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CAIS Group

Advisor Group Taps CAIS to Build Customized Alternatives Platform

CAIS has a pipeline of five to seven other enterprises in the RIA and broker/dealer spaces also interested in bespoke platforms.

Alternative investments platform CAIS has penned another deal to bring a customized version of its platform to Advisor Group, a network of independent broker/dealers with about 10,100 advisors and $515 billion in client assets. The news follows an announcement in February that Focus Financial Partners enlisted CAIS to build a customized version of its platform for its partner RIA firms.

Matt Brown, founder and CEO of CAIS, said this deal is a continuation of his company’s strategy to provide customized versions of the platform to other enterprises. In addition to Focus, CAIS also has done something similar for William Blair, Northwestern Mutual, Truist and RW Baird. The company also has a pipeline of five to seven other enterprises in the RIA and broker/dealer spaces that want to bring a similar offering to their advisors. 

“This is the next step in our strategy we put in place a few years ago to really understand the unique needs of larger, more complex firms,” Brown said. “The larger the firm, the more you realize that one size doesn’t fit all.”

The customized version for Advisor Group allows the firm to manage user access and product permissions based on FINRA licenses and roles. In addition, the firm’s advisors will have access to certain products only after they’ve completed required coursework within CAIS IQ, its personalized learning system. Home office staff will be able to track advisors’ education data and progress in real time.

The version includes CAIS’ new Sales Supervision Coordinator role, which allows Advisor Group to assign pending trades to specific team members to streamline approvals.

CAIS has also built out a customized menu of products for Advisor Group and onboarded its funding ideas onto the platform in a centralized place. The platform is customized with the firm’s unique workflow that responds to its compliance or operational needs, Brown said. And it also integrates with Advisor Group’s key providers—Pershing and Envestnet.

Some IBDs have moved away from alternative investments in recent years, due to greater regulatory scrutiny around those products, as well as litigation risks. But Brown says the CAIS platform gives advisors access to alternatives in a more structured, compliant way.

“We’re the platform and guardrails of process, structure, menu, delivery and oversight that’s been missing,” he said. “We’re that middle piece to allow the advisors to have even more access.”

Brown says there’s more interest in alternatives today, as end clients and advisors are more willing to enter into less liquid investments. And advisors have largely been disappointed with the traditional 60/40 portfolio.

“There’s a tremendous amount of money leaving traditional ETFs and mutual funds and traditional assets and going into alternative investments from wealth management,” Brown said.

“Allocation rates in wealth management and the independent channel are still around 2%. Sophisticated institutions are at 50%. Wirehouses are at 10-15% because they have platforms.”

Brown says advisors at IBDs and RIAs who don’t have systematic ways to access alternatives are at a disadvantage to the wirehouse advisors, which have platforms for investing in alternatives and are talking to their end clients.

“The mid-sized and smaller firms are realizing, since firms like CAIS exist, we can level the playing field and empower advisors regardless of size with a great platform and be able to serve their clients the same the way the largest firms do,” he said.

CAIS recently announced it had raised $225 million in fresh capital, bringing the firm’s valuation to more than $1 billion. It will be using the latest funding to improve its client experience and eliminate administrative tasks for advisors, according to Shane Williams, chief technology officer. Over the past year, CAIS saw its overall employee head count expand from 75 to 156 employees with plans to have more than 300 employees by the end of 2022.

CAIS works with more than 5,300 advisor firms/teams that have transacted over $17 billion in volume since inception.

TAGS: Technology
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