This week Citywire RIA published another dispatch in the continuing saga of Vise.
Vise, for those of you who don’t spend all your waking hours scouring investment advisor trade news, is the flashy startup that invests on behalf of RIAs. There is some idea that the company uses ‘artificial intelligence’; the company’s full name is ‘Vise AI Advisors,’ and early news coverage said the company ‘automates portfolio management using AI and machine learning,’ that it ‘uses artificial intelligence to help advisors build and manage portfolios,’ that it is ‘pioneering the use of artificial intelligence in investment management for RIAs,’ and that its co-founder Runik Mehrotra is an ‘artificial intelligence wunderkind.’
The company seems to have stepped back from that branding recently. In early 2021, its homepage crowed: ‘Harness the power of artificial intelligence to build your clients personalized portfolios’; the language has since given way to a demure third-person explanation: ‘Vise is a technology-powered investment manager that provides financial advisors with customized and intelligent investment solutions to help their clients achieve their goals.’
The words ‘artificial intelligence’ have also conspicuously disappeared from its regulatory filings. Whereas its March 2021 Form ADV brochure said 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 brochure changed that language to say that Vise ‘operates an investment advisory business that uses proprietary algorithms and other technological means’ to provide those services. The algorithms have become proprietary, but the mention of artificial intelligence that was so key to the company’s marketing, and whose acronym still forms its middle name, has vanished.
In its March 2022 ADV, the most notable change is its decline in assets. Comparing the two filings side by side, we see that while Vise was managing $559m in assets as of December 15, 2022, it is managing $362m as of March 29, 2022. The company blamed the drop on changing technology and strategy, as well as the fact that Vise ‘mutually parted ways with a large advisory firm this past quarter.’
No matter the explanation, it’s pretty odd that a company that was talking about ‘$800m in client commitments’ in May 2020 never approached that level in an ADV report, and is now managing less than half of that amount. And its diminutive AUM is downright startling when one remembers that the company’s self-reported valuation, in a May funding round that included such heavyweights as Sequoia Capital, is ‘$1B+.’
Meanwhile, the company recently suffered an executive exodus that leaves it without a chief technology officer to this day.
Are there similarities, here, to Onramp Invest, the crypto-for-RIAs startup that made itself famous among advisors but has appeared to struggle in building a business? Are there shades of ARK Invest’s Cathie Wood, who has been criticized for making absurdly over-the-top predictions that threaten her credibility when they fail to be achieved?
Perhaps. But we’re not in the business of rooting against innovation. Perhaps they are indeed ‘reimagining portfolio management,’ as a 2019 TechCrunch headline claimed.
After all, no one who’s been paying attention could accuse Vise and its founders of suffering from a surfeit of imagination.