Ep 19: Surviving the (Digital) Tsunami With Jason Wenk (Ep. 19)

Episode 19 of Rethink Financial Advice, co-hosted by Derek Notman, CFP® (Founder & CEO, Couplr AI) and H. Adam Holt, CFP® (Founder & CEO, Asset-Map). (40:19)

Episode 19 of Rethink Financial Advice, co-hosted by Derek Notman, CFP® (Founder & CEO, Couplr AI) and H. Adam Holt, CFP® (Founder & CEO, Asset-Map). Listen on Apple Podcasts, Spotify, YouTube, or Acast.

Episode Summary

Jason Wenk, founder and chief executive of Altruist, joins Adam Holt and Derek Notman to argue that the digital disruption of financial advice is visible well before it arrives, and that most practices are not positioned for it. The organizing metaphor is a tsunami, where the water pulls back from the shore before the wave lands, and the hosts read the current calm as exactly that signal. Wenk’s substantive contribution is the Amazon flywheel: low prices attract customers, customers attract sellers, scale produces shared infrastructure economics, better margins fund lower prices, and the loop accelerates. He argues an equivalent loop is possible in financial products because the underlying infrastructure already exists. The most concrete version of the threat in the episode is the observation that nothing technical prevents buying insurance or opening a retirement account by voice command.

What this episode covers

• The tsunami signal, and why the quiet stretch is the warning rather than the reprieve
• Amazon’s flywheel explained, and how the same loop could apply to financial products
• Why the infrastructure for voice-initiated financial products already exists
• What paper-based operations cost a practice once client expectations shift
• Deciding whether you are building a 2005, a 2015, or a 2025 practice

Full Transcript

Machine-generated transcript of this episode.

Welcome to Rethink, the financial advisor podcast. My name is Adam Holt. And this is Derek Notman. We are your hosts, both veteran advisors and FinTech CEOs who challenge the status quo, question everything and have fun doing it. Hear honest commentary on the challenges facing advisors today and be part of a community where we can all rethink the profession. Now on to our episode. Derek, are you ready for the tsunami that’s coming? Hey Adam, I, I think I am, but I think a ton of people aren’t. Let me explain. So how, what is this tsunami? It’s this massive event that builds and builds. We have fair warning.

It’s coming. It’s precipitated by one event, but then it takes time to build. We know it’s coming. We can see it coming. And if we don’t get out of the way or preempt it, it crushes and destroys everything in its way. So I know that I love to surf. So I’ll even go out and surf when we have a tsunami warning, but you know, I’m prepared for it. And I think if we apply this to the financial advice industry, we have got a massive tsunami coming and we’ve talked about this before. That’s going to be disruptive in ways we’ve never seen before. Now that I’m trying to be overly dramatic here.

Yeah, that’s great. I think there should be drums in the background. We do that like a beatbox on a podcast. I now a tsunami is a wave, right? And we know that there’s been several actual tsunamis in the worlds that have been art modern day, actually that have been devastating and one of those things that we’ve learned about tsunamis is that the water goes out before it comes in because it gathers and it goes in. And I happen to think, and the reason why we’re bringing this up on this podcast is we’re seeing the signs of the water coming out, going away from the shore, the shore is getting long.

People are getting comfortable. They’re like, Oh, look at this nice big beach. And that’s an indication that something’s coming. And yeah, and it really has to do with major change. It’s coming in the digital advice realm. I think that’s the tsunami. Yeah. Digital tsunami. 0, or maybe that’s really just digital processing or straight through processing. And I would argue, I think we both would that it’s all of it. There’s a digital advice wave coming and you realize how many people have their house and their practices boarded up with like paper and staples and that’s not going to survive this, what this kind of tsunami. No, it’s going to take this digital waves on.

It’s going to push all that stuff away. You’re gone. You’re done. It’s been a long time coming. I mean, you talked about this years ago. We’ve discussed it many times, but we’ve got a special guests that has been talking about this for a while too, that I think it’d be fun to listen to today. Absolutely. Well, we did invite Jason Wang from our community. Jason is the CEO and founder of Altruist. And if you haven’t checked out what they’re doing, they’re really trying to reinvent the whole custodial process, how you see performance on boarding and they’re really using modern techniques to do it. And Jason has been like the two of us have been 20 years as a financial advisor, he really focuses on systems.

He’s an EY entrepreneur of the year in 2018. I know that’s a big deal because I didn’t make it to the national. So I was kind of annoyed. So he, Hey, hats off, man. That’s a real big deal. He previously founded formula folio. So he’s got a lot of focus on tech in our space and he’s got a really interesting perspective. I think Derek will appreciate this speed rethink tank interview. Should we hear what he has to say? Yeah, let’s jump in. Here we go. All right. Let’s hear Jason. Well, I mean, I wish I could say that it’s like entirely unique and only mine and no one else in the world has the same view, but my, my take is that it’s this massively huge market.

That’s largely ignored. I mean, we live in it. So of course we think it’s the greatest thing in the world, but when you really think about like people talking about DeFi and web three and all sorts of other things happening around the world, I mean, one of the most slept on industries that is absolutely gargantuan in, in massive need of a reinvention it’s financial advice. I mean, it’s, it’s very, very, very much slept on. And I think going to have a really, really big run the next 10 to 20 years. What are you tending to see in terms of advisors? I mean, when they, you talk to you a lot about what their aggravations are, their pains, why they’re moving around.

What are you seeing as the bigger motivations for people entertaining we’ll call new platforms? Yeah, I’ve been like living in the RIA space for almost 20 years now. And so I don’t have total blinders on to the whole rusty industry, but that’s the area that I live in. And I can say that the RIA channel is fascinating because what we’re really seeing are incredibly unique, small businesses being born really rapidly, meaning like, you know, hundreds, thousands, hundreds, two thousands of these really, really unique small businesses being created. That was not possible in 2004 when I started my first RIA in, and I’m really, really excited about that.

I think people are doing things on their own terms. It’s really cool. They don’t have some manager saying, go only serve people with a million dollars or $5 million or $10 million, or only work with these people in our local geographic banking office region, like people can create these incredibly unique specialized businesses in this RIA channel and still some deficiencies of the tools, but it’s so much more possible to build the business of your dreams, serving clients exactly how you want to today than it’s ever been. Yeah, it’s really encouraging, right? It’s just, it’s a great time to be in this industry. I think as a younger advisor, if we were to rewind 20 years, it’d be a pretty cool, exciting time to enter in.

What would you say Jason is like a missing opportunity for advisors, something that is, I don’t know, maybe it’s a challenge currently or an upcoming challenge that advisors at large are not addressing or don’t even see coming. It’s been talked about since I basically got into business and it’s never come to fruition, right? There’s this whole like, what’s going to happen when all of the old advisors are gone or what’s going to happen when all the old people die and all their money gets transitioned, there’s trillions of dollars of wealth transfer, you know, and for, you know, the better part of 20 years, I’ve been hearing about these things that are going to happen and they have not happened yet.

And so I think as a result, people are like, Oh, they’re never going to happen. Mortality is real. It’s just going away, right? I mean, yes, maybe people are living longer and yes, maybe a lot of advisors have made the decision that they’re just going to coast and kind of work part-time-ish, you know, versus selling. But in the next 10 to 20 years, it is going to be just wild how different the average client demographic is, right? Today, all the people who are 60s, 70s, 80s, many of them won’t be alive. There will be a massive wealth transfer. The expectations of those clients that today are 40s, 50s, 30s, or even 20s, look, they don’t want their grandpa’s financial advisor and they don’t want their grandpa’s financial tools.

They don’t want a 400 page financial plan. That’s impossible to read. These are all things that like, it’s been talked about a long time. People are sleeping on it because it hasn’t happened yet. And if people just continue to operate advisors, it is like with their blinders on, it’s just going to hit them like a ton of bricks and it’s going to be too late if they’re not preparing for it right now. They’ve really been resting on their laurels. That’s what it sounds like, right? I got time, easy money. Nobody has to do anything to look smart. Look, the day’s coming, right? At some point and people are going to have to actually be smart, actually have meaningful relationship with their clients, actually do real planning.

The last 10 to 12 years has made it look real easy, but it’s not going to be this easy forever. Yeah, a hundred percent agree. So along that vein then, Jason, what action steps would you say for advisors knowing that this, this tidal wave is coming? We just had this tsunami warning here on the West coast. What can we do with this warning that we’re getting? What are the action steps? Whether you are listening and you’re six months in, you’re like, what the heck am I doing? Or you’ve been around for 30 years and maybe you’re like, okay, I finally got to address this thing.

Well, I think again, self-serving because obviously I’ve seen this stuff coming and I think both of you have as well. So we’ll be collectively self-serving, not just me serving myself, I suppose advisors have to fully. 100% embrace being digital and delivering phenomenal digital client experiences, um, people that are still trying to get by with DocuSign and that only works on a third of your forms. And then you’ve got to get something else. Medallion stamps are guaranteed and you’re inviting clients to, you know, just in terrible user interfaces and thinking they’re going to be okay with it. Like they can get on their phone right now, open accounts, fund accounts, trade accounts, be buying NFTs and buying crypto assets and trading fractional shares of stocks, getting a fully automated sort of financial plan with really elegant design at, I don’t know, 70% lower cost.

I’m not saying we all need to be deathly afraid of this innovation, you know, tsunami, so to speak, but clients expect something that is modern and relevant. And especially again, those next generations of clients that will need to have, if we want to maintain sort of the wealth of their parents, um, so you might as well start today. And it’s just, again, it’s really easy for people to get complacent and be like, well, I don’t need to change anything right now. My clients are cool with the way things are right now. Um, and again, then it’s too late. Then the client passed away. The 45 year old kids inherit the money and they’re like, yeah, no, I don’t want to use my planner.

I already got a planner, right? My planner is a fully digital planner that I don’t have to meet with in their mahogany office in the 37th floor of some crowded city, right? It’s a more of a kindred spirit relationship with someone who gets them, um, and like, so start today, be prepared, build meaningful relationships, deliver that phenomenal experience, and you’ll never have to worry about it. In fact, you’ll benefit from it, which is a great spot to be in. Represent. I love that. I’m going to put you on the spot because that’s really great. You’ve been in the future forward, but in this kind of thing, you know, if you put yourself in this space, 10 years from now, what does it look like?

What is the Jason Wang perspective looking back 10 years from now? Yeah. I mean, unpopular opinion, right? But I want it. Yeah. I feel like, um, and I’m hopeful that, that the company that does it is altruist. That’s why I work as hard as I do at the things that I do. But, but I think that there will be an Amazon like disruption in our space. And what I mean by that is you look at like Amazon’s flywheel and they came out and they, there, it was really simple. They did this in 2001. If all of us have read good to great, like we know this, it’s literally been sketched there.

It’s been sitting there for 20 years, incredibly low prices, attracts a lot of customers, more customers means more marketplace vendors will come in to sell their products. Cause there’s more distribution with more distribution. They get shared economics, right? Of their core infrastructure. Um, that gives them better margins than anyone else, which allows them to lower the prices, which allows them to track more customers. That’s the flywheel, right? This thing just starts to spin and it takes a lot of pushing for them to do it. But eventually it spins. Um, and now it’s so obvious. We look back 20 years ago, of course, Amazon’s incredibly successful, but people didn’t feel that way in 2001, um, when they met, um, and kind of created their flywheel, you know, so to speak.

I don’t know how that will exactly come out in our space, but expecting that we can continue to use monolith infrastructure and technology that’s been around for 40 or 50 years to be the core of like most advisors business, which is the custody business, that’s the core piece, right? Every single other piece of technology in our space. And with no disrespect to all of us who are fintech entrepreneurs, every fintech vendor that serves advisors, combine all of us in terms of our, our market values, take the 20 largest RIA firms in the country, all huge, huge firms, right? Combine all of them, take all of our collective value, quadruple it and you get Charles Schwab.

Like there’s so much more mass, right? In those two or three really key core vendors and all the rest of us combined time, some order of magnitude, um, that whole thing needs to be disrupted a la the way that Amazon’s done it again. I don’t know if it’ll be Amazon or Google or some tech company coming to our space or just somebody that today is, is out there executing and building the flywheel that 20 years from now, we look back and go, Oh, damn, like, of course they did that, right? Much like, I think sometimes we look at Amazon today. So that was pretty awesome.

There’s a couple of nuggets in there, Derek, that I think are worth discussing. What did you think about his concept of the unique small businesses born rapidly? I love that. I think the path to entrepreneurship or business ownership, even if you want it just to be a solo shop is definitely faster and easier than it was when he did his back in 2004. For example, there’s it’s been somewhat commoditized. So that’s great. Wow. Like it’s not like a massive mountain for me to have to scale. Now it’s not as scary. I don’t have to attach myself to an insurance BD or wirehouse to do this.

I can do it on my own. That’s huge. Cause I, at the end of the day, most of us are individuals. We like to do things our own way. And it’s true. There’s more and more RE starting now than at any time ever in the history of them. Well, it’s enabling more innovation than we’ve ever seen too. I can’t tell you the number of people over the past 15 years that came to me and said, Adam, I’ve got a great idea too, but I really, I can’t leave my practice. And the level of ideas never were light, right? Everybody has had an idea of that, how to disrupt the economy.

But now I actually know 10 advisors who have literally built their own tools because they can build in their shit. I mean, granted, I probably did it a little bit earlier. So we did have to, you know, we had to put a significant amount of capital behind it and didn’t know what the heck we were doing. Now there’s like the internet, like how to build a company in 20 days. Like, so I think it’s amazing. The accessibility that innovation is going to continue to drive disruption to create these almost many disruptive waves that I think a lot of people are not even going to come seek comment.

Have you ever been on your surfboard where all of a sudden you think the waves are pretty systematic and all of a sudden this huge swell comes out of nowhere, like I didn’t see that and wipes you out. And I think that what’s happening is that what’s because there’s so much entrepreneurship and it is so easy to put out a shingle and start a business and also build a technology platform now that there’s going to be disruptions to the way we do business. Coming left and right. The question I think is, how are we going to keep our practices that are established continuing to grow?

And I love this comment on, you know, people don’t want their grandpa’s advisor, they don’t want their grandpa’s tools either. Um, what do you think about that? They don’t, they want a different experience. And if you haven’t learned this about me to our listeners here, I recently started my own RIA so I could do it, my own tech company. And part of that was I wanted to have this better experience for my clients, which is really, really important. And I was actually just speaking to the CEO and owner of a huge RIA in the Midwest and he custody’s with a couple other well-known custodians and is looking on bringing altruists on.

And I’m not saying terminate your old relationships, but I’m like, listen, your average demographics, what 55, 60, you’ve got an older client base, how are you going to retain the assets of the kids of those people? And that’s the, that’s the disruption there. So that’s where bringing on these tech forward experiences for these folks is what they’re, they don’t want the 400 page plan. Right? I mean, just as an example, like I’m using altruists and I’m using asset map right now. And the feedback I’m getting from my clients is awesome. And they are actually referring me to younger generations because they love it so much.

It’s just such a great experience. They don’t want me to send them a 400 page report. They don’t want to do deal with a half hour DocuSign E app. That stuff’s all antiquated. It’s done. Yeah. You know, I like what he said too, about the whole generational wave coming. I’ve done a lot of public speaking about this, you know, wealth transfer, the 90, maybe it’s a hundred trillion dollars now that’s going to move from one generation to the next or be spent down, obviously, cause a lot of it’s in qualified plans and it has to be distributed for income purposes. So it’s going to move, right.

Whether it goes to the government or it goes to spending or it goes to the next generation, there’s a lot of money that’s going to change hands. And of course it’s going to change hands from a very different mindset of this boomer greatest generation to X generation slash Y and millennials. And the question I’m wondering is what’s driving the tsunami, this singular event, or are expectations going to change before that generational transfer wealth happens, right? What’s precipitating this massive change that I think is going to force a lot of advisors to, to change the way they do things. Cause we do know that the younger generation is expecting digital first experiences and there’s an argument that we should try to serve and grab them now, or do we stick it out for the next five or 10 years and try to hold on to the old school expectations of how you can run a practice behind the paper and the gilded books and the cards on their birthday.

It’s like your office. Yeah. We updated our furniture. We went to maple just, you know, I think you’re making a really interesting point. I, I don’t know if we’ve got the right answer, but I suspect it’s probably a combination of both things you just said. Uh, but it’s this, it’s the flywheel, right? Like Amazon got the flywheel started for books and then all the things they do now, but it doesn’t take a whole lot of thought to be like, huh, what if I got a flywheel like that for financial advice and then. Arguably, and he made a really interesting comparison. Like he like added all of the fintech companies and the large RIAs together and we’re still not as big as Schwab, but when you do take that collective to get together, maybe that collective over the last 10 years has actually spun up that flywheel.

And now it’s either running on its own. We just don’t know it yet, or it’s about to, and that’s going to be kind of like when that tsunami starts to crest. Like, wow, that beach was really nice, but what’s that big thing coming towards me really quickly now? Uh-oh. Yeah. And you feel the wind on your face, right? Yeah. You know, right. You’re done. It’s too late. Isn’t it tsunami? Is there a, is there a survival mechanism? I guess you just get a buoy. I don’t know what you do. What do you do with it? You don’t be there in the first place. You listen to the warnings.

You listen to the, the people saying, Hey, it’s coming. It’s coming. Get the hell out of there. Well, I think to stick with this analogy, I think tsunamis in real life also have multiple ways, right? There’s usually one, then there’s a follow-on, then there’s a swell. I don’t know. I don’t know exactly how it works. So I apologize if we’re destroying this. We’re not oceanographers. Right. Is that, I mean, oceanographers, geologists, right? Uh, those are the right terms. I don’t know. We’re not scientists. We’re financial advisors, which means we, we know very little about a lot of stuff. You know, self-deprecating here a little, I think that where I was going with that is I think there’s several different mega trends that are coming that I don’t know that advisors are really paying attention to or caring about, because as he said, and I agree, and I talk about this too, we’ve been a little bit complacent.

I, we’ve seen that an argument. So I’m paperless now. You’re not paperless. You’re using PDF on DocuSign. You’re still doing a fillable PDF. You’re doing 30 minutes to complete an application. It’s not a digital process to move the money over four days, not, you know, to do a telemed and that’s as advanced as you’re going to get as opposed to, you know, AI underwriting. I don’t know. So I think it’s true that there’s been a lot of patchwork tape, uh, glue put on those shanties that are still generating huge margins, which is just right for the next level of disruption. And I want to ask you about this idea of an Amazon like disruption, because I know we’ve talked about it on prior podcasts.

What do you think? What do you think are the first two or three? Let’s just imagine for a second. What do you think could be an Amazon like disruption in our space? Oh my gosh. I, are you talking from like a product perspective, like what products or even like, and this is where I, I’m not worried about them replacing us human advisors. Cause they can’t do that. I think you and I were just chatting about this, but why can’t I go, Hey Alexa, buy me some life insurance or Hey Alexa, open up a Roth IRA for me. Right. And then they do like credit card on file.

Let me use your, uh, yeah, seriously. Right. The piping is already built to do it. So I think it’s just a matter of hooking up the pipes, um, to get that to work. And whether that’s Amazon or Google or Facebook or some other behemoth that says, you know what, it’s time to turn this thing on. Why can’t Apple just add it to their wallet? I mean, can I just add a Robin Hood style purchase or, you know, take the extra money I was going to put on his bagel, the extra 50 cents and with Apple wallet, move it to shares in Bitcoin. I, I don’t, it’s, it’s so clear that this is going to happen.

The question is going to be, what’s the advisor’s role in it? And I don’t know that it’s going to be built with the advisor’s access in mind. So the advisors are going to basically who have usually had access and oversight on the investments and the assets and what’s going on. So we could be a little bit of the, you know, quarterback or like watching over it. We’re watching the store. I think it’s all going to happen on the consumer side and advisors are going to be in the dark unless the consumer is actually at the mint. Cause it’s going to be in such a convenient mindset.

It’s in my Alexa or I bought it. Yeah, it’s easy, right? Yeah, it’s easy. You know, as a consumer, I like that model and I, here’s where I, you know, for our advisors list and here’s where you can position yourself to actually take advantage of this, at least in my opinion. My opinion is not worth much, but I’ll give it to, I’m going to give it to you anyways. Yeah. It’s the whole advice piece. And I’ll give you an example. I talked to a brand new client today and he’s like, I’ve got all this money and I don’t really trust the financial advice space. I can do everything online, but I have questions.

Can I retire at 60? How does this purchase or this investment very affect my future versus this one? How do I put all these things together? And that’s where human advice becomes really important. Cause human advice is not something a robot can just punch out and do. Yeah. So now if I’m a consumer, I’m like, all right, I’ve got this app, I did my Apple wallet. I’ve got my Bitcoin. I’m doing all these things digitally, but I, it’s not helping me answer the big questions, the things that are keeping me up at night. I need a human to do that. That is trained with all of these different products and services and to help me figure out how to do everything right now, all of a sudden that becomes huge.

And now the consumer is clamoring for, for human advice. They’re desiring it, but now they got to find it. Yep. That’s the thing though. Is that advice? Think about how often you talk to your clients or how often they call upon you. Do they call it? They talk to you maybe once, twice, three times a year. They don’t need continuous advice. It’s like, I need an hour here and needed to, but here we are charging a percentage of asset based comp because theoretically we’re managing day to day their assets. When for the most part, we all know we’ve used technology to scale so that we don’t have to spend 80 hours a week making investment decisions.

So as a result, there’s inherent, we’ll call it arbitrage in there that I think that technology is going to squeeze out, which is my argument for as much as it, you know, concerns me and awareness that wave is going to disrupt a bunch of people. The monetization for most of the financial services community has been asset based and, you know, fee only asset based comp. If I want to pay, if I’m going to do a lot of this stuff myself from these different disruption tools, that’s easy for me to do and execute, I’m probably going to pay a fee as a professional to an advisor, a fee based at true like I’m paying about a hundred dollars an hour or whatever it is.

My question to you, and I made this to my doctor friends. I said, you know what, you’re going to be disintermediated eventually by China and India. And they’re like, what are you talking about? Medicine is always delivered by human. Yeah. And so we’re near never going to get rid of the humans. We’re the human advisor. I’m like, yeah, I went to the emergency room two years ago and the doctor was on a screen on zoom in India. Okay. Now you tell me that there’s not going to be an impact of that, especially in emergency room technology or magic triage environments that you can outsource a physician or a pharmacist or someone else who can make a legal decree and digitally record that within their like boundaries of their profession and their codes and all that.

How long is it going to be before we can put a CFP in a low cost human, uh, you know, capital costs. And so why can’t I pay 50 bucks a year instead of 5,000 already happening? I’m not going to name the companies, but there are companies doing just that already. Power plan. I know entire companies have power planner teams, hundreds of advisors, CFP, certificates in India right now. And they’re, they’re back office right now. And they’re doing it. You’re telling me already happening to the client who already has the money. I think the wave is coming in such a disruptive wave that most advisors are literally resting on their laurels knowing it’s not going to happen here.

You know what? If you’re five years out from retirement, eh, okay. I agree. But unless your exit is to literally walk away from your business and just shut the door and turn off the lights and that’s it. And you don’t need to sell it or whatever. Okay. Well, what if you do want to sell it? What if you’re going to, or what if you have a successor advisor that you’re trying to bring on or groom? Yep. They don’t want grandpa’s solutions. So you better pay attention. So I would argue that the majority of people or advisors really actually need to pay attention to this unless you really just don’t care and you are going to walk away.

Yeah, I don’t say that also to, you know, at least that perspective I think we have and we share in some regard is not to scare everybody and depress you and say, okay, let me go listen to a happier podcast. The point is this is the warning system. It may be years away, but don’t be surprised when it happens over a long period of time. All of a sudden, and it’s also a massive opportunity, right? So big. And that’s what’s exciting is like, holy smokes. Look what is possible. Just heed the warning, start implementing some things to be prepared for when the thing comes and you’re actually going to ride the wave instead of get crushed by it.

Amen. I think that’s good. That’s great. So let’s tell our takeaways to everybody. What kind of takeaways do we have Derek from you that advisors can put into action? Well, I think, and this is even from my own personal experience, I would say a lot of us cut our teeth at like a wirehouse, a insurance broker, dealer, whatever. And that was okay. It worked, but the future of our business is we’ve just talked a ton about is headed in a different direction. It’s what our clients expect, et cetera. So can you do what you need and what your clients want where you currently are? Maybe not today, but can you do it in three years?

Are they going to get there? Are they going to have the tech and the capabilities to do that? Or are you still doing faxes and docu-signs in five years? I don’t know. So that’s something to think about. And if you can’t that then that’s kind of like a big question you’ve got to answer. And then also, I think just like digital’s here. I don’t know if you heard us, but we said digital like a thousand times during this podcast, Adam’s got the little clicker he’s been watching, but we’re all going to have growing pains going through this, even just doing my own RA recently, I had to bring on some new tech that I had to learn and go through the growing pains, but better to go through them now and with your clients than to have your clients go through them without you.

And then all of a sudden you wake up and they’re like, they’re saying goodbye. I already did all this. I’m going to do something else. Thanks. You know, nice meeting you, but goodbye. That’s not a good place to be. So better to experience the growing pains now than to like get crushed. No, that’s, those are some of my bigger ones. Yeah. And so you made me think actually about user experience again. I used to be such an advocate for this in all things. I was just zealot about it. Being stuck in behind a screen for two years. I don’t know that I’ve gotten out to experience what other people have innovated recently, but what you think about Disneyland or you think about the local great adventure.

Disneyland’s got a, you know, got a UX, you know, super lead against, let’s say great adventure as an amusement park. And they might have the same exact rides, but you it’s much more memorable. And so remember that your tech experience is where the rubber hits the road for many of these clients. They’re going to interact with the tech and they’re going to start being judgmental. If your tech is pretty lame and they’ve seen better tech, they’re going to like, ah, I think it’s a great point, but I kind of, you know, it’s just easier to work with, you know, Mary, she’s like more modern and Joe is kind of, you know, let’s move all our stuff to Mary.

I just like the interface better. I think people are going to move because the app is better. You know what? You are spot on with that. And it’s true. I mean, think about the stuff that you use on your phone or your computer or anywhere that user experience, like I’ll get on that zealot stage with you. I agree. That’s the truth. And if it’s not happening now, it’s going to happen in the next few years because especially next generation, the younger generations, like you make something a little bit difficult for them. They start crying and they just, they leave, they just leave and it’s okay.

They don’t have to fight the put up with stuff anymore because they don’t be choice for free. So maybe that’s the burden of the X generation is that we were taught to put up with everything. We did be grateful. Okay. We didn’t have it so good when we were your kids. But now we have access. I think we still have that. We’re not that old, dude. Come on, stop. Well, I am, I feel that. All right. So here’s my takeaways. I was thinking about this before what Jason said. Decide if you’re going to be in the financial advice business, but decide whether you’re doing it like it’s 2005, 2015 or 2025.

Just think about where the practice that you’re building has to be intentional and you can certainly keep running like it’s 2015 and maybe you’ve got an aggregation portal and maybe you’re planning and I don’t, you can do that for a while, but I don’t know if you’re going to grow the way you could grow. And I think you’re going to really have to deal with fee compression because clients are going to look for more value. 2025 means you’re coming at it all digital. Or you’re, or you have a path to get there. If you’re not there yet, you know how to get there. Invest back in the business.

I’ve seen a lot of financial advisors who they make great money. They make more than they need to survive in their family and they take their money and they go put it in the S and B or they go put it in some deal of one of their clients and do some private equity. Why aren’t we investing back into business? Okay. The highest rate of return I saw ever in my practice was when I built asset map for it. I had the highest rate of return. Now, granted, it obviously had scale outside, but the point is that find ways to actually invest real cash into your business.

Don’t always thinking about a cash flow. I got to suck all the business cash out. And then I just, it’s a cash cow. Invest back in it. That means people, that means technology, it means next gen. It will pay if you do it right and actually manage it like an investment. And it’s also number three, it’s time to run the family meeting and the family meeting for us in our practice was every three years, get together with the full family, talk to the next generation. So if you’re working with a generation, we’ll call it a, that means you bring in their parents, if they’re still living, you bring in the children, if they’re adults and hopefully, you know, going to be the next, the recipients of those assets and you get to know them and you show them that you actually know where everything is going on.

You want to stay that concierge, the owner of the treasure map and show that you’ve got relationship value and that you’re not a mystery. So that when grandpa does pass, you’re not grandpa’s advisor and you’re the family advisor. And that’s the point of having a family meetings, run them every three years, bring in lunch, make it a relationship meeting and then use that opportunity to show what you’re doing and how they can make better financial decisions as a family. Really smart and very effective at building and we’ll call it relationship fingers into the next gen. Yeah, I like that. That’s great. That’s a human element.

Yeah, no, look, and it’s scrappy. It doesn’t work. How much ever does that take? No, it’s actually empathetic and that’s it just makes a lot of sense. Awesome. All right, well, let’s wrap this up. We’ve got an interesting question where we can kind of, you know, end on this today and get ready for another awesome podcast another day because we’ve got so many awesome listeners now. What do we have three? Or I think I’ve heard for four listens. Is that what we’re up to now? We’re at like the top 99% of podcast. That’s right. With four listeners sort of. All right, well, this one came into you.

Do you want me to to out? You just want me to ask you. Read it. Yeah, you read it like you’re Jay. Oh, that’s Danny. No, this is, yeah, so this comes from an advisor, Danny in Florida. I’ve heard a couple times that I, as an advisor, should be more transparent with my prices, fees, all that stuff, especially on my website for the work that I do. First, why should any of us list our prices? And secondly, how should those of us who work on commission handle this? Keep on rocking the pod. Thanks, Danny. Thanks, Danny. All right. Awesome. We appreciate you think it’s an interesting thing.

I’ve seen this more and more. There is something that’s interesting that we learned from sales many years ago. Was that when you don’t show your prices. You’re communicating something. Intentionally or unintentionally. Number one, you don’t want to give them sticker price shock, right? Because you know you’re going to deter people or you’re too high end and you don’t need to show your prices because if you can’t afford me, you’re not a good client. All right. There was that that you walk into the Cartier and there’s no prices. You got to ask them what the prices you got to ask. OK, you know, I shop at Walmart, dude.

I don’t know what you’re talking about. Do they put the prices there? Everywhere, Matt, a little happy, like yellow face. This big, this special, right? Or whatever it is. They even point out the price is excellent. I think it’s what you’re trying to communicate there. I tend to believe that financial services was the original SaaS business where advice as a service, we’re charging an ongoing asset management fee. And as your success happens, so does my success. And we keep you long term. And so the lifetime value of the client is really very similar to a tech company. You’re paying monthly for that product. But the reason I say that is because I have seen a couple of firms actually start posting the different price tiers because people are so used to going to a website, checking out the people, looking at the founders and then seeing the tech at a high level or whatever it is they’re buying and then seeing the price.

They go to the price. It’s the second or the third page almost every single time. And in the absence of it, it basically helps. It makes it difficult for me to understand. So that’s my take on it. I’m if you want to be accessible, put your prices and be proud of those prices. I think so. I think it goes to even a bigger like topic that we may or may not even want to unpack is transparency in this industry. And maybe it’s not your prices. Maybe it’s the fees of the things you’re doing for your clients and how that can lead or not lead to trust.

So I don’t know. We can hash this out, but it’s a really interesting question. I mean, me personally, I’ve been listing my prices for years. I was always of the opinion, just as you said, in the example for the website. That’s one of the things I want to see. And if I don’t get that answer, I’m out of there. I don’t care how much it is. I want to know. It’s just like buying a TV at Best Buy. I’m not going to compare the three most expensive TVs, but not know the prices. Right. Right. I want to know that stuff. Look, price is one thing.

We do use price to communicate perceived value. So the question is, what are you going after? Where price is not an object. Or where price is recognizably a smart decision. If you’re a financial planner and you want to have people make good financial decisions on what they spend money on, why are we hiding prices? Exactly. I know the antithesis of a budget. So don’t worry about you. Would you pay for coffee or worry about what you pay for coffee? Don’t worry about what you pay for advice. That does not. That kind of doesn’t make sense. I think you should show it if you can. A lot of the commission ones, I obviously that’s a problem.

I don’t know how you do it. Yes, I I make 50% of your first year premium. I don’t think people want to know that. No, they don’t want to know that. But you know, I’m not a commission anymore, but I used to be. And what I did for that is I simply said that some of the things that I may help you with pay a commission that is set by the issuing company. If you want to know more about it, ask. Right. And that’s pretty transparent because I may or may not sell you one of those products. And if I don’t, why am I telling you how much I’m going to get paid on it?

You know, that seemed to work pretty well. Anyway, so that’s a good one. That’s great. Well, thank you, Danny, so much for that. And of course, thanks, Jason, Wayne for being a great sport and putting up with our antics. We appreciate all the stuff that you’re doing out there for altruists and sporting advisors. And we very much think that you’re going to be creating part of that tsunami. So good luck in that. For those of you that are listening to us, make sure that you follow us on LinkedIn. We have a rethink the podcast now actual LinkedIn page. You can go and check that out.

Follow us there as well as remember, if you do submit a question, we’ll send you some swag that has Rethink on it. You can walk around. People be confused why you say Rethink on your T-shirt or your hat. Pretty, pretty cool. Make sure you subscribe and definitely leave a review so other financial professionals like you can find us. Derek, as always, I appreciate you and all you’re doing. Likewise, my friend Hang Ten, everybody. Thank you for listening to Rethink, the financial advisor podcast with Holt and Notman. Be sure to subscribe now and join the ongoing conversation. The information covered and posted represents the views and opinions of the guest and does not necessarily represent the views or opinions of AssetMap or Connector.

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