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How FAs Engage Third-Party Services is Changing

By Thomas Coyle September 28, 2017

To gain their edge, financial advisors need access to knowledge about the tools and resources available to them against a backdrop of sharper competition from low-cost providers and an uncertain regulatory environment – best exemplified by the drawn-out fight over extending the fiduciary standard to more U.S. FAs. But finding and assessing these tools can be a difficult process.

That’s the premise behind Wealth Mosaic, a brand-new London-based company attempting to help wealth managers “across the globe” and in all business channels “better understand their market, identify and find suitable solutions, and ultimately to make better, faster and more efficient decisions” for their practices, according to its website.

Wealth Mosaic aims to build “a resource covering all of the main business needs of wealth managers” in about a dozen verticals, says its co-founder Stephen Wall, who has worked as a wealth management consultant with Boston-based Aite Group and Scorpio Partnership in London. At first, though, he says the service will focus where it’s needed most: on technology and data resources as well as consulting and research options.

As a digital platform, Wealth Mosaic’s verticals will be “dynamic, engaging and populated with a broad range of knowledge resources as well as filters to let users discover what they want,” says Wall. That is, its listings are subject to continuous updating.

Though Wall sees a role for Wealth Mosaic with all “different types of wealth managers,” he sees particular growth opportunities helping “smaller independent” firms that lack in-house consulting arms to help them match their needs to third-party providers, whether the services in question are critical to the firm’s core mission or add value around the edges.

For Ian Ewart, a London-based consultant with Anchura Partners, Wealth Mosaic could prosper in the face of “a supplier conundrum.”

Ewart explains. The wealth industry “is defined by relationships, which can be both a good and a bad thing. It’s great to do good business with the right people one knows well; it’s less than optimal if one returns only to one’s known suppliers,” says Ewart, a former top executive with Coutts & Co.

Also truncating the wealth industry’s collective ability to match needs to viable solutions is the fact that firms’ senior management has “often graduated from client relationship management, or technical roles and investment management” — niches, in other words — says Ewart, who doesn’t work for Wealth Mosaic. As a result, “there has been a lack of broadly, functionally expert management that has a real understanding of the supplier choices and value.”

In turn, this “has frequently led to ‘me too’ solutions, or expensive in-house proprietary solutions that become increasingly costly to maintain and limit flexibility in respect to advances in technology, or changed working methods,” Ewart adds.

Ian Ewart

Wealth Mosaic has an opportunity to illuminate these blind spots, according to Ewart. “The very fact it’s not just a vendor platform, but rather a directory of services covering all the third-party needs of wealth managers, will enable choice and increase transparency,” he says.

Urs Bolt, a Zurich-based financial-technology expert, agrees Wealth Mosaic emerges with a decent chance “to structure the sprawling landscape of fintech startups and other related services in order to assist technology buyers to navigate through the emerging ecosystem and to effectively benefit from it.”

And Bolt thinks Wealth Mosaic has the field to itself – at least for now. “I am not aware of something similar in the financial-technology space,” he tells FA-IQ.

But Bolt’s experience with digital directories in other industries — covering sectors as diverse as durable goods to freelance clearinghouses like Fiverr and Upwork — tells him providers are likely to seize on Wealth Mosaic “to offer services to a much larger target group than is currently viable.”

Wealth Mosaic’s Wall is counting on that happening.

The directory is free for wealth advisors to use, requiring only registration. The company plans to make money by up-selling “premium solution subscriptions” to vendors. In this view, Wall says providers would pay Wealth Mosaic “to host more informative and engaging profiles for some or all of their solution profile pages and business profile page.”