Specialist
Former AVP at Orion Advisor Solutions Inc
Agenda
- Operating environment for wealth management technology and TAMP providers
- Growth outlook for Orion, noting opportunities for organic and inorganic growth
- Orion's competitive landscape vs Envestnet (NYSE: ENV) and upstarts such as Addepar, highlighting potential gaps in product suite
- Outlook for 2023 and beyond, noting pricing and unbundling trends
Questions
1.
What are your thoughts on the current operating environment for Orion, pulling out 2-3 key trends or drivers we should be paying attention to?
2.
It seems you think Orion might try to take advantage of the current market environment for acquisitions, but what is the company’s ability to grow organically in this market? Do you think people will start outsourcing to technology more to cut costs, or will people cut back on their technology offering to wait out the current recessionary or volatile period?
3.
Are most independent advisors already outsourcing to technology, is there a large amount of growth where existing advisors can outsource or is most of the future growth from new advisors becoming independent and then needing a technology platform?
4.
You mentioned Orion’s platform has everything, including compliance and billing. Do you think future regulation in the wealth management industry is a tailwind for a company such as this, given the increased compliance costs and structure, or is it a bit of a headwind because the company will have to integrate these new regulations into its technology offering?
5.
You mentioned Orion acquiring Redtail Technology and its ability to help with the compliance with text messaging and other types of things. What type of competitors would this Redtail Technology have once it’s integrated with the company? Is it an area that doesn’t have much competition, or is it a heavily competitive space that Orion is trying to break into?
6.
You mentioned Redtail has greater than 50% of the market share for financial advisors. Is there a specific reason why financial advisors like Redtail so much? How easy would it be for a player such as Salesforce or Wealthbox to mimic Redtail’s offering and take market share away?
7.
How is Orion able to stay at the bleeding edge of innovation in the financial services space, or as it gets larger, do you think it will slowly fall back into more of that laggard context that you mentioned earlier? You mentioned Wealthbox is the new, flashy shiny object in the marketplace.
8.
Is there anything missing from Orion’s product suite that you feel that it should offer to keep up with the industry or move forward with being on the front line of everything?
9.
Are there any competitors that offer the full suite of products, including those that you think Orion might be missing, that could take market share if advisors just want to utilise one provider?
10.
You brought up Addepar, one of the up-and-coming companies that seems to be disrupting the industry and taking market share. How much of a threat is Addepar to a player such as Orion, or is it focusing on different aspects of the advisor community?
11.
You highlighted the difficulties with switching advisors. Even if you get a better deal at someone new, just the time and human capital involved with switching is very difficult. If an Orion client was to leave and move to a competitor, what would have initiated that change?
12.
How much churn does Orion usually experience? You mentioned it’s difficult to leave, but do clients leave the company frequently, or does it have a steady relationship with its clients?
13.
How well is Orion able to offer additional products or services that it can upsell to a client to generate increased revenue? Is it something the company does frequently, or do most clients only want the core?
14.
If we were to enter a recessionary period or an extended period where valuations are lower so advisors are generating lower revenue, will advisors cut back on additional services, or is it something that Orion has made integral to the advisor’s job and it’s one of the last things they would look at cutting?
15.
What pricing power does Orion have? Has the company been facing fee compression, or has it been able to offset that by creating additional services?
16.
Do you think a company such as Altruist would ever be able to compete at scale with Orion with these lower prices, or will it eventually have to increase prices to offer a better product suite to compete with Orion?
17.
Altruist has a smaller product suite compared to Orion, but of the products that it does offer, how does it compare to Orion? Is it sleeker, or tech-forward?
18.
How does Orion match up competitively with Envestnet with technology or product offerings? You mentioned the industry doesn’t really have a good taste in their mouth with Envestnet.
19.
What is your outlook for Orion for 2023 and beyond?
20.
What driving factors will separate potential winners from losers across the players we’ve discussed?
21.
Is there anything we did not discuss today that you feel is worth noting?
22.
Is there any risk for insourcing for Orion? Are some of the large IBDs [independent broker-dealers] or RIAs [registered investment advisors] potentially trying to develop technology internally?
