December 3, 2023

Financial planning software company RightCapital has tripled its market share since 2020, with 15% of advisors using the technology choosing its platform, according to a recent report. Consultant Software Survey Conducted by T3 and Inside Information.

The company’s growth is fueled by efforts by industry leaders eMoney Advisor and Envestnet to maintain their controlling market share. Envestnet and eMoney have gained 11% and 14% respectively in 2021, but the “big two” have each lost between 2% and 5% over the past two years.

recently published Kites’ research The market shares of these three companies have fluctuated little in recent years, likely because T3 and Inside Information revised their survey methodology in 2021.

Kitces’ market share survey differed slightly from those conducted by T3 and Inside Information, but still found RightCapital to be the fastest-growing financial planning software for 2020-2022.

“RightCapital has taken full advantage of its ability to create a one-page financial plan (the popular

Survey authors Joel Bruckenstein, president of T3 Technology, and Bob Veres, owner of Inside Information, said:

One-page financial plans have become a controversial new product for some consulting firms.

The plans have been criticized by some for being both too laconic, leaving little room for context and detail, and for putting too much burden on the client in too little space.

“Our clients don’t care about how many pages their financial plan has, but they do care about achieving their goals,” says William Parrott, founder of Parrott Wealth Management in Austin, Texas. “Our focus is on helping clients retire on their terms, not shrinking the pages of their financial plan.”

Still, other advisers say the one-page plan is here to stay.

“Clients often have busy schedules and limited time to review lengthy financial planning documents, which makes it easier for them to get concise one- to two-page summaries,” says Sean Lovison, a financial advisor with WJL Financial Advisors in Philadelphia. File.” Right Capital. “These summaries provide a quick overview of their financial situation and goals, allowing clients to get to the gist and have meaningful discussions with financial professionals without being overwhelmed with information.”

RightCapital’s snapshot feature is just one example of what founder and CEO Chen Shuang calls the company’s “customer-centric approach.”

“When I started RightCapital, I thought, ‘If I’m a consumer, how do I want you to see a financial plan from my financial advisor?'” Chen said. “We[made sure]that the app was really designed for the end consumer, the client and the client, so they can understand what they’re looking at, they can understand the value that the financial advisor is providing them, and they can really appreciate .. …. work with a financial advisor on the financial planning process.”

According to the Kitces report, RightCapital is popular with “indie companies, teams with revenue under $250,000, and teams that have been around for less than four years.” This focus on smaller, younger companies may be a result of RightCapital’s own age, with 2023 marking the company’s eighth year in business.

RIAs have historically been reluctant to replace their financial planning software due to the time-consuming data transfers.

While experts don’t think RightCapital will poach many long-term users away from eMoney or Envestnet, the company’s approach puts them “well-positioned for growth if they can continue to attract a significant number of new consultancies, along with their high satisfaction and word-of-mouth “Honor earns the betrayal of competitors, which is hard to come by,” according to the Kitces report.

According to the report, by 2022, RightCapital will account for 23% of the total market share, Envestnet will account for 32%, and eMoney will account for 39%.

“At eMoney, we take a holistic view of the market, focusing not only on meeting the needs of independent advisors and large corporate clients, but also ensuring our users are highly satisfied,” said Rachel Eccles, eMoney’s Senior Vice President of Marketing.

Eccles said T3’s survey did not include eMoney Premier, the company’s “most powerful solution,” and therefore may have underestimated eMoney’s total market share.

A spokesperson for Envestnet said the company “is working to empower and engage customers and change the way they think about their financial future.”

“To this end, we are extending the capabilities of the platform by adding new prospecting tools, such as the ability for advisors to embed planning functionality into their website, new MyBlocks functionality and expanded integrations, to meet the needs of advisors and their clients,” the statement said people said. .

RightCapital’s growing market share may also be a result of its strategic partnership with the XY Planning Network, which allows members to access the software at a discounted rate.

In a CRM software application, Wealthbox more than doubles its market share Part of the success over the past three years is due to a similar partnership with the XY Planning Network.

“Redtail’s old pricing didn’t appeal to me because I could get it for $12 a month,” said XYPN member Ron Strobel, founder of Retire Sensously in Meridian, Idaho. Price to buy Wealthbox.”