Wealthtech funding is heating up, and a global market meltdown may simply add fuel to the fire. 

Worldwide, the total wealthtech market is expected to reach almost $9.5 billion by 2028, according to data from Research and Markets. The latest example of firms cashing in on that demand is asset management platform Ethic, which closed a $64 million round last week. Led by State Street Global Advisors, the funding will go toward building out Ethic’s accounts and model portfolios, and a partnership with State Street will focus on automating more features for advisors. 

It’s a substantial funding round, led by the fourth-largest asset manager in the world, and speaks to the overall health of the booming wealthtech sector after a strong 2024. “It’s very much having a moment, especially as the advisor space continues to grow and more advisors look to go independent to provide differentiated client experiences,” said Ethic CEO Doug Scott.

Tech Stacking Up

One of advisors’ top concerns when it comes to building out their tech stacks is how new platforms can help navigate volatility, Scott told Advisor Upside. “We got a particularly big example of that last week,” he said. “Markets are moving a lot, so having a more efficient way to integrate capabilities like tax loss harvesting in this kind of environment is important.”

Additionally, clients are demanding more customization when it comes to how their assets are managed. One portfolio doesn’t fit all, and wealthtech platforms can provide advisors with customization options at scale, Scott said. “Clients want more choice, control, and influence,” he said. Ethic currently manages more than $6 billion in assets across some 250 firms, including RIAs and institutional clients.

Wealthtech on a Tear. Just last month, digital estate planner Trust & Will landed $25 million in funding, led by Modern Ventures. And 2024 was a healthy year, too, for funding rounds focused on wealth managers:

• Digital financial planning firm Facet raised $35 million in October.
• Farther, a startup wealth management firm, secured $72 million that same month. 

“It’s a signal around the strength of what’s happening in the wealth ecosystem,” Scott said of all the funding.