Can tech start-up Vise still “reinvent” portfolio management?


This week, Citywire RIA published another dispatch in the continuing Vise saga.

Vise, for those of you who don’t spend all your hours perusing investment advisor business news, is the flashy startup investing on behalf of RIAs. There is an idea that the company uses “artificial intelligence”; the company’s full name is “Vise AI Advisors”, and early news reports said the company “automates portfolio management using AI and machine learning”, that it “uses the ‘artificial intelligence to help advisors create and manage portfolios’, that it is a ‘pioneer in the use of artificial intelligence in investment management for RIAs’, and that its co-founder Runik Mehrotra is an “artificial intelligence prodigy”.

The company seems to have recently retired from this branding. In early 2021, its homepage sang: “Harness the power of artificial intelligence to create personalized portfolios for your clients”; the language has since given way to a wise third-person explanation: “Vise is a technology-enabled investment manager that provides financial advisors with personalized and intelligent investment solutions to help their clients achieve their goals.

The words “artificial intelligence” have also visibly disappeared from its regulatory documents. While its March 2021 Form ADV brochure stated that it “operates an internet-based investment advisory business that uses artificial intelligence, algorithms and other technological means” to provide services to advisors, its December 2021 changed this language to say that Vise “operates an investment advisory business that uses proprietary algorithms and other technological means to provide these services. Algorithms have become proprietary, but the mention of artificial intelligence which was so essential to the company’s marketing, and whose acronym still forms his middle name, has disappeared.

In his March 2022 ADV, the most notable change is his drop in assets. Comparing the two filings side-by-side, we see that while Vise was managing $559 million in assets as of December 15, 2022, it was managing $362 million as of March 29, 2022. The company attributed the drop to changes in the technology and strategy, as well as the fact that Vise “mutually parted ways with a major consulting firm in the last quarter.”

Whatever the explanation, it’s pretty odd that a company that was talking about “$800 million in customer engagements” in May 2020 never approached that level in an ADV report, and now manages less than half of this amount. And its small AUM is downright surprising when you remember that the company’s self-reported valuation, in a funding round in May that included such heavyweights under the name of Sequoia Capital, is ‘$1B+.’

Meanwhile, the company recently suffered an exodus of executives that leaves it without a chief technology officer to date.

Are there any similarities here with Onramp Invest, the crypto-for-RIAs startup that rose to fame among advisors but seemed to struggle to build a business? Are there shades from ARK Invest’s Cathie Wood, who has come under fire for making wildly over-the-top predictions that threaten her credibility when they don’t come true?

Perhaps. But we’re not here to root against innovation. Perhaps they are indeed “reinventing portfolio management”, as a 2019 TechCrunch headline claimed.

After all, no one who paid attention could accuse Vise and its founders of suffering from an excess of imagination.

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