Resource Data

AssetMark allows RightCapital to sell financial planning software to its advisors – with data synchronization – despite simply acquiring Voyant for $145 million

Concord, California-based TAMP’s $90 billion API connection also follows one with MoneyGuidePro before acquisition and SEI deal to integrate with Right Capital

Note from Brooke: It’s a world of bundle, bundle, bundle. Don’t tell that to Shuang and Song Chen, two brothers who founded RightCapital. They’re dedicated to the self-contained, best-of-breed, category-killing approach we thought was a thing of the past. Despite their atavism, the approach seems to work for the same reasons as before: few channel conflicts and a level of focus you need to solve big problems. RightCapital is not yet on a par with eMoney, MoneyGuidePro or Advicent. Yet, given that it was only founded in 2015, its growing profile is remarkable. AssetMark’s signature caught my eye because AssetMark has financial planning software and needs to prove its worth. Inviting competitors is a healthy and wise move by AssetMark, but it’s harder to justify its $145 million investment last summer. RightCapital still has a long way to go to get all the functionality of companies established decades ago. But it already proves that the pendulum may have swung too far towards multi-channel bundles and watered down expertise.

Sometimes it looks like RightCapital can’t hurt.

The Shelton, Connecticut-based financial planning software maker just gained access to AssetMark’s thousands of advisor customers through an API integration that provides single sign-on access with just a credit card and fee $125 to $150 per month, per advisor.

Muk Mehta: “Adding RightCapital gives them a powerful tool.

AssetMark integration is more than just an occasional API connection, according to RightCapital co-founder and CEO Shuang Chen.

“This is the most comprehensive API connection we have,” he says.

“They thought of an end-to-end journey.” For example, once someone chooses RightCapital at AssetMark, all of their existing information is populated and synced with the planning software, he says.

To get into TAMP’s $90 billion camp based in Concord, Calif., the 2015 startup had to prove its worth against two different types of former incumbents – MoneyGuidePro and AssetMark’s scheduling software Voyant. which AssetMark acquired last March and closed in July.

“Right Capital has done an impressive job over the past few years,” says Joel Bruckenstein, producer of Technology Tools for Today events. “In the Q3/Inside Information Technology Survey of 2021, the third in number of users, but they are far behind two market leaders, MoneyGuidePro and eMoney.”

Open Architecture

Voyant was the biggest acquisition in the company’s history. See: Natalie Wolfsen’s sudden rise as CEO of AssetMark marks a whole new ‘liberated’ RIA vibe and could be a catalyst to fill the service vacuum left by custodian cuts

Song Chen
Song Chen co-founded RightCapital.

Adding RightCapital as another planning software choice is not a reflection of existing choices, according to AssetMark in response to a query from RIABiz.

“AssetMark is proudly open architecture,” writes a spokesperson.

“The integration with RightCapital is an addition to our suite of powerful third-party and proprietary financial planning tools, which includes Voyant, WealthBuilder and MoneyGuide.”

Best of breed

RightCapital was in the midst of negotiations when AssetMark announced its deal with Voyant. Chen says he received an immediate phone call assuring him that negotiations would continue.

“I really appreciate that they reached out,” he says.

Muk Mehta, director of technology innovation at AssetMark, said the company is “committed to empowering advisors to help their clients achieve and maintain their financial well-being.

“Adding RightCapital gives them a powerful tool to facilitate important planning conversations,” says Mehta.

RightCapital is one of the few RIA software companies still trying to compete as the cutting edge application in a world that has mostly become best of all.

“We win big,” Chen says. “Customers like it.”

RightCapital does a weekly software upgrade. “That’s our mentality. People are speechless,” he says.

The grassroots appeal also helped Chen win integrations at Commonwealth, 2018, and LPL, 2020, on the broker side and XY Planning in the RIA field. I completed its integration with SEI’s TAMP in 2020.

Still, RightCapital still has a long way to go to get in the company of the two high-end competing giants, Bruckenstein says.

“To date, RightCapital users tend to be younger and their incomes are on the low end. This is no surprise as RightCapital is part of the XY Planning Network technology platform.

“If they want to continue their growth trajectory over the next few years, they will have to compete head-on with MoneyGuidePro, eMoney and Orion Financial Planning. All three of these companies are big, well-funded and have the scale to support big business. If RightCapital wants to succeed, they will need to expand the capabilities of their software and hire more support staff as well as more software developers.

Priming

Chen, 45, operates with a small, tight-knit team that includes his ex-Yahoo! engineer brother and co-founder, Song Chen, as CTO. He also works with a group of former members of Prudential Annuity where he once worked from.

Aaron Klein
Aaron Klein: “It was impressive to see what RightCapital.”

His quest to build a business began while he was completing his MBA at Columbia Business School.

He wanted to be an RIA, but was told at Fidelity Investments and other companies that it wasn’t that easy to get started.

After briefly considering creating a robo-advisor, he settled on what he particularly loved about advice – the planning aspect – and started pushing in that direction.

What he never did was look at existing RIA scheduling software in the industry. “I have the benefit of never having seen financial planning software. I did it from a consumer perspective,” he explains.

“I didn’t know anyone and I said, ‘I’m going to make it work. I just said, ‘I can do better.'”

“I still remember meeting Shuang at a T3 conference, before he even had a product,” says Aaron Klein, CEO of Riskalyze. “It’s impressive to see what RightCapital has accomplished, and we’re proud to be one of their integration partners.”

Counter intuitive

But Chen’s first product out of the box was panned.

“I called Joel Bruckenstein and Michael Kitces [to have them demo the product]and they told me why it wasn’t working,” he says. “The first product had a lot of issues, and it didn’t have the capabilities of MoneyGuidePro and eMoney.

“MoneyGuide and eMoney Advisor have focused heavily on creating ‘simpler’ planning software tools (e.g., MyBlocks and Foundational Planning, respectively),” he writes.

“This positions RightCapital well as advisors increasingly charge stand-alone planning fees.”

The problem for an RIA that falls in love with “best-of-breed” software is that next year the owners are offered a small fortune and sell it. Or they expand into other software verticals.

RightCapital receives tempting offers – and opportunities to expand its base – but Chen is not tempted to accept them.

“Every day it’s getting better. I’m enjoying the ride. I have enough problems to solve,” he says.

Also, keep her things away from home to maintain family order and space.

“My wife told me that we have more than enough money for the things we need.”