Orion's Purchase of Advizr Made Sense, but Challenges Remain: Wealth Tech Experts

Meanwhile, Advizr has "struggled" with advisor market adoption and carries a much lower user rating than peers, he pointed out. That means Orion "still has some real work to do to bring Advizr up to snuff with the high-end RIA users running Orion," he said.

It was also unclear if Orion's purchase of Advizr represented a good deal for either of the two companies because the purchase price wasn't disclosed, he noted. He also pointed to the lack of clarity around whether Orion users will have to pay extra to use Advizr.

Orion paid about $50 million for Advizr, RIABiz reported, citing an unnamed source. Orion on Tuesday declined to confirm or deny if that was accurate as it continued to be mum on terms of the deal.

But Orion Chief Marketing Officer Kelly Waltrich told ThinkAdvisor on Tuesday that "there will be no extra cost for use of the tool." She added, however, that "if folks want to add aggregation there will be a small per-household fee for that."

Kitces rated the Orion purchase of Advizr a "B- or so," explaining that the startup and its client experience technology platform "helps expand Orion's offering, but not to compete hard right away, as Advizr's user ratings from RIAs suggests there's still a lot of work to be done on its FP core even as new entrants loom."

However, "on the plus side," he said: "Yet another financial planning software acquisition should support ongoing interest from [fintech] investors who see both market opportunity and a long list of strategic acquirers to exit to." He predicted it will be an "exciting few years for advisor FP software."

Welsh of Nexus Strategy said he pretty much agreed with Kitces' tweets on the acquisition — "except the grade of B- [because] Advizr has a robust cash flow engine, a very intuitive user interface and advanced functionality to open accounts right from the planning analyses."

Giving the deal a grade of "A+," he called it a "very significant acquisition for the industry as it once again fires up the debate for owning all of the components of the tech stack (Envestnet, Orion, Fidelity) vs. best-in-breed integrations (Black Diamond, TD Ameritrade)."

— Check out Orion Buys Planning Software Startup Advizr on ThinkAdvisor.