As the novel coronavirus pandemic has wreaked havoc on world markets, some fintech firms serving the advisor market have come up with free offers of assistance or limited time discounts on their products or platforms.
Wealth management platform provider Addepar on Thursday announced its own novel approach to the current situation with the Addepar Assurance program, which is designed to make it easier for prospective RIA firms to gain access to the provider’s platform and reduce up to 50% of the cost.
“Right now is exactly when they [prospective firms] most need Addepar and this is also the worst time in terms of wanting to sign a contract,” said Addepar chief revenue officer David Lessing, in an interview with WealthManagement.com.
“Fortunately, we have come into the crisis from a position of strength because of our recent raise; it has provided us with a war chest and we have had a good pipeline of prospects. So we have had more flexibility in being able to shift some of our priorities and resources to create this program and plan for rapidly onboarding new clients,” he said.
With the offer, firms new to Addepar receive a credit to offset their payment until the adverse impacts of the market on their business subside.
Specifically, the credit will equal up to 50% of the cost of an Addepar license, though the amount of the credit depends on the size and complexity of the firm’s implementation. (Addepar licenses are generally firm-wide based on AUM and other factors, not by the seat.)
Credit duration is based on and directly linked to an RIA’s choice from among one of three benchmarks: the point at which the client firm’s AUM recovers to its 2019 average, the S&P 500 index remains above 2850 for 30 days, or the CBOE volatility index remains below 25 for 30 days.
Credits will apply until the earlier of up to 18 months following contract signing or until the achievement of a new client’s benchmark of choice. And the Addepar Assurance program is only available to U.S.-based RIAs that have up to $25 billion in AUM. It also only applies to new contracts signed between April 1, 2020 and June 30, 2020.
Lessing said that Addepar had seen a 400% increase in usage of the platform among existing advisor clients. “We’ve had a substantial increase from advisors trying to solve problems as they struggle and try to work,” he said.
When asked about specifics regarding usage Lessing said it was wide-ranging and provided several examples. “We’ve had existing clients [firms], whose clients want to know their exposure to healthcare stocks or their exposure to China for example, [end clients] who want to know where their excess cash is and the ease of use around our performance reporting, and the flexibility of that allows advisors to quickly generate reports on the platform,” said Lessing.
The Addepar wealth management platform specializes in data aggregation, analytics and reporting and launched in 2009. The firm now has over $1.7 trillion on its platform.
