MoneyGuidePro's Kevin Knull credits Edmond Walters for helping sell Cetera on doubling down on MGP planning software

November 11, 2016 — 12:20 AM UTC by Brooke Southall

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Brooke's Note: They say money changes you. For sure it changes the way we laugh, for instance. But it surely does not remove a hard worker's desire to work. Look at the presidential race. The winner gets the hardest job in the world. The loser gets to live a life of ease and luxury. So we should hardly be surprised to see the name Edmond Walters pop up so soon after he cashed out of eMoney then parachuted out of Fidelity. We just didn't necessarily expect his first big public act would be as the best new friend of of old planning software foe, MoneyGuidePro. No word on Edmond's laughter yet.

In his biggest play yet as the new CEO of Cetera Financial Group, Robert Moore is doing a sweeping deal with MoneyGuidePro, and crediting eMoney Advisor LLC founder Edmond Walters with guiding his choice. Sources: Larry Roth is out at Cetera, supplanted by ex-LPL president, Robert Moore 

The Los Angeles-based broker-dealer owned by Aretec is doing the deal with PIEtech Inc., which will sell it licenses to use myMoneyGuide and Best Interest Scout to the thousands of financial advisors and financial institutions that use Cetera.

Cetera frames the deal not as a software buy but as a purchase of an "ecosystem" that delivers on its its "strategic vision to redefine the delivery of 'best interest' retail financial advice in a post-DOL industry."

In other words, Moore is trying to retrofit IBD reps processes under FINRA and DOL to closely mimic RIAs meeting SEC fiduciary demands.

Cetera includes Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions, Cetera Financial Specialists, First Allied Securities, Girard Securities, The Legend Group and Summit Brokerage Services. Previously, four Cetera IBDs used MoneyGuidePro and now all nine will.

In making its announcement, Cetera and Moore were effusive in praising Walters and the role he played in fulfilling a strategy. See: See: PE-backed Cetera board member Robert Dineen sees Larry Roth to the door, takes CEO reins

Egos and ecosystems

"Our efforts in this area have been accelerated tremendously through the strategic guidance provided by Edmond Walters – a widely recognized pioneer in the financial technology space," Moore said in the release. "This new ecosystem is a key ingredient on the road to positioning Cetera to be the industry leader that is fully prepared to answer the most important question in our space today: What does it truly mean to deliver financial advice – beyond just DOL preparedness – for the future?" Kevin Knull, ‎president at MoneyGuidePro, puts it more bluntly.

"Edmond was the driving force," he says. "He was extremely involved in the process."

What observers could hardly fail to notice was what the strategic vision of Walters, an Aretec board member, did not include any role for the company, eMoney, he founded. Walters made a hasty exit from eMoney in September of 2015 only six months after selling it to Fidelity for $250 million. See: Edmond Walters bolts from eMoney and Fidelity Investments scrambles to manage the jilt

"Edmond resigned. He wasn't forced out," says Joel Bruckenstein, principal of T3 conferences. "It was Edmond being Edmond." Walters is known for his maverick style and was presumed to have bridled under a corporate structure. See: The spoonful of gamifying sugar a 33 year-old CEO took to make the boomer-ethos T3 conference go down and the robo-bonobo mentality that she observed

Kevin Knull: Edmond was the driving force.

Sources say that Walters and Moore may have developed a trusting relationship when Moore was president of Boston-based IBD LPL Financial and eMoney was the primary planning software used by the firm's 14,000 advisors.

Fidelity and eMoney both declined to comment for this article. When Walters vacated the eMoney CEO position, Fidelity first installed its former RIA custody chief, Mike Durbin, who later ceded the job to RIA technology chief Ed O'Brien. See: Mike Durbin goes deep at eMoney Summit on why Fidelity got into RIA software -- a 'culture' point driven home by mind-bending MoneyGuidePro news

At the time David Lyon, founder and CEO of Chicago-based Oranj, sounded an alarm that Walters had an irreplaceable quality -- experience as a financial advisor.

Lost value?

“For me it’s a disappointing thing to hear and I think Fidelity really lost value by losing him," he said in his RIABiz interview last September. "I know [Edmond] had all the right intentions [of creating a leapfrogged desktop for the industry]. I’m not saying that’s not still achievable but that independent advisor in him is hard to replace. It takes a special company to understand advisors the way they did. There’s a spirit in the way a software company serves its clients.”

Since the Walters's departure eMoney has kept a low profile though it reported its win of the account of Waddell & Reid. eMoney makes its first big enterprise sale as a Fidelity sub-unit by showing a few features and much salesmanship 

Fidelity also reported that the eMoney dashboard is the centerpiece of its new robo-for-RIAs. How Fidelity's robo for RIAs 'leapfrogged' rivals -- and why the landing might not stick

PIEtech likely gained the edge on eMoney based on Cetera's specific needs for what Best Interest Scout can do in conjunction with MoneyGuidePro -- namely to comply with DOL regulations, Bruckenstein says. He adds eMoney may be poised to release its own DOL-minded upgrade within months. 

Cetera has reason to hustle toward an upping of its compliance game after some its broker-dealers gained attention for fielding a high number of brokers with black marks on their records, according to a study by the Securities Litigation & Consulting Group, a research firm in Fairfax, Va., Cetera disagreed with the study’s methodology. See: Cetera's giant software buy shows how eMoney's founder could prove a thorn in the Fidelity side $250 million later

Cetera was the major asset of RCS Capital left over after its bankruptcy and Aretec, Cetera spelled backward, is owned by RCS debt holders. 

Indeed, eMoney and MoneyGuidePro hardly even constitute an apples-to-apples comparison anymore. "We have diverged," he says.

MoneyGuidePro remains more zeroed in on planning and eMoney emphasizes its dashboard and account aggregation capabilities. See: Alert to Pershing's API move and eMoney's dashboard acumen, TD Ameritrade brings its API partners to Texas to drive home its first-mover advantage

Road less traveled

Tim Welsh, president of Nexus Strategy of Larkspur, Calif., adds that Walters recommendation of MoneyGuidePro as a planning tool is not surprising to insiders.

"Walters always knew that MoneyGuidePro had a better planning system."

Welsh says that it comes down to an advisor documenting that they have applied a planning process to a client.

"Right now, it's someone's notes. They need to show a real system is in place."

Knull insists that the differences go far deeper into the depth and breadth of the planning process that just improved documentation. For example, his system takes into account how an investors intersects with the Social Security system and how many cigarettes they inhale. The average smoker's planning horizon is shortened by about nine years, he adds.

Cetera will roll out the PIEtech software starting in early 2017, and throughout the first half of next year. See: MoneyGuidePro back on a roll after the "blip" of being sued by Wealthcare, PIEtech's CEO says as settlement is signed


Mentioned in this article:

MoneyGuidePro
Financial Planning Software
Top Executive: Bob Curtis

eMoney
Financial Planning Software
Top Executive: Edward O’Brien



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