InvestCloud’s merging Finantix and Tegra118 into the business will create a global wealth
management platform with some US$4tr in assets. Mark Trousdale, Group CMO for InvestCloud talks about how the combined offering will make a positive contribution to the wealth management space.
The combination will create a best-in-class digital advice platform for advisor networks and advisors, as well as manufacturers looking to offer their products.
The InvestCloud platform was already a substantial player with in the US market with international presence and plans to further expand globally. It now recapitalized at U$1 billion and its new financial investors, led by Motive Partners and Clearlake Capital, and has integrated two businesses, Finantix and Tegra118, into InvestCloud, creating a global Software-as-a-Service (SaaS) wealth solutions platform with over U$4 trillion in assets.
Tegra118’s platform, linking manufacturers (like fund sponsors) and distributors (advisors and other wealth managers) is already a significant market presence. It has the largest integrated platform in the US, with fund sponsors (asset managers: nine of the top 12 in the USA) connecting to distributors (wealth managers: seven of the top 10 broker dealers in the USA) for financial products.
Combining the Tegra118 base with the digital platform of InvestCloud will bring about increased breadth of fund choice and delivery - hosted on InvestCloud’s robust digital platform.
“The combination will create a best-in-class digital advice platform for advisor networks and advisors, as well as manufacturers looking to offer their products. Tegra118 (aka APL) will integrate into InvestCloud’s wealth solutions platform to offer critical mass and choice to the market. This accelerates our existing investments in an international financial supermarket by two to three years,” says Trousdale.
Finantix meanwhile is a strong player within the wealth management world in Europe and Asia, particularly in private banking. It brings with it a strong set of tools and functions that give a value-added wealth manager experience – something that is a real differentiator within the market today. It acts as an amplifier to the fund platform and provides the customer centricity to help private bankers and wealth managers better serve their clients.
“The Finantix brand offers our clients a lot of solutions that make for best of breed functionality and process efficiency at the front end. This is a compelling offering in terms of the superior service that can then be used by our clients to make best use of the funds that lie beneath; wealth managers are faced with several operational complexities, including increased demand for tailored, diverse investment products as a result of the shift towards open banking. The combined offering will build upon existing the existing private banking platform InvestCloud has pioneered in the States and catapult InvestCloud to the front of the pack for private banking globally,” he says.
AI
Artificial Intelligence, (AI), is one of the differentiators in this. “In particular the AI next best actions app that is being brought onto the InvestCloud platform from Finantix gives the advisor easy to understand narrative reasoning to make for better investment selection. This is important. It is also able to filter investments on suitability and other regulations. This is vital given that the three companies currently have a footprint in around 40 countries, each with their own rules and regulations.
“For existing Finantix clients, meanwhile, the merger brings about access to massive funds supermarket and fund manufacturers - something that is increasingly important in a world where choice is everything,” he adds.
Systems
The systems that underpin the combined offering are intended to be future proof and scalable.
“We are prepared for life to get more complicated and we’re honing our collective knowledge to make sure that our offering is fit for purpose today and into the future. For that reason we are in the cloud and able to be flexible and add capacity,” Trousdale says.
He explains that InvestCloud’s entire platform uses a hyper-modular cloud platform so that clients can design and build unique Intellectual Property (IP) using InvestCloud's design-first methods and AI PWP (Programs Writing Programs) TM technology to create cloud solutions.
Trousdale says there are also three behavioural science disciplines that InvestCloud uses throughout its platform. Gaming theory, aka the science of engagement, which is all about increasing usership amongst advisors and clients alike – this builds upon designing intuitive and customizable user experiences. Next comes decision theory, which helps users make better decisions on the platform – e.g. what to trade – and thereby also automates and streamlines business processes. Thirdly comes data science, where data captured in InvestCloud’s digital warehouse is run through an AI inference engine to further improve the platform and enable InvestCloud’s clients to gain better insights.
“It’s like a ‘next best suggestions or actions’ model for business strategy so that we can move with our clients and know what is and isn’t working and help them continually make improvements,” he says.
“There needs to be a coherent offering at the customer end and a joined up approach to meet client pain points otherwise this becomes just a corporate merger – we only do things in a joined up way,” he says.
The InvestCloud platform will house the expanded offering and crucially, it will also be able to plug into any number of accounting and core banking systems at the back end so as to provide seamless integration and smooth process management for clients. (Although InvestCloud also offers portfolio accounting solutions through its Green suite of apps.)
Trousdale points to the API connectivity that has become commonplace today and says that the ease with which other solutions and systems can be integrated adds value; end clients seek actively to build their own bespoke ecosystems. “The market is now all about being able to provide not just the product or the platform, but the collaboration with others to facilitate a client’s desired ecosystem make up,” he says.
“We think that our existing clients have reacted well to this news and can see for themselves the bonuses and added value that our combined ecosystem will offer.”
Trousdale explains that at the moment advisors are going to a bunch of point solutions and trying to work out for themselves what fits where and how. “We view our combined talents as an ecosystem in itself that provides a robust response to a broad need. We can also add to it depending on the client’s exact needs and guide them through. Because we offer our apps pre-integrated into our digital platform, we make life seamless regardless of which apps our clients use, and we evolve with our clients to continually provide them with choice and rich functionality,” he says.
Thus the InvestCloud offering will be an ecosystem in itself as well as being able to add on additional components to create larger ecosystems that are bespoke to clients’ needs and fit in with their existing ecosystems and technology stack.
“The big idea for the roadmap is to be the Amazon of finance, leveraging the ultimate private banking platform as well as the financial supermarket, but which unlike Amazon can be customised to our clients such that their brands and desired experiences are front and centre, not ours,” he concludes.
