Innovative Firms


You don’t realize how easy asset under management billing is until you try billing clients who aren’t under that model, said Michael Kitces, co-founder, chief strategy officer of AdvicePay, which sells payment software for financial planning fees.

The software was developed by the fee-for-service-oriented XY Planning Network (also co-founded by Mr. Kitces) because there was no payment platform available to allow for receiving fees without violating the Securities and Exchange Commission’s custody rules. Common credit card processing options permitted too much direct access to clients’ credit cards, making it too easy to steal from them. Furthermore, certain payment platforms banned use by financial advisers. The alternative, collecting checks from clients, proved cumbersome.

AdvicePay software, in response, was designed to protect private credit card information and to fit into adviser workflows and software. Originally built for its members, demand from outside XY Planning convinced the company to make the solution available to all advisers.

In 2019, the three-year-old firm launched an enterprise version. Reception has been enthusiastic — about half of the top 30 broker-dealers are in the process of adopting the software, Mr. Kitces said.

– Deborah Nason