Australian fintech company Lumiant is moving into the U.S. wealth market with an investment from Savant Wealth Management.
The Rockford, Illinois-based registered investment adviser has invested $3 million in Lumiant, which provides a digital client portal and engagement technology to financial advisers. In addition to becoming a minority owner, Savant, which manages $12.8 billion in assets according to its most recently filed Form ADV, will be Lumiant’s first customer in the U.S.
Savant founder and CEO Brent Brodeski will join Lumiant’s board of directors, which also includes Gavin Spitzner, president of Wealth Consulting Partners, and Matthew Brinker, managing partner at Merchant Investment Management.
Existing technology for advisers focuses primarily on numbers like investment returns, risk quotients and Monte Carlo simulations rather than what clients really care about, which is having peace of mind, Brodeski said. While Lumiant does track portfolio performance and retirement goals, it also takes into consideration how clients value their occupation, education, health and social life.
This unique approach can help it gain a foothold in a crowded American market, Brodeski said. Before meeting Lumiant, Savant was planning on investing millions to build its own software to help advisers have the sort of “soft conversations” they don’t learn in business school.
“We figured it would take us five to seven years to build this,” he said. “We ended up getting introduced to the Lumiant team and were blown away.”
Instead of focusing only on retirement, households on Lumiant are putting in an average of 10 to 15 goals for achieving “their best financial lives,” said Blake Wood, who was named CEO of Lumiant’s U.S. business in May. Wood previously served as senior vice president of corporate strategy at Envestnet before departing in April after 17 years with the company.
While “financial wellness” is a popular buzzword in wealth management, including at Wood’s former employer, it’s just one of eight areas Lumiant focuses on, Wood said.
“It’s all good and great to focus on money, but it leaves out the overall mental well-being of a client,” he said. “It’s about having a better balance in life. For example, spending 100-plus nights on the road and countless plane rides in the chase of doing better financially really wasn’t helping me or my family live our best lives.”
Lumiant also focuses on what Wood calls “financial spouses,” a spouse passively engaged in a household’s financial decisions but not speaking with the financial adviser. Lumiant’s software encourages advisers to get both parties involved in planning, something that Savant valued in the software.
“They don’t teach you how to do that in school, becoming a kind of financial shrink,” Brodeski said. “The challenge is there hasn’t been a good, scalable way in our industry for advisers to have these discussions.”
While some advisers may be hesitant about straying from their bread-and-butter of investment management into more touchy-feely services, having easy-to-use technology makes training and adoption much easier, Brodeski added.
“It’s one thing for advisers to have one-off planning conversations and pull out a single tool to talk about goals, and it’s another to have a unified dashboard to allow clients to monitor in real time their well-being, their goals and their [overall] financial health,” he said.
Wood is convinced Lumiant can convert even some of the most old-fashioned portfolio managers.
“They’ve got their special sauce and that’s what they’ve been doing for 30 or 40 years, so we might not be the right technology for them to use, but [it] might be right for their practice,” Wood said. “They see the value in doing this with a client relationship manager or junior adviser. It opens up the relationship and provides more [services] to that client.
Having been designed for the Australian market, which is more heavily regulated and less focused on investment management or product sales, positions Lumiant well for the ongoing shift to holistic planning happening in the U.S., Wood said.
The fintech plans to use the $3 million investment to hire more software developers and sales staff to expand its nascent footprint. While its focus initially is on financial advisers, Lumiant also sees potential to expand into accounting firms.
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