Episode summary
Why Billing Infrastructure Is Becoming a Growth Issue for RIAs
Summary
Billing is becoming a growth constraint for RIAs as firms add custodians, expand service lines, and go through M&A. Seth Johnson says the biggest pain point is operational friction around integrating custodial data across multiple systems, especially when firms need fees calculated and collected on time.
He argues Investnet is adapting by offering multiple billing systems that cover different operating models, including Tamarac, Revenue Manager, Ready to Billfin, and Investment Payments. That mix, he says, lets firms support AUM, retainer, and subscription pricing as fee surveys show those models changing quickly.
Johnson also says modernization matters most after acquisitions, when aggregators need to centralize billing at the home office while still supporting acquired firms. He points to Ready as a way to build a billing center of excellence and says firms are increasingly looking to replace mediocre or outdated billing tools, including Excel and QuickBooks. He adds that advisers need systems flexible enough to charge separately for planning when assets are too small, then include it once clients cross a threshold like $300,000 in AUM.
Key takeaways
- Seth Johnson says the biggest billing pain for RIAs is integrating custodial data across multiple custodians on time.
- He says Investnet is covering changing fee models with multiple billing systems, including Tamarac, Revenue Manager, Ready to Billfin, and Investment Payments.
- Johnson says M&A makes billing infrastructure a growth issue because aggregators need home-office control without losing flexibility for acquired firms.
- He says some firms are still using outdated tools like Excel or QuickBooks, which creates room for modernization.
- Johnson says billing systems must support separate financial planning fees for clients below a threshold like $300,000 in AUM.
Notable quotes
“we find some problems around the inter interfacing with the the custodial data”
“they can have a home office billing experience with an advisor portal uh to allow for that scalability to grow with a with a billing center of excellence at the home office”
“I will say clutch my pearls a little bit when I do hear that firms are still using things like outdated QuickBooks or Excel to to do their billing”
How the episode opens
Billing may not be flashy, but it can certainly make or break scale. I'm joined by Seth Johnson to hear how Invest can help reduce friction. Seth, thanks for sitting down with me. — Oh, thank you. It's great to be with us.
So, look, billing is certainly one of the more complex parts of running an advisory practice. Where are advisers feeling the most pain right now? Well, when it comes to billing complexities and operational pain points, uh what we're finding a lot is uh in the integrations uh interfacing with the data with multiple custodians.
Uh you got situations where advisory practices when they start out, they might just have a single custodian that they're working with and that's pretty simple. But as as soon as they start expanding their product offerings and start working with multi-custodians, that's at the point where there's a lot of pain and they have to have a lot of different integrations and the the timing of when that in the the data comes in. and then just making sure that the data can come in in a time frame where uh the fees can be presented and collected uh in a in a timely way.
So we find some problems around the inter interfacing with the the custodial data
And look the reality is that advisor fee models are changing fast. So whether it's aum retainers subscriptions how is advis how is in now there's me screwing it up. And look, the reality is is that advisor fee models are changing fast, whether it's AUM, subscription based, retainers. How is InvestNet making sure its billing infrastructure keeps up with the change of pace?
Yeah, it's a great question. Investment has multiple billing systems. There's billing system that's inherent to the wealth management platform.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- r ia billing infrastructure
- billing technology
- aum-based pricing
- retainer and subscription models
- ria m&a operational efficiency
Watch the episode
Watch “Why Billing Infrastructure Is Becoming a Growth Issue for RIAs” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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