Waddell & Reed Adds Riskalyze Risk Alignment for Its Advisors

WaddellONE provides "direct connectivity to several of the firm's existing technology partners" and is a "key part of an incremental series of enhancements the wealth management business is implementing over the next year as part of its business administration program," he said. "Additional components will include enhanced reporting, improved data analytics and a simplified business processing model," he pointed out.

The enterprise agreement was finalized in June and the launch came a few weeks later, Patrick Hannon, managing director of major accounts at Riskalyze, told ThinkAdvisor on Wednesday. Prior to the deal, the companies had "maintained an unofficial relationship for a number of years, simply based on advisor interest and common interest," he said, adding: "Starting in 2018, both teams came together to take deliberate steps to improve the user experience for its advisors and clients. Delivering the Risk Number quickly, across multiple endpoints in the tech stack, is a great win for Waddell & Reed advisors and clients."

The Risk Number is an "objective, quantitative measurement of an investor's true risk tolerance and the risk in a portfolio," Riskalyze says at its website. The company's "patented technology calculates risk utilizing a scientific framework … and is a more efficient way to discuss risk with a client than subjective terms like 'moderate' and 'aggressive'," it says.

Waddell & Reed advisors will now be able to "effectively align clients and investment portfolios uniquely suited to their needs through the use of Riskalyze's sophisticated tools and features including Risk Assessment, Portfolio Analytics, Retirement Maps, and more," the companies said in their announcement Wednesday. "The enterprise agreement between the two firms is currently in place, and Waddell & Reed has already activated Riskalyze users on the platform," they said.

Waddell & Reed had $57.4 billion in assets under administration as of June 30, up from $56.1 billion March 31 and $57.1 billion June 30, 2018, it said in its Q2 earnings news release. But the number of advisors and associates of the firm dipped to 1,347 as of June 30, down from 1,367 as of  March 31 and 1,469 as of June 30, 2018.