Why Lori Hardwick left the Riskalyze board of directors

Advisor fintech company Riskalyze proudly announced in 2019 that industry veteran Lori Hardwick would take over as chairwoman of its board of directors.

The company was much quieter when she not only vacated the position, but left the Riskalyze board entirely less than two years later. In fact, Riskalyze didn’t say anything other than a tweet from CEO Aaron Klein after the story broke on Citywire.

Hardwick declined to comment, and Risklayze offered Financial Planning nothing beyond the statement Klein made on Twitter.

The reason for Hardwick’s departure is connected to Riskalyze’s decision to publicly attack competing risk analytics wealthtech HiddenLevers, according to sources who asked to remain anonymous. The marketing campaign created a conflict of interest for Hardwick, who also sits on the board of HiddenLevers' parent company Orion Advisor Solutions.

Though the companies would not confirm this to be the case, it’s not hard for an outside observer to connect the dots, says a former Riskalyze executive who requested anonymity due to their relationship with the firm.

“I cannot imagine that the board would be in approval of that,” says the former executive when asked about the marketing campaign. “I wasn’t surprised to see her step down.”

With the companies avoiding the topic, here is the relevant backstory: Hardwick was a titan in the wealthtech arena before she joined the Riskalyze board. She was one of the original partners of Envestnet and worked there for nearly 16 years before accepting a role as chief operating officer of BNY Mellon Pershing. Hardwick left in 2017 to launch Advisor Innovation Labs, a technology consulting firm.

She first joined the Riskalyze board of directors in 2018, and in April, 2019, was named CEO of wealthtech at consulting firm RedRock Strategic Partners, where she worked with some of the largest wealth management firms. When Riskalyze made her chairwoman of the board just a couple months later, the company hoped to use her expertise to grow within the broker-dealer channel.

In February, 2020, Hardwick joined private equity firm Genstar Capital as a strategic advisory board member, where she “advises the firm in the financial services industry,” according to the company’s website. Genstar would later partner with another private equity firm, TA Associates, to reinvest in Orion Advisor Services and merge it with investment management firm Brinker Capital. Hardwick represents Genstar on Orion’s board of directors, a role she has held since December, 2020, according to her LinkedIn.

Orion acquired HiddenLevers in March, 2021. At the time, some saw the deal as Orion moving into the market of client risk assessment software dominated by Orion’s long-time integration partner, Riskalyze. The two wealthtech companies maintained they were still close integration partners, despite HiddenLevers co-founder and chief revenue officer Raj Udeshi indirectly criticizing Riskalyze's core product, the Risk Number.

Riskalyze fired back in May with a marketing campaign to discredit the risk methodologies used by HiddenLevers (and independent wealthtech RiXtrema) with a white paper, a website called Unhiddenlevers.com (which has since been taken offline) and a video criticizing Udeshi and co-founder Praveen Ghanta for using the racist joke “Kung Flu” when discussing the coronavirus pandemic. The campaign had been in development for six weeks, according to the initial report on WealthManagement.com, meaning it went into production shortly after Orion announced its acquisition of HiddenLevers.

Hardwick left the Riskalyze board that same month, according to her LinkedIn, though no public statement was made until the CityWire article in late June.

HiddenLevers lands $3B client after Orion acquisition and public spat with Riskalyze

Orion and Genstar both declined to comment. Neither Hardwick nor Riskalyze have confirmed the reason for her departure, but outside observers say it isn’t a coincidence.

“You can’t be in two camps at the same time, if there’s any kind of perception that they are competitors,” says Doug Fritz, founder of consulting firm F2 strategy. “The two companies she’s advising were at each other’s throats. That must have sucked for Lori.”

Marketing campaigns don’t usually require board approval, so it’s difficult to say whether Hardwick was involved in the campaign or even aware of it, says the former Riskalyze executive. “Even if they didn’t know, Aaron Klein is pretty smart,” the person says. “He had to know that it wasn’t going to go over well with his chairwoman.”

Losing Hardwick could end up impacting Riskalyze’s ability to secure enterprise deals with broker-dealers, according to the former Riskalyze executive. One of the wealthtech’s biggest successes to date has been a partnership with Cetera Financial Group — a firm also backed by Genstar with Hardwick on its board of directors.

Cetera buys hybrid RIA from fellow Genstar Capital-backed firm

It could be an opening for Riskalyze competitors to start winning some of those enterprise deals, says the former executive.

“If you have something like HiddenLevers, which has only been a little successful, and join with Orion as a bundle and [advisors] don’t have to pay extra for it, it becomes a threat to Riskalyze’s value proposition,” the former executive says.

Orion declined to answer when asked if it has seen any uptick of HiddenLevers adoption among Cetera advisors. Cetera did not respond to requests for comment.