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Portfolio > Portfolio Construction

FinaMetrica, Redtail Announce Tech Integration

By Danielle Andrus

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FinaMetrica announced on Wednesday that it is integrating with Redtail Technology to offer FinaMetrica’s risk tolerance scores in the Redtail CRM.

FinaMetrica scores clients’ risk tolerance based on a 25-question and a new 12-question psychometric profile.

“We believe this integration will appeal to advisors and advisory networks seeking a valid, reliable and defensible suitability process,” Tyler Nunnally, FinaMetrica’s U.S. strategist, said in a statement. “FinaMetrica has been at the forefront of risk profiling for almost 18 years. Our system has been tested and proven accurate through several market corrections by hundreds of the world’s best financial advisors.”

According to Nunnally, Redtail will “link directly to FinaMetrica’s website to synchronize client data.”

Mario Canas, a spokesperson for Redtail, said that the deal will allow advisors to “streamline delivery of their risk profiling tools to clients as well as to monitor risk tolerance directly from Redtail CRM. The ability to simplify the delivery of Client Risk Assessments and sync data with Redtail CRM can only enhance conversations surrounding client suitability.”

This is FinaMetrica’s third collaboration this year. In February, the firm announced a collaboration with RiXtrema, which provides portfolio stress testing.

“A strong advisory practice requires three things: a detailed assessment of the investor’s risk tolerance; a thorough understanding of the investor’s goals and financial plans; and a robust estimation of portfolio risk and construction of suitable portfolios,” RiXtrema President Daniel Satchkov said in February. “Equipped with the best tools available, our subscribing advisors can provide maximum protection and value to clients, successfully compete in the advisory marketplace, and effectively stay ahead of changing market scenarios.”

The firm integrated with another portfolio risk scorer, MacroRisk Analytics, in March. “Our goal with FinaMetrica is to expand and streamline MacroRisk’s capabilities to construct highly customized bespoke portfolios, specifically tailored toward each client’s needs and circumstances,” said MacroRisk co-founder Michael Phillips in a statement. “Through this collaboration, advisors can work in tandem with their clients to examine likely portfolio responses to major economic factors, including interest-rate movements or changes in the oil price, while taking into account their risk tolerance levels.”

FinaMetrica also integrates with MoneyGuidePro, Finance Logix and IPS AdvisorPro.

This announcement is on the heels of Envestnet’s deal to buy data aggregator Yodlee for $660 million in stock and cash.

Jud Bergman, chairman and CEO of Envestnet, called the acquisition a “watershed moment in the financial technology industry.” He said in a statement, “The union of these two pioneers will enable investors and the advisors who serve them to access and make better sense out of their disparate and complicated financial data.”

Envestnet also acquired FinaMetrica partner Finance Logix in May. Following the acquisition, Finance Logix’s president and CEO, Oleg Tishkevich, joined Envestnet as managing director and chief technology officer of financial planning. The deal integrated Finance Logix’s financial planning application with Envestnet’s wealth management platform.

Nunnally told ThinkAdvisor in an email that Envestnet’s purchase of Finance Logix has not had an immediate affect on its integration with FinaMetrica. “We are, of course, cognizant of the fact that Finance Logix’s acquisition has the potential to expose FinaMetrica’s risk profiling solutions to a much wider audience. Risk tolerance assessment is a vital step in determining investment suitability and FinaMetrica has established a world-wide reputation as the best in the business,” he said.

“Our intention going forward is to explore opportunities that will enable FinaMetrica to better leverage the existing integration with Finance Logix and forge closer ties as Envestnet continues to build a fully integrated and truly unified technology platform.”

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