The Next 20: Reflections on Twenty Years in Wealthtech & Wealth Management

Lifeyield Hits Episode 150, Sound View Wealth on the Pod, XYPN Fintech Competition and more

It’s May.

The month where we wind down the school year, gear up for vacations and look forward to summer fun.

For my family, this May is filled with birthdays, anniversaries and lots of finals.

Twenty years ago, as I was finishing my undergrad degree, a friend invited me to interview for a job at a startup where he worked. I walked into the Orion office and started working there the Monday after I walked for my degree. Twenty years out from that day, I have some thoughts about the state of our industry and where we go from here.

Here’s everything we’ll cover in the Connected Advisor this week:

  1. My Reflection on Twenty Years in Wealthtech

  2. Sound View Wealth Advisors in the Pod

  3. Wealthtech on Deck Hits 150 Episodes

  4. XYPN’s Fintech Competition 2024

  5. On the Road

The Next 20: My Reflection on Twenty Years in Wealthtech & Wealth Management

Twenty years ago, I was four weeks away from marrying Kim Mackrill and finishing undergrad. At the same time, I was trying to figure out what I wanted to do for a year or so before grad school.

While hanging out with our friends, Scott & Heidi Klaassen, Scott mentioned that he was working at a company called Orion. I hadn’t heard of it, and assumed he was talking about Orizon, a firm led by Dan Tucker, which has since become part of Mariner. I’d heard of Orizon. But I didn’t know anything about Orion.

I was thankful I double-checked Mapquest at the time, or I would have walked into Orizon. Instead, I made my way to Orion’s offices at 147th and F Street in the Millard area of Omaha and met Randy Lambert.

Randy had started at CLS Investments and when Orion spun out, he’d become the COO of this young tech start up. He was looking for people who could work with advisors and their data and he took a gamble on me.

In 2004, Yahoo! had just moved Google outside of their tech stack as Google surged to 200 Million searches per day. The average American had been turning to Amazon for way more than just books. Although online commerce was hitting its stride, the technology side of investments was still novel. In the world of wealth management, I was surprised how data moved between institutions and reporting software.

I had no idea how much work it was to transfer data between old systems, load it into a reconciliation system, get it to reconcile, and then print correct data on a statement — which, then, we often printed in our office and mailed to the retail clients using the brands of our 20 or so clients.

As I thought about the future, it was easy to imagine a day when the manual work we did wouldn’t be necessary. Surely the Custodians would make the data move so smoothly and accurately that we would simply present it without anything in the middle?!

I wondered when advisory fee billing would become as easy as Stripe.

I imagined that there would be a Shopify-like solution of payouts to make everything seamless.

Everything would be delivered to clients through mobile apps that looked and functioned like Uber.

I wondered if my job would be obsolete within the year.

I had a lot to learn.

Looking ahead

The past 20 years did not lead us anywhere close to a harmonious singularity of data, like I imagined would happen in 2004. While I doubt the future will ever get everyone from custodians to planning softwares to the IRS to work in harmony, we can still have some fun and imagine the next 20 years together.

Stop for a moment and imagine. What do you think will happen with the technology in our space?

Here’s what I see:

  1. Data Domination
    Your Firm will be paying for data more than software. For some, this may already be the case. As this becomes normalized, the sooner you are in a position to receive and store data, the faster you’ll be able to level up your services, scale and increase your firm’s value.

    Timeframe to relevance: 8 years

  2. Have a Seat. How are things?
    Advisors will look and behave even more like therapists. The information will take care of itself, but helping people with their psychological well-being will finally completely take center stage. This will become really multidimensional as people start to unpack more of their uniqueness.

    Timeframe to relevance: Now

    Point of Action: Look for up and coming advisors who’ve taken classes beyond Freshman Psychology or who are incorporating counseling classes and training alongside standard CE.

  3. Augmented Mentality
    Most of reality will be augmented. Instead of just getting bombarded with political ads when we walk into a geofenced area, we’ll get legitimately helpful prompts and details through smart devices. The innovation will finally find adoption when the information we receive actually augments our activity, not obstructs it.

    Will be able to view any physical or digital object and learn whatever we want to know about it. Product creators will get to elevate their marketing collateral to include immersive brand experiences.

    Those who don’t communicate this way will either be irrelevant or making a deliberate point to remain exclusive luxury brands.

    Timeframe to relevance: 10 years

  4. All the Markets all the Time
    Due to the influence of the crypto markets, we are already in the emerging phase of markets never closing. To keep up with consumer demand and expectation, public markets will start trading around the clock. To meet the constant desire for more, watch for new ways to gain access to private funds via public markets.

    This will have a large impact on staff, behaviors and the technology you use. It will place a greater emphasis on real-time analysis, data transmission, automated reconciliation, and everything you need to move swiftly.

    Timeframe to relevance: 3-8 years

  5. Everything will be Tokenized, Exchanges will be Multiplied
    The future will likely lead to broad-based tokenization where every legal agreement, share, and transaction is represented in some sort of tokenized form. While currently novel, the real opportunity will be in the ability to exchange tokens more easily between parties outside of any custodian as we know it today.

    Shareholders will sell tokenized shares on secondary markets to strangers who swap values in anonymous wallets. This will lead to a drive for increased regulation as this will likely lead to a new level of activist investors.

    Timeframe to relevance: 5 -15 years

  6. Decision & Scenario Modeling Will Be Infinite
    With the ability to run situation analysis on any opportunity, retail clients can unlock all sorts of decision guidance with the power of a prompt.

    Your OCD friends will lose their minds, and your free-spirited friends will run away from it. Advisors will constantly be navigating the best ways to present information that doesn’t offend or overpower.

    Timeline to relevance: 7 years

  7. Advisors will Plan Experiences for Clients
    This happens in pockets today, but a big part of your commitment to your clients will lead to advisors designing experiences for clients to augment their wealth experience.
    - Trips
    - Holiday Celebrations
    - Special Occasions
    - Family Retreats
    - Helping Aging Clients Capture and Document Memories

    Timeline to relevance: Now

  8. The Majority of Your Clients Won’t Have a Formal Singular Job
    Depending on who you work with today, you may already have lots of clients without W2s. With the gig economy the the need for fractional specialization, you will have advisors who specialize in all sorts of unique niche audiences with clients in far less than formal careers.

    Timeline to relevance: now in many markets, 3 years everywhere

  9. Every RIA will be Expected to Serve as a Family Office

    Expectations are tough. The reality is that your clients are only going to expect more from you. The best model for that expectation is the family office of today. Baked in legal, accounting, bill pay, laundry service (sort of kidding), etc.

    To prepare for this, we need to rethink our fee schedules and start building our networks of personnel who can provide you FO-level services. The top firms I work with are already well underway.

    Timeline: Now and increasing daily

  10. More Information Will Lead to Less Happiness
    With the ability to have all of these details in our lives, models, projections, and various scenarios, people overall satisfaction will decline. One of the glories of life, lies in the excitement of the unknown. The deluge of information available to the average person will be waiting to catch the hope of humans to dissuade them from happiness into a certainty that isn’t accurate. People will have to fight harder to find joy.

    Timeline to relevance: Right Now

What’s Your Top Ten for the Next Twenty?

You heard my list of things I’ll probably be really wrong about. I’d love to hear your thoughts on where the world is going.

What am I wrong about?

What about do you see that I didn’t mention?

On the Pod

Kyle interviews Melissa Bouchillon, Managing Partner at Sound View Wealth Advisors in this insightful episode. With her unique background in psychology and education, Melissa discusses her innovative approach to marketing within the financial advisory sector. She emphasizes the importance of demystifying complex financial concepts for clients and the transformative role of technology in enhancing client service and operational efficiency.

Key Discussion Points:

  • Melissa's Marketing Strategy: Leveraging her educational background to simplify financial advice.

  • Impactful Moments: A pivotal experience that guided her into the financial advisory field.

  • Technology in Practice: How digital tools are shaping Sound View Wealth Advisors.

  • Vision for the Future: Melissa shares her perspective on the evolving RIA industry.

Episode Highlights:

  • Melissa's commitment to community involvement is evident through her board roles at various organizations.

  • The strategic decision to expand operations into Bluffton, South Carolina, and the benefits of rotating staff among offices to foster versatility and broadened experience.

Notable Quotes from Melissa:

  • "Understanding material thoroughly is evident when you can explain it simply, enabling actionable insights without relying on jargon."

  • "Our decision-making prioritizes our clients' best interests, ensuring that our team delivers their finest work."

  • "Mentoring is crucial for onboarding and the continuous development of our team members."

Milemarker Minute: Melissa shares personal anecdotes about her longest race, dream travel destinations, an alternative career path in teaching, and her favorite book.

Full episode is available now 👇

WealthTech on Deck Hits 150 Episodes

Our friends at Lifeyield and WealthTech on Deck have hit a really amazing milestone. 150 episodes!

If you haven’t listened, you are missing out.

My congrats to Jack Sharry and Matt Nollman on their commitment to providing the industry with the single most informative look at the Wealthtech industry.

Full Disclosure: Turncast, a company that I co-own alongside Adam Clark, produced all 150 episodes of WealthTech on Deck.

Turncast proudly produces the Connected Advisor and many other important podcasts in wealth management — all while being the single best way to tell your unique story.

XYPN Announces its 2024 Fintech Competition

Our friends over at XYPN have announced their 2024 Fintech competition.

I had the pleasure of pitching and winning this in 2018 and its’s a legitimately great event.

Milemarker on the Road

Catch our team on the road at the following events or cities:

  1. May 13-14 - Atlanta, GA

  2. May 13-15 - Miami, FL

  3. May 13-15 - Phoenix, AZ

  4. June 5 - Minneapolis, MN

  5. June 10 - Omaha, NE

If you’re in any of those cities and want to arrange a meeting time, reply to this email, and we’ll get something on the calendar.

Jud Mackrill