Data Processing as System and Business Informatics
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Every month, looks at a fintech platform that’s working with wealth management firms.

Company: PureFacts Financial Solutions Inc., a wealthtech provider that offers digital onboarding, data analytics, goals-based investing tools and other services.

CEO: Born and raised in Montreal, founder and CEO Robert Madej started teaching himself programming when he was 12. He and his brothers were allowed to play video games but had to write their own software. After earning a master of mathematics at the University of Waterloo, Madej started his career working on complex math and programming with YMG Capital Management Inc., later acquired by Fiera Capital Management Inc. In 1997, Madej founded custom software developer LYNXDev Inc., from which PureFacts was spun off.

Funding: Scotiabank, Canadian Business Growth Fund and Round 13 Capital Inc. provided a combined total of $37 million in debt and equity financing, which PureFacts started to raise after it acquired Zurich-based billing and commission software vendor Quartal Financial Solutions in 2020.

Products: PureFacts’ software helps advisors manage fees and commissions, analyze client data to identify needs and opportunities, and onboard clients digitally. It also has a goals-based investing tool to help clients plan for retirement and other life stages.

How it makes an advisor’s life easier: PureFacts aims to help advisors increase the size of their practices more quickly and profitably, Madej said.

It uses AI to look through advisors’ books of business and find similarities among clients, said Mehrnaz Shokrollahi, PureFacts’AI team lead. The technology then segments the clients into different buckets — based on factors such as how frequently they make contributions, assets under management and age — and feeds that data into a model.

The software can then identify which clients are most likely to leave by looking at past client behaviour. The characteristics that determine a client’s flight risk are unique to each firm because the machine learning model is re-trained with a firm’s data, and not with other firms’ data, Shokrollahi said.

With its technology, PureFacts aims to give an advisor a “conversation starter” if the AI predicts a certain client is likely to leave, Shokrollahi added. For example, the AI might find that older clients are more likely to leave than younger clients, so an advisor could suggest a decumulation product.

PureFacts also uses AI for product selection, predicting which products would suit a client based on their life situation. There’s a goal-tracking module and a decumulation tool that helps advisors tell clients how to withdraw from certain accounts in tax-efficient ways.

PureFacts also has billing software that helps advisors aggregate accounts into households. This saves clients money because they often pay lower fees based on total household assets, Madej said. It also uses AI to predict when the data used to calculate fees is incorrect. The idea is to catch an error before the client is billed instead of having to reverse an incorrect fee.

Wealth management firm adoption:  PureFacts has more than 100 corporate clients — including Desjardins, Fidelity, iA Financial Group, Manulife, National Bank Financial, Scotiabank, Mackenzie Investments and Canada Life. Boston-based GW&K LLC, with over $47 billion in AUM, began using PureFacts for fee calculation, processing and reporting this year.

Pricing: Cost depends on the number of accounts in the business, on a per-advisor basis. Madej said in most cases firms pay less than $100 per month per advisor.