Zoe Strategy 2025 and Beyond

Written by: Andres Garcia-Amaya, CFA

When we started Zoe Financial, the idea was simple: make it easier for clients to find and hire the right financial advisor. As we scaled the marketplace, we realized the problem wasn't just connecting clients and advisors—it was what happened after.

The client's experience with an advisor is antiquated; it lacks personalization and is full of friction. RIAs are drowning in inefficiencies: disconnected tech stacks and workflows, messy and unstructured data, and manual processes that leave them little time to focus on what matters most—helping their clients grow & protect their wealth. We saw an opportunity. We started with improving the client onboarding experience and kept solving pain points in the RIAs' workflows, including funding, trading, rebalancing, reconciliation, and billing. Fast forward, and Zoe has evolved from a two-sided marketplace to a modern end-to-end platform for mass affluent consumers to find, hire, and work with a trustworthy financial advisor.

When thinking about 2025 and beyond, our strategic decisions are built on three central thesis:

1. Build for the client. Empower the advisor.
2. Wealth Tech is abundant; integration is scarce.
3. The power of AI lies in proprietary data.

Build For The Client

In our marketplace, consumers interact with us before speaking to the advisor. We also only get paid by the advisor if the client hires them. This direct relationship with the consumer and our alignment of incentives allows us to understand what they want deeply.

Incumbent wealth tech platforms focus solely on selling to advisors. Zoe, on the other hand, combined a platform solution with a two-sided marketplace. Tidemark calls this business model “The Great White Whale.” They describe vertical platforms that extend to a consumer two-sided marketplace as the "financial promised land," highlighting the significant economic benefits and strategic advantages it offers. There is a reason that Schwab and Fidelity's market capitalizations are in the hundreds of billions. They are the Great White Whales of the 20th century. Zoe aims to be The Great White Whale of the 21st century.

Empower The Advisor

Once we built digital account opening, fractional trading, tax-loss harvesting, and automated rebalancing functions, we had the ingredients to offer personalized investment options. The natural next product offering was Direct Indexing? (DI.) After all, although prospective clients don’t call it DI, they have been asking for it for years in our marketplace. A prevalent reason a qualified consumer, through our “Find an advisor” experience, does not hire an advisor is that they “don’t see the value of paying 1% on an ongoing basis.” To be more specific, one prospective client told us, “I just can’t justify paying 1% every year to be placed on a five passive ETF portfolio that is rebalanced annually. I can do that myself.”

Our new Direct Indexing capabilities offer a personalized alternative to traditional ETFs and mutual funds. Instead of buying one investment vehicle that tracks an index, clients can own individual stocks that make up that index, enabling them to invest in a personalized version. This approach offers greater flexibility for tax optimization and tailoring portfolios. The pitch an advisor on our platform can now give is, “Unlike many advisors you will speak to, we are not giving you a cookie-cutter passive ETF portfolio. We will build a personalized portfolio composed of individual stocks that we will look to rebalance daily to seek tax savings opportunities.”

Looking ahead, we will continue to build capabilities that will empower our RIA partners to provide more personalization and access to products that were only available to the ultra-rich.

Wealth Tech is Abundant; Integration is Scarce

The charts below show that the RIA space is no longer "low-tech." In the last few years, innovation and adoption of new software for RIAs have exploded.

RIAs are now overwhelmed. On average, advisors use at least seven different technology solutions. There are so many fragmented point solutions and duplicative customer and investment data sources that integrating data across platforms is now their biggest tech challenge.

While there are a few incumbent tech platforms in the market, they have been built through M&A and lack deep integrations to their many-point solutions. They also have stayed at the application layer, which impedes them from truly controlling & improving the user experience. By launching our broker-dealer (Zoe Securities LLC), we moved one level of abstraction closer to the data source. This shift gives us direct access to transactional and custodial data, empowering us to create deeper insights, improve operational efficiencies, and deliver a more seamless experience for our advisors and clients.

The challenge of fragmented technology stacks is not unique to wealth management. For instance, the HR & payroll space faced a similar challenge. As highlighted in their 2024 Memo, Rippling tackled industry fragmentation by creating a single platform that integrates payroll, benefits, devices, and apps into one seamless system. This approach simplifies workflows and eliminates the need for manual data synchronization across multiple systems. Rippling’s strategy has been incredibly successful, achieving an annual recurring revenue (ARR) of $350 million in 2023, a 100% increase from $175 million in 2022. Their growth trajectory underscores the power of their unified platform strategy in transforming an operational headache into a competitive advantage.

Zoe aims to bring a similar evolution to the wealth management space by providing a unified wealth platform that integrates critical functions and data. Zoe intends to become the integration layer for customer and RIA data and workflows.

The Power of AI Lives in The Data

Software makes data accessible. Generative AI now makes data understandable. As the CEO of NVIDIA describes, “the core of generative AI provides us the ability for software to understand the meaning of data.” AI enables us to "talk to our data," transforming static datasets into dynamic conversations. Vectorized databases allow users to extract meaningful insights and act on those insights in real time—all without needing to be data experts. Unlike the plethora of new AI single-point solutions in our space, Zoe is becoming the integration data layer for RIAs. Having full access to the data layer can allow us to bring the full power of generative AI to clients’ and advisors’ fingertips, unlocking a whole new level of personalized insights into their financial lives.

The Path Forward

At Zoe, we are driven by a singular mission: growing and protecting clients’ wealth. Our journey from a marketplace to a modern Wealth platform has been shaped by our relentless focus on solving real problems for both consumers and advisors. As we look to 2025 and beyond, we aim to empower advisors to provide truly personalized advice at scale by harnessing the power of integration, personalization, and AI. If we continue to execute our differentiated strategy and stay true to our mission, Zoe aims, a few years from now, to service millions of clients with trillions of dollars, truly becoming wealth management’s Great White Whale of the 21st century.