As the financial technology, or fintech, industry continues to expand and become ever more important in wealth management, new and emerging market opportunities are rapidly shaping how independent financial advisors will work with clients and manage their businesses.
One of the more prominent developments the industry is experiencing is the latest invasion by Canadian fintechs targeting the hundreds of thousands of financial advisors managing the trillions and trillions of dollars in investable assets residing in the U.S.
"We are seeing more and more established and startup technology companies from Canada now entering the U.S. market," said Joel Bruckenstein, industry tech guru and producer of the T3 technology conferences.
"This is happening for a number of reasons, most notably the vast size of the U.S, wealth markets and a strong U.S. dollar, which means they can grow much more quickly, profitably and achieve higher valuations by targeting financial advisors here in the States," Bruckenstein explained.
Plus, he adds, there are "more and more private equity and venture capital investors focused on the U.S. wealth tech space that they can tap into for growth capital to expand their businesses beyond their relatively much smaller home markets."
Cross-Border Players
The most recent example of this PE and VC money crossing the U.S. and Canadian borders is CapIntel, which focuses on day-to-day workflows and fund analysis for financial advisors and is opening up shop in the U.S. CapIntel recently announced U.S. $11 million in Series A funding led by the New York-based FinTech Collective with participation from Fengate Asset Management on behalf of its investor, the LiUNA Pension Fund of Central and Eastern Canada.
Since launching its platform in 2019, CapIntel experienced nearly 800% revenue growth in 2021, following 640% growth in 2020, and it is now used by more than 10,000 advisors serving more than 2 million households.
CapIntel plans to hire at least 150 new team members over the next two years, focused on building out its sales and product teams after the recent expansion into the U.S. market. Its platform addresses the perennial challenges of engaging and presenting investment solutions to clients along with the preparation of investment proposals.
Another example of recent cross-border fintech investment is Conquest Planning, a financial planning software platform created by Mark Evans, a longtime Canadian technology innovator.
This is actually Evans' second financial planning software venture from Canada targeting financial advisors in the U.S. His first foray happened over 30 years ago with the launch of the well-known NaviPlan, which has subsequently been passed around by various wealthtech platforms and insurance companies via M&A, most recently landing at the wealthtech supermarket InvestCloud.
Conquest recently raised $7.5 million on top of $3 million a year ago to expand U.S. operations.
Another well-capitalized Canadian venture heading south is FutureVault, a secure digital vault and document exchange platform targeting the U.S. with its powerful document management capabilities, automated workflows and collaboration tools. Meanwhile, ReachStack, a Canadian, AI-powered email communication, content sharing and revenue nurturing platform also recently set its sights on the U.S. financial advisor marketplace.
Advisor Websites is another Canadian fintech success story that has grown dramatically in the U.S. by focusing on a single core piece of the advisor tech stack, websites, by making them flexible and dynamic — so much so that Advisor Websites was recently acquired by the fast-growing marketing platform Snappy Kraken.
