Orion Advisor Solutions is adding one of the most popular client relationship management (CRM) programs among advisors to its growing ecosystem of technology.
The Omaha, Nebraska-based provider of outsourced investment management and technology announced it would acquire Redtail, the CRM software company based out of Sacramento, California. Details of the deal were not disclosed. Redtail is widely used among independent financial advisors, with a nearly 62% control of the CRM market, according to T3’s 2021 Advisor Software Survey.
The companies have long been integration partners, and a significant portion of Orion’s user base is also already using Redtail, said Orion founder and CEO Eric Clarke.
“Redtail is our top integration, not just in CRM but across all integration partners that we have. More than 650 firms are leveraging our Redtail integration,” Clarke said.
Despite the long-standing relationship, technology integration continues to be a pain point for many independent advisors, he added. After the deal closes, which is expected to happen before the end of the quarter, Orion can more efficiently combine Redtail’s CRM with Orion’s existing portfolio accounting program to create what Clarke calls a “most-in-one solution.” The company also owns financial planning software Advizr, which it acquired in 2019, and risk analytics wealthtech HiddenLevers, which it picked up in 2021.
“Orion is making another play in becoming the ‘app store,’” said Doug Fritz, the co-founder and CEO of consulting firm F2 Strategy. “CRM was the missing piece. [Orion is] clearly making the one-stop-shop play.”
However, Fritz has some concerns for some of his clients that use one or both of the technologies. He wonders what the long-term integration roadmap is and how much additional investment Orion is planning to make in Redtail.
“Did they buy this to really expand usefulness, or just get stickier with clients?” Fritz asked.
Redtail co-founder and CEO Brian McLaughlin will become Orion’s president of CRM and join Orion’s board. McLaughlin will transition off Riskalyze’s board,
Otherwise, it’s business as usual for Redtail, which was rated one of Financial Planning’s Best Fintechs to Work For in 2021 — both for financial advisors using the software and its workforce. Redtail will maintain its presence in Sacramento and continue to support advisors that aren’t otherwise using Orion, McLaughlin said.
“That said, we believe that this deal will only strengthen the partnership between our firms,” Klein tweeted.
2/Brian will transition off the Riskalyze board, just to avoid any appearance of conflict. That said, we believe that this deal will only strengthen the partnership between our firms.
— Aaron Klein (@AaronKlein) April 19, 2022
“We believe in advisors’ choice and their ability to pick and match the tools that work well for them,” he said.
F2’s Fritz sees the acquisition as a response to ongoing growth of companies that are building advisor-oriented overlays on top of CRM giant Salesforce, such as Practifi and Skience. While the deal will undoubtedly benefit firms using both applications, it may not do much to sway larger firms that tend to use Salesforce, Fritz said.
Orion isn’t the first advisor technology platform to acquire a CRM.
