterans is just going to be a great acceleration."

Ms. Hardwick will remain CEO of Wealth Tech at consulting firm Red Rock Strategic Partners, where her client roster includes the kind of firms Riskalyze would like to work with: broker-dealers, turnkey asset management platforms, custodians and asset managers.

At Envestment, Ms. Hardwick served on the senior leadership team as the company grew rapidly and eventually went public. She then went on to serve as chief operating officer of BNY Mellon Pershing before co-founding technology consultancy firm Advisor Innovation Labs. She is no longer president of Advisor Innovation Labs, but remains on its board.

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As Riskalyze chairwoman, Ms. Hardwick will represent Riskalyze at industry events, coach the senior leadership team on how to engage with large institutional firms, and advise Mr. Klein on the firm's strategy.

Does that include helping Riskalyze through an initial public offering? Ms. Hardwick said she would support whatever direction Mr. Klein would like to go.

"But I can say that ringing the bell on the New York Stock Exchange is still one of the best days of my life, and I would like nothing more than to help Riskalyze get there as well," Ms. Hardwick said.

For Mr. Klein, going public is an option Riskalyze is exploring, but not a certainty.

"We haven't made any decisions about the right capital structure for our firm but, with the kind of growth we've experienced, and the kind of leadership we're bringing aboard, we do think an IPO is on the table," he said in an email to InvestmentNews. "That speaks volumes about the kind of long-term independent partner we're building for the advisers we love to serve."

For now, Ms. Hardwick wants to bring her experience to help Riskalyze meet the unique needs of broker-dealers, such as expanded oversight over advisers using the technology and evidence that the expense is adding to their bottom line. Envestnet grew rapidly because it was good at listening to clients, Ms. Hardwick said, and she wants to ensure this philosophy guides Riskalyze with hiring talent, product development and future acquisitions.

"I do see a very clear path to growing the firm to multiples of where it is today," she said.

Supercharging that effort is where Mr. DiMarino comes in. He was head of sales for eMoney Advisor, guiding the financial planning fintech to rapid growth, both before and after the Fidelity Investments acquisition. He most recently led sales and marketing at Apiture, a cloud platform for banks and credit unions.

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Mr. Klein sought Mr. DiMarino not just for his sales skills, but for his reputation in getting firms to embed technology across the entire firm. For Mr. DiMarino, this involves ongoing coaching to make sure advisers and their clients understand how the tech actually benefits them.

"At the end of the day, consumers need help; they need a coach," Mr. DiMarino said. "I want to help educate the market as a whole."

Despite his eMoney experience, Mr. Klein said Mr. DiMarino's hiring isn't meant to signal a shift toward financial planning for Riskalyze.

"I don't think we have to build everything to be wildly successful," Mr. Klein said, adding that he would rather "make a deep impact" on a few things than "be mediocre at everything."

Even without owning every piece of the technology stack, Mr. Klein believes there is room for Riskalyze to compete in the race to own the financial adviser's digital desktop. As firms like Fidelity and Envestnet build platforms leading with financial planning, Mr. Klein sees Riskalyze providing an alternative platform for advisers who place risk at the heart of client engagement.

"I really think it is the future of advice. If you build a framework for understanding and reacting to risk … you transform fear-bound clients who make bad decisions into fearless investors who make great decisions," Mr. Klein said. "I think advisers have been voting with their feet and we have absolutely been winning more than our fair share of advisers putting risk as the center of their experience."

"That's a trend we're going to double down on."

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