Wealth

Untangling Motive And Clearlake’s Median Communications Deal

Even for someone who has followed the advisor technology sector for many years, it can be a challenge to keep up with what has been broken up, sold off, digested or reconstituted into pairings with something else.

Take, for example, the latest move by private equity firms Motive Partners and Clearlake Capital, which this week announced the acquisition of the investor communications firm Mediant Communications.

While terms of the deal were not disclosed, Mediant has long been a provider of investor communications technology to banks, brokers, corporations, funds and investment managers, competing with proxy behemoth Broadridge.

Advisors might be familiar with Mediant as well for offerings like its Advisor Mailbox, rolled out in 2012, that could keep advisors updated ahead of mailings to clients (if their broker/dealers were users of the software).

Some might also recall that Mediant last year agreed to settle a class action lawsuit following an April 2019 data breach, which exposed the personal information of 225,000 people. Some 1,100 had made claims in the suit and the company ultimately agreed to pay up to $10,000 to each as reimbursement for expenses related to the breach.

Now, Mediant’s technology will join the three pieces Clearlake and Motive acquired a year ago for $1.1 billion from Refinitiv, a part of the London Stock Exchange Group (at which time a strategic partnership between the private equity firms and LSEG was also announced).

Last year’s acquisitions included the BETA, Maxit and Digital Investor products, which, in addition to having been owned by Refinitiv, had previously been parts of Scivantage and Thomson Reuters.

BETA is used for securities processing as part of clearing and custody operations, while Maxit is used for tracking cost and tax basis data on assets.

Sometime during the past year, BETA and Maxit were combined under and renamed as part of the BetaNXT platform, to which Mediant has now been added.

What was old seems new again. The platform already had plenty of existing users, of course, including Wells Fargo Advisors and Janney Montgomery Scott. And the firms state BetaNXT “supports more than 50 million retail accounts, has more than $6 trillion of assets on the platform, and processes more than 35 million securities-related transactions daily.”

For its part, Mediant touts on its website that it supports more than 70 million shareholders and has processed more than 52 billion share votes on its platform.

InvestCloud Releases InvestCloud White FMB+

In related news, InvestCloud (which is majority-owned by Motive and Clearlake) announced the release of the the next version of InvestCloud White that it is now calling InvestCloud White FMB+ (the letters referring to front, middle and back-office).

White was first rolled out in March 2020 and designed to bring together more than 300 different InvestCloud applications and pieces of functionality and allow for firms using it to design custom workflows and configurations to support the work of advisors and asset managers.

FMB+ includes applications for client communication, planning, trading and accounting, as well as business process outsourcing among other technology categories. One user of the BPO technology happens to be William Blair, which in collaboration with InvestCloud, rolled out its own SYSTM platform for UHNW advisors and clients in February.

FutureAdvisor Shuts Down

I know most advisors will shed no tears hearing that the direct-to-consumer robo operations of FutureAdvisor are shutting down—at least one, Ritholtz Wealth Management, is probably pretty happy about it—it was, however, a little sad for me.

That sadness stems more from my work as a journalist covering the firm over the years, which I first wrote about in 2012. I had already written about its predecessors Betterment and Wealthfront (the latter I also spent two years working for) but I continued to follow FutureAdvisor and the others after departing Wealthfront.

It was a bit of a shock when BlackRock acquired FutureAdvisor in 2015 but it proved a couple things, at least at the time. First, big firms were interested in the ideas, innovation and technology being built by it and its competitors and second, the entrepreneurs, founders and engineers behind automated investing startups saw it as more possible that they too could either see a big payday (from an acquisition) if not an IPO one day.

I remember seeing Bo Lu, FutureAdvisor’s co-founder, on stage at Financial Planning’s Invest Conference in 2016, which I was covering for RIABiz. Lu talked about BlackRock’s entrepreneurial autonomy and how his startup remained a standalone subsidiary of the larger firm. While it made a few important deals, perhaps most notably LPL and US Bank signing on to use FutureAdvisor’s platform, its own standalone direct-to-consumer operations seemed to stagnate.

After almost 11 years of operation, the robo’s last Form ADV showed only $1.8 billion in AUM, which is dwarfed by both the remaining standalone D2C automated investment platforms Betterment with $34 billion and Wealthfront at $23 billion.

AcreTrader the Innovator

I will end on a happier note, at least as far as I’m concerned. The farmland investing platform, AcreTrader, which I have written about several times over the last three years, has hit a mainstream milestone: the plucky Arkansas-headquartered technology firm landed on Fast Company’s annual Most Innovative Companies list, where it was ranked No. 2 (only behind Amex) in the Personal Finance Sector.

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