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Aaron Klein sells against fear and risk in San Antonio — and hits back at competitors

By LifeYield | October 22, 2018 | News
The Riskalyze CEO has three businesses, an expanding list of copycats, 600 close friends and a rah-rah message: Fearlessness

Brooke’s Note: There was much talk in Newport Beach at the Dealmakers Summit about the concept of “boutique” practices. I presumed they sold high-end handbags. In fact it is a term for a business comprised of super-principals, fresh to being powerful who have yet to go to seed by making themselves redundant because of scale and succession issues — or just sheer boredom. That concept applies to everything — including conferences. Clearly the Riskalyze event has hit that Goldilocks mark — in record time. Scroll at the FISummit hashtag and you’ll see what I mean. Or you can just read this article. It starts with the fact Aaron Klein was willing to locate in a no-direct-flights city like San Antonio when he lives north of Sacramento, which barely has any flights at all. In other words, this is an event born of great energy, which itself is a product of blistering growth and optimism. (Not that expending all that wattage, and shaking 600 hands, doesn’t come at a cost. Klein is currently nursing a vicious flu at home, a fate Alex Potts suffered after he hosted his Loring Ward conference a couple weeks ago.)

Wall Street is about managing fear- and greed-driven risk and, off Wall Street. Aaron Klein is playing exuberantly to that theme.

Three days in dreary, cold and rainy San Antonio wasn’t going to slow down a bit his second annual Fearless Investing Summit.  The CEO of Riskalyze presided atop his three-engine startup machine for 600 attendees deep in the heart of Texas.

The risk-simplification software firm, based north of Sacramento in Auburn, Calif., has grown to serve 154 broker-dealers and 22,000 advisors since last year’s confab in Lake Tahoe, Nev. On the strength of $23 million in VC-type funding, it’s also added 90 employees in the last 18 months to bring the total workforce to 200. See: How Aaron Klein plans to make Riskalyze the epicenter of the RIA business with $20 million of fresh private equity money

Yet if you are a pioneer in the advisor software business, the sincerest measure of success might be how many competitors you attract — unless of course they rise up and devour you. Riskalyze has attracted its fair share whose marketing strategy centers around using the pioneer’s simplicity against it — something Klein deflects.

“Because we have hid so much of the complexity of the calculations and the science under the hood to make the user experience elegant, simple and easy, our competitors like to downplay our sophistication,” Klein wryly noted in an interview at the Summit.

“But once they realize what it takes to replicate our coverage of over 250,000 securities, funds, ETFs, separate accounts, bonds, UITs and more, combined with Nobel Prize winning research, they tend to make a splash, flounder and then go bankrupt in 18 months,” he boasted.

The world is awash in risk assessment, but Klein is adamant about keeping simple how he applies its quantification.

Klein said the most common questions he gets are:

  • Will Riskalyze become a TAMP?
  • A national RIA with affiliated advisors?
  • An independent broker – dealer?
  • Or the most worrisome outcome for the tech industry, an all-in-one, full technology stack-integrated application that would also include CRM, financial planning, portfolio accounting, performance reporting, rebalancing and more, all delivered via one unified platform? See: Riskalyze tromps onto Envestnet turf by signing $20-billion, 975-advisor account with its robo-manager
  • The answer to all of the above, according to Klein, is a resounding “No.”

(The collective sigh of relief from the 30-plus tech vendors exhibiting at the Summit was more than audible across the room!)

“One of our core values is the focus on helping people invest fearlessly,” Klein said. “Which means we will do a few things extremely well and not do a lot of things poorly.  We do not want to boil the ocean – if we did, that would be a recipe for mediocrity.”

Top on the list is simply assigning a risk number to a client and a portfolio then matching them up. Second is using the risk number to help advisors make the appropriate risk-based decisions in portfolio construction. Third, Riskalyze provides the trading automation tools to implement those portfolios and make sure that clients are on track to meet their goals.

“Over 5 million risk numbers have been completed,” Klein said. See: LPL Financial is latest to go the ‘risk number’ route by signing deal with LifeYield, which signed a Riskalyze deal in February.  See: LPL Financial is latest to go the ‘risk number’ route by signing deal with LifeYield, which signed a Riskalyze deal in February

That latest Riskalyze application is the Riskalyze Autopilot model marketplace “store.”  Advisors can use as a “one click fiduciary technology.” It is also making Riskalyze a place for big ETF makers, such as BlackRock and First Trust.

Though Klein was his Summit’s ace, he brought along a big bullpen of A-list relievers including: Brian Hamburger CEO of Market Counsel; Lori Hardwick CEO of AI Labs; Megan Carpenter CEO of from FiComm Partners and the hard-driving Ron Carson, CEO of Carson Group.

The group also included behavioral finance guru Dr. Daniel Crosby and even famous ESPN college basketball announcer Dick Vitale. Controversial Trump political flame-out and hedge fund manager Anthony Scaramucci also lent his presence. See:  As dust settles on Scaramucci story, a different picture of DOL rule nemesis takes shape: A ladder-climber who slipped on the top rung What Aaron Klein’s board pick of Lori Hardwick tells about Riskalyze’s next big hurdle

Josh Brown, of Ritholtz Wealth Management,  KO’ed fear about crypto-investing by using his patented irreverence to eviscerate. A jab, an uppercut and a roundhouse did the job.  “A crypto bundle is sort of like an index fund for the mentally ill,” he said.

“We will not give financial advice related to crypto because they cannot be valued like any other asset, since they don’t have cash flow attached and are more like commodities and trade according to supply and demand,” he added.

Then speaking as both advisor and blogger, Brown added:  “You cannot trust media organizations to give you unbiased information on crypto currencies.” See: After five-year stealth project, Fidelity goes big-time into crypto-asset custody with standalone company

On another plutonium topic — cyber attacks — Hamburger used a similarly slashing style. “Who cares about what the regulators want you to do about cyber-security? Your standards should be much higher than that,” he said.

Hardwick, whose firm is on a quest to offer the super-duper dashboard of all dashboards added: “Studies show that every day, advisors have to work with eight to 15 different applications, five times a day to get one piece of information.”

Riskalyze and its BFF, Sacramento, CA neighbor and preferred CRM partner Redtail, were at the forefront with new product news.

Redtail CEO Brian McLaughlin announced from the main stage in an afternoon keynote the launch of artificial intelligence in its popular CRM. It will make use of machine learning to help alert advisors about anxious or unhappy clients. The system would allow advisors to be proactive in their response for enhanced service and client retention.

The key to this new feature is to use AI to analyze the big data in Redtail coming from 70 million investors, 1.3-billion emails, 50-million advisor notes and the 450-million activities that have been logged into Redtail’s massive databases.

Continuing its frenetic product-building pace, Klein and his developers announced a slew of new features for Riskalyze at the Summit, including a new metric to measure the “efficiency of investments’ risk/reward trade offs,” called the Riskalyze GPA.

 Additionally, Klein announced a new mobile version of the platform; a new workflow process to reconcile different risk-profiles of spouses, called Multiple Opinions and a new ability, called Timeline. to incorporate life moments into retirement projections such as college funding or a large savings goal.  The features are all wrapped up in a slick, new, “edge-to-edge” user interface.

Fearless Summit days were followed by evenings devoted to networking and fun.

The first night was highlighted by the “Riskalyze and Redtail Rodeo” held at a real working ranch an hour’s bus ride away on the outskirts of San Antonio. The event featured real Texas BarBQ, line dancing and the chance to ride a real Texas Longhorn steer, while racing Armadillos.

Night two included the comic stylings of Nate Bargatzi, a regular on the late-night comic show circuit with Jimmy Fallon and Conan O’Brian. Featuring a comedian is always a high-risk affair for conference organizers. You never know who might potentially offend with humor – yet the risk was perfectly in sync with the Fearless Summit conference theme.

To learn more about what went on at the Riskalyze Fearless Investing Summit, check out the many tweets on the #FISummit hashtag on Twitter.

Timothy D. Welsh, is president and founder of Nexus Strategy, LLC, a leading consulting firm to the wealth management industry, and can be reached at or on Twitter @NexusStrategy. He owns a stake in FiComm, which serves as PR counsel to Riskalyze.

Read the full feature here.

About RIABiz
RIABiz is an online journal covering the financial advice business. Our Mill Valley, Calif.-based publication rose from the wreckage of the 2008 financial meltdown and the tattering of printed trade publications. RIABiz uses sourced journalism and editorial analysis to capture the rise of new models for providing client-first financial advice against the backdrop of Wall Street’s decline. After nine years in business, RIABiz knows readers properly binge on the NetFlix-worthy action when we put the story in words the freshest data, facts, context, photographs — and drama.

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About LifeYield
LifeYield LLC (, creator of the Taxficient Score®, is the industry leader in facilitating tax-smart, risk-smart household portfolio management solutions to help financial advisors quantify and improve investor outcomes.  LifeYield’s Advantage Suite enables advisors to provide a comprehensive, tax-aware overview of an entire portfolio with easy-to-use tools that suggest an optimal implementation plan to help investors make and keep more money while increasing the likelihood of achieving retirement goals. 
LifeYield connects: financial planning, account aggregation and investment proposal tools, brokerage holdings, advisory programs and insurance products to optimize after-tax returns, maximize retirement income and support household-level goals-based wealth management strategies. 
Based in Boston and founded by finance and technology industry leaders, LifeYield offers digitally-enhanced advice software to support today’s advisors and clients in an increasingly complex world. 
For more information, please visit