Vise, a portfolio management platform for independent financial advisers, announced a $14.5 million funding round to help develop tools to automate managing client portfolios.
The Vise technology analyzes clients’ investment needs and appetite for risk and then creates a basket of stocks, bonds and other assets, which the adviser manages directly on the platform. The tool is already available to advisers on the Charles Schwab and TD Ameritrade Institutional platforms, according to a release.
The new funding comes after a prolonged drought in new money for wealth management fintechs and it could help accelerate AI technology development and prop up tech adoption among independent advisers.
“AI brings lower costs and better outcomes for advisers with their clients,” said Mark Casady, CEO of the venture capital firm Vestigo Ventures and former CEO of LPL Financial.
The vast majority of the top performing independent advisers are already using a portfolio management software, according to an upcoming report by InvestmentNews Research.
“We will see more and more of these applications in the future,” Casady said.
Relatively few finance professionals currently employ AI in their investment processes, according to recent data from the CFA Institute. Many portfolio managers continue to rely on Excel and desktop market data tools, and only 10% of respondents used AI-based tools in the past 12 months.
Firms looking to diversify revenue streams are emphasizing the technology and systems they currently deploy, according to a report by the consultancy firm Aite Group. AI-based tools have the potential to boost the efficiency of services — especially back-office operations in the near future — and increase profitability.
Vise will use the funding to accelerate growth of adviser partnerships and product development, according to the firm. The additional funding brings the total raised since Vise’s founding in 2016 to over $16 million.
“Vise enters the RIA space at a critical time for the wealth management industry,” said Keith Rabois, partner at VC firm Founders Fund, which invested in the round. “Whereas actively managed mutual funds and robo-advisors are both struggling to provide competitive risk-adjusted returns and sufficient downside protection, Vise was designed to help advisors thrive amid volatility and uncertainty.”
The Series A funding round was led by Sequoia Capital with participation from previous investors like Steve Chen, co-founder of YouTube and Jon Xu, co-founder of FutureAdvisor, according to the release.
Fintech funding and deals have slipped in recent months, due in large part to broader market uncertainty stemming from the COVID-19 pandemic. Over the past three years, approximately 200 to 300 deals closed in the months of December through March, while this year only about 100 to 200 deals were reported over the same period, according to CB Insights.