Michael Kitces and Alan Moore knew that if they built a tool for advisors wishing to charge financial planning fees, many fee-only advisors would flock to use it. But would advisors also fund AdvicePay Enterprise, an expansion designed for enterprise firms and hybrid advisors?
With the launch of AdvicePay last year, the two XY Planning Network founders, Kitces and Moore, had created a simple solution for charging planning fees. Yet larger enterprise firms and hybrid advisors also expressed a desire for tools that would allow them to charge clients hourly, retainer and subscription fees—but they needed a higher level of technical and compliance support than the one available on AdvicePay’s payment processing platform.
“As soon as we launched, we got inquiries from large enterprises, broker-dealers and RIAs, who told us that they needed software like AdvicePay but they had additional needs,” said Kitces.
Rather than go the traditional route of raising private capital to fund an expansion of AdvicePay’s staff and capability, Moore and Kitces appealed to their fellow financial advisors to crowdfund a more robust version of the platform for hybrids and larger enterprises.
Advisors answered the call to the tune of $2 million in less than two months.
Now, AdvicePay is announcing the launch of AdvicePay Enterprise after four months of development.
“We needed to raise capital to build the additional features on top of the original AdvicePay system,” said Kitces. “With a larger enterprise, fees don’t typically go to the advisor because the advisor works for the enterprise.
“We also needed a dedicated staff; we already had a support team working with solo advisors, but with the added complexity of enterprises and the additional advisors, we needed more relationship managers. We also needed more sales and marketing for AdvicePay Enterprise. Now that we have an enterprise solution, we want more enterprises to start using it.”
The original AdvicePay has its roots in the XY Planning Network, a group of advisors committed to serving clients from Generation X and Generation Y (also referred to as millennials) with financial planning while charging hourly, retainer or subscription fees.
AdvicePay was originally designed to eliminate the need for paper checks and the slow “analogue” processing of payments by solving the custody problem for the network’s planners.