Barely a day after Riskalyze launched a public campaign and webpage attacking some of its competitors, the popular risk management and trading software company has walked back some of its claims.
“We believe in our methodology and that it’s worth defending. That said, parts of what we actually said have been misperceived by some, and I wish in hindsight we’d kept our focus entirely on methodology differences, and hadn’t called out other risk products by name,” Riskalyze CEO Aaron Klein said on Twitter Wednesday evening.
The day prior, Klein had biting words for competitors HiddenLevers and RiXtrema, software companies that also analyze the risks of investment portfolios. Riskalyze claimed the competitors used “predictive guesswork” that is “fundamentally flawed” and produced “wildly inaccurate” results.
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The webpage (that can also be found via the website domain: Unhiddenlevers.com) also criticized the competitors’ methodologies and accused HiddenLevers of “cherry-picking” data for a white paper to show its models performed better in 2020 than they actually did. HiddenLevers and RiXtrema refuted the claims.
The campaign was six weeks in the works, Riskalyze told WealthManagement.com, which was first to report on the campaign Tuesday.
Orion Advisor Solutions, which acquired HiddenLevers in March, defended the company Wednesday. “Regarding the portfolio stress-testing and risk assessment engine of HiddenLevers, we are laser-focused on moving the industry forward by democratizing and bringing the best of behavioral finance and risk assessment to advisors and their clients,” Orion CEO Eric Clarke told RIA Intel.
“We’re confident about the HiddenLevers offering and we’re excited about what we’re building toward.”
RiXtrema defended itself in its own blog post Wednesday, saying its “scientific credentials speak for themselves” and pointed to its methodology that was published in the Journal of Risk Model Validation.
Later Wednesday evening, Klein sought to de-escalate the tension between his company and the others.
“Orion in particular has a well-earned reputation for integrity and supporting fiduciary advisors. We may have a difference on risk methodology with certain companies, but this is what gives advisors choice in the marketplace,” Klein wrote on Twitter.
He also stated that “advisors have a fundamental responsibility to make sure their risk methodology is sound. As I said yesterday, that doesn’t mean that ours is the only choice.”
The executive also announced that Riskalyze planned to make changes to the webpage it created about the competitors. A new version will focus only on the differences between risk methodologies and the results. “That’s the right thing to do, and if I had to do it over again, I’d stick to that approach,” Klein wrote about the changes.
As of Thursday morning, a highly critical video produced by Riskalyze focused on one of HiddenLevers webinars had already been removed from the campaign website.
“At the end of the day, despite our occasional differences, we’re all here for one purpose: to serve financial advisors. That’s what we’re going to stay focused on.”
Founded in 2011, Riskalyze has the greatest market share of risk management software companies focused on independent private wealth managers. It added more than 10,000 users over the past 12 months and has recently begun establishing enterprise relationships with some of the large advisory firms.
Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.