Advisors are always looking for a differentiator, and many see the advantages of working with business owners, but there has always been a dearth of specialized technology to help them do so.
Enter RISR, which defines itself as the first comprehensive business owner engagement platform for financial advisors, announced this week it raised $1.5 million in a pre-seed capital round.
The name plays on the word rise, as in rise up and grow, but is not an acronym.
“We are laser-focused on the financial advisor and think about this as a planning tool helping them work with the owners of private companies, but to do that, they need access to better data, and our platform is more about data capture and providing insights,” said Jason Early, founder and chief executive officer of RISR.
RISR uses an integration, right now, with QuickBooks (financial planning applications and other tools are on the roadmap) and, through the use of scanning technology for business tax documents, to import key financial data about client businesses. The platform then analyzes all that data and provides not only an initial business valuation but helps guide the advisor through ways the owner can improve aspects of their business and raise its value.
“Our differentiator is not about business valuation; that is not rocket science; our platform is a business development tool for the advisors themselves,” he said.
He said many owners who work with advisors either do not know what their business is worth or think it is or should be worth a certain amount.
“Based on everything you’ve told me, you need your business to be worth $9 million,” he said as if talking to a business-owning advisory client. “Our platform helps you determine the levers the client can press to bring it to that, though we also think there is a lot more to the story, many more critical discussions to have, like about capital structure, risk management and on and on and on.”
Some of those other discussions, which are built into the platform, would include business succession, estate, tax planning, and investments and insurance, among others.
There appears to be plenty of potential business out there, especially at the smaller end of the market business market.
A June 2023 survey by the Nationwide Retirement Institute of 400 small business owners found that only 35% had financial advisors (small business owners were defined as the owners of a company with one to 50 employees and less than $10 million in annual revenue).
Things are already a bit more competitive when it comes to landing midsize business owners. That same Nationwide survey also interviewed 400 midsize business owners, those defined as a company with either 51-500 employees or $10 million to $500 million in revenue: 59% of those firm owners already have financial advisors.
RISR’s data capture capabilities at present include the QuickBooks integration, which is used by many small businesses, to import a company’s key data, and the ability to pull data from business tax returns. The platform then aggregates the data and, in turn, provides personalized insights on the business that advisors can use when working with owners.
“In our business, it comes down to what are things that differentiate you from other advisors, and when it comes to a software problem like this—which has always been an obstacle—that can provide value and not delay the process, we’ve always been looking for a technology solution,” said Bill Medico, co-founder and a senior wealth advisor at Jacobi Wealth Advisors and Jacobi Capital Management, which were founded a decade ago and have always worked with business owners.
He said his firm, which manages approximately $3 billion in assets across both of its offices (and was provided by RISR), has been using the platform for several months and now has 12 advisors on it.
“We are already doing fee-based financial planning for clients and this is an add-on but what I’ve always found is that sometimes the data is an obstacle to [working on business] plans,” he said.
“That to me is another game changer, bringing ideas to the table, what are the driving factors that can get you that value you are seeking from your business, and doing so without delaying the process and from the client side not to have to input the data,” said Medico.
RISR charges $350 per month for an individual subscription, which allows a single advisor to bring on as many businesses as they would like. A subscription for firms with a few advisors will cost approximately $1,000 a month; enterprise licenses and pricing are more complex.
“In one to two clients, it is paying for itself,” Medico said.
While there are few at present, other providers are targeting the same market of working with business owners. WealthManagement.com wrote about Capitaliz in December, which overlaps with RISR in providing business valuation guidance, insights and succession planning. interVal.ai, an artificial intelligence-based tool, also provides similar functionality. Both also work with other verticals within financial services, including accounting firms.
