Wealth tech platform Orion has signed a deal with CAIS, an alternative investment platform for independent financial advisors, to give Orion’s advisor users (and their clients) access to a series of alternative investment products.
Advisor interest in alternatives has been growing rapidly within the past several years. A recent CAIS-Mercer survey of more than 250 independent financial advisors found that 85% said they expected to increase their allocations to alternatives by 2025.
Orion hopes to seize on that demand, and its partnership with CAIS can grant advisors access to products such as private equity, private debt, private real estate and hedge funds, according to the firms. CAIS, a New York-based firm, launched in 2009.
“Orion, at the end of the day, wants to ... arm its advisors and provide those end clients with best-in-class investments across the investment world, and the reality is there are more and more assets flowing to alternatives,” said Josh Flade, deputy CIO with Orion’s OCIO offering (it stands for “outsourced chief investment officer.”)
CAIS is offering Orion a turnkey platform that will provide an end-to-end pre-trade, trade and post-trade experience, according to Brendan Cuddihy, chief operating officer of CAIS. By pre-trade he means due diligence, marketing, and access to all 125 of CAIS’s products, though Orion will curate it down to 10 to 15 so as not to overwhelm advisors, Flade said.
“From a CAIS perspective, having a superstore where firms can build their own alternative investment platform customized to meet the needs of their advisors and end clients is our objective,” Cuddihy said. Orion is “doing a fantastic job on thinking about not only product, but product strategy and structure and how it fits into the end-client base.”
In the actual trade portion of transactions, CAIS offers a fully digital trading experience, and in post-trading it will conduct ongoing reporting to make it easier for advisors who work with multiple entities, Cuddihy said.
Advisors working with alternative investments can find it cumbersome to manually deal with different funds with different managers and transfer agents, not to mention managing multiple custodians. CAIS hopes to simplify that process.
“Being able to have all those data positions and transactions and capital calls all centralized in one location in a consistent and digestible manner is very challenging and difficult,” Cuddihy said. “However, CAIS has built an end-to-end integration with all those ecosystem parties to enable a post-trade reporting system that allows advisors … easier tracking and ongoing client conversations so that it gets digested into Orion.”
Access to CAIS’s services is currently available for Orion’s Wealth Advisory and Outsourced Chief Investment Officer clients. The access will be expanded to Orion Portfolio Solutions by early next year and to Orion Advisor Technology clients after that, Flade said.
By providing this access, Orion hopes to consolidate its advisors’ workload so they can keep their clients interested in expanding their portfolios.
“To be able to show in one place for an advisor a client’s equity portfolio, fixed-income portfolio, then alternatives and see all the performance in one place I think is really the Holy Grail of what we’re trying to accomplish,” Flade said.