OneAdvisory
We are excited to announce our investment in OneAdvisory, which aims to be the data connectivity layer of the RIA ecosystem.
Over the past decade, the advent of financial robo-advisors and self-serve digital money management tools have grabbed the spotlight, chasing a growing number of tech-savvy millennial investors. And yet, despite the fanfare around D2C fintech, wealth management continues to be a relationship-driven services business, one where trust and expertise are critical to enabling financial progress. Surveys repeatedly suggest that American households are skeptical of automation when it comes to their personal finances, as nine out of ten investors believe that a human-to-human relationship with a financial advisor is “extremely important.”
The rise of registered independent advisors (or RIAs) is a testament to consumers’ preference for the human touch in financial advising. In the United States, assets under management (AUM) in RIA-managed accounts have ballooned to over $114 trillion, taking market share from big banks and wirehouses, which do not offer the same amount of transparency and personalization.
The RIA industry is hyper-local and fragmented. Of the 30,000 registered investment advisors in the US, roughly 80% are independent firms with less than $500M in AUM. These smaller firms are the driving force behind wealth transfer and creation for millions of American families, accounting for tens of trillions of dollars in wealth. In the past few years, the technology landscape serving the traditional RIA has continued to proliferate, as shown in the market map below:
This hyper-fragmentation has caused the average RIA to use over 10+ SaaS solutions, resulting in inefficient, time-consuming and largely manual workflows. Financial Advisors struggle to manage and analyze large amounts of complex and unstructured client data: the average independent RIA spends nearly half of their day on tedious back-office management rather than on client-facing activities or revenue-generating opportunities.
We believe this technology fragmentation presents an opportunity for One Advisory. By leveraging artificial intelligence, OneAdvisory eliminates manual data entry and streamlines access to client data. Within minutes, financial advisors can onboard new clients, open and fund new accounts, or gather customer insights to drive better financial outcomes. OneAdvisory’s technology ingests and parses information from a variety of personal documents — from tax returns to mortgage statements — and automatically syncs the data with the dozens, and soon hundreds, of software point solutions that financial advisors use every day, including billing, performance reporting, and CRM products. As a result, OneAdvisory saves participating RIAs time and money and empowers them to take advantage of new revenue opportunities they previously had to forego due to lack of bandwidth.
When we met OneAdvisory co-founders Rob Nance and Madalyn Armijo, they made their vision clear: OneAdvisory does not want to replace human advisors; rather, it promises to amplify their impact. Both Rob and Madalyn started their careers in the investment management industry, where they became intimately familiar with the pain points financial advisors face in running their businesses. We are confident that their domain expertise, along with their entrepreneurial experience at fintech startups, offers them a unique vantage point to modernize the RIA industry. We are thrilled to partner with Rob and Madelyn as they build OneAdvisory to support the ecosystem of independent RIAs — and their customers — across the country.
