RightCapital, a financial planning software firm, has experienced significant growth in its market share, according to a recent survey by Advisor Software Survey conducted by T3 and Inside Information. The survey revealed that 15% of advisors who use financial planning technology have chosen RightCapital’s platform, tripling its market share since 2020.
This growth comes as industry leaders eMoney Advisor and Envestnet work to maintain their dominating market share. Despite an 11% and 14% increase in market share for Envestnet and eMoney in 2021, respectively, both companies have lost between 2% and 5% of their market share over the past two years.
However, it is worth noting that a recently published survey by Kitces observed less dramatic swings in market share for these three companies in recent years. This discrepancy may be due to modifications in the survey methodology made by T3 and Inside Information in 2021.
Nonetheless, the Kitces report still identified RightCapital as the fastest-growing financial planning software from 2020 to 2022. According to the survey authors, RightCapital has been successful in capitalizing on the current trend of generating one-page financial plans and offering superior tax planning compared to its competitors.
The emergence of one-page financial plans has sparked controversy within the advisory industry. Critics argue that these plans lack the necessary context and details, potentially overwhelming clients with excessive information. However, proponents of one-page plans contend that they are here to stay, as they provide a concise summary of a client’s financial situation and goals, making it easier for busy clients to understand and engage in meaningful discussions with their financial professionals.
RightCapital’s success can be attributed to its client-centric approach, as Founder and CEO Shuang Chen aimed to design the application in a way that consumers would appreciate. RightCapital is particularly popular among smaller, younger firms and solo practitioners with lower revenue and less extensive operational histories.
It is important to note that Registered Investment Advisors (RIAs) typically resist switching their financial planning software due to the time-consuming process of transferring data. Therefore, while RightCapital may not attract many established users from eMoney or Envestnet, it is well-positioned for growth by capturing new advisory firms and winning over satisfied customers from its competitors.
According to the Kitces report, in 2022, RightCapital held 23% of the total market share, while Envestnet and eMoney held 32% and 39%, respectively. However, eMoney’s total market share may have been underestimated in the survey since it didn’t include their most robust solution, eMoney Premier.
RightCapital’s increasing market share is also credited to its strategic partnership with the XY Planning Network, which allows members to access the software at a discounted price. Similarly, Wealthbox, among CRM software applications, has more than doubled its market share over the last three years through a similar partnership with the XY Planning Network.
While RightCapital’s growth may not directly impact the market share of industry leaders, its success among smaller firms and newer practices suggests it is well-positioned for future growth. By focusing on customer satisfaction and maintaining positive word-of-mouth recommendations, RightCapital has the potential to attract new advisory firms while continuing to meet the needs of clients.
