RIA launches its own direct-to-consumer planning and robo-advice technology

While firms across the advice industry are turning toward financial planning and digital advice technology to reach new clients and assets, North Capital, a registered investment adviser with $244 million in assets under management (according to its most recent Form ADV), is taking a different approach.

North Capital is rolling out a new direct-to-consumer financial planner and robo-adviser that it built in-house.

The financial planning software, known as evisor.com, is free to use, requiring nothing more than an email address and password. Without committing any assets or even connecting a bank account, users can get a financial review using the same process North Capital takes its traditional clients through. The software will recommend certain actions, such as saving toward an emergency fund or creating an investment account.

North Capital CFO Stephanie Holt said that while there are plenty of options for young and mass-market people to get investment advice, there’s a gap in the market for actual financial plans. Existing free apps do little more than budgeting, while the functionality of something like MoneyGuide or eMoney requires a relationship with an adviser. Evisor is completely user-guided.

(More: MoneyGuide, eMoney battle for financial planning software crown)

“Evisor is a solution to the fact that traditional financial planning is costly and painful,” Ms. Holt said. “Competing products require a lot of user information before you can get in and start looking around. People don’t want to give out Social Security numbers and private information.”

A single person with a relatively simple financial situation can complete a plan on evisor in about five minutes, while a more complicated plan shouldn’t take longer than 10 minutes, she said.

Sara Borazan, North Capital’s director of business development, added that the financial planning will do more than just recommend a brokage account.

“We recognize that a lot of millennials have debt,” said Ms. Borazan, adding that it’s an area of evisor the firm wants to further develop. “It’s not just, ‘Hey, you should be saving for retirement,’ but baby, actionable steps you can do between now and then.”

Investors can implement the strategy by opening an account with the robo-adviser for a 25-basis-point management fee, and they can access a human adviser for an additional fee. The robo-adviser has no asset minimum.

Assets on evisor are custodied with Charles Schwab via Institutional Intelligent Portfolios, but North Capital founder Jim Dowd says everything used by the clients was developed by North Capital’s own technology team. Schwab’s IIP does provide some of the back-end functionality, such as rebalancing and connecting with the custodian platform.

(More: Next-gen portfolio management tool from Schwab is now live)

While user growth at many of the direct-to-consumer robos reportedly has slowed, North Capital believes evisor’s financial planning capabilities will resonate with young professionals and the so-called HENRY (high earning, not rich yet) crowd. North Capital also plans to offer evisor as part of its 401(k) business for small businesses as benefit for employees, and eventually license evisor to other RIAs as a low-cost alternative to other tools on the market.

While certain clients could eventually move into a more traditional relationship with North Capital’s RIA, Ms. Borazan said evisor is intended primarily as a stand-alone product.

The adviser fintech field is filled with companies that began as a firm’s in-house solution, but don’t expect RIAs to abandon B2B technology en masse in favor of building their own tools.

Few firms have the resources and wherewithal to develop and maintain software, said Dave Miller, CEO at Portfolio Pathway. Buying a product off the shelf usually makes more sense for firms looking to embrace modern digital advice.

Financial planning is also an especially difficult path to forge, said Lex Sokolin, global fintech strategy director at Autonomous Research. North Capital has long been a tech-forward firm, working in both the equity crowdfunding and blockchain spaces, but it’s hard to make financial plans that resonate with consumers, Mr. Sokolin said.

“If it is a prospecting tool, then the numbers are all very light and high level. They are often an order of magnitude wrong as a result,” Mr. Sokolin said. “If it is a workflow tool or an actual calculator, then the interface is almost impossible to simplify.”

North Capital also faces competition from the Silicon Valley startups increasingly investing in financial planning to expand their functionality.

“Wealthfront, I think, has done a nice design job of wrapping financial planning in more relatable terms than just the math,” Mr. Sokolin said.