Kanishk Parashar said he saw the need for his latest wealthtech venture long before its public launch this week.
Parashar, who co-founded portfolio projection software firm Real Capital Navigator (RCI) alongside Soo-Yung Cho in 2017, said that financial advisors are just as interested in growing their practices as they are in keeping current clients happy.
But while there are countless wealthtech tools focused on client retention, he felt the pickings were slim when it came to solutions squarely focused on modernizing the prospecting process.
“Proposals, which are the growth side of the fence, are almost overlooked as a feature. But when we talk to advisors, they say I want to grow my firm. I want to have new clients. I’m a business,” Parashar said in an exclusive interview with Financial Planning. “This is a key problem, and how are they doing it today? They’re cobbling together proposals from statements and keying them … and this takes a while. It’s very manual.”
What’s worse, Parashar said, is how that long, manual process feels to the potential client at the other end of the table.
“From a prospect’s perspective in 2023, as we’re talking about artificial intelligence taking over, they’re doing everything with technology. Even their cars are technology. And all of a sudden when they talk to their advisor, they’re like, wait a second, I’m going through this process of the past,” Parashar said. “There’s a gap on both sides.”
In an effort to close that gap, Parashar and Cho are entering a new AI-powered platform called Powder into the wealthtech race. Parashar will serve as CEO of the startup. Cho, who was most recently a senior manager of engineering at Addepar, will serve as chief technology officer.
Billed as a co-pilot for wealth advisors, Powder arrives on the scene at a time when both organic growth and artificial intelligence are on the minds of the entire industry. On Monday, the company emerged from stealth mode to announce its debut in a pre-seed funding round led by Elefund.
The company also has the backing of Laks Srini, former co-founder and CTO of Zenefits; Bryant Chou, co-founder of Webflow; Jon Xu, former co-founder and CTO of FutureAdvisor; and David Meister, head of enterprise sales at Addepar.
“Powder and Robinhood are solving the same problem,” Nate Rodland, general partner at Elefund and co-founder of Robinhood, said in a statement. “They are creating access to wealth.”
The new venture builds on what the team was creating at RCI before it was acquired by Addepar in 2021 and gave birth to Addepar’s well-known Navigator platform, an AI-powered financial portfolio projection tool that allows wealth managers to streamline the client sales and onboarding process.
Parashar and Cho believe this kind of simplification is crucial because the wealth management industry still relies on long pitch decks, emailed statements, manual portfolio data entry and analysis to win over clients.
As a result, advisors have become accustomed to an arduous sales process that has little transparency and leaves prospective clients unclear of the value the advisor is able to provide.
Powder aims to flip that script by more clearly demonstrating an advisor’s worth to prospective clients and eliminating manual operations in an effort to cut the sales process from months to weeks.
“The biggest problem is in gathering the information of a prospect. It’s a multifaceted problem. But within that problem is [the question of] when you do get some information, how do you best leverage it to generate a great proposal? To learn more about the client to make way more custom? And part of that is just transcribing information,” Parashar said. “What we have found is that generative AI parsing is very powerful. It basically can take any odd statement, a broker statement, bank statement, state document, and turn it into information that’s leverageable in short order.
“That piece is pretty much with every single firm. No analyst wants to key in stuff anymore. It’s just not a thing that someone likes to do.”
Parashar said Powder can gather portfolio data, build portfolios, create tax and estate models and facilitate the onboarding paperwork when a financial advisor finally wins a client’s business.
The platform automatically aggregates and classifies prospect portfolios to assess investment allocations, risk, expense ratios, estate considerations, tax implications and private investment opportunities.
Additionally, Powder can run comparisons against proposed portfolio and estate options allocations to visualize benefits; create step-by-step recommendations and run market stress tests; and monitor prospect usage through business intelligence tools.
If it sounds like Powder is weaving its AI capabilities into a lot of different parts of an advisor’s typical prospecting workflow, that’s because it is. Instead of being a single-point solution that tackles one part of sales like email generation or meeting transcriptions, Powder was created to ride shotgun with an advisor from beginning to end.
With that in mind, nailing the user interface and making it a pleasant experience was a top priority for Parashar and Cho. Not only will advisors interact with Powder, but prospects will be able to jump in, too.
That means walking the line between raw power and ease of use.
“We’re building what I call a ‘prosumer’ interface. It’s like a consumer interface, but for professionals. People who view themselves as very knowledgeable … but if an advisor is using our platform and they’re using it to build proposals, prospects can see the same thing if they’re tech inclined to actually log in. That creates the need for an experience that needs to be seamless,” Parashar said. “You can’t have a prospect getting confused. You can’t have a prospect seeing a bunch of numbers on the screen and asking, what am I getting? Am I [getting] something that’s over my head? Or am I getting something that I can align with and partner with?”