Orion Advisor Solutions has been a prolific shopper for wealth management technology companies over the past few years; now, executives say, it's time to stitch the pieces together.
There have been seven major acquisitions over the past four years, including turnkey asset management platform FTJ FundChoice in 2018, New York–based financial planning and workplace planning tech firm Advizr in 2019, TAMP Brinker Capital in late 2020, risk analytics provider HiddenLevers in early 2021, regtech provider BasisCode Compliance in 2021, CRM software developer Redtail Technologies in April 2022, and investment and trading platform TownSquare Capital in May 2022.
The company will slow its pace of acquisitions to now focus on bringing all those components of an advisor’s desktop together into one unified and “highly integrated” user experience, the firm's CEO says.
“Obviously there are things that you do to bring the businesses together from a technology perspective and a functional perspective, and you get cost synergies when you do that,” said Eric Clarke, founder and CEO of Orion Advisor Solutions. “But the number one issue, when you talk to advisors and you say to them, ‘What's the biggest issue that you have with your tech stack or that you have in running your business?’—always the number one answer that comes back is integration. So, they struggle to get their systems and their workflows connected as they're working to connect themselves to that investor.”
“We're intentionally not trying to leave those businesses alone. We're trying to integrate the heck out of our offering, keeping in mind that we want to solve that number one concern advisors have, which is providing an integrated experience to their clients through having an integrated technology stack.”
Orion has come up with a framework for how the typical advisor would use its unified platform, with what the firm calls four strategic pillars: prospect, plan, invest and achieve. The company now has all the components to take the advisor through that entire process, Clarke says.
There’s been a debate among advisors and tech firms about what “integration” means. Historically, Clarke said, a single sign-on, or moving bits and pieces of data back and forth among tech tools, counted as "integration." But most advisors still find the tech stack integrations spotty. Clarke thinks you can elevate the integration experience by having all components under the same corporate platform—an “all-in-one” user experience.
Take Redtail, for example, which Orion integrated with for over a decade before the acquisition. The two had more than 600 advisory customers in common. Previously, they were on different document systems. Now they are able to unify those systems across portfolio management and CRM. When a client uploads a document to the client portal, the document won’t just show up in the portfolio accounting system but also in the CRM, and the advisor can launch a workflow process based on the data.
That kind of data synchronization is, advisors say, the holy grail of tech integration—but more often promised than realized.
Amazon’s Redshift, the company’s data warehouse technology, is key to Orion’s integrated platform. Redshift allows for cloud-based, real-time data sharing. Historically data has been shared through data query generation, flat-file delivery or API integrations. Those protocols run into performance problems and can result in stale or mismatched data.
“Newer cloud technologies have the power to dramatically reshape our industry and offer a simple, elegant solution to the ongoing issue of stale and inefficient data delivery,” Clarke said, in a statement. “Cloud-based data sharing revolutionizes the ability for advisory firms to access their data in seconds. Instead of having to create batch file exports or call APIs, firms can immediately share Orion data in real time to power integrations and decision-making.”
“For those largest of firms, this gives them access to the information in a way that breaks through those traditional barriers where they have to call it one at a time and/or get a massive data dump at a certain interval, which no sooner do they get that than it becomes stale,” Clarke said.
Orion is still open architecture and uses APIs to connect and integrate with third-party vendors, Clarke said. The firm has partnerships with many tech providers not under Orion's roof, and advisors can still access the different pieces of Orion's platform on an a la carte basis.
But Clarke hopes more clients will see the benefits of an all-in-one platform. "Our objective is to make the integration so elegant that they will want to consume the suite of technology services that we offer," Clarke said.
Kristen Schmidt, founder of RIA Oasis, a technology strategist and consultant, said one of the downsides to APIs is that the information that flows through is minimal, based just on what one platform asks for from another platform. But a unified platform has the ability to push much more data through.
“If I don’t use HiddenLevers and I use Riskalyze, most of the APIs that we have today are relatively weak in the data that they supply bilaterally, meaning it goes one way and it goes the other way,” Schmidt said.
The data warehouse also allows advisory firms to compare themselves against other firms for customized business intelligence reports.
“That is trendy; that is what advisors are looking for. The unified platform gives them a much better chance of strong data analytics. That is a huge positive.”
Schmidt definitely sees the value in a unified platform but acknowledges a lot of advisors will still want the choice to create their own tech stacks.
“It’s a struggle for firms to learn, connect and manage third-party integrations, and a unified platform does alleviate that within a firm,” she said, but it will be a challenge to convince many advisors to "put all of their eggs in one basket on one platform."
Doug Fritz, co-founder and CEO of F2 Strategy, says Orion is far ahead of other vendors in the wealth management space, especially with the data warehouse.
“This Redshift move to having your own private data lake ... is so freaking sticky,” he said. It will clearly keep advisors inside the Orion system, he said.
He doesn’t see the company’s acquisitions as forcing any advisors away from Orion; in fact, most of his clients just use Orion for accounting and some trading functionality.
But he could see smaller firms, startup advisories with $50 million in client assets, using the unified platform; it’s likely cheaper to license, and they don’t have to integrate it themselves.
“If you’re going to use Orion for the majority of your technology, tech might not be your biggest differentiator,” Fritz said. “Going from $50 million in client assets to $100 million in client assets, technology’s role in that will mostly be about automation. You’re going to be able to scale your own day, and (clients) are not going to come to you because you’ve got a cool planning tool or a cool digital tool.”
“You’re going to be able to manage your book of business more by having scale, which is exactly what Orion lets you do—automation, scale, integration.”
Orion recently laid off 19 sales employees, according to a report by Citywire, citing sources with knowledge of the situation. As of July 1, the company had over 1,500 total employees. Candice Hudson, a spokeswoman for the firm, confirmed the layoffs.
“A small number of sales support roles were impacted by a recent organizational shift,” she said, in a statement. “These decisions were not undertaken lightly. Impacted team members were communicated with directly by Orion leaders. Eliminating these positions will not change the services we provide to our clients, and we remain committed to and confident in our go-forward strategy.”
Scaling back on acquisitions and laying off some staff makes good business sense, Fritz said.
Orion currently supports $3 trillion in assets across its CRM and portfolio accounting systems. On the TAMP side of the business, it supports $59 billion.