The wealth management sector is undergoing a technological revolution, integrating advanced systems into its operations. This transformation promises cost reductions, innovative business models, and new revenue channels. Wealth and asset managers are particularly keen on exploring artificial intelligence’s potential to enhance client experiences and optimize advisor workflows. Savvy Wealth has positioned itself at the forefront of this change with its digital operating system for financial advisors. This platform leverages cloud-based infrastructure to simplify wealth management for clients while automating crucial processes such as compliance, portfolio analysis, and financial planning for advisory teams. The system offers clients a centralized hub to manage their advisor relationships and access sophisticated tracking and planning tools. It covers a wide range of services, from tax optimization to foundation and endowment management, all in one comprehensive platform. For advisors, Savvy Wealth’s platform streamlines operations by automating lead generation, customer relationship management, client services, back-office tasks, and marketing workflows. This automation allows advisors to shift their focus from time-consuming administrative duties to high-value client interactions, ultimately improving service quality and efficiency.
AlleyWatch caught up with Savvy Wealth Cofounder and CEO Ritik Malhotra to learn more about the business, the company’s strategic plans, latest round of funding, which brings the company’s total funding raised to $33.8M, and much, much more…
Who were your investors and how much did you raise?
Savvy Wealth raised a total of $26.5M during its Series A funding round. Investors include Canvas Ventures, Thrive Capital, Brewer Lane Ventures, Index Ventures, The House Fund and Alumni Ventures.
Tell us about the product or service that Savvy Wealth offers.
Savvy Wealth is a digital-first platform for financial advisors centered around modernizing human financial advice. Financial advisors who are employed by its affiliate RIA, Savvy Advisors, leverage its purpose-built, integrated technology platform to scale revenue faster and spend more time with their clients to deliver better outcomes. Savvy has unlocked the power of artificial intelligence (AI) to successfully automate tedious middle and back-office tasks, augment marketing and prospecting, and streamline traditionally manual, time-consuming processes. Over the last few years, the firm has consistently rolled out innovative solutions including its AI-powered advisor dashboard, direct indexing tool, and in-house investment management solution.
What inspired the start of Savvy Wealth?
Throughout my 20s, I founded and sold two startup companies (Streem, acquired by Box in 2014; Elph, acquired by Brex in 2019). Following the two successful acquisitions, I received a cash windfall and didn’t know where to start with managing my newfound wealth so I sought financial advice. This search introduced me to the wealth management industry, which I quickly grew passionate about. However, I was surprised by the outdated technology advisors were using.
I noticed that most advisor tech lacked both rich client experiences and efficiency. I described the traditional wealth management model as surprisingly analog, especially considering the industry’s profitability. I realized that no one had successfully integrated cutting-edge technology with personalized financial advice, so I decided to start his own company to solve this issue, Savvy Wealth.
How is Savvy Wealth different?
Savvy stands out by addressing the challenge of integrating technology with human advice through a modular, open architecture approach. This strategy ensures the platform remains flexible and adaptable as the industry evolves. Savvy’s commitment to feedback and collaboration with its internal advisor team enables it to stay ahead by continuously refining its offerings. As a result, Savvy Wealth has demonstrated its ability to dramatically boost efficiency for independent advisors, reducing time spent on non-revenue-generating administrative tasks by up to 90 percent.
What market does Savvy Wealth target and how big is it?
Savvy Wealth, as a technology firm, focuses on supporting entrepreneurial advisors who are looking to grow and expand their practices through advanced technology solutions. It primarily recruits advisors with a pre-existing client base, providing them with an all-in-one tech platform that automates non-client facing tasks using AI and offers a wide array of financial products.
The advisors they support typically manage assets ranging from $20M to $500M, are aged between 30 and 55, and are either independent or part of small teams of 2-5 advisors. This market is significant, driven by increasing wealth and complex financial needs among high-net-worth individuals, who are served by these advisors.
What’s your business model?
Savvy Wealth operates a unique business model focused on empowering financial advisors through advanced technology. Advisors who join the firm’s affiliate RIA, Savvy Advisors, incur no direct costs, as the firm hires them as employees under either a W2 or 1099 arrangement, depending on what’s most beneficial for both parties. This structure allows advisors to access Savvy Wealth’s proprietary technology platform and tools at no additional cost, enhancing their ability to deliver superior financial advice and service to clients.
How are you preparing for a potential economic slowdown?
Savvy Wealth is somewhat agnostic to market fluctuations. When markets decline, individuals are more likely to seek financial advice.. Conversely, in a rising market, Savvy’s services are naturally advantageous due to the growth in managed assets. This resilience has been a significant factor in capturing attention and interest, regardless of economic conditions.
What was the funding process like?
While the firm wasn’t in a formal fundraising process initially, it was introduced to Canvas Ventures, known for its successful early investments like LendingClub and FutureAdvisor, which was acquired by BlackRock. Having Canvas as a strategic investor was crucial for Savvy, and when a funding round took shape, Savvy approached its existing investors with an opportunity to reinvest, which they gladly did.
In 2022, Savvy raised $11M, which was sufficient for that phase of its growth. With the continued success and traction of its proprietary technology and national affiliate RIA Savvy Advisors, the firm decided to raise an additional $15.5M in its Series A round this year.
This funding will accelerate the development of its AI-powered technology platform, enhance marketing and operational support, expand product and engineering teams, and recruit entrepreneurial advisors to Savvy Advisors. Partnering with Canvas Ventures and Rebecca Lynn, who has a strong track record with early-stage investments, has been a key factor in unlocking the next phase of Savvy’s growth.
What factors about your business led your investors to write the check?
Investors were drawn to Savvy Wealth for several key reasons including:
- Growing Demand for Autonomy: Advisors are increasingly seeking more autonomy and moving away from large banks to independently-run practices. Savvy aligns with this trend by offering a platform that supports their transition to independence.
- Added Value for Advisors: By choosing Savvy over traditional wirehouses or starting their own RIA, advisors can unlock additional value. The platform provides comprehensive solutions that enhance their ability to serve clients effectively.
- Integrated Full-Service Offering: Advisors can deliver a full family office-style service through Savvy’s integrated platform, which offers a wide range of financial products and services. This eliminates the need to manually piece together third-party solutions, offering a more seamless and efficient experience.
These factors highlight the strategic advantages of our business model and the value we provide to both advisors and their clients
What are the milestones you plan to achieve in the next six months?
In the upcoming months, Savvy aims to accomplish multiple key milestones:
- Achieving $1B in AUM for Savvy Advisors: This is a major growth target that reflects the firm’s rapid expansion, building on the current $700M in assets managed by over 30 financial advisors nationwide.
- Enhancing Proprietary Technology: Savvy is committed to further developing its technology to reduce the time advisors spend on middle and back-office tasks, enhancing client interactions and advisor efficiency.
- Streamlining Onboarding and Client Access: Savvy will continue to innovate its client engagement platforms, making financial planning more accessible and onboarding smoother through smart automation. This aligns with their mission to use technology to redefine wealth management, ensuring a high standard of service and deeper advisor-client relationships.
These milestones represent Savvy’s ongoing dedication to leveraging technology to transform the wealth management industry. The firm aims to address the industry’s challenges by providing advisors with advanced tools, broad financial products, and comprehensive marketing support, ultimately improving client outcomes in a rapidly evolving market.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Due to the COVID commercial real estate crunch, there are good deals to be found when trying to secure office or coworking space. Try looking into NYC companies with office space that would be willing to sublease to you on certain days so that you’re not financially tied to a large opex commitment.
Further, one good part about NYC is that there is a community for every industry, with multiple events happening every week. Joining community and networking events can help get your name and presence out there, on top of building your
Where do you see the company going now over the near term?
Savvy will accelerate the development of its artificial intelligence (AI)-powered technology platform, expand its product and engineering teams, and recruit entrepreneurial advisors to its national affiliate RIA, Savvy Advisors.
What’s your favorite summer destination in and around the city?
Savvy does a social outing with its team at least once a month, and especially enjoys outings that only NYC can offer. The team is excited to attend the US Open in early September!
