Advisors are always looking for a differentiator and many see the advantages of working with business owners, but there has always been a lack of specialized technology to help them do this.
Enter RISR, which bills itself as the first comprehensive business owner engagement platform for financial advisors, announced this week that it has raised $1.5 million in a pre-capital round.
The name plays on the word revival, as in revival and increase, but it is not an acronym.
“We're laser-focused on the financial advisor and we think of this as a planning tool that helps them work with private company owners, but to do that, they need access to better data, and our platform has do more with capturing and securing data. insights,” said Jason Early, founder and chief executive officer of RISR.
RISR uses an integration, right now, with QuickBooks (financial planning apps and other tools are in the pipeline) and, through the use of scanning technology for business tax documents, to import key financial data for client businesses. The platform then analyzes all that data and provides not only an initial business assessment, but helps guide the advisor through ways the owner can improve aspects of their business and increase its value.
“Our differentiator is not about business valuation; this is not rocket science; our platform is a business development tool for the advisors themselves,” he said.
He said many owners who work with advisers either don't know what their business is worth or think it is or should be worth a certain amount.
“Based on everything you've told me, you need your business to be worth $9 million,” he said as if speaking to a business owner consulting client. “Our platform helps you determine the levers that the client can press to bring it, although we also think there's a lot more to the story, a lot more critical discussions to have, like capital structure, risk management and in anymore.”
Some of those other discussions, which are built into the platform, will include business succession, wealth, tax planning and investments and insurance, among others.
There seems to be a lot of potential business out there, especially at the smaller end of the business market.
A June 2023 National Retirement Institute survey of 400 small business owners found that only 35% had financial advisors (small business owners were defined as owners of a company with one to 50 employees and less than $10 million annual income).
Things are now a bit more competitive when it comes to downsizing for mid-sized business owners. The same nationwide survey also interviewed 400 medium-sized business owners, those defined as a company with either 51-500 employees or $10 million to $500 million in revenue: 59% of those firm owners already have financial advisors.
RISR's data capture capabilities currently include QuickBooks integration, which is used by many small businesses, to import a company's master data and the ability to pull data from business tax returns. The platform then aggregates the data and, in turn, provides personalized business insights that advisors can use when working with owners.
“In our business, it's about the things that set you apart from other advisors, and when it comes to a software problem like this – which has always been a bottleneck – that can deliver value and not delay the process, we have I've always looked for a technology solution,” said Bill Medico, co-founder and senior wealth advisor at Jacobi Wealth Advisors and Jacobi Capital Management, which were founded a decade ago and have always worked with business owners.
He said his firm, which manages roughly $3 billion in assets across its two offices (and is underwritten by RISR), has been using the platform for several months and now has 12 advisers on it.
“We're already doing fee-based financial planning for clients and that's a plus, but what I've always found is that sometimes the data is a hindrance to plans (to work in the business),” he said.
“That to me is another game changer, bringing ideas to the table, what are the drivers that can give you the value you're looking for from your business, and doing it without delaying the process and on the customer side to you don't need to contribute. data”, said Medico.
RISR charges $350 per month for an individual subscription, which allows a single advisor to bring in as many businesses as they want. A subscription for firms with few advisors will cost approximately $1,000 per month; enterprise licenses and pricing are more complex.
“At one to two clients, it's paying for itself,” Medico said.
While there are few at the moment, other providers are targeting the same job market as business owners. WealthManagement.com wrote about Capitalized in December, which overlaps with RISR in providing guidance on business assessment, insights and succession planning. InterVal.ai, a tool based on artificial intelligence, also offers similar functions. Both also work with other verticals within financial services, including accounting firms.