Digital advice platform Oranj has bought a majority stake in Trade Warrior, a portfolio rebalancing software firm, making it the latest technology company to bulk up its capabilities for financial advisers who are hungry for operational efficiencies.
Oranj founder David Lyon said adding the TradeWarrior technology will allow his Chicago-based firm to provide advisers a single system that offers a robo experience for clients integrated with a back-end tool for
portfolio management.
Mr. Lyon considered a less formal partnership with the Layton, Utah,-based Trade Warrior, or another rebalancing company, but he believes the two will be more powerful with their business interests aligned. It's also better for advisers because they will have one service team to deal with, Mr. Lyon said.
Mr. Lyon and TradeWarrior founder Damon Deru met about a year ago at a conference and learned they have similar histories as former advisers turned fintech entrepreneurs. Both men created their specialized tech while working to solve a particular problem at their respective registered investment advisory firms.
"We have a shared vision for what advisers demand today," Mr. Lyon said.
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Many financial advisers are looking for new technologies to improve the advisory experience for clients who are increasingly used to digital engagement, as well as other tools to make their own businesses more efficient.
For his part, Mr. Deru said the merger with Oranj, which has 47 employees, will bring its tax-efficient portfolio management software to a larger network of independent advisers.
The firms did not disclose financial details of the acquisition, which was announced today.
Mr. Deru left the advice business in 2008 after the rebalancing software he developed for First Western Advisors attracted attention from other advice firms that wanted to license it for their businesses. He founded TradeWarrior in 2010 and the firm today has 13 employees and serves 150 RIA firms. Its revenue grew 60% last year, Mr. Deru said.
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The money that Oranj is paying for the business will be invested into the company to add developers and sales staff, "not into our pockets," Mr. Deru said in an interview.
Advisers will still be able to license each of Oranj's technologies separately, as well as bundled, Mr. Lyon said.
