As the race to stay on the forefront of technology continues, ScratchWorks,the industry’s wealthtech accelerator, recently launched Season 3 of its“Shark Tank” style competition in anew virtual format.
Known as the place for emerging fintech and wealthtech companies to gather and gain instant fame and valuableinvestments from the industry’s leadingRIA firms, Scratch Works featured threehand-selected innovative companiesthis year.
Under normal circumstances,ScratchWorks is held in a live generalsession at an exclusive industry conference. However, due to the pandemic, itrecently used video for its online debutin a four-episode streaming series thatculminated in a record-setting level ofinvestments.
The event was sponsored again byFidelity Institutional and the Universityof Colorado’s Leeds School of Business,and finalists were judged by leaders oftop RIAs from across the industry. Theinvestor panel included Marty Bicknell,CEO of Mariner Wealth Advisors; JohnEadie, founder and managing director ofCovenant Multifamily Offices; ShannonEusey, CEO of Beacon Pointe Advisors;Jon Jones, CEO of Brighton Jones; andMichael Nathanson, chairman and CEOof the Colony Group.
Collectively managing more than $80
billion in AUM, these five firms are lead-
ing the way for investing in the wealth
management space via the Scratch Works
accelerator. In fine fashion, David Canter,
head of the RIA and family office segments
for Fidelity Institutional, returned to his
role as host and chief deal negotiator.
First up was Lifeworks, a financialadvisor platform that provides growth-minded advisors with proven systems,tools and templates to support andenable a scalable, fee-based subscriptionmodel for financial planning and wealthmanagement. Its platform also providesautomated digital onboarding, clearinghouse and credit card processing, combined with a digital marketing solutionto drive the growth of ideal prospects,all delivered through a modern, comprehensive and unified advisor and client technology experience.
Lifeworks founder and CEO Ron
Bullis opened his pitch for $1.8 mil-
lion, roughly a 6% stake of his company
at a $30 million valuation, by saying,
“Wealth management is broken.”
Bullis’ own experience in setting up
his RIA firm as a breakaway advisor
opened his eyes to how the industry has
a value misalignment under the AUM
model, as clients pay for commoditized
investing while advisors are giving away
what clients really want and will pay for
— financial planning. Also, advisor tech-
nology today is made up of disconnected
systems that create an inefficient and
disjointed advisor and client experience.
“To win the future, advisors will needto win the client experience,” Bullis said.His answer to this problem is a unifiedapproach to technology, combined withdigital marketing and the right combination of custody, trading, rebalancing,compliance and reporting tools that heand his team designed and integratedinto one environment using the latestCloud-native technologies and a unifieddata model.
Several Scratch Works investors wereskeptical of Bullis’ attempt to try andbuild the next “silver bullet” unifiedtech stack.
“This has been tried before, and you’llbe up against some major players suchas Salesforce, Envestnet and others, soI am out,” said Jones. Nathanson andEadie also bowed out of the negotiationsdue to similar concerns.
Bicknell, though, was intrigued. “Isee the vision, I love the platform, butI’m stuck on the valuation,” he said,
By Timothy Welsh
ScratchWorks’ Season 3 Invests
$5 million in Wealthtech Startups
Pairing up wealthtech companies with top RIA investors brings
suspense and cements the biggest deal to date.