Wealth management fintech Oranj is slated to close by year end, a company spokesperson confirmed to InvestmentNews Wednesday morning.
The Chicago-based technology platform has notified its adviser clients that it is currently winding down operations with a transition plan for Oranj clients in place, the spokesperson said, declining to comment on reasons behind the closure.
Oranj CEO David Lyon declined to comment.
Oranj offers a myriad of adviser tech products including its Advisor Dashboard, client portal, portfolio management, rebalancing and trading and its most popular model marketplace. Just last month, the platform added a new reporting feature to its list of offerings for advisers.
The fintech touts free to low-cost wealth management tools that have attracted smaller RIA’s eager to access its technology at zero cost. In 2017, Oranj bought TradeWarrior rebalancing specifically to support this business model.
However, offering a free platform to advisers is likely why Oranj is closing up shop, according to William Trout, director of wealth management at Javelin Strategy & Research. “Oranj eventually ran out of oxygen … no way to scale fast enough,” Trout said.
Other industry experts took to Twitter when the news was first reported by Financial Planning. Tax planning expert Jeffrey Levine commented on the fact that many advisers now only have six weeks to make the transition.
"In normal times, making the shift to new rebalancing software in that short a span would be tough... But on top of year-end planning? And [with] holidays? During a pandemic?" Levine wrote.
Oranj’s business model uses its software platform to distribute models from asset managers. Those asset managers sometimes pay to have their models included on such platforms. Financial planning expert Michael Kitces wrote in a June 2019 InvestmentNews column that the compensation models behind the marketplaces may jeopardize the quality of the investments.
“The caveat, though, is that when model marketplaces are driven by the economics of asset managers, the resulting models are not necessarily objective,” Kitces said.
Lyon, a former financial adviser himself, said asset managers on the Oranj platform all pay similar prices to be included, and that advisers are also able to access the model marketplace free of charge. “The larger asset managers do not pay more than the smaller asset managers,” Lyon said of the platform. “Oranj has leveled the playing field by providing a diversified set of asset managers for advisors to choose from.”
Oranj was founded by Lyon in 2014.
Federal prosecutors say the scheme used fake investment accounts and a fictitious financial advisor to lure victims into romance-fueled fraud.
Morgan Stanley sought to claw back recruiting bonus money from Darryl Cohen.
Referrals from centers of influence may open the door, but the real key to success for advisors comes from clarity about their ideal clients and where they want to show up.
Three advisor groups overseeing more than $700M in combined client assets head to new firms.
New research finds most Americans fear a US retirement crisis, while skepticism grows toward AI financial advice and crypto in retirement plans.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
