Practice Management

Orion Advisor Services acquires Advizr financial planning

The acquisition keeps Orion's TAMP on pace with larger companies like Envestnet

Jul 11, 2019 @ 2:33 pm

By Ryan W. Neal

As Orion Advisor Services continues expanding beyond its origin of portfolio accounting software and towards a full adviser technology hub, the company has acquired financial planning company Advizr.

Beginning next month, advisers using Orion will be able to use Advizr's financial planning technology for no additional fee. In November, the Orion plans to have Advizr fully integrated into the FTJ Fundchoice turnkey asset management platform (TAMP) that it acquired in 2018.

The companies did not disclose specific terms of the deal, but Orion CEO Eric Clarke said it was a "multi-million-dollar investment," all in cash.

Though Orion already integrates with most adviser financial planning software on the market, Mr. Clarke said firms using Orion were only doing financial planning for 30% of their household accounts. Concluding that there must be something wrong with the existing planning process, the company saw an opportunity to bring an option in-house.

(More: Advisers have their sights set on these fintech tools)

"We stepped back and went through a lot of these traditional planning systems. It was about as exciting as getting a root canal," Mr. Clarke said.

Advizr's technology is known for its ability to offer easy-to-digest financial planning that embeds portfolio management into the process. This reputation helped Advizr secure a partnership with SEI Advisor Network in October to help more traditional advisers and brokers dip their toes in financial planning.

"As we looked at different planning options available, we realized quickly that Advizr created a best-in-class experience," Mr. Clarke said.

(More:How 'high beam thinking' can help advisers adapt to a changing future)

Financial planning is quickly becoming table stakes for any company looking to be the central hub of financial advisers' technology. Fidelity kicked off the trend with its acquisition of eMoney Advisor, while Envestnet more recently acquired MoneyGuide.

Meanwhile, the larger companies are playing defense against rising platforms like Orion. Fidelity recently introduced its FMAX managed accounts platform, while Envestnet Tamarac acquired Orion competitor PortfolioCenter.

Mr. Clarke denied the Advizr acquisition was a response to Envestnet MoneyGuide, but he does believes the combination of Orion and Advizr will create a competitive offering in the market.

"We have a long track record of being innovative, disrupting and helping our advisers win more than their fair share and use technology to effectively grow their businesses," he said.

Although Advizr has a fraction of the market share of eMoney or MoneyGuide, it has found a foothold among among newer advisers running smaller, fee-only firms, according to Technology Tools for Today's recent technology survey.

"We are specifically focused on supporting independent, fiduciary advice," Mr. Clarke added. "And as we focus on that market, we realized there are still a lot of things we need to do as technology providers."

Mr. Clarke said he plans to keep both companies open-architecture and existing Advizr clients won't see any disruption to their current service. Because Advizr is built on application programming interfaces (APIs) that share a common code base with Orion, the companies expect a quick, easy transition to a single platform.

Advizr CEO Hussain Zaidi and COO Mustapha Baassiri will join Orion's executive team.

"We were not up for sale, but this was a discussion that we had with Eric where we realized our mission and vision to scale advice to more advisers and to more clients, this was a great way for us to do that," Mr. Zaidi said.

Mr. Clarke, who founded Orion two decades ago, sees an opportunity to use Advizr's technology to improve the digital client experience advisers provide, something leaders across the financial advice industry are working on.

(More:Advice leaders focused on improving the digital client experience)

For example, Mr. Clarke would like to make Orion's client portal to focus more on financial planning and less on investments and performance.

"We were hearing from advisers that they want to have a client experience on par with what Personal Capital is offering, and scalable so they could compete on price points that the Vanguards of the world are offering," Mr. Clarke said.

Two years ago, Advizr expanded beyond the RIA space to target employers looking to offer financial planning as a benefit to employees. Mr. Clarke said the defined contribution space is an area of growth for Orion, and he hopes to provide referrals to financial advisers who use Orion when plan participants want more hands-on help than Advizr provides.


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