WealthTech – Sales Enablement Perspective


Whether you’re an advisor, investor or founder – if you’ve spent time in the wealth industry, it’s clear why this is an exciting space:

  • Large, Expanding Market: There’s around $114 trillion in advised assets in the U.S., a figure which has grown in 20 of the last 23 years (total assets declined in 2002, 2008 and 2022). These assets are managed by roughly 15,000 RIAs across the country. Despite the emergence of private equity rollups, the number of firms has increased every year due to the regulatory and economic favorability of the independent model, which drives advisors to start their own firms. This has led to a massively fragmented ecosystem of SMBs with 93% of all RIAs having under 100 employees.
  • The Great Wealth Transfer: Over the next two decades, $84 trillion is expected to be passed down from baby boomers to millennials and Gen X. This will dramatically shift the concentration of assets across the U.S. and change the profile of most client bases, creating a risk for idle, inflexible advisors but an opportunity for motivated, tech-forward firms to gain additional AUM.
  • Increased Technology Spend and Adoption: Shifting expectations of younger, more tech-savvy clients are driving increased spend on advisor software. 77% of firms added to their tech stack in 2023 while 91% of firms plan to increase their tech spend in 2024. One poll also found that 92% of advisors would switch firms over technology.

These are all positive trends for technology providers selling into the space; however, these aren’t exactly trade secrets. A quick search on “wealth management trends” will lead you to similar conclusions. The rising number of start-ups (Kitces’ market map, which has become the industry standard, grew by >100% over the past five years) and large sums of capital invested ($60 billion over the past five years) affirms this as well. So as prospective investors in the space, we’re left asking: where will there be opportunities for persistent differentiation in a fast growing and changing industry?


To start, we focused on the challenges that advisors are currently facing:

  • Fee Compression: Fee compression is affecting multiple parts of the wealth management value chain, particularly ETFs, mutual funds and other investment products. With the availability of low-cost robo-advisors and retail investors increasingly favoring passive portfolio strategies, we expect fee pressure to affect the AUM-based advice model in the coming years. Cerulli & Associates has confirmed that transparency around costs and fees is the biggest hurdle for prospects to work with an advisor. Their research shows that 46% of prospects are unsure of the value they receive for the fees that they pay.
    • Takeaway: Advisors will need earn their value and avoid fee compression by offering a comprehensive suite of specialized services and proactive, tailored engagement.
  • Organic Growth: On the surface, RIA AUM growth rates have exceeded 20% on average. However, further examination suggests that true organic growth (net new assets) only makes up a small percentage of that. The majority of growth in the industry is driven by M&A and market appreciation. Although M&A activity has been hot in recent years, we anticipate acquisition opportunities to become less abundant and accretive for many firms due to increased competition and prices.
    • Takeaway: To reduce uncontrollable risks to growth such as market volatility and M&A considerations, advisors will need to focus more of their efforts on organic channels. This requires innovation to develop new go-to-market strategies beyond “word of mouth.”
  • Time Constraint: Client engagement and communication are key to the financial advisor value proposition. A major pain point around the industry is that net new growth is constrained by an advisor’s availability to add more clients without changing the existing client experience. Despite technology improvements that automate routine administrative and back-office tasks, the median ratio of clients per advisor has remained constant.
    • Takeaway: Consistent touchpoints with clients will become even more difficult as advisors feel pressure to add additional services and work with a higher volume of clients. Additional back-office automation may not be enough to address this issue.

In the context of these challenges, our research suggests that over the next decade, successful advisory firms will be (i) hyper-personalized, (ii) multifunctional and (iii) accessible to the masses, with a core focus on sales enablement. We at Catalyst are focusing our time and efforts on finding technology solutions that drive towards this future and are initially focused on the following areas:



Value within the wealth management business model is driven by personal relationships. During the transition in recent decades from product sales (commission fees) to ongoing advice (AUM-based fees), in-person meetings and phone check-ins became the standard for client engagement. While live conversations may be the best way to develop trust with clients, it is unrealistic to maintain at scale and can be a major bottleneck to growth given the issue of advisor time constraints.

We believe the following sub-categories will increase advisor capacity and enable firms to deliver a more personalized investing experience to a broader range of clients.

  • Behavioral Finance / Risk: Tools that help bridge the gap between psychology and financial planning. They allow advisors to understand why clients make certain decisions using statistically proven frameworks – advisors can then create a more informed plan and provide a superior experience to the standard risk questionnaires that have been used for decades. Firms using behavioral finance attracted three times as many assets from existing clients in 2022, compared to the median.
  • Advice Engagement: Solutions that enable a more interactive experience between a client and their financial plan. Financial planning software is built to deliver a plan upfront, while engagement software enables virtual collaboration and educational resources. While this is a newer category, industry research suggests that this is a category rapidly increasing in importance and adoption. If one assumes that advisors will take on more mass affluent / future high earners, advice engagement solutions will be essential for servicing and retaining these smaller clients.
  • Additional Areas: CRM, client communication, investment data, proposal generation



To avoid fee compression, the “multifunctional” RIA will generate additional revenue by expanding service capabilities beyond traditional wealth management. This trend is already gaining traction. For example, Holistiplan is projected to reach 44% market share among US-based independent financial advisors this year despite being founded only five years ago. They essentially created an entirely new value channel for advisors by offering a turnkey platform for strategic tax planning (an offering that was previously outsourced to CPAs). Given how interdependent all areas of advice are (e.g. investments, tax, education, healthcare, etc.), we believe a single, integrated experience for all advisory services will be a natural evolution for the modern RIA. This will provide a better customer experience and enable advisors to unlock new revenue channels by incorporating services that have historically been separate and / or outsourced to third parties.



We see an enormous opportunity for products that complete the full lifecycle of advice, such as:

  • Retirement Income Planning: Retirement planning is the number one issue that financial advisors address. While legacy financial planning tools have historically focused on the wealth accumulation phase, we see an opportunity to offer a more dynamic and informed approach to spending in retirement. By re-thinking the mathematical framework of retirement success probability, modern technology solutions are enabling advisors to maximize their clients’ spending and quality of life.
  • Healthcare Planning: Healthcare costs and insurance policies can be highly complex, and there are typically limited resources for individuals to receive guidance outside of company HR departments. Access to healthcare is one of the most important components of one’s life plan, and we expect advisors to use specialized solutions to manage the complexity of the U.S. healthcare system and bring additional value to clients.
  • Estate Planning: Software that enables advisors to bring the estate planning process in-house as opposed to outsourcing to attorneys. Historically, this process has been difficult for wealth managers to address due to changing regulations. However, newer solutions monitor regulatory changes while also offering a platform to easily organize, visualize, strategize and deliver estate plans to clients.
  • Comprehensive Platforms: NextGen financial planning solutions are disrupting the landscape by providing a single platform for advisors to expand their service capabilities, supplementing traditional goals-based planning with modules such as tax, estate, healthcare planning, etc.
  • Additional: Insurance planning, cash flow analysis, business planning, education planning

Not only do specialized planning solutions unlock new revenue channels for advisors, but they also function as sales tools that help them differentiate. While it’s early to know which route will prevail over the next decade and beyond (specialized point solutions or comprehensive planning platforms), we are evaluating all opportunities that drive towards an integrated experience and “multifunctional” financial advisory firm.



While the transition to AUM-based fees has been largely positive for the industry due to the proliferation of fiduciary relationships, increased client engagement, and favorable economics for advisors, it has also limited who is eligible for financial advisory services given the profitability dynamics. Naturally, high-net-worth and ultra-high-net-worth clients towards or in their retirement years are ideal customers given their positive impact to the bottom line with less risk. On the other end of the spectrum, smaller, typically younger prospects have been overlooked due to their current customer value versus the time spent assessing, onboarding and servicing them – we expect this dynamic to change.

A recent study found that 80% of millennials plan to find a different financial advisor than their parents once they inherit family wealth. With $84 trillion expected to be passed down over the next two to three decades, advisors are at high risk of losing large, longstanding relationships. Successful advisors will proactively work to (i) mitigate the existing client churn risk of younger family members and (ii) develop the muscle to service smaller clients and prospects looking for a different advisor than their parents.

To do so, advisors will need to evolve their practice with the changing expectations of a digitally native generation (e.g., virtual-first relationships, co-creation of financial plans, etc.). This will initially encourage (and then later require) advisors to adopt modern technologies and services to help implement cost effective pricing and servicing strategies to turn smaller, younger clients into profitable, long-term relationships.

We’re interested in products that make wealth management accessible to more people. In addition to advice engagement solutions (as mentioned previously) that offer the functionality to service smaller clients, we see growth opportunities within the following sub-areas:

  • Non-AUM Billing Solutions: Enable advisors to charge more flexible and variable fees (e.g., subscription, hourly, one-time, etc.). These products allow advisors to serve smaller clients and future high earners.
  • Customer Data Analytics & Marketing: Extending organic growth channels beyond word of mouth. While this sub-category is still early, we see continued interest for solutions that enable data driven customer identification and acquisition.
  • Lead Generation: Top of the funnel solutions that attract and engage retail investors, often through free financial plans and content, which then funnel leads to a network of paying advisors. We view this as an effective way to drive top of funnel for younger and future high earning prospects.



The modern advisory firm must adapt and innovate to overcome the challenges of fee compression, organic growth and time constraints, and we believe that innovation in the advisor’s tech stack centered around sales enablement will be a large part of the solution. These products will allow firms to offer an advisory experience that is personalized, multifunctional and more broadly accessible in a way that meets changing demographics and client expectations. We’re excited by the opportunity set and look forward to continuing our research and outreach to find the best entrepreneurs and teams shaping the space!