Finny bets a $50 fee on the assets it helps win

Finny is dropping its flat annual subscriptions for a fee that only lands when its prospecting software pays off. The platform, used by independent advisors to find clients, now charges $50 a month plus a slice of the assets it helped bring in, and that slice extends only as long as the client remains with the advisor. InvestmentNews reported the change Monday. The new structure replaces Finny's old subscriptions, which ran $6,000 or $12,000 a year.

The pricing echoes referral programs that Schwab and Fidelity run for RIA custodial clients. Those programs, Finny CEO Eden Ovadia told InvestmentNews, move trillions of dollars annually into the RIA channel, but they are closed to most firms — minimums, custody mandates and lock-ins put them beyond the reach of all but the largest RIAs. Finny's version has no minimums, no custody requirement and no obligation to change how a practice operates.

"Growth in this industry has been rigged for a long time — we're correcting that," Ovadia said. Co-founder and president Victoria Toli said she expects performance to prove out: "We're kind of putting our money where our mouth is. From our perspective, if we don't deliver anything, then we don't deserve to get paid." Ovadia added that the $50 monthly fee barely covers costs; data licensing alone runs into the millions each year.

LPL Financial, the country's largest independent broker-dealer, is the first firm to get access to the new pricing. Finny says the arrangement makes it the first non-custodial platform in wealth management to charge this way. The custodian referral programs it mimics have existed for years, so the claim is partly a matter of category. The sharper observation is what the pricing says about Finny's expectations: the company is betting that an aligned incentive will generate more revenue over a client's lifetime than a flat subscription ever did.