Orion Advisor Solutions Acquires Redtail Technology

One of the largest TAMPs now owns the most popular financial advisor CRM.

Illustration by Institutional Investor

Illustration by Institutional Investor

Orion Advisors Solutions, one of the largest turnkey asset management platforms that supports more than 2,300 advisory firms, has acquired Redtail Technologies, the developer of the most popular client relationship management software used by financial advisors.

The deal was announced by the companies Tuesday afternoon and it’s expected to close this quarter. Terms and conditions were not disclosed.

In a statement, Orion founder and CEO Eric Clarke said the deal made his company’s ecosystem of services even more attractive to advisors. “The addition of Redtail to Orion will further enhance our user experience. By embedding Redtail’s highly regarded, next-generation CRM software with our portfolio accounting and advisor technology, we will connect the advisor-client journey with a highly integrated, most-in-one technology suite,” Clarke said.

Brian McLaughlin, who co-founded Redtail in 2003 and is the CEO, will become the president of CRM at Orion and report to Clarke. McLaughlin will also join both Orion’s executive team and board of directors. Redtail’s executive leadership team and employees will continue working at their existing locations as part of Redtail, which will become a brand entity of Orion.

“In general, we like the merger,” Doug Fritz, founder and CEO of F2 Strategy, a technology consultant to wealth management firms, told RIA Intel. “It won’t help those already on Saleforce, Wealthbox, [or Microsoft Dynamics 365] but Redtail has a long-standing client base and this might keep more of them on the platform.”

If Orion’s goal is to become the “App Store” for wealth managers — a reference to Apple’s platform — a CRM software was the missing piece, Fritz said.

The acquisition is the latest by Orion, which for years has been buying or merging with other companies to expand the services it offers to wealth managers beyond portfolio management, reporting and billing. Orion already has $1.9 trillion in assets under administration.

In June 2020, San Francisco-based private equity firm Genstar Capital bought a stake in Orion and merged it with Brinker Capital, one of the biggest TAMPs, with $24.5 billion under management. (Genstar’s stake is equal to that of TA Associates, a private equity firm that was Orion’s majority shareholder since 2015.) The investment by Genstar boosted interest in TAMPs at the time, according to one of the few investment bankers focused on them.

In 2021, Orion acquired the portfolio risk management software HiddenLevers. Shortly after, a HiddenLevers competitor criticized it and called the software “fundamentally flawed” but walked back some of its claims the next day.

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Orion already integrates with third-party CRMs (including Redtail before the acquisition) but the deal makes Orion the owner of the most popular software.

Nearly 62 percent of wealth managers use Redtail’s CRM, according to the 2021 T3/Inside Information survey of more than 5,200 advisors. Redtail has lost a little market share, while Envestnet’s Tamarac and Wealthbox have doubled theirs, but it is a clear favorite.

“The opportunity to join Orion will greatly benefit both companies’ client bases via a seamlessly connected, end-to-end technology experience that solves some of their tech integration challenges,” McLaughlin said in a statement about the deal. “We’ve worked side-by-side as integration partners for many years; this is a natural progression for us to come together to benefit RIAs who seek an integrated suite of technology to grow their businesses.”

In general, advisor satisfaction with CRMs has fallen in recent years, according to a recent survey of more than 70 executives at wealth managers by F2 Strategy. Although, that isn’t necessarily the fault of the software companies.

On the dissatisfaction, David Mehlhorn, director of sales at Redtail, told RIA Intel that there is often a disconnect between people’s expectations and the work that is involved to get the most out of a CRM — something F2 strategy agreed with.

This story has been updated to include a consultant’s comments about the deal.

Michael Thrasher (@Mike_Thrasher) is the editor of RIA Intel and based in New York City.

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