Toronto-based Super Advisor has closed $2 million CAD in seed funding to build a wealth management platform focused on independent financial advisors.
According to Super Advisor co-founder and CEO Miguel Fernando, these advisors are trying to digitize their operations and provide clients with more holistic advice, but lack the requisite technology to do so and face countervailing pressure from the large institutions to which many of them are tied.
“In our view, the latent financial and technical motivation was there, and we felt Miguel and Michael had the right skillsets and depth of knowledge to find success here.”
-David Hogarth, Rhino
Led by a pair of former Purpose Advisor Solutions employees in Fernando and fellow co-founder Michael Valentine, Super Advisor aims to give financial advisors the tools they need to go their own way and build, manage, and scale their independent businesses.
“What we’re trying to do is make them feel like their business is being orchestrated for them by leveraging a lot of different automated flows and pre-built processes to help them really take control,” Fernando told BetaKit in an interview.
Super Advisor’s all-equity seed round, which closed in late August, was led by Vancouver-based Rhino Ventures and supported by a group of other undisclosed investors. The financing represents Super Advisor’s first round of institutional venture capital.
Super Advisor is Rhino Ventures’ third investment in Eastern Canada to date. The early-stage venture firm, which boasts a portfolio of fast-growing British Columbian tech companies that includes Article, Thinkific, Fispan, and Klue, announced its intention to begin investing beyond Western Canada about a year ago after closing $120 million for its third fund.
Rhino Ventures partner David Hogarth, who is joining Super Advisor’s board as part of the round, acknowledged that this deal marks a continuation of the firm’s cross-Canada expansion, adding that Rhino Ventures also sees opportunity in the embedded FinTech space.
“Additionally, we have a dedication to solutions that enable individuals to more efficiently manage their own businesses and an interest in embedded fintech solutions following promise with our investment in FISPAN,” Hogarth added.
According to Super Advisor, most Canadian financial advisors are currently tied to institutions with siloed and outdated systems, shrinking and limited product offerings, and rising fees that can surpass 50 percent of their revenue. As Hogarth puts it, this leads to “a lot of administrative repetition and reconciliation” between platforms that combined with the economic incentives have fuelled a desire from “many more advisors to go independent.”
“In our view, the latent financial and technical motivation was there, and we felt Miguel and Michael had the right skillsets and depth of knowledge to find success here,” said Hogarth.
Fernando claims that, amid these conditions, the trend of financial advisors starting their own businesses has taken off in the United States (US), and is now “really starting to pick up steam” north of the border. Super Advisor hopes to provide them with the tools they need to make the leap, including automated workflows to “streamline repetitive processes and eliminate hours of manual work.”
Speaking to the opportunity Super Advisor sees in Canada, Fernando noted, “While Canada is a smaller market, it’s our home market, [and] we see that trend [of financial advisors going independent] as much more timely here,” adding that the competition north of the border is also “much lower” compared to the US.
“It’s easier to provide a product that’s much better than the other alternatives that are out there, and we think that specifically with open banking being a trend in Canada that’s actually mandated, there are going to be a lot of opportunities to provide a broader range of financial services to people over time,” said Fernando.
Within this space, Fernando groups Super Advisor’s competition into two categories: B2B software firms, and other tech platforms looking to provide a home for financial advisors. According to Fernando, the former group tends to be siloed and have less integration with other platforms, while players in the latter segment typically have less tech expertise than Super Advisor.
“We’re very technology and product focused … and we also have that really deep domain knowledge in wealth management.”
“The main difference is most of them are run by people that have spent the majority of their career in the wealth management industry, and have very little knowledge on the technology side of things, whereas we’re very technology and product focused … and we also have that really deep domain knowledge in wealth management,” said Fernando, who spent some time working at RBC before joining Purpose Advisor Solutions.
Fernando said this funding will ensure Super Advisor has the resources necessary to build out its platform. To get there, the startup plans to grow its team, invest in product development, and focus on meeting legal and regulatory requirements.
“We plan to have enough runway with this round to get to the point where we have a really comprehensive platform,” said Fernando.
Super Advisor hopes to roll out its minimum viable product in the first quarter of 2023, ahead of a targeted full launch later next year.
Feature image courtesy Super Advisor.