Lumiant acquires longevity and health planning fintech Genivity

At the 2017 Envestnet Advisor Summit, Genivity was selected by attendees as the best fintech innovation to come from the Envestnet Yodlee technology incubator, which gave startups access to data, APIs and infrastructure to develop their products. Founder and CEO Heather Holmes joined Blake Wood, then Envestnet’s director of product, on the conference stage to present her company.  

Six years later, with Envestnet’s 2023 summit set to kick off in Denver Wednesday, the two are officially joining together.

Wood, who's now CEO of advisor fintech company Lumiant, which closed a $3.5 million funding round in March to bring its total funding to $9 million, announced a deal to acquire Genivity. Holmes will join Lumiant’s executive leadership team as chief evangelist officer and was appointed to the board as an executive director.

Genivity’s core product is the Health Analysis and Longevity Optimizer, or HALO, which creates a customized longevity model based on a client’s health risks, lifestyle choices and demographics. Instead of relying on averages and actuarial estimates, advisors can use HALO’s models to offer more accurate and personalized projections for health care costs in financial plans, Holmes said.

“Advisors just really do a poor job around addressing client concerns of health risks and costs,” she said. “Health care costs are the number one cause of bankruptcy, but most planning software out there leaves this to blank fields for people to come up with their own assumptions.”  

While the timing of the announcement is coincidental with their first meeting, a more personal story drove the executives’ decision to bring their companies together. After Holmes’ father passed away last year, she experienced firsthand what can happen when advisors focus only on assets and numbers rather than the emotional conversations about a family’s values and wishes.

“It caused a bunch of turmoil and confusion, and it didn’t have to be that way,” Holmes said.

When a mutual customer reintroduced her to Wood, she realized Lumiant’s suite of engagement tools could have helped. “This is exactly what my advisor should have been doing with my mother,” Holmes said.

Lumiant offers client discovery and lead capture tools that advisors use to engage with clients on both financial and nonfinancial goals. For example, the software helped Wood discover that his own mother’s top priority was to avoid being a financial burden to her family, so she saved much more than she needed to in retirement.

“Had she had that conversation with her advisor in the years prior, she could have lived a very different retirement," he said. "It took away some really good years for her.”

While advisors using traditional planning software average less than two goals per household, advisors using Lumiant average 7.6. These can be used with Lumiant’s own financial planning tool or in conjunction with technology like eMoney and MoneyGuide.

“Everybody is offering financial planning. That’s table stakes. That’s not fancy,” Holmes said. “The only thing that makes goals-based planning good is the data and assumptions that are going into it. So many advisors are starting with bad data and bad assumptions. Longevity and health risk are two of the biggest wildcards [in retirement planning].”

Integrating Genivity gives Lumiant what Wood calls the three pillars of financial planning — lifestyle, legacy and longevity — needed to address the often emotional conversations associated with health risks and the cost of care.

While these topics can be difficult for advisors more comfortable with traditional portfolio management, Lumiant's aim is to anchor them in science, Wood said. For example, Genivity’s algorithm was developed by Emily Chang, who completed her doctoral work in theoretical, computational chemistry at Stanford and post-doctoral work in computational genetics at Stanford Medical School, and worked as a health scientist at the consumer genetics company 23andMe.

“Putting these together isn’t a finger-in-the-wind guess, really meaningful research has been done behind this,” Wood said. “It used to be that the smartest advisors could win because they could build the best portfolios. Today, the advisor or the planner who has the highest EQ [emotional intelligence] is the one who wins relationships.”

Lumiant launched in Australia before a $3 million investment from Savant Wealth Management, a Rockford, Illinois-based registered investment advisor with $13.4 billion in assets under management (according to this most recently filed form ADV), helped the fintech moved to the United States in 2022. It’s now used by more than 150 advisors and 7,000 households, and Wood expects business to double by the end of the summer.

Lumiant plans to continue offering HALO to the market as a stand-alone product and to make the product available to customers in Australia and New Zealand.

Terms of the deal were not disclosed.