Conquest Planning, an AI-powered financial planning platform, has raised $24MM (CAD) in its Series A funding round, bringing total funding to $35MM (CAD). Fidelity led the latest round with support from Portage, BNY Mellon, and RBC. Conquest uses a proprietary digital assistant called SAM (strategic advice manager) to simplify the client onboarding process and help advisors create personalized client portfolios.
An October 2022 report sizes the financial planning software market at $3.7B in 2021, reaching $16.9B by 2031 with a CAGR of 16.6%. The structure of the market has always been fragmented with a few key leaders — in 2022, the most popular software providers were MoneyGuide Pro Elite, eMoney Pro, and Right Capital. Together, these three providers represented 73% of the market, with MoneyGuide alone at ~33%. Also remember that MoneyGuide is owned by Envestnet and eMoney by Fidelity — there aren’t *that* many independing financial planning apps that make for great companies.
According to Michael Kitces, an advisor can spend 10+ hours developing a financial plan and 35 hours during the onboarding, data gathering, analysis, plan recommendation & monitoring lifecycle. A winning playbook should use technology to reduce advisor/client areas of friction, offer planning depth in a unified platform across a client’s assets, and be interoperable and visually appealing, while adding value to a customer’s personal finance journey.
Planning is often caught in an awkward part of the user journey, because it doesn’t always lead to the investment management product sale. As a result, it acts more like a diagnosis rather than the surgery itself. Putting “AI” into that diagnosis may make it faster, but we think that the integrations required into the rest of the human advisor workflow will continue to undercut the effectives of technology solutions. For more, see the McKinsey Digital And AI-enabled Wealth Management report.
IFSAM offers (1) fund dealing/execution services, providing access to 135,000+ funds ranging from Mutual Funds and ETFs to Hedge Funds; (2) fund custody, offering 1,750+ depository access in 45 jurisdictions with an open architecture; (3) fund data, offering fund target market data (e.g., trading, prospectuses, reports, factsheets, KIIDs, PRIIPs, and KIDs; (4) fund research using in-house research and external analysis of Morningstar and Scope Analysis GmbH; (5) and distribution support, administrative workload via automated bundling of order and settlement processes. IFSAM also helps meet regulatory requirements such as AML, KYC or FATCA.
The acquisition of IFSAM scales FNZ's European operations into Luxembourg, the largest fund centre in Europe. Previously, FNZ acquired Fondsdepot Bank, a German B2B bank with €60B+ in assets under administration, working with 330+ fund providers and 200+ distribution partners, and Appway, the Switzerland-based client onboarding firm that provides low-code no-code workflow automation solutions.
We are still amazed at the differences between European and American infrastructure in asset management. ETF adoption into asset allocations across most US-based investment management has put pressure on anything not resembling that structure. Further, we are also amazed at the incredible amount of technology required to keep international fund distribution going — certainly a prime target for tokenization and an open source architecture.
Digital wealth platform Endowus partnered with Amundi's Alternatives business to provide clients with investment strategies from Bridgewater Associates, Ray Dalio's hedge fund. Endowus and Amundi already have a partnership for active and passive investments. In its last round, Endowus raised about $25MM in 2021.
Endowus is a leading Asian digital advice platform, with a private wealth service that includes a personal advisor and a customized portfolio, and access to 200+ institutional share-class funds and alternative assets. The company has added many funds to its offerings, including private market and Alts strategies from KKR, Partners Group, Millennium, Blackrock, QuantEdge, UBS, and now Bridgewater.
Amundi Alternatives has $71B in AUM across Europe. It offers (1) real estate solutions ($47B in AUM), whereby Amundi develops, structures and manages European-focused property funds, club deals, impact funds, co-investments, and advisory and multimanagers' structures for institutional and retail investors; (2) private markets ($13B in AUM) covering PE, private debt, infrastructure, and real estate via hedge fund managers; and (3) private debt ($9B in AUM) specializing in senior corporate debt, commercial real estate, and LBOs.
We are very interested in the integration of Alternatives into digital offerings, and impressed with the traction of Endowus to date. One key difference to companies like Betterment is that you end up charging the client a lot more than 25 basis points when selling private equity — so fees are a key thing to watch.
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