September 28, 2023


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The RIA and insurance worlds draw closer again as MassMutual buys Flourish, a digital bank with 350 RIA banking clients

The Springfield, Mass. life insurer, founded in 1851, gets the 2017-founded seller of FDIC-insured cash through RIAs in an atmosphere where RIA vendors and big insurers see more and more good in each other.

Brooke’s Note: The RIA business and the insurance conglomerates are forming a curious symbiosis that just seems to gain momentum by the day. Insurers like how RIAs grew up to manage big assets and to kindly never ask them to pay for commissions or give up shelf space. RIAs like how insurers are designing products without commissions and how they pay attention to risk. But RIAs vendors also like insurers who pay them what they believe they are worth and share a disdain for Wall Street brokerages. MassMutual, in buying Flourish, also becomes the firm’s investors’ insurance policy both by assuring wider distribution and by cashing out their well-timed startup before anything can go wrong in a radically low-interest rate, high-uncertainty world.

MassMutual just bought an RIA vendor that grew its RIA base 100{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} in the past year as it further evolves past serving brokers — not that the deal’s rationale doesn’t include MassMutual’s massive brokerage following.

Yan Zhao
Yan Zhao: This is a great outcome for RIAs.

The Springfield, Mass., Fortune 100 company bought Flourish in a deal it announced Dec. 14.  The manager of nearly $600 billion in assets is making the New York high-yield cash manager into a subsidiary on undisclosed terms.

The MassMutual offer was too good to pass up, according to Yan Zhao, co-founder of New York-based Stone Ridge, and former head of Flourish, via email.

“[We] came to the mutual realization that the resources of MassMutual [would] open up significant opportunities for Flourish … the deal and timing made sense,” she says.

Difficult market

Michael Halloran
Michael Halloran: ‘MassMutual should be able to grow its brokerage business.’

Northwestern Mutual paid $250 million for Learnvest in 2015, an amount it wrote off in 2018. See: Why exactly Northwestern Mutual bought a digital darling for $250 million, shut it down, orphaned its customers and declared progress

Flourish made the right decision in a partly commoditized, shrinking-margin banking market, says one financial technology executive, speaking anonymously, via email.

“Cash is a major factor contributing to RIA successes, [but Flourish] soon realized … that building a large bank network is incredibly difficult . A market like we’re in now, and expect to be in for the next two years, doesn’t make it any easier.”

Flourish pays out rates of up to 0.7{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}. Its clients include Buckingham Strategic Wealth in St. Louis and Private Ocean in San Francisco.

Flourish has not encountered difficulties in this market, insists product chief Ben Cruikshank.

Frank Bonanno
Frank Bonanno: [We do] not introduce RIA clients to other banks and competing wealth managers.

“While rates are at an all-time low, interest in Flourish has been at an all-time high; the number of RIAs we work with has increased by 50{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} in the past six months alone,” he says.

“We’ve built key integrations across the advisor-tech landscape with companies such as Envestnet, Orion and eMoney,” he adds.

“We believe we are well positioned to deliver additional products and services across banking, wealth management and insurance, all of which will be built specifically for financial advisors.”

Flourish now works with more than 350 RIAs that cumulatively represent more than $600B in AUM, he says.


Those RIA relationships are gold to MassMutual.

“MassMutual will [also] get access to a small universe of advisors that they can cross-sell other products,” the source says.

Indeed, cross-selling is likely a key driver of the deal, according to Michael Halloran, head of business development for rival New York cash manager, MaxMyInterest.

“MassMutual should be able to grow its brokerage business … by engaging with clients on cash,” he says, via email.

MassMutual previously did a deal with Commonwealth Financial Network for its software. 

The insurer also recently purchased a $5 million minority stake in a second Stone Ridge subsidiary, the crypto-currency custody venture, NYDIG.

Independence threatened

All of Flourish’s staff, with the exception of Zhao, and former head of client strategies Kelly Brewster will move to the insurer, should the deal pass regulatory muster in the first quarter of 2021.

Kelly Brewster
Kelly Brewster, former head of client strategies, has joined Yan Zhao at NYDIG. 

Zhao is now president of NYDIG. The New York City financial services firm is focused on Bitcoin for institutions, private clients, and banks. Brewster followed her there as chief marketing officer. 

For now, the COVID-19 pandemic has put its plan for long-maturity, home-equity lines-of-credit on “the back burner”, Cruikshank told RIAIntel.

The cash manager is also hiring new developers and client service employees, and working on developing an insurance-linked new service.

Yet RIAs could balk if Flourish loses its feel of independence under a big insurer, according to Frank Bonanno, managing director of rival New York cash manager StoneCastle. See: StoneCastle storms into RIA market with high-yield, FDIC-insured accounts in direct challenge to MaxMyInterest for the title, King of Cash

“Our success comes from the fact that … [our RIA service] was created based on the success of our institutional cash vehicle, FICA, which is truly independent and does not introduce RIA clients to other banks or competing wealth managers,” he says, via email.

Zhao insists that Flourish’s new owners put it in a better position than ever.

“[As we] learned more about their vision for technology … we both came to the realization that MassMutual would be a fantastic partner to help Flourish accelerate its growth … focused on RIAs, while continuing to add resources and scale,” she says.

“This is a great outcome for the RIAs.” See: Phones at RIA cash managers ‘ring off the hook’ amid yield crunch and MaxMyInterest pulls rabbit out of hat — keeping rates on FDIC cash near pre-cut levels.