AdvicePay, co-founded by Alan Moore and Michael Kitces, buys payroll software solution from LPL RIA owner that should ease a major headache for RIAs -- getting staff paid
AdvisorBOB, formerly RIAFees.com, is acquired from owner of Great Valley Advisor Group to replace clunky spreadsheets for RIAs with mad alluvial comp deals.
3 min readAdvicePay ensures RIA firms get paid, and now it will see to it that staff are paid, as well — a leap that will take the firm from a bill-for-plans niche to a giant, underserved category — non-salary RIA payroll.
The Bozeman, Mont., billing software firm, co-founded by Alan Moore and Michael Kitces, is buying AdvisorBOB for an undisclosed sum small enough to require no financing.
Yet, the deal opens big, green pastures for AdvicePay to move beyond the fee-for-service financial planning niche and into the more sprawling advisor compensation or “comp” payroll market, both huge and obscure. See: Funded to the teeth by RIAs, Michael Kitces and Alan Moore now have a second big play--modernizing plan payments--and broker-dealers are beating down the door
“We consistently hear from firms that comp is a major operational headache," says Moore in the release. "This isn’t about replacing software – it’s about replacing spreadsheets.
"It becomes a critical need the moment you have variable comp. You need a system that gets it right, down to the penny.”
Increased efficiency
"Variable comp” refers to RIAs that end up with a Frankenstein array of mini-comp contracts from across decades, Moore says.
Funded to the teeth by RIAs, Michael Kitces and Alan Moore now have a second big play--modernizing plan payments--and broker-dealers are beating down the door
Various payouts, salaries, and other compensation aspects are all the more complicated in firms that roll up other RIAs with their own mad array of legacy compacts.
“The market for AdvisorBOB is larger, and they're doing great things,” Moore tells RIABiz in an interview. “You can have hundreds of advisors on hundreds of [differing] comp [grids.]”
The added benefit is that the sprawling compensation data becomes useful in knowing how to compensate advisors in the right way, and it aids in conducting audits efficiently.
James Spinelli, CEO of Great Valley Advisor Group, a $9.7-billion RIA, founded AdvisorBOB internally in 2019 as “RIAFees.com.” Now, more than 100 firms are using it.
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LPL Financial, which became Great Valley's RIA custodian in 2014, bought 20% of Great Valley in 2022 when it had about $5 billion of AUM.
The firm now has 333 staff, including 191 advisors. Of the 191 advisors, 159 are also registered as brokers, according to the current SEC ADV.
Achieving simplicity
Spinelli chose to sell his young software unit to achieve simplicity, he says.
“AdvisorBOB joining AdvicePay allows us to help even more firms simplify operations and scale with confidence.”
He added: “Our origin story is very similar to that of AdvicePay, as we are both advisor-founded technology companies built because there weren’t products that fit our needs.”
AdvisorBOB’s CEO, Colton Pence, and his staff will join AdvicePay and continue to work from Berwyn, Pa.
Strategic alignment
Over time, Moore says the two firms will merge certain operations to gain efficiencies.
But he expects that AdvicePay customers are already hungry to use the AdvisorBOB software.
AdvicePay has 13,000-plus advisors from 3,000-plus firms making use of its software, or nearly 30 times the number of firms using AdvisorBOB.
“We had customers saying, ‘Do you have a [payroll] solution?’" he says. “We went down the path of, ‘Do we build our own?’”
Just don't call it a budding software rollup, Moore adds.
“We’re not shifting to an M&A strategy,” he said in the release. “This was an opportunity that aligned perfectly with our roadmap and values."
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