Emotomy’s business model and approach were quite different to what I had expected. Emotomy is not just a robo-advisor or a standalone piece of software for archaic strategy planning— it is a comprehensive interactive tool that touches each element of a wealth management business’ value delivery chain.
Dr. Patrick Beaudan
, CEO of Emotomy, received his PhD in engineering from Stanford University. Afterwards, he joined a consulting firm, where his clients were banks and financial institutions. Always active in the finance sector, he then joined an investment bank where he was the head of European business development and M&A. He subsequently created Belvedere Advisors, which eventually led to the development of Emotomy.
Emotomy in a nutshell
Emotomy had a humble beginning as a simple visualization tool that allowed money managers to scale their marketing, without having to repeat themselves or manually create and update presentations. It was an online platform for reviews with investors. Today, it covers the entire value-delivery chain of what a money manager or a private wealth manager does, which includes portfolio research, portfolio construction, investment proposals, custom risk questionnaires, tailored client demographic profiling tools, paperless client onboarding, account reviews, billing and performance reporting Emotomy has a range of tools available for end users, who can be investors or financial representatives. These tools help clients build and optimize a portfolio, discover and perform trade-off analyses, etc. The platform also has automatic optimizers, manual optimizers, goal seekers, and questionnaires (which can be custom questionnaires put together by the financial institutions using Emotomy as a client portal).
The fact that Emotomy is so customizable is what draws investors to it. There is no default questionnaire or risk-scoring system, and investors can build their own investment policy that creates a portfolio out of the questionnaires. Another plus is the ability for clients to be able to model and load their own investment strategies with Emotomy. In addition, as Patrick explained to me, it also offers unmatched flexibility and can cover anything from asset-allocation strategies to hedge funds.
“I developed Emotomy to be that way for my own business. I earned my PhD in computational physics, so numerical mathematics and software development is my background. The programming side is simple; the hard part is to program something that’s useful to some clients.”
The other thing that differentiates Emotomy is that they do not force their institutional clients to use all of the features. They have clients that use it purely for onboarding and account opening, and clients that use it purely for marketing. Closing in on $4 billion dollars of platform assets, several hundred advisors are using the platform, and Patrick says that Emotomy’s clients are driving the growth and development priorities.
Not just a robo-advisor
Robo-advisors are a simple solution for small client accounts and for advisors who want to spend zero marginal time and have as close to zero marginal cost on opening a new account for a small investor. Their portfolio strategy is typically a simple asset-allocation strategy. Using Emotomy, an institutional client can push a button and configure the front-end white-label portal to act like a robo-advisor. This means that when users go to this institutional client’s portal powered by Emotomy, they can answer a questionnaire that leads to a suggested investment portfolio. Users can also use goal seekers, simply pick an investment strategy, or combine strategies to make their own. If the institutional client wishes to offer more tools, manual or automatic optimizers are also available and users can create their own portfolio with ticker symbols and also combine these with proprietary strategies of their advisor. Emotomy can then seamlessly onboard the investor at the RIA and its custodian, and automatically trade the investor’s portfolio.
Although Emotomy can be configured for what it calls a “pure robo” experience, the difference between robo-advisors and Emotomy lies in the wealth of custom features and interaction tools available between investor and financial representatives. The platform includes tons of rebalancing tools, automatic volatility minimization tools, stop losses, trading stop losses, and overlays, demographic profilers, questionnaires, and customizable workflows that can be deployed towards specific investors to walk them through the platform in pre-determined ways. Institutional clients decide which tools are available to the user—this can be multiple tools or just one tool. The freedom to sign e-documents with
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