Efforts to help advisors beat back potential competition from robo-advisors continues this year with two recent offerings—one born of a collaboration between Vanare and NestEgg Wealth, and another from social media company Hearsay Social.
Technology platform provider Vanare acquired in late December NestEgg Wealth so the two could offer what they say is the first-ever platform that integrates robo-advisor and traditional wealth management services—freeing advisors from choosing between serving their clients and competing with robo-advisors.
Richard Cancro, Vanare’s co-founder and CEO, told me in a recent interview that the platforms used by robo-advisors are “stand-alone and only support the online advice channel,” requiring advisors to use one set of technology for their existing business and another set of technology for their robo-advice offering.
Vanare, however, “has one platform that supports both the advisor’s online robo-advice and their traditional business.”
By putting together Vanere’s wealth management technology platform and “deeply integrating” NestEgg into that platform for online advice, an advisor on one technology platform—customer relationship management (CRM), client onboarding activities, client reporting and portfolio management—can now manage both an online channel as well as a traditional channel, Cancro said.
Vanare and NestEgg, a private-label online wealth management platform, are “integrating all the disconnected wealth management processes into one powerful and scalable platform that focuses on the advisor and client experience,” he said.
Vanare’s platform has $1.5 billion of combined assets, and “the client base is growing quickly,” Cancro said.
Alexey Sokolin, NestEgg’s founder and Vanare’s chief operating officer, said the traditional wealth management platform requires putting together a proposal for clients on paper that’s then printed out in a glossy PDF. Now it can be “pointed through a robo-advisor channel” via the platform, allowing individual investors to engage more easily with the advisor. “The traditional and the online business are driven by the same technology underneath,” Sokolin said, making it “seamless” for advisors to participate in the robo-advisor movement “and not duplicate a lot of the work.”
The “magic” in the Vanare platform, said Cancro, is that the advisor can control “how they want the experience to be for themselves internally, as well as with their clients or prospects.” The overall platform, he said, is built for the advisor or the client to use and “work together—that’s probably the most important point.”
If an advisor wants to onboard a traditional client in the traditional way he can do so, Cancro said, but the advisor can also choose, by individual client, to onboard them online, “so the client can self-serve themselves and create the relationship.”
Appropriate for All Advisors?
Should all types of advisors—large and small—be worried about competing with robo-advisors? Cancro said that while having a more interactive and collaborative online experience is a “must-have for any type of advisory firm,” that doesn’t mean every type of advisor needs to offer online advice.
Deciding whether to offer online advice depends on the firm and the client base that the firm is targeting, he said. “The world has changed for advisors to create a much more dynamic experience for the advisor and client. Historically, advisors have had fairly flat, not particularly interactive websites; now […] depending on the advisor, they can let the client play with their portfolio and update their financial plans and goals much more interactively.”
Online advice is still a “very narrow product,” but the acquisition by Vanare of NestEgg is “exciting,” added Sokolin, because the Vanare platform goes a step further in the robo-advice realm by marrying “a deep institutional platform and then [offering] the forefront of innovation on the advisory side.”
NestEgg Wealth “started out as a direct-to-consumer company and quickly realized that we wanted to work with advisors” to allow them to serve “that much larger market of existing relationships,” Sokolin added.