The Story of AdvicePay

Hi there. Alan Moore and Michael Kitces here.

As AdvicePay has come into its own, we’ve received a lot of questions about how this FinTech company came to be. After all, we’re not software developers; we’re financial advisors.

But, when you follow your passion, you just never know where that might lead you. That’s kind of how we got here.

Here’s the story of our AdvicePay journey so far, including what we’ve learned and how we’ve grown.

Alan Moore and Michael Kitces
Michael Kitces & Alan Moore
Co-Founders of AdvicePay

From inside the industry, we saw a need.

The original idea for AdvicePay was born out of the XY Planning Network’s (XYPN) experience in helping financial advisors establish their practices and become RIA-registered at the state level.

XYPN member advisors were offering financial planning on a fee-for-service basis and needed the ability to bill their clients for one-time and recurring fees, and the ability to collect these payments in a convenient and compliant way. As the co-founders of XYPN, we took up the task of finding a solution. We started searching for any options that might exist, or that could be adapted for our industry.

We didn’t set out to build a new software. But then, we did.

The search for a platform that we could recommend confidently to advisors was a lengthy process. We had a number of conversations with existing billing and payment software providers, but all these conversations ended up getting stuck on the same set of questions:

  • Does the system store payment information in ways that the advisor can see it?
  • Can the advisor input payment information on their end?
  • Does the system send out invoice and payment receipts as required by regulators?
  • Does the system trigger or avoid custody?
  • Is the system compliant at the SEC and state level?

No single product checked all of these boxes. We even asked existing platforms if they were willing to build an iteration of their product that could serve these very specific needs of financial advisors.

They all said a flat, “no.”

So, we decided to build it ourselves.

We (passionately) believe in the fee-for-service model.

So, remember the part about us not being software developers? Ha! True, but we believe that the future of financial planning is for advisors to be paid for their advice, not paid only for selling products.

The fee-for-service model expands the opportunity for financial advisors to help clients build wealth when they are ready to do so, before they help them manage their wealth down the line. (And, isn’t that what we thought we would be doing when we entered this field?)

In order to make this model viable, however, the system to support fee-for-service had to become operationally efficient. It couldn’t depend on paper checks. It had to be a convenient, reliable, positive client experience. Advisors had to be assured that the workflows were intuitive and efficient, while remaining compliant with ever-changing state and SEC regulations. Advisors also needed to be able to be paid quickly and accurately through secure technology.

And so, it began.

AdvicePay logo

Committed to this idea and out of already-in-market options, in March 2016, we invested together to hire AdvicePay’s first development team.

After many long days of design discussions, the very first version of AdvicePay launched in April 2017, serving just 10 advisors in a limited pilot of the platform. Numerous tests of the system were conducted, and the feedback came in heavy. Long story short – it didn’t work well.

We went back to the drawing board with new knowledge and renewed determination. We stayed close to the client and advisor experience needs and brought in new, creative developers who got us and got our industry.

The official Beta version of AdvicePay was launched in July 2017. Testing and user feedback from this round proved that we were finally on the right track. As word began to get out that we were creating this niche billing and payment platform for financial planners, advisors began calling us, asking when they could get on the platform.

Realizing that our idea would quickly find a market, in October 2017 we initiated a capital raise to build out the Beta version scaled to the demand we were already bumping into prior to launch. This fundraising enabled us to round out our team with the business and development expertise required to make our product launch successful.

We did it!!!

(And now, things get a little crazy.)

We launched the public version of AdvicePay in January 2018. The demand we sensed early on proved to be legitimate.

By March of 2018, AdvicePay launched a multi-user version of the system to enable groups of advisors to benefit from a shared platform. Enhancements and improvements continued as we settled into our commitment of monthly system releases to expand our platform and ensure timely compliance updates as needed.

In September 2018, we rolled out a significant enhancement with the integration of the eSignature feature. With this feature, AdvicePay users are able to send a client agreement, payment agreement, and initial payment request all in one workflow for streamlined new client onboarding. Simplifying this client experience while avoiding custody and ensuring required client notifications along the way is a huge efficiency win for advisors

In January 2019, AdvicePay announced the official close of its capital raise and the launch of AdvicePay Enterprise – a customizable API to meet the unique needs of large-scale RIA and broker-dealer hybrids seeking to grow their advice-based offerings.

As this development has continued, we’ve started to receive recognition for AdvicePay’s innovative approach. In March 2019, AdvicePay was recognized as one of the Top Ten Tech Startups in Montana by The Tech Tribune.

Also in March 2019, AdvicePay was named a finalist in the ScratchWorks FinTech competition. It was an amazing experience to get to share about our product to the top 100 RIAs in the country.

Michael and Alan at ScratchWorks.

So far, AdvicePay Enterprise is available to nearly 60,000 financial advisors – and that number is growing rapidly as more advisors and firms adopt the fee-for-service model.

AdvicePay Essential and AdvicePay Professional are growing as well, with new advisors subscribing every day to streamline their fee-only processes.

Read more about these developments in our News section >>

What’s next? We keep going.

We’re working hard on AdvicePay every day. Our monthly releases launch helpful new features (often by user request) and the latest compliance updates to ensure that that our platform remains current with state and SEC rulings. New partnerships and integrations are rolled out on a regular basis, too.

Recently, we’ve been happy to work with a number of national Enterprise clients as our industry makes the exciting move toward offering more fee-only financial planning services. We believe this trend is the future, and is just getting started.

Think big, live small town is how we roll.

We remain innovative and agile as a company because our business model is a bit atypical from how most SaaS companies operate. All of our developers are in-house. That means when a regulatory issue comes up, we deal with it immediately. Our company is owned and led by CERTIFIED FINANCIAL PLANNERS™, so we can’t help but stay close to our users. The concept of our platform began with the industry need first, cool tech solution second. (That’s the reverse of how most tech companies are formed, BTW.)

While we leverage functional experts from around the world, the heart and soul of our company is that of a small town business on Main Street. (Literally, our office is on Main Street.)

We’ve worked hard to create an intentional work culture that supports work-life balance and empowers each team member to grow personally and professionally. Read more about our work culture here.

AdvicePay is headquartered in beautiful Bozeman, Montana.

Follow our progress!

If you’d like to keep up on what we’re doing, take a moment to subscribe to our blog. That’s where we dish out all of the details on what’s new and what’s next for AdvicePay as a platform and share our purview on the growth of fee-for-service in the financial planning industry.

Have you tried AdvicePay yet?

Now that you know all about it, it seems only fitting for you to take AdvicePay for a spin. Use AdvicePay Professional free for 14 days and see for yourself why thousands of financial advisors are finding an efficient, compliant, secure solution for their practice with AdvicePay.