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Addepar has two new 'grown-up' leaders but the same mantra: double down, triple down then quadruple down on engineering

The almost unfathomable Silicon Valley investment being poured into creating wealth management software a catch-up move after decades of falling behind

Author Brooke Southall July 21, 2014 at 7:59 PM
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Women of Wealth Management



Jeff Spears

Jeff Spears

July 22, 2014 — 5:14 PM

The ONLY professional that appears to be missing at Addepar is someone with experience in the Wealth Management business. If/when they add that piece they will be hard to beat.

J L Livermore

J L Livermore

July 22, 2014 — 7:05 PM

Mr. Spears:

Aren’t we being a bit caustic? After all the boy-genius progenitors of Addepar successfully built multi-billion dollar Palantir. There is no difference in snooping on John Q and reporting on wealth right? Why would you need any wealth management experience anyway? Its just a bunch of numbers – right? Streams of data carried by digital conveyor belt into a massive data crunching machine that just spits out what everyone wants – right? There is the small matter of taking on Darth Vader (spelled A-d-v-e-n-t), but a newly filled purse of $50MM should make building a worldwide sales organization child’s play – right?

With five-fold growth they should have no worries right? But are revenues proportionate to assets? Imagining they had $20B in assets to start generating a $1MM in revenue. Today they are $100B in assets with $5MM in revenue. Take the 80-100 engineers and executive staff and we are burning how much cash? Oh and lest we forget that we are in a consolidating market. Hmmmm

Till death and data do us part:-D


Mike Golaszewski

Mike Golaszewski

July 24, 2014 — 7:04 PM

Here’s the thing about Addepar: they’re not only hiring engineers, they are hiring some of the country’s best engineers and computer scientists.

They are interesting precisely because they are behaving so differently than the rest of the technology vendors serving the Wealth Management industry.

I find the whole thing refreshing.

Brooke Southall

Brooke Southall

July 24, 2014 — 10:53 PM


What is a reasonable framework for assessing whether a company is getting carried away with engineering or just showing phenomenal discipline in building the engine before plunking it into the race car?

And how much can be 'engineered’. Isn’t much of the challenge in making this all work come down to providers agreeing to work with each other, an exercise in diplomacy as much as technology?

These are not facetious or rhetorical questions. I really am trying to come to grips.

thank you,


Mike Golaszewski

Mike Golaszewski

July 25, 2014 — 11:16 AM


Fair questions.

The most reasonable, objective framework that I’m aware of for any company investing in R&D or product development is a financial one (after all, companies exist to make money). So, whether somebody spends time calculating NPVs or does simple back-of-the-napkin ROIs, the most reasonable standard really ought to be answering the question “will this investment of capital generate a favorable return commensurate with the risks?”

Considered from that perspective, it’s sort of rational to conclude that the best people to ascertain whether or not these investments make sense are Addepar’s shareholders and investors. And clearly those VCs are liking what they keep buying. Without the same set of facts, you and I are simply speculating as to the wisdom of these investments. Time will tell, I suppose.

(BTW, it’s probably not completely fair to say they have an engine but no car—they do have a product, and they are winning deals).

As to your second question, one of my all-time favorite managers had a great saying which I’ll totally plagiarize here. “Mike,” he’d say, “you can build almost anything you want with enough money and time” (he was also fond of pointing out that we weren’t building rocket ships, but I digress).

The point is that almost anything can be engineered—that’s what modern innovation is about. Now, I can’t claim to speak for Addepar, but they don’t seem to want to simply build a better Portfolio Management & Performance Reporting system. According to their website, they want to “reinvent the technical infrastructure of finance.” That’s sort of a lofty language that extends beyond the standard, uninspired trope of building something of marginal value just because it’s new and shiny. It’s aspirational, even if it is somewhat nebulous. Maybe that explains all the engineers hanging out on Terra Bella Ave.

Look, I really don’t have a dog in this race. I’m clearly fond of Advent and many of my close friends here in San Francisco have a stake in the continued success of Schwab’s PortfolioCenter product (there’s also a rumor that I once crashed a Tamarac industry afterparty, a rumor with I can neither confirm nor deny).

Addepar , though, is acting and investing differently. This is clearly frustrating for other market participants as well as RIAs who are trying to figure out where their product fits in the technology value chain (my personal opinion is that the opaqueness around what is clearly a superior product offering does them a pretty big disservice). Their actions, however, are interesting. Who else in our space is recruiting engineers away from the likes of Google and Facebook?

In an industry vertical with a history of staid, uninspired innovation—it’s refreshing…no matter what the end game ends up looking like.

Brooke Southall

Brooke Southall

July 25, 2014 — 3:57 PM


Very well put, and reminds why Advent and Schwab used you in key spots.

It’s near impossible to disagree about your point that the effort as a whole is a refreshing
even if refreshing candor is not yet a part of their modus operandi.

thank you for taking the time to fully explain your point,


Peter Giza

Peter Giza

July 31, 2014 — 10:30 PM

Brooke, Mike,

Ok I can’t resist; cars, money, engineers – yeah baby, yeah! Watching Addepar closely now for the past 24 months or so I agree that if nothing else they are inspirational. It is the type of inspiration that spurs forward thinkers in this industry to think higher and outside the box and innovate.

Opacity is a double-edged sword. On the one hand it allows you to keep the competition guessing. One the other hand it can be misconstrued as disorganized, arrogant, out of touch with your prospects and industry. Its a balance and something that has to be monitored.

The visual aspects of Addepar are impressive there is no taking that away. As you Mike you can throw money and engineers at a problem and build really amazing things. But you can also build an amazing race track on the south pole. Its cool but has little chance of generating revenue via spectators of Scuderia Ferrari, Mercedes AMG Petronas, et al.

With Advent at top of the mountain for 30+ year there is a begging for “King of the mountain” shove-fest. I a lot of folks are wondering where’s the money in the services side of the advisory industry to support the magnitude of investment in technology that Addepar represents.

If the advisory ranks are compressing as purported and the aging firm principal is not interested in fixing something they do not feel is broken – how do you capture the revenue? For most advisors, migrating from one portfolio accounting and reporting platform to another can be very unpleasant and expensive if the provider doesn’t know how to get the job done.There has to be a more compelling value proposition than prettier reports and better infrastructure.

The race is on and the drivers and cars are as varied as Michael Schumacher in his Team Scuderia Ferrari F1 and John Surtees behind the wheel of Team Ferrari 312 circa 1965.


Brooke Southall

Brooke Southall

July 31, 2014 — 10:48 PM


Would you consider speaking at the annual RIA reporters dinner? You can begin with the informed quote: Opacity is a double-edged sword.

We could hardly agree more.

I have heard the concern that all the dollars currently spent on advisory software combined would barely be enough to get Addepar the kind of ROI that its founders are accustomed to. This advisory business is a smaller world than it may appear to an outsider.

But there is something to the dictum about supply creating its own demand. None of us could imagine how much we’d be willing to spend on the Comcast triple play, the Sprint unlimited data plan and the second accounts for all that at our office.

Who could have foreseen that the world could support ten of thousands of coffee shops, Starbucks, Peets etc. where you spend as much for a latte as your parents spent for a month’s worth of Maxwell House.

So if Addepar truly leaps ahead two generations, couldn’t there be a similar effect?


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Top Executive: Eric Poirier

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