Written by: Kamil Ponicki, Director of Talent Acquisition, Digital Colliers
Savvy Wealth just closed a $100M Series C led by Halo Fund. The company builds all-in-one software for independent registered investment advisors. The round size tells you where the RIA software market is heading: away from fragmented point solutions, toward integrated platforms that own the entire workflow.
If you're a lender financing advisor practices, that consolidation creates a new credit risk you probably aren't tracking. When a practice's revenue depends on a single software vendor, any pricing change or prolonged outage hits cashflow directly. You need vendor-concentration data, and most credit teams don't have it yet.
The RIA software stack is consolidating
Five years ago, a typical independent advisor cobbled together half a dozen tools. CRM from one vendor, portfolio management from another, billing separately, compliance separately, client portal separately. That fragmentation created friction, but it also spread dependency risk across multiple providers.
Now platforms like Savvy Wealth, Addepar, and others are bundling those functions into single systems. Advisors get tighter workflows and lower admin overhead. But the trade-off is concentration: if the platform goes down or reprices aggressively, the practice has no immediate fallback. Switching vendors mid-year means migrating client data, retraining staff, and risking compliance gaps during the transition.
The consolidation trend isn't speculative. Savvy's $100M raise follows similar rounds across the sector. Investors are betting that advisors will pay a premium for integrated platforms. That bet is probably right. But it also means a growing share of your loan book depends on a shrinking number of software vendors.
Why lenders care about vendor concentration
DORA, the EU's Digital Operational Resilience Act, has been in force since 17 January 2025. It requires financial entities to manage third-party ICT service provider risk, including concentration risk. If you're lending to advisors in scope of DORA, you're already supposed to be tracking this.
Even outside DORA's direct perimeter, the credit logic is straightforward. A practice that runs entirely on a single platform faces binary operational risk. If that vendor raises prices 30% at renewal, the practice either absorbs the margin hit or undertakes a costly migration. Both outcomes stress cashflow. If the platform suffers a multi-day outage during quarter-end, the practice can't bill clients or rebalance portfolios on schedule. Revenue timing shifts, and your monthly monitoring dashboard might not catch it until the next statement cycle.
Most lenders have sector concentration limits. You wouldn't let 40% of your book sit in a single industry without heightened monitoring. Vendor concentration works the same way, but it's harder to see because it cuts across your portfolio by technology dependency rather than by revenue source.
The vendor-dependency data model
To manage this risk, you need three layers of data. First, identify which borrowers use which platforms. That means adding a software-vendor field to your borrower profile, updated at each annual review. For practices on integrated platforms, note whether the platform handles billing, custody integrations, or compliance workflow. If it handles billing, vendor downtime directly delays cash collection.
Second, capture contract terms where you can. Renewal date, notice period, and whether the contract includes price escalation caps. Practices locked into multi-year agreements with annual step-ups carry different risk than those on month-to-month terms. You're not trying to audit every SaaS contract, just flagging the ones that represent operational dependency.
Third, estimate switching costs. A practice with 200 retail clients and simple portfolio strategies can migrate platforms in 60-90 days. A practice with 50 high-net-worth clients, custom tax-loss harvesting workflows, and deep CRM integrations might need six months and outside consulting help. Higher switching costs mean higher lock-in, which means pricing power sits with the vendor.
What this looks like in practice
Winning lenders are building vendor-concentration dashboards alongside their usual sector and geographic views. When a single platform carries more than 15-20% of managed AUM across the portfolio, that triggers a deeper look: Is the vendor financially stable? Has it repriced aggressively in the past? What's the average contract term among your borrowers on that platform?
You're not trying to ban concentrated platforms. You're pricing the risk correctly and setting monitoring tripwires. If a borrower migrates platforms mid-term, that's a signal to check in early rather than waiting for the next scheduled review. If a major RIA platform announces a pricing change or experiences a publicized outage, you know which loans in your book are exposed.
The data model isn't complicated. The hard part is deciding it matters enough to track before your competitors do.