Riskalyze is bringing fintech veteran Tricia Rothschild onto its board of directors to help guide the company’s expansion into investment research and analytics.
Rothschild most recently
During her tenure, Rothschild led many of the technology initiatives that expanded Morningstar’s offering for wealth managers beyond its core investment analytics and research. On the Riskalyze board, she plans to use that experience to guide product development teams and scale some of Riskalyze’s new business lines, Rothschild told Financial Planning.
“Where Riskalyze excels is in bringing common sense language through the Risk Score and other things they’ve developed over the years to help the advisor engage with the customer in a personal, relevant way,” Rothschild said. “I want the solutions, the portfolio analytics, the investment tools, or whatever it is that’s being developed to be useful to the advisor or end investor. And [that is] what I see as the opportunity here with Riskalyze: how do individuals engage with the concept of money?”
The addition comes as Riskalyze increasingly looks like a competitor to Morningstar. With the launch of Discovery at its annual conference in November, advisors can now use Riskalyze to search for and evaluate ETFs, mutual funds and securities that align with a client’s risk tolerance score. The company also stepped into trading and rebalancing in 2017.
In July, Morningstar, which also provides trading and rebalancing to advisors, launched a suite of risk measurement tools, including a Riskalyze-like “Portfolio Risk Score” and “Risk Comfort Range.”
While Riskalyze CEO Aaron Klein maintains his company is both a partner and a client of Morningstar in many respects, he acknowledges that the two are competitive in the advisor software business.
“Welcome to wealthtech. That’s a pretty normal thing in this industry,” Klein said. “We’re at our best when we keep our eyes focused on the financial advisors and not when we drift over and look at competitors.”
Morningstar declined to comment.
In May, Riskalyze launched a marketing campaign
Riskalyze named Lauri Schultz has its new chair
Adding Rothschild to Riskalyze’s board was less a competitive move against a friendly business rival and more about her unique insight and perspective on the advisory industry, he added. Riskalyze wanted the sum total of Rothschild’s experience — at Morningstar and in working with fintech startups as president of Apex — to keep product development up to speed with evolving advisor needs, Klein said.
However, the lines are blurring when it comes to which technology products companies offer, said Joel Bruckenstein, producer of the T3 advisor technology conference. Five years ago, most fintechs fit into specific niches — such as CRM, financial planning, portfolio management — but companies are increasingly getting into adjacent businesses, he said.
“They’re all trying in some way, shape or form to get more wallet share, and when everyone is going for more wallet share, you’re going to cross lines and [start to] compete with each other,” Bruckenstein said.
But if Riskalyze really has ambitions to grow its investment research business, they couldn’t have added a better person to the board, Bruckenstein added. In addition to her background at Morningstar and vast experience in software, she also has connections in private equity.
“I’ve known her for a long time … She has a very analytical mind and certainly understands the investment business,” he said. “I think she’s very well-positioned in a lot of areas.”
Rothschild downplayed the competitive aspect of her new role, saying she still has many connections with her former employer. Morningstar is an investor in the TIFIN Group, a wealthtech company where Rothschild is on the advisory board. In addition, the Chicago-based research firm has a relationship with the Financial Fitness Group, a financial literacy and education firm where she is a member of the board.
“I have great relationships with my former Morningstar colleagues,” Rothschild said.
