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How Technology Deals Are Changing the Business

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Wow. A year doesn’t go by without a “headline” technology acquisition, merger or partnership that involves a company focused on serving the technology needs of advisors.

Already, 2019 will be remembered as the year that MoneyGuidePro was acquired by Envestnet for $500 million. Of course, the advisors using the technology product involved are directly impacted — hopefully in a positive manner. But there certainly is more to any transaction story than just the direct users. Let’s discuss some of these other details and look at some of the ways such deals affect our profession.

Whenever a technology deal is announced, it gets a lot of attention. This makes sense because many of these stories involve products that were created by people who were simply trying to address an immediate need. And this often begins with limited resources.

Then they start the next chapter for their companies with a positive liquidity event and frequently with a shot of new resources.

Needless to say, there are PowerPoint strategy presentations being updated on a regular basis that list each of these past technology deals. Aside from the commonplace beginning with someone who is passionate about providing a solution that helps advisors better serve the needs of their clients, any new company needs to be economically viable at some point.

Therefore, all these past technology deals help to define the “economic” opportunity for others, and they provide further support for an entrepreneur looking to start a new company. Ultimately, the good news is that this is just another reason why advisors continue to see more choices of technology companies that want to earn their business.

Another observation about past technology deals is how frequently the founders who are selling the business decide to essentially start another new company or effort focused on serving some part of the advisor technology ecosystem. This includes people like Matt Abar (FinFolio), Oleg Tishkevich (, Rob Major (Assetbook) Jim Starcev and Mark Calhoun (NEXA Insights) … just to name a few. Clearly, not many have decided to “ride off into the sunset.”

We also have seen a number of advisors decide to start their own technology companies, while continuing their traditional business. Starting a business requires resources, takes a lot of work, involves risks — and serving the needs of advisors isn’t necessarily easy. It takes a special passion and drive to go for it again. Clearly the benefits and rewards of serving advisors are more than a financial return. Otherwise, none of these entrepreneurs would do it again after their first successful business transaction.

Competition Flurry Technology deals over the years have increased the competition in the advisor technology space, too. Take a look at your technology stack today. Perhaps one company is fulfilling a number of your firm’s needs with several of their products. More likely, too, is you have other products where companies compete and work together. An example would include ByAllAccounts owned by Morningstar, but it works with many other reporting systems (not just Morningstar Office). Junxure owned by Advisor Engine is a similar example. Now you can add MoneyGuidePro to the list.

Of course, this sometimes makes advisors anxious because they worry a company might make the decision to no longer support a product they have just acquired because they already have a competing solution. In today’s technology environment, this is highly unlikely, especially if there is a sizeable number of users of the solutions. Most companies will have “talking points” for addressing these questions, but sometimes they do not alleviate advisors’ concerns. Therefore, watch where and how they focus their attention and resources. You should be able to tell how much they value the newly acquired relationships.

All things considered, the regular activity of technology deals is certainly a positive indication of future innovation and growth. Often that is the goal … the “heavy lifting” is in the execution.

Dan Skiles is the president of Shareholders Service Group in San Diego. He can be reached at [email protected].