LPL Financial’s Vendor Affinity Program is the cool clique of which everyone wants to be a part. Riskalyze is the latest company to make the cut. The company that invented the Risk Number for financial advisors and their clients to use to align risk preference with portfolio risk announced on Wednesday its selection for inclusion by LPL, the nation’s largest independent broker-dealer.
The Vendor Affinity Program offers “a centralized repository of vendors who have been reviewed by LPL and that have agreed to provide their products and services to LPL advisors at discounted prices.”
“We are very excited to be part of the first tranche of providers to be included in LPL’s Vendor Affinity Program,” Aaron Klein, CEO at Riskalyze, said in a statement. “We appreciate LPL’s recognition that so many of their advisors are already using the world’s first Risk Alignment Platform to show prospects they’re invested wrong, and prove to clients they’re invested right.”
Riskalyze claims that 53% of investors in the 20 to 29 and 70 to 79 age groups are inaccurately served due to age-based risk tolerance stereotypes. The Risk Number’s quantitative approach allows advisors to find “true north” for their clients and design portfolios accordingly.
“The data clearly shows that investors who are invested outside of their risk preferences sell when markets are down, buy when markets are high, and consistently achieve poorer outcomes than if they had the ability to stay invested for the long run,” according to the company.
Earlier this summer, Klein explained one of the firm’s objectives is to “to democratize access to quality financial advice by demolishing the barriers that traditionally prevent it.”
Klein is also a frequent critic of firms and advisors who try to “out-robo the robo-advisors.”
“In the race to depersonalize the investor experience, the venture capital-backed money will win,” Klein noted at the TechLeaders conference in Dallas in March.
The latest news comes on the heels of the company’s announcement with CLS Investments in June concerning the launch of “Autopilot,” an automated asset management platform for financial advisors.
“You might have a 401(k) plan with 200 participants, but only about 10 participants have enough assets to get access to quality advice,” Klein explained at the time. “With Autopilot, there is now a solution for all 200 clients to get that advice and get the Risk Number right.”
Amidst the “robo” noise, financial advisors are looking for a lower-cost solution that allows them to combine client self-service capabilities with a personalized service approach, he argued.
“The combination of CLS’s strengths in efficient and cost-effective asset management and Riskalyze’s unique Risk Number technology put a powerful capability in the arsenal of every financial advisor in the country.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
