Fintech Bytes: iCapital, Morningstar, RIA in a Box

I don’t know about you, but the news this week made it a bit tough to concentrate on adviser fintech.

The good news is it’s a three-day weekend for many in the U.S. I hope all of InvestmentNews’ readers can spend some quality time with friends and loved ones this Memorial Day. If you’re looking to catch up on the adviser fintech world, check out our coverage of a study showing advisers are getting better at social media; a column on the libertarian world of cryptocurrencies warming up to the idea of regulation; and FPPad founder Bill Winterberg returning to the world of adviser fintech with a new role at AdvicePay.

For some additional coverage in between cookouts and baseball games, here are the rest of the week’s adviser fintech headlines.  

ICAPITAL ACQUIRES FINTECH SPUN OUT OF GOLDMAN SACHS

Alternative investments provider iCapital is using some of the $497 million raised in January to continue its buying spree, this time picking up Simon Markets, a fintech company originally created by Goldman Sachs to help financial advisers with structured investments, annuities and risk-managed products. Simon had more than $48 billion of issuances in 2021, and in July raised $100 million of its own.

Terms of the deal weren’t disclosed, but it’s likely iCapital paid a significant amount for this acquisition just given Simon’s own funding. This is a significant deal that gives iCapital, already a leader in the alts space, a significantly expanded menu of investments. It also provides iCapital with some new technology, notably the allocation analysis and portfolio construction tool Simon Spectrum.

MORNINGSTAR LAUNCHES ANALYTICS LAB

Following the interactive research features it rolled out last year, Morningstar on Tuesday introduced the Analytics Lab, a new capability that allows data scientists and investment analysts to dive into data and discover opportunities. Analytics Lab gives access to the programming platform behind Morningstar’s research and data so coders can create custom workflows within Morningstar’s environment.

This is an interesting example of a company opening its technology to third parties, and it’s also the second example of new investment research and analytics tools in as many weeks. While Fidelity Institutional’s Portfolio Quick Check tool is targeting different users than Morningstar’s Analytics Labs, both are pitched as ways to dive deeper into data to unearth new investment opportunities. It remains to be seen whether this will become a full-on trend, but with the stock market still offering investors a roller coaster ride, it’s likely more firms are looking for ways to help advisers come up with unique portfolio management ideas.

RIA IN A BOX PARTNERS WITH REGULATORY COMPLIANCE FINTECH

To help firms and advisers comply with the Securities and Exchange Commission and the Department of Labor’s PTE 2020-02 rollover requirements, which go into effect July 1, wealth management technology company RIA in a Box has partnered with InvestorCOM, which provides compliance software to the financial services industry. The partnership gives RIAs access to InvestorCOM’s RolloverAnalyzer technology to make sure rollover recommendations fit with a client’s best interest.

As someone who’s currently going through the rollover process and wrote four years ago for InvestmentNews about how ludicrously paper-based the process still is, I am in favor of giving the industry as much technology as possible here. It really shouldn’t be so complicated to transfer my retirement savings from one account to another in a way that doesn’t completely screw me over with fees, taxes and mailing paper checks.

WEALTHCARE PARTNERS WITH PONTERA ON ACCOUNT AGGREGATION

Wealthcare is adding account aggregation from Pontera (formerly known as FeeX) to the financial planning technology on its GDX360 platform for advisers. The partnership gives Wealthcare’s advisers a more complete picture of a client’s financial situation, the company said.

In 2022, it feels odd for a self-described “technology enabled RIA” to tout account aggregation as a new feature. InvestmentNews has been writing bringing all a client’s accounts into a single website for at least 22 years, and it seems as though this technology should be table stakes for most advisory firms at this point. Perhaps it’s just a sign of how truly slowly a lot of the advisory industry still moves when it comes to tech adoption.

Related Topics: iCapital, Morningstar, RIA in a Box