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FolioDynamix Builds on Its Stealthy Success

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Call it the largest company you’ve never heard of, even though it goes head-to-head with Envestnet and other large industry mainstays.

Founded in 2007 via acquisitions, FolioDynamix has $727 billion in assets under advisement, 4.8 million active accounts, over 95,000 advisors users on their platform and $20.8 billion in AUM ($3.4 billion with discretion).

It serves brokerage firms, banks, large RIAs and RIA networks and other fee-based managed account providers from offices in Secaucus, New Jersey; Sacramento, California; Evansville, Indiana; and Columbus, Ohio.

Yet Chris Ollendike is happy to be the man behind the curtain.

“We offer model strategies, research and due diligence on managers, model portfolios and we also run assets for smaller broker-dealers,” the firm’s senior vice president of business development explained at the TechLeaders 2015 conference in Dallas in late March. “We have white-labeled trading tools, and we can act as a TAMP or point solution, it all depends on the client.”

Got all that? And despite their tremendous output, they’re hardly ready to take a break.

“We’re incredibly innovative, and aim for two releases a year,” added Jonathan Ferrara, the firm’s senior vice president of product development. “I’ve been with the firm for six years. We’ve spent all of that time building core applications and straight-through order processing, which we tested with firms like Pershing and LPL Financial. We now have thousands of advisors all on at the same time using the platform.”

Now that it’s up and running, Ferrara and his team are shifting toward the user experience.

“Our clients know they have to have their advisors be able to perform functions like rebalancing, but they’re scared, which results in low adoption,” he said. “So now our focus is on the user experience to make it more inviting.”

To do so, FolioDynamix has partnered with a user interface development firm in New York, but Ferrara was quick to emphasize that it’s a user design firm as well, with “a great fintech background.”

“We want to take all the data, present it to a user in an organized fashion and say, ‘here it is and this is what you can do with it.’”

Ferrara also said the firm is looking into goals-based financial planning through an updated portfolio construction solution, so advisors can have conversations with their clients around their investment objectives, rather than simply performance benchmarks.

As for the impact of robo-advice on both traditional advisors and the end client, a major theme of the TechLeaders conference, Ferrara said it will put “tools in the hands of investors in a way they can understand. For instance, they’ve able to take Monte Carlo simulations all the way down to the end user.”

Robo-advisors, he added, are also forcing change in terms of how accounts are viewed, particularity with accounts that have multiple custodians that can all be viewed on a single screen.

Echoing other conference attendees and speakers, Ferrara concluded that it’s not an either/or scenario, and advisors who can incorporate robo-advice tools are those that will be successful.

“At the end of the day, they’re not just for clients, but for advisors to be more productive as well.”