BY HEIDI P. WERNER
Last year, the Chicago-based financial technology company Oranj launched a free wealth management software platform designed to give advisors more time with their clients and lower the cost of implementing technology into a firm’s practice.
“We created OranjMAX to lower costs for advisors and the investors they serve, while also giving them direct access to some of the best investment strategies and managers in the market,” said David Lyon, Oranj’s CEO and founder. “Our goal is to eliminate unnecessary overlay fees that create a drag on performance for investors while at the same time lowering the cost of doing business.”
Asset managers hosting model portfolios and funds on OranjMAX include BlackRock, Direxion, ETF Securities, OppenheimerFunds, SpiderRock Advisors, First Ascent Asset Management, Frost Investment Advisors and Marsico Capital Management.
The company announced that OranjMAX combined Oranj’s client-facing account and aggregation tools with rebalancing software from TradeWarrior, in which Oranj acquired majority ownership in April 2017. Now advisors can invite clients to create a profile on a platform where they can work toward the client’s investment goals together, virtually.
Lyon said OranjMAX saves investors $1,375 annually for $250,000 of invested assets, a significant number when compounded.
The Oranj platform offers a secure document vault, client collaboration tools, and aggregated data from more than 25,000 financial institutions, the company said in its press release. The platform offers direct access to model portfolios and funds from investment managers, along with portfolio management tools to incorporate these strategies into investor portfolios, Lyon said.
The goal of the platform is to improve the advisor-client experience and allow the advisor to grow business, work with smaller accounts and appeal to the next generation of clients.
Lyon clarified that he wanted to improve the economics of doing business for advisors, since technology is a large investment for firms. He recognized that there have been a lot of changes in the industry in the past decade. The launch of OranjMAX was a journey to find the right way to give advisors something they wanted, rather than just building a product.
“Advisors are demanding access to transparent strategies that address risk mitigation and income enhancement,” said Eric Metz, president and chief investment officer of SpiderRock Advisors. “Our partnership with Oranj helps SpiderRock deliver options strategies to advisors and their clients at every level.”
Lyon said he studied the free software options and knew that offering a base platform was possible. Technology costs are much higher for an advisory today than they were five years ago. Like any software package, Lyon said, Oranj offers à la carte services for an additional cost on the platform.
“This is an evolutionary process,” said Scott MacKillop, the CEO of First Ascent Asset Management in Denver, who has signed on with Oranj. “While traditional business models are slow to change, innovators like Oranj have brought new options to the marketplace that can improve advisor efficiency while lowering client costs.”
Since January, Oranj said it has met in person and virtually with some 700 advisory firms interested in its service. Some big names in the financial industry have signed up and have seen significant growth in assets from advisors.
“Providing advisors with a wide range of tools and capabilities to help them successfully generate positive investment outcomes for their clients is a core commitment for us,” said Matt Straut, head of RIA Distribution for OppenheimerFunds. “This partnership with Oranj is an exciting opportunity that better positions us in support of that goal.”
Oranj also continues to invest in the technology of OranjMAX, including the TradeWarrior trading and rebalancing tools and other portfolio management features for advisors, the company said in a release. The firm also said it will be hiring more software developers in 2018 to continue with innovative features and increase its regular updates to the OranjMAX and TradeWarrior platforms.
Source: https://www.fa-mag.com/news/free-fintech-platform-alleviates-fees-37789.html
