Addepar Stands for Transparency and Impact

| Eric Poirier Industry

The year is 2016.

We are eight years removed from the 2008 financial crisis, but repressed memories and fears are resurfacing. Global markets started off the year with record-breaking declines, as concerns over China, tanking oil prices and continued Fed Funds rate uncertainty dominate the headlines. Private markets are becoming volatile too, as lofty valuations are coming under scrutiny, and the environment for public exits has proven to be challenging. The latent market risks that keep us up at night may have evolved since 2008, but the financial system still suffers from the same limitations today as it has in prior decades: the industry’s reliance on a complex and brittle combination of people, spreadsheets and antiquated systems has resulted in tremendous friction points and information asymmetries. It lacks a common language, central data platform, and neutral infrastructure to unify its parts. This makes allocating capital inefficient and also creates massive risks, many of which do not become known until it is too late.

The lack of adequate visibility into complex investment portfolios is broadly acknowledged — but it’s a really hard problem to solve. As a result, the financial system has continued its march forward on a fractured infrastructure of decades-old systems, with hundreds of thousands of people using spreadsheets to stitch the pieces together. The deep risks and dire consequences this approach brings are hard to measure, and inertia continues to prevail. The financial system is still broken at its core.

Ambitious technology platforms have modernized the consumer experience over the past decade, delivering tailored experiences at scale through data-driven insights. Other industries are poised to follow suit with the emergence of the Smart Enterprise Wave. These disruptions are happening gradually, but they are meaningfully affecting consumers in every corner of the world. Despite their undeniable importance to the global economy, financial services have been largely unchanged by technology — perhaps with the exception of consumer finance innovations in lending, payments, bitcoin, and robo-advice. In fact, the technology and processes that power the core of the financial system are still woefully outdated. In many cases they were built before the Internet was a thing, to solve a fundamentally different set of problems. Investment and wealth management have been especially neglected, and decisions are still based on subjective factors instead of data-driven insights. Why does one of the most important and impactful sectors in the world still rely on decades-old technology and conventions that are notoriously prone to human error?

In this blog post and accompanying video, we identify a few of these problems, highlight what inspired us to fix them, and share what makes Addepar’s platform and products transformative for our clients and for the broader financial system.

The Problem

Transparency and financial services have been at odds for decades. The industry is riddled with information asymmetries, creating shadows and dark corners where bad decisions are frequently made. It’s a system rife with guesswork and wasted money, and it’s based on old-fashioned models that don’t reflect data or logic. The most underserved constituencies are the owners and advisors of complex, multi-asset class portfolios, including endowments, foundations, family offices, pensions, and wealth managers.

The vast majority of investment advisors don’t have a reliable way to make accurate, timely, and informed decisions. As a result of having inadequate tools and stale, disparate data, they are forced to be reactionary, uninsightful, and unable to build opportunistic portfolios to truly reflect their clients’ goals and objectives.

The Addepar Solution

We’ve spent our careers at the intersection of financial services and innovative technology, and have experience helping businesses make sense of complex datasets to solve their hardest problems. Since meeting and working together at Palantir, we have pushed the envelope to radically improve financial services, recognizing the need for data- and logic-based software to eradicate the waste and corruption that plagues many parts of the industry. This meant rethinking basic processes and building them around modern technology to give asset owners and advisors a platform where they can capture and aggregate data from multiple sources and then apply it in the most intuitive and impactful ways.

Addepar was founded in the wake of the 2008 financial crisis, with a laser focus on empowering asset owners and their advisors to make more informed investment decisions and mitigate unintended risks. We work hard to deliver ambitious technology and clean, complete data, and to weave it into intuitive products so that our clients have what they need to run their businesses. We give our clients a precise understanding of critical portfolio details and enable them to unpack factors like performance and risk exposure at any level of the portfolio. This in turn helps our clients build trust with their end-clients.

The Addepar solution is a threefold approach:

  • Comprehensive Data Aggregation and Reconciliation

    Through our large network of partners, we’re able to aggregate, reconcile, and enrich data from custodians, fund administrators, market data providers, and other sources to provide our clients with full visibility across accounts, asset classes, banks, and currencies.

  • Robust Data Modeling and Powerful Analytics

    Our comprehensive data platform powers our breadth of analytics, which allows our clients to dissect volumes of data in seconds. With Addepar, our clients can perform custom, in-depth analysis on any portfolio, as well as flexibly map and model complex ownership structures.

  • Customizable Reporting and Interactive Client Portal

    Addepar’s drag-and-drop report editor and dynamic charts and graphs enable our clients to share meaningful information and insights with ease. Reporting is customizable, scalable, and unconstrained by rigid templates or time-consuming manual processes.

Our Path Toward Transformation

We’re working to build technology to empower advisors to serve their clients in a more tailored way by improving the relevance, fit, and outcomes of the advice, products, and services they offer. Our goal is for end clients to extract more meaning from their advisor relationships and feel greater loyalty and appreciation as their own goals and objectives are better defined and realized. We’re striving to replace the opaque black box with transparency and accountability.

As Addepar grows, it’s our ambition to turn our platform into infrastructure that will serve as a hub to connect all aspects of global finance, including asset owners, advisors, products, services, and all counterparties.

Addepar has come a long way in the six years since it was founded. We work with more than 140 clients that manage over $300 billion in assets on Addepar. Our clients span a broad spectrum, and include leading family offices, wealth advisors, and institutions at the forefront of technology innovation.

We’re proud of our achievements thus far, and we’re deeply committed to continuing to build meaningful partnerships with our clients and deliver innovative solutions using technology and data. Our mission to fix finance is what drives each and every person at Addepar. The problem is vast, but it is in fact tractable. We’re passionate and determined to serve the financial services industry and to push the system to once again be rooted in common sense and trusted relationships. This transformation is within our grasp, and it will be an extraordinary journey for us all.

– Eric Poirier, CEO
– Joe Lonsdale, Founder & Chairman of the Board