How InvestCloud is Modernizing the Fintech Industry

Q&A with InvestCloud CEO John Wise.

InvestCloud is a design-behavioral science tech company. The company focuses on the development of financial digital solutions, pre-integrated in the cloud. By providing investors and managers with a single version of the integrated truth through its platform, InvestCloud creates client experiences and intuitive operations solutions using an ever-expanding library of digital modular apps. This includes Client Portals, Advisor Portals, Digital Onboarding, Digital Advice and Financial Planning Performance, and Analytics. The result is powerful products for individual investors and institutions, assembled on-demand to meet clients’ specific needs.  InvestCloud’s technology addresses three of the most significant pain points customers experience today including 1) providing a modern digital engagement platform that allows clients to maintain their own branding and identity, 2) reducing errors through aggregating information in one place and 3) addressing fee compression by eliminating inefficient workflows and internal processes. 

What was the inspiration behind the idea?

Technology has democratized so much of our lives. So many things that were inaccessible even 15 years ago have been made easier, faster and more attainable. Private Car service? Personal Chef? All accessible with a tap of the finger. But this is NOT the case for the financial industry. It is still siloed, still expensive to change, still – in a lot of ways – for the elite. We saw an opportunity to change things by being smart with deploying behavioral science and design to build scalable technology specifically for the financial sector. Programs Writing Programs (PWP) was our game changer – PWP augments human intelligence and enables a designer or business analyst to do the work of 50 programmers. 

How has InvestCloud shaken up the financial world?

We’ve revealed the breaks in the system. We’ve pulled back the curtain on the inefficiencies and redundancies and the fact that the old way isn’t sustainable. It’s “Old Think.” We’re the “New Think.”  How to retain clients, grow clients and become more operationally efficient are our key focus areas. 

How have new technologies like robo-advice and AI changed the face of wealth and asset management?

These technologies are also trying to democratize and offer scale to wealth and asset management. They are about understanding modern customer needs and creating modern customer experiences. Meeting people on their own terms – no matter who they are or what platform they want to be met on – is difficult for legacy providers. That is where we are offering value. Through gaming theory and augmented intelligence, InvestCloud is creating digital empathy for our wealth and asset management clients — which in turn allows them to acquire and retain clients, even as wealth transfers from generation to generation.

How quickly has the company grown?

In 2010, we were less than 15 people in a garage. Today we have approximately 400 employees and over $100 Million in total bookings every year. We operate eight offices around the globe and there are over $2Trillion in assets on our platform. It’s astronomical growth.

Has the business faced any growing pains?

Of course. It is complicated to grow quickly, bring on a lot of new people, and work with so many clients. But we have taken an approach to expand with purpose – keeping true to our mission and developing a strong internal culture to ensure our team knows why we do what we do, not just what we do.

How will you grow the business? (e.g. what are InvestCloud’s growth aspirations)

Looking ahead, there are several levers that will drive continued growth and lead us to our ultimate aspiration which is an IPO:

1) Continued organic growth as we further penetrate Tier 0/1 asset and institutional managers as well as major multinational financial institutions 

2) Continued product innovation which will enable us to cross and upsell existing clients as well as target new markets and clients (such as digital financial wellness)  

3) International expansion by entering new markets (such as Asia)

4) Growth through targeted acquisitions

Since 2012, what has been the rate of growth? 

We’ve averaged nearly 50 percent YOY growth since 2012; more importantly, in recent years InvestCloud has managed to equal or outpace this long-term average. 

What value does InvestCloud provide its clients that is a unique differentiator?

Our relentless focus on Digital Engagement through unique personas and Digital Empathy, and our ability to provide massive automation across our clients’ value chain; from account acquisition and servicing (sales) to product creation to middle and back office administration.

With the unprecedented transfer of wealth occurring in today’s wealth management market, financial firms recognize the need to ‘go digital, or die.’ This is because unlike the traditional client engagement techniques that have served this industry – i.e. meet with clients in their office once a year to review their portfolios, perhaps taking them out for dinner and / or golf – the younger generation to whom the wealth is being transferred to expect to have digital access to their portfolios. 

InvestCloud provides our clients with the tools to digitally engage their clients with unique personas that create digital empathy.  Why is this important? The untold story is that most financial technology has extremely poor adoption rates. For example, CRM systems. A recent survey and found that CRM systems eat up 19 percent of all IT spend, but typically have less than 10 percent adoption rate. InvestCloud’s products combine Digital Empathy with AI to maximize adoption and automation to address the second issue the financial industry is facing – fee compression.

Given IC’s level of growth, how have you progressed your hiring and expansion plans? 

Having initially focused on developing our technology platform and establishing a core base of US clients, our expansion in recent years has been defined by the following themes (often occurring in combination with one another): 

1) International expansion: we tend to establish small local offices in new markets to serve as a launch pad in order to build a regional sales team and penetrate local markets. We did this in Canada and the UK and will likely do the same in Asia and/or Australia.  

2) Product expansion: we have gone from being primarily known as a front-end wealth management solution to now being a complete wealth management platform by successfully expanding our offerings to include a robust data warehouse as well as a full suite of 300+ apps that include data aggregation, accounting, trade ordering and reconciliation as well as performance and financial planning.

3) Acquisitions: to date, we’ve executed several acquisitions here and abroad which have supported our product and international expansion efforts and have enabled us to scale more efficiently and rapidly.

How do you describe your products and services during an introductory sales meeting?

InvestCloud has over 300+ apps that are modular and assemble together like building blocks allowing our clients to purchase only the components they need without incurring the costs of enterprise software. These apps are referred to as BOBG and fall into one of four categories:

  1. Blue refers to our Digital Client Communication Automation and Management Apps and consists of Client Portals, Digital Onboarding, CRM, Advisor Portal, Mobility, Financial Planning and our Data Warehouse
  2. Orange refers to our Digitizing data into information all in one place. It is our digital warehouse and data aggregation tools that include more than 1,000 API’s into many of the leading third-party systems, custodians, market reference data providers
  3. Black refers to our analytics engines that include Performance, Risk and Attribution 
  4. Green is our suite of portfolio accounting engines, IBOR, ABOR and SBOR that are true multi-asset class / multi-currency.

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