Ep 73: Is the tail wagging the dog? (Tech Advisor) Featuring Brian McLaughlin

Episode 73 of Rethink Financial Advice, co-hosted by Derek Notman, CFP® (Founder & CEO, Couplr AI) and H. Adam Holt, CFP® (Founder & CEO, Asset-Map). (47:15)

Episode 73 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

Brian McLaughlin joins Adam Holt and Derek Notman on whether technology has started driving practice decisions rather than serving them. McLaughlin, who founded and led Redtail CRM, has built more integrations than almost anyone in the industry, and his concern is advisors bolting together applications with no training, finding the combination does not work, and moving on to the next one. The conversation’s most uncomfortable turn is about minimums. Holt notes that a $250,000 liquid asset requirement excludes exactly the households who need help most, and that consumer platforms are already reaching them through mobile apps while the profession that trains the experts stays out of that market. McLaughlin also raises unified identifiers, used in some other jurisdictions, and what their absence costs firms in duplicated and mismatched client records.

What this episode covers

• Whether technology adoption has started leading practice strategy rather than following it
• Integrating applications without training, and the churn that follows
• Asset minimums, and who gets excluded from advice as a result
• Consumer platforms reaching the households advisors decline to serve
• Unified identifiers, and what duplicated client records cost a firm

Full Transcript

Machine-generated transcript of this episode.

Welcome to Rethink, the financial advisor podcast. My name is Adam Holtz. 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, is the tail wagging the dog in the advice business? All right. What do you mean by that? Cause that could have a lot of different. Well, have you heard of the phrase, the tail is wagging the dog as opposed to the dog is wagging the tail?

Totally. I’ve used it a ton with clients. Like don’t let the tax tail wag the investment dog. I’ve used that one for years. That’s a good one. So I’m asking you right now with all this tech coming in, is the tech wagging the advisor? You know, there’s probably something to that. There’s a, there’s like a FOMO thing going on. There’s drinking from a fire hose with all the tech that’s coming in and having to learn it. Yeah. I think it is to a certain extent. It’s forcing change. Just like, you know, when we went from paper apps to digital apps, or when we went from literally going around neighborhoods and knocking on doors to get new business to using a thing called the telephone.

Right. Backs machines to email, like amazing. That was back in your day, right? Yes, that’s right. The stone chipping, just like you’re about to do some posts trying to mine coal out of a cave. That’s what I did first. That’s how I got profit. Well, you know what I really mean here is, we are seeing so much tech, AI. You’ve heard this phrase AI. You remember robo-advice. Oh yeah. All these things are catalysts that get advisors to just jump on board. They are. We’re seeing actually this big question of human advice. Now getting questioned the relevance at least. And a lot of the interviews we’ve been doing recently have been about how we got to elevate the human experience.

But the question is, is that the what’s the shiny object in the room is the tech. And I was seeing advisors literally with no training, just integrate a whole bunch of apps, probably to their detriment. Yeah. And then it doesn’t work. So they’re onto the next one. Yeah. Did they spend the time to learn it or teach their team? Yeah. Right. Do they all integrate together? I say to your question, yes, to an extent it is, but I think there’s a way that we can stop that too. And ultimately the advisor has to get a hold of the tail. Right. The advisor has to wag the tech as opposed to the tech wagging the advisor.

Well, we do joke and we’ve said this plenty of times that if advisors don’t get on this new kind of trend of integration and AI and all the other fun stuff that’s coming that they will be beholden to, I think those that are able to use these advantages. And it’s a great intro actually to our good friend, Brian. So help us get to know Brian McLaughlin, the teddy bear of our industry. The teddy bear of our industry. So Brian McLaughlin, FinTech CTO, CEO, board member extraordinaire and fellow rebel dad. Yeah, he is. He started red tail technology, the CRM that has been used by it’s gotta be over 130,000 advisors at this point and created it into an amazing tool that was actually sold over to Orion.

So I think the red tail, I don’t know if the tail wagged the dog on that one. I think he was in charge over there, but talk about perspective on integrations and experience and what we can do and is AI important or not and so forth. He brings a really great perspective given his journey and how he’s touched so many different parts of this industry too. That’s so true. And he’s got, look, he’s got plenty of years left in the industry. We’re wondering what his next splash is gonna be, but we did have the opportunity to interview him at Fearless Investor Conference in 2024. And we’re just getting now to actually publishing this episode, but we wanna introduce our good friend Brian because he’s got some great perspectives and care for the industry.

Brian, I’m the founder of a CRM company named after a dog. I’d like to tell that to, you know? Yeah. Who else would have done that, you know? Sold the company a couple of years ago to Orion. That was awesome. What a great win. And great win for me and for the whole team actually. You know, I stayed working there for about two and a half years. I helped transition the companies and we do a bunch of different projects and initiatives ticked off. And just recently now decided to set down from day-to-day ops and still a board member of Orion. Happy board member over there and cheering them on and trying to push the mission of strategy and vision for them.

But yeah, now I’m nowhere day-to-day. I’m on week four with no day-to-day. Still trying to figure it out. I have no idea. The only question I get now is, so what’s the next thing? And like, the next thing is a break. The thing that happened. You know, I just got back from a cruise. That was nice. So I haven’t been as full to like, just decompress. Yeah, right. After 25 years. I mean, you guys can get as good as soldiers. I mean, 25 years of running so hard and so fast. It’s finally built to the next idea what you’ve been thinking about. Like, I have it.

You know, I’m a guy who’s like, if I’m in, I’m a thousand percent full throttle. Like, I don’t think about what’s next. I might tinker with stuff. I didn’t really formulate it. I’m just laying it like, oh, I’m gonna stop and do this. Right. It’s, I’m gonna stop and like, then figure it out. Yeah, slow down. Yeah, slow down. I mean, everybody in the industry are probably one of the biggest road warriors out there for so many years. Oh, yeah. And it’s gonna be a little weird, but it’s gonna be kind of fun to just like, take a breather. Very cool. Very cool. It’s cool.

It’s true, actually, thinking about the opportunity to interview you here, I fear that there was, you know, I think most people know you as the nicest guy who’s always present in the industry, and they want. Oh, yeah. So they’re wondering, is Brian gonna continue to come to events? Or some of the events? I mean, I’m here. Like, I opted to be here. I wanted to be here and hang out. I haven’t missed a single Fearless. These are amazing. And of course, supporting our friend Aaron and his whole crew and team, and now Dan. I’m a fantastic organization, also. People will see me at Schwab. They’re gonna see me at Ascent for Orion, of course.

So much ice will be around. I’ve got it. That’s a curie, you know? That’s honorary curie. Yeah. So it’s kind of like floating. Well, it’s your community, right? It’s not floating, it’s handy now. It is. Yeah, I grew up here. You grew up exactly. Yeah, I was 23. I was 24 when I started Redtail. I mean, my first event, actually, was an insurance event, MBR. Oh, shit. Oh, don’t kiddin’. That was my first ever conference. I still have the name badge. I have a box of name badges. Fun fact, I’m like a small hoarder. Called the Wall of Honor, right? Yeah. It’s just like literally every badge, every event I’ve bounced into a 20-something badge.

You have all of them. All of them. I mean, the name tags are off, you know, whatever. I have the badges, and MBRT back in the day used to give out little stickers, little things. Yeah, that’s right. They’re really cool, like they had flair, right? But that was my first ever event, growing up, I was like a 20-something year old kid, like I have no idea what this industry’s all about. Yeah, right. Why do you guys do it? I’m like, I’m making a CD around them. It’s online, and like online’s a new thing, like what are you talking about? They’d probably ask like, what’s online?

What are you saying? You know, what’s the meaning of it? What? I don’t trust anything. I do paper apps, right? You mean like AOL for zero. What’s wrong with the paper system? The one-card system. I have those, the ticker cards, the box, I have all those, yeah. It is true. Oh my God. I’m a photo shoot. But yeah, this is my crew, right? The industry has rewarded me with amazing things in life. So I mean, if I can give back, that’s gonna be phenomenal. That’s always been my goal, is like, what can I give back to everybody? Hopefully I give them a good CRM. But, so.

Yeah. That’s pretty awesome. I think so. Can’t go very far without hearing about Red Sail. No. The name is Stick It, right? It’s so cute. People love dogs. The irony is now you are the mascot of the industry. I think I’m missing like a red dog out there. I think you are. It was like, what’s the Clifford hanging out over the corner? That’s too funny. Maybe it should be that. There should be a Red Vail dog. Right? That would be memorable. That would be a memorable one. It’d be really cool. I mean, there is a Red Vail dog. It’s my dog. But yes. He’s drinking a beer.

He should come. Yeah. It should be your support. That’s a little nuts out there. So Brian, you’ve been in the industry a ton of years. You’ve served over a hundred thousand advisors through Red Tail. Tell us a little bit about your unique perspective, like from your vantage point. What’s, just tell us something interesting about the industry or insights that you have. I think some of the basics, right? The industry is very small. Very tight-knit community. I only really appreciate that, especially the startup coming in or something. How tight this group is. Whether you know somebody or not, I mean, it’s just, everybody seems to have like less than six degrees of separation, right?

Cause people will jump around. They’re going through the industry, through different organizations, but all achieving a common goal, which is really awesome. Like, yeah, and how do we service them? Advise is better, serve clients, and you know, humanity is better. Like that’s the goal. And everything we do is in that light. Like how can we make your business better so you can make their life better? I think that’s the perspective I always take here. Like we can give so much to America and the world at large through all the things that we learn and do and teach. I mean, there’s a community where we talk about like people’s future, right?

And we’re going to talk about retirement. We talk about longevity, behavioral finance, all these other cool topics. What you think about that, you break it down. It’s just about making people have great lives. Exactly, exactly. It’s one of the coolest communities out there. I mean, there are people that, there’s communities that are for SARS, electronics, all this type of stuff, and entertainment, but like we’re solving real world problems. And I don’t think we take that into account a lot of times at some of the events and just, you know, talk about the next annuity or talk about the next best way to do fee based planning or something like that.

But I loved it yesterday. Bill Simonette said, is financial finance supposed to be fun, right? Financial advice is supposed to be fun. Where’s the fun people? Like, let’s not have that again. We just get so much better when we have the time. Oh, that’s very true. It’d be cool for the clients, general public to see how much fun we do have in these things too. Like, wow, these guys are actually really cool. Yeah, if you don’t do that. You don’t, you don’t, right? You really, so, and you’re right. It’s a close sent family, but everyone’s trying to improve people’s lives. Yeah, I mean, there’s a little competition in this industry.

It’s like a friendly competition. There’s enough business for like a bromance is everywhere. Yeah, totally. It’s for whatever they call that. But like, you know, hanging out, I’ve been going out to like dinners and events after hours with my other CRM friends. Yeah, right. There’s a couple CRMs in here that I was competing against, but at the end of the day, you’re like, small world, let’s just go hang out. That’s definitely true. I felt that. And we talk about problems. We talk about issues in the world. You know, you build these great bonds. And I think that can really push this industry even further in all this great company.

I wonder if other industries are as welcoming. And you’re right, that high focus of financial services. I remember coming in with Acid Map, it was. You specifically were incredibly welcoming and it made it feel like there was this community. And it’s also something that we’ve been trying to perpetuate. Keeps welcoming new parties too. So that pay it forward thing, I think has shaped Bintec and financial services really. Pay it forward, great. And I hope that continues really strong. I’ve been an advocate for that. I mean, when I started Red Tail, three companies took a chance on me. There’s MoneyGuyPro, Laser App, and they were staying the one and all British at the time.

A lot of these companies, they helped me get, you know, a kickstart going. You had to integrate. You had to tie into things that were, these were the standard players. Like MoneyGuy was around for a lot longer. Laser App was around a lot earlier, serving IBEs across the board. I mean, huge companies. It’s a great point. And they’re like, yeah, we’ll integrate. And cool, like I don’t have any money. Okay. You know, a little scratch, so back, okay, so it works. You know, and you build those great connections. And, but it’s funny that you look at it later on and go, man, it’s a great advantage through all the advisors and the large, the companies were talking to each other like that.

I don’t know if other industries are like, I’m sure we are. And I had to add to them, but sure. Well, it’s interesting because you have this, you’ve been so present for 25 years in the financial services environment. You know the language, you know the people and the players, but you’re also on the technology side. Yeah, right. Have built more integrations, I think, than pretty much anyone. What do you think is the missing challenge that advisors don’t see coming that you might be uniquely aware of? I mean, the big one, the obvious one is AI, right? I mean, I think I’ve seen things come in different patterns, like cyclical patterns over the career.

We were talking last night, about consolidation, we can get to that if we want, but for here, AI is the next robo-advisor. I hear some fear about things taking out, either companies, vendors here, like won’t survive, maybe. I’ve heard that a little bit. It’s kind of strange to me because I think that actually enhances them. But yeah, when robo-advisors started, there was like massive fears in the industry that change everything. We’re going to be the next travel agents, you know, and obviously it didn’t pan out. What actually happened, when you look at retrospect of it, is it actually advanced technology of the industry, made it easier.

So we eliminated pay-per-forms, we started opening accounts digitally. Everyone had to do it. It kind of made it a must-do. And AI is doing the same thing. It’s just still a while, Wes. So, I mean, what do they need to do? You got to lean in. I think I’ve said it for millions of panels and podcasts and all that, but go learn the tech. Like, stop hiding in a shell, like go Google it, just take a YouTube course or something. Understand what it can and it can’t do. So you have at least a high-level response that when you come into here, you can ask real questions.

But I’m seeing the AI explosion happen. I mentioned the consolidation, because obviously my comp is as well, and so you can say that’s part of consolidation. And I think it’s really cool that this consolidation curve, as it goes on to this next journey, and we’re seeing it happen right now. Everybody buying everybody. So there’s less and less players. At the same time, that opens up a flourishing and new startup. A lot of them are particularly in this industry. And that’s the interesting thing I’ve realized over the last couple of years, like the cyclical events of like Sardis spring up out of nowhere. But I think RoboAdvisor’s like, I mean, they do survive.

The rest were assimilated. And they were never really profitable either. No, they weren’t. But they moved the tech forward. Well, that’s it, right? They helped the whole industry get forward in adoption of tech and open eyes a bit and whatnot. I mean, open AI was a big one. Or open API, sorry. Yeah, oh, huge. Huge one. I was the one that first to publish an API publicly in the industry. I can remember the presentation. It was literally around that. I was like, okay, I’m literally opening up the doors to everything we do. But you let everybody show up to you. Yes. Pretty enormous scale. I mean, bingo.

That’s, yeah. So that’s a two way. We have a closed door system at it. You didn’t integrate the like, I mean, pick a vendor, but you didn’t just go and integrate with them. Like it was a big monster of steel. Contracts. And you had to know the right person. Sure. Had y’all’s handholding. And I’m like sitting there going like, hey, here’s the doc. Like just go do it. Well, we just finished our integration with you guys. Yeah, right on. Right? And so it’s huge. Cause it brings us a ton of value, but literally it brings Redtail and your whole organization that much more value. It’s interesting.

Well, CRN had to be kind of is the hub, right? CRN of the data set. That’s everything. That’s nearly in and nearly out. It’s essential repository for it all. So yeah, it had to be integrated. I mean, and we were reducing that friction. Yes. Enable opportunities. We would not pay a fuller model, right? I mean, we opened it up because anybody, you can be a startup. Literally, I never heard of it. You could build to us and leverage our distributors and they wanted to want it. You know? So there was some really cool opportunities to startups even get going into the business and get distribution.

I think Aaron brought it up to a day. Or Riskalize. Like that was a big thing for them. It’s like one to many, right? One to many. You got to build it, but then it’ll happen. And what did I get my customers? I gave them more choice. More on the analogy. I gave them more opportunities to see an easier way to do something. Well, they made the call. They made the choices. Not me. Well, ultimately it made probably things a lot more sticky too at the end of the day. Yeah. Because it’s really hard to have a change management and then rip out infrastructure. Exactly.

So we know the same reason why a lot of people are kind of well installed into their legacy now. So it’s interesting because we think about that also too. We’ve been really happy. Redtail actually, Redtail Orion is actually our number one adopted integration since they merged. Oh, that’s cool. Interesting that Riskalize was number one for many years. Oh, I thought that happened. Merge happened then brought to Orion and so forth. I’m excited for what they’re doing with Redtail and Orion right now, right? These are really exciting projects going on. One of the ones that they’re doing is this global entity project, which basically unifies all the identifiers of all these acquisitions.

We’re going to invest in Orion’s biologic companies over the years. And different tech sacks, different identifiers for clients and zutification. So you’ll have one platform, one identifier for finding prime involvement anywhere in the system. How many proposals do they have? What are they at? What’s their phone number? I mean, all of that’s in their swine. And then when they get to the next step with that opening up for the API, you can have one point of contact. You’re like, hey, I want to have everything about primates in the Orion system. And it’s going to be Redtail days and Orion days. That’s planning. So almost like it has like a blockchain.

Yeah, they’re talking about it. In a way, it looks like a blockchain. Yeah. Interesting. That’s really cool tech. Very cool. So all this talk about tech, if I’m an advisor listening, I’m probably feeling a little bit overwhelmed. Like I’m drinking from a buyer hose. I’m at the event. I’m seeing all of these vendors. What would be like an action step or some advice that you would give advisors trying to just figure out like, where do I go? What do I use? That’s a great question. So I mean, what we use, what we try and tell people for years and still do is, you pick your four-tack stack.

So that’s planning. Or CRM, whatever it is. And then you’re probably around that, right? You learn your four-tack and say, look, this is most essential technology to my business. I have to have. It’s like in a normal small business, it’s like maybe or something. I’ve already learned that or Salesforce. But you go, hey, this is my one-tack thing I have to have. What do they work best with? They’re going to talk to the vendor. Like, hey, I’m looking to do X. Sure. Who do you integrate best with? Sure. Oh, I work with Redshift really well. We can share it. Okay, cool. I got CRM. Hey, I need to do a better job with marketing on who now works with these two vendors the best.

So it ends up asking the question like, hey, can you show me what the integration looks like? It’s like, there’s a million, everybody says integration. Yeah, well, let’s call it. Let’s call it a one-click option. Yeah. It would help a lot. I can leave two tabs open. Yeah, right. Right. But when you start getting into partnership companies that work really seamlessly, yeah, where it’s like, hey, I updated an 8-year and updated a year. Seem them. All right, I didn’t do anything. Or it notified me about an opportunity because of the data in another system. These are really cool, powerful integrations that can change the scale of your business real fast.

So as an advisor doing a demo. It’s overwhelming, you’re right. You walk in that hall. Oh, it’s probably like, oh my gosh. Yeah, you’re like, what do I? Hey, there’s 50 vendors. Oh, I know. And 10 of them look the same. Yeah. Yeah, that was true. But I like that. I feel like you need an anchor. If you’re at, yeah, you have the anchor. Then when you’re looking for the demos or like ask those specific questions, how do you integrate? Show me, like, how does this help me instead of just looking at the demo and decide if I have to buy right then or there or not?

And then a lot of people buy like in a moment here. Oh my God, they saw it. Go probably think about it first. And see if it actually integrates. Does it do what you want it to do? Yeah, talk to the staff about it. Hey, what do you think about this? That’s the other thing actually I think about that is like staff buying. You know, Ryan changed a lot of technology when I was there for a couple of years. So a couple of different internal software stuff like here or whatever. It’s how to get that staff to dox it because they’re the ones that actually use it.

The advisor walking around here, they have three or four staff members. That person’s not the one using it. They’re the buyer, but they’re not the user. The one that’s actually sold is the staff. That’s why I see such tough things on adoption. Advisors are not spending the same amount of money on licensing as they would on training, right? So they always had amazing training and brought in thousands of people. In fact, paraplanners, assistants to come and learn the tools. So there was the adoption. Yeah, I was at Ritell University a couple of years ago and that’s been going on for over a decade. And it’s an education program.

And you know, I told another vendor here, one of our, I think our successes was selling through education, teaching, not pitching. That’s right. And that’s like, show me how this stuff works. Let me show you what you could do. You may not, but yeah, let me show you what the potentials are and also know what it is. And really kind of gets the brain going for them. Like, oh, well, if I can do this. Yeah, that’s super cool. And people will build businesses off of that. Yeah. I’ll tell you better ways to use the tool that you bought. I’m like, whoa, okay. I thought we knew everything about our own tool.

They’re like some of these cool, creative, like abstract ideas on how to do stuff. I never thought of. This is certainly not the last time we’ll be interviewed in FinTech with Boris, despite your full and full retirement and we’re sure there’s lots of going forward. But is there anything that you’re going to see for the future or not a drop in their controversy? Welcome to anything that you want to say. Controversy, I know what you’re going to say. Okay, well, what I’m going to say that I thought about this a little bit was, and I spoke about this this summer actually at an event. What I think this industry fails at is fails at serving the average American, the average person.

I’ve told the story a hundred times, but I was raised by a single mom. We grew up, very limited means in Los Angeles. And I think her top gross earnings was probably 60K a year when I was an adult at that time. And she had no access to this environment. Like no access to budgeting, planning, that’s basics. Yeah, right. I mean, put us into a 60-40 all the day. Yeah, whatever the employer did is what she had access to. That was it. And I wish that we could get this industry into a position where it was profitable for their business to go in service to people literally outside of some town street.

Yeah, the ballet. Yeah, right. These are people. I was talking to a friend over at BYU last week. He does wellness coaching for players. Because you realize 95% of college players, athletes, don’t make it to the NFL or NBA or whatever. And they need to have planning, education on how to be ready for life after this. And you’re not gonna make, you’re not gonna be a superstar making $30 million. No, chances are not. Chances are low. Good for you if you do. But how do we get this where I fear all the time, I’ve worked for 20-plus years. Oh, it’s $100,000 liquid assets. It’s $250,000 liquid assets to work with you.

Yeah, cool. I appreciate that. You’re running a business. But like, you know, I think that was more than the price of the home I lived in when I grew up. And the assets were the house. Right? Yeah, that’s it. And these people need help. These people seriously need. And if we’re not careful, and we’re seeing it already with M1 or Robin Hood or Acorns, name it. That, you know, or Bangar was through their digital asset gathering, saying, hey, we’re gonna go and tap into markets through a mobile app. And people are doing that. Yeah. But we’re the experts. Right. Yeah, we’re the ones that come up with all the software, all the education, all the training.

Sure. Like, we are the experts on how to be financially best for your life and have wellness. And then just scale that down. One, it’s gonna feel great for everybody. Yeah. But then how you make that a business model. And I think this is something we can solve. That’s true. Very similar. Well, that was a really fun chat with Brian. And we’ve been friends with him for years. Really cool to see his journey. We’ve spent time on Necker Island with him twice now for the Rebel Dads event. This is a super cool dude and really neat to see and hear his perspective given, I mean, he’s had a heck of a ride the last 25 years with Redtail.

Yeah. He did it in a very humble way too, by the way. He really did. Solved problems, spent time with people, just did it. He’s a real quick start. I mean, we think about ourselves and the Colby. Yeah, right. He just has an idea. He goes and does it. He’s like, I built it last night. We think of these CEOs running major companies. He was a CTO first. He just solved the problem back when he was in his 20s, the CRM side. Look how big they got. 130,000, last count I heard, advisors using his technology. And of course- I think it’s more now. I think it’s actually more.

I’m sure it’s way more. It’s so cool. And he bootstrapped the heck out of that thing. I mean, what a great story and great example of what’s possible. Couple hundred employees, I think at one point and multiple locations around the country. And I think if there was anything that was interesting about looking back at Redtail and its successes, especially as somebody in the fintech world, as you know, it was the people. The people were just really great. He did it. I mean, I look, I model a lot after what Brian built because I want people to love working at the company. And I know that they’re passionate about it.

That came through as a customer for sure. No question about it. It’s funny because we talk about Rebel Dads and Necker and Richard Branson, part of his success he attributes is like treat your employees well and the rest kind of takes care of itself. And Brian’s just a great example of look what happens. When you’re building something like that and people want to be part of it, that’s awesome. All right, so let’s talk about what we took about. This was a very interesting interview because Brian has just left the industry to a degree. He’s taken a little hiatus after 25 years. What did he say here that advisors need to start thinking about?

Well, firstly, we’ll preface it. He makes it very clear that advisors and fintech, our industry in general, we’re a special group and that we really do have the opportunity to improve people’s lives. We’re not just selling a cell phone or a hamburger. We are helping people with decisions that will impact their legacy, like really deep, meaningful things. So I really liked that because that shows at the core like how he’s thinking about all of us and what we should be doing. I like how he said our community, even behind the scenes, it’s pretty welcoming. It’s small. It’s a small community. It really is, but it’s pretty welcoming.

And I like that. There’s a lot of friendly competition out there. I mean, I’ve even had competition approach me like, hey, what are you doing? Maybe we should work together. I don’t know. What do you think? You know, it’s kind of fun. It is. Maybe it’s because the fintech community or wealth tech community in the United States is so small. I mean, yes, there’s something like 300,000 to a million advisors depending upon how you want to count, who you want to include. But you know, it just boils down to several broker dealers, a bunch of wire houses and some insurance companies. Yeah, sure. There’s plenty of names out there, but the bottom line is that we all basically do the same thing, right?

We have the same kind of experience. We have the same needs. We need fact-finding. We need CRM. We need portfolio management and a whole bunch of other stuff that supports the process of advice. But it’s really amazing how we all know each other. When I joined in the community, I guess, back in 2016, 17, I was so surprised how welcoming everybody was. And if you’re willing to play out and be out loud a little bit and show up, you can build great relationships. It’s been really the hallmark of my excitement about being a fintech CEO versus an advisor because, gosh, I have community. I’m like everywhere.

That’s how you and I met. That’s how we met. Yeah, for sure. So clearly it works and it’s really cool. And there’s, I think, lean into that. You mentioned that too. Lean into the community and lean on it as much as you can. I also liked how he was talking about a challenge. So there’s all this talk about AI, but he’s like, it’s the next robo-advisor, which is interesting because robo-advisors were a flash in the pan. They were gonna replace advisors. They didn’t, but robo-advisors are still around and have gained some market share. And I think AI, I think he’s right there, right? I think AI is a big flash in the pan now, probably bigger than robo-advisors because it touches more parts of our lives, but it’s not gonna replace humans.

Just can’t. No, it’s not. But let me challenge you on that because I think what I heard in this rethink discussion is that robo-advice was the catalyst for all of us to retool and retool fast so that robo didn’t have a competitive advantage over humans, right? So most of the modern companies either bought the technology that robo was providing or built it themselves and renovated, right? They went paperless. They went to dashboards and client portals. So they basically obviated the technical advantage that robo came out with at a low cost, right? But didn’t have the context of a human. And then the robo started adding humans and kind of fizzled out for the most part because it’s a relationship business.

All day long. But AI is, I think it’s interesting because you’re right, it’s forcing everybody to wake up. Is it gonna force financial advisors to change much? I think it will mind up changing the back office. You and I have done a bunch of work in AI and we have gotten enormous leverage from it. Oh my gosh. Tremendous leverage. And so what are we doing with that? Extra time? Yeah, we’re getting time back. It’s more human interaction. If you choose to use that time for human engagement. Well, I suppose. And so if you’re an advisor and you’re looking at this from a business perspective, yes, you can apply this to calling more clients, meeting with more clients, all of that.

That’s what we’re paid to do. I’m not paid to file your stuff. I’m not paid to update Redtail as much as, I mean, I use Redtail, but I have staff that helps me with that. As an advisor, this is where my time is spent. So AI is helping me do that. But also I think, right, you could play more golf. You could deliver more value. Maybe golf is your highest revenue producing work. Could be. I know for some advisors it certainly is. It works for some of them. Yeah. We’ve talked about this before too though, is it’s the advisors that are not gonna use AI.

The firms, the broker dealers, the life insurance companies who are worried about it or putting their heads in the sand about it. That’s how you go obsolete. I had a friend come into one of the conferences I was doing, Panos Lelidakis. He’s pretty much known globally as a crazy person. I think we might actually have him on the podcast. We planned on having him. That’d be fun. He’s too ADD to like focus on anything. He literally runs around and he showed on stage as a handheld drone, followed him around the stage, showing advisors what they could do from making AI avatars that literally had full responsiveness trained with his voice and his face.

It was like him speaking on screen. And he showed advisors what AI can do today and asked the question, what is it gonna look like in a year? And Brian’s been a real student of this stuff, especially because he has his extra time on his hands now. He showed us a bunch of stuff when we saw him in Necker that has gotten him all fired up. So I really don’t even think that the mass population has any clue because they’re busy doing their job and they’re making money. Of course, what these AI tools can do already and how that could cause a massive disintermediation, at least in status quo.

It may not be taking business away from humans, but something in the value chain is going to get innovated. The question is it processing? Is it portfolio rebalancing? And either way, it’s probably gonna force margin compression. And if that’s the case and we need to lower our prices, are we prepared to do that? I think that’s gonna be the disruption. I agree with you on that. I would say though, that it is taking business away from humans and that it’s taking business away from humans, from a certain group of humans and giving it to the ones, to another group. Okay. It’s a transfer of wealth from one group of advisors to another group of advisors.

From those using it to those who aren’t using it to those who are. Yeah. So you have that going on and then you’ve got the fee compression. But are we really, I mean, even Kitsis, I think, came out with something this last couple of months. There’s all this talk of fee compression, but it doesn’t seem to be happening. But so maybe it’s not fee compression, maybe it’s expansion of services to justify said fee. Ah, that’s probably where it plays out. I agree with you, right? Can you expand this conversation from investment management to estate planning? Or can we start talking about tax structure or maybe working with your company?

And I agree with you. I think we’re gonna deliver more for less price. Well, here’s a good example. Here’s a good example. com, they’re doing really interesting estate planning solution, technology-driven for advisors. And I just did a deep dive with them. Like Tim was on Necker with us as well, right? Yeah. They’ve really figured it out now where I can now be a more comprehensive advisor. I can go offer all of my clients estate planning packages. I don’t have to touch it. I’m not the attorney. And I can actually make that into another revenue line for my business. So now the clients are stickier. They’re getting more service.

I’m actually making more instead of less. It’s a really interesting model, but it shows clearly how if you use the technology correctly, you can deepen relationships, make more money. You’re gonna get that business versus. I mean, like if I’m a practicing attorney and I see this, I’m starting to freak out. Even a sudden advisor. Oh, I’m looking at this RIA’s website and they offer estate planning services. It’s all turnkey. Whoa, I don’t do that, huh? Yeah, but you know what’s interesting even about that marketplace, like you think about the estate attorneys, they’re really so few and far between. Most large firms have one or two people in their entire partnership that’s focused on T&E, right?

That’s trust in the States. And the reason is because despite the fact that the market is massive, the actual demand for that work is so low. And really the reason it’s so low is because it’s expensive and it’s complicated. And this is a classic industry that is ripe for disruption. And advisors tend to not touch this one with a long pole because you can’t ever solve it. You don’t practice law. I think it’s a really interesting way that fee-based advisors must, I’m not saying should, must be able to provide an outlet like this. com, but the key is you gotta provide an off-ramp for people to do this work and do it cheaply.

This should be a commodity. And the fact that nobody has it or something like 60% of the population doesn’t even have a will is a huge opportunity. And you might be saying, well, why do I have to do this? Who’s telling me I have to do this? At the end of the day, the consumer is driving this now more than anybody else. That’s true. The consumer has expectations. They want convenience. They want hyper-personalization. They want digitally enhanced. They will go wherever they can get that. So if you don’t have that, they will go find someone else that does. Yeah. You know, there’s another thing that Brian said that I wasn’t thinking about or expecting to hear.

When he mentioned something about the unified ID, this is something that I wasn’t really thinking about because in the States, we don’t, we have a social security number. Unified ID is for the EU or United Arab Emirates has, basically everyone has a number, a distinct number that unifies your data across multiple platforms. And obviously there’s lots of, we’ll call them state systems within the EU that need to talk to each other. They don’t have the same social security number. So they have a UID. So this is interesting that he’s contemplating this because one of the bigger challenges that we have, certainly across households and different registrations, and my first name is not Adam, right?

It’s Heath, right? Or it’s I’m by H. Adam. And then in a CRM system, as an example, there can be six records. It gets messed up. Yeah. And the data gets all messy. Now you got to integrate that data, send it someplace and you know, where everybody’s complaining. Like, householding has been such a hard thing to do. We clearly do it in asset map. That’s like what our thing is, but that’s because we’re asking the advisor, like what’s the, you know, we’re starting from scratch. Maybe we should get an asset map universal ID and roll it out nationally. We do have this though. That’s the thing.

And it’s not only numbers. If you integrate with asset map, you have to use our UID, right? To integrate with us. And that’s a household and member level registrant, kind of like a blockchain, like he said. That’s pretty cool. Nobody knows that behind the scenes, except now I guess I just shared that. I think you need to sell that separately. We just give it away. Well, certainly you want to give it away because now you’re embedded in the entire ecosystem of that data forever, right? So think about downstream data. If we’ve seen a lot of kind of change here, advisors don’t even think about this.

So let me kind of give you some insight. There’s data protection agreements between a lot of these companies. What does that mean? It means that if I take data, let’s say from Schwab, right, I pull in the data from Schwab because the advisor says, I want my data. Okay, let’s say an asset map or some other tool. If now I take that data from asset map and send it to, let’s say, precise FP, because you want to move it to eMoney, I have to hold the downstream data recipient accountable to a data protection agreement on behalf of Schwab. When Schwab’s data came to me, I sent it off with authorization to precise because they wanted it and then they sent it to eMoney.

That chain has to be able to be turned off through a sieve today. That is really difficult to do. And things that Brian didn’t have to deal with in the same way with Redstone, it’s like, oh, you have a login? I give you the data. Here’s my API. Today, we’re seeing that people want to protect the data from leaving their vendor. Yeah, right. Take my data to my competitor. So it’s interesting to see how these unified IDs are actually going to become more prolific because we need to make sure where is this data coming from? And most of us advisors are like, I just want to integrate the data.

Can you just give me the data? Yeah, just let me integrate. These are problems that I think a lot of people don’t even realize. Well, speaking of integrations, I think Brian had some good comments about that as well. If we want to kind of jump into like, what can you actually do? Like if you’re listening today, like, all right, I’ve heard enough of what Derek and Adam have to say. They can stop jaw jacking. Is that what we do jaw jacking? Yeah. Never heard that one. I want to know what to actually do now. So we’ll go straight to the integration thing. But I like that is that Brian was saying like, what’s your core tech?

What do you use most of all? Probably CRM or maybe it’s like a financial planning, asset map type tool. All right, now what do you need to do in addition to that? Okay. All right, I want CRM. What do you want your CRM to do? Okay, well, who does that? And do they integrate really well with this other core tool I’m doing? Now you’ve built two. Now you go to the third one. All right, I have these two doing this. I need this third thing. Who integrates really, really well with both of these? It’s a bit of a process. I think this is why also your tech stack should be less versus more because it can get very slippery.

Oh, it’s kind of expensive once you add up all these different things. So I really liked that you was talking about that make sure there’s a seamless integration. It works well. You keep it simple. Yeah, well, clearly I agree with that. I did find though, I’ve built a pretty successful practice with virtually no integration. So I do feel in some way that people have gotten integration like giddy and they don’t want to re-key any data. And I get that, but there’s an element also, and here’s my pathetic excuse of why not to integrate is that we’re definitely seeing a bunch of bad data get in front of clients every once in a while because no one actually cares to inspect anymore.

They just assume it’s right. And so that’s why I think over integrating in the current state of the world without a human saying, hey, I double check that number runs the risk of actually perpetuating a scale problem, which is I walk in front of a meeting and I just assumed that the e-money aggregation was right. And it turns out that it wasn’t updated for two years. And now the client’s like, that’s wrong. What are you talking about? Why do you think you’re so, you know, what’s going on? I’m like, well, downstream, I’d be relied on that data for five different systems and it’s wrong. And I didn’t check because I rely on the thing to work.

So it makes it look like a fool. You’re in a client meeting. The client doesn’t remember that the tech wasn’t working. The client members like, man, Adam wasn’t prepared. That’s right. That’s right. But hey, look, I saved all this time by just hitting the easy button. So I understand the design. And then you lose the client. Right, I lose face, I lose credibility. And in this world where tech is so fungible, I just don’t think we can be. We have to, I don’t wanna say we have to be infallible, but we have to be thoughtful. And we have to show that we’re actually paying attention to the store, not just like, you know, hey, yeah, the camera didn’t show anything.

So I guess we didn’t lose any product this month, but somehow there’s like apples missing a part. Well, you’re in charge, man. What’s the deal? So I think that’s all. You know, that goes back to an old saying I learned at my first job out of college. What’s that? Inspect what you expect. That’s right. That’s right. My mom says it this way. She said, people don’t do what you expect. They do what you inspect. How about that? That’s good. Yeah, she went to the same school as you. She sure did. Yeah, she didn’t, she went to high school. I got a GED. All right, nice.

I agree. Awesome. Awesome. That’s great. Listen, I’m really proud of you. I knew there was something there. They were, right? You left that out of every interview I’ve done with you, amazing. You know what I thought was cool? That Brian did a fantastic job at Red Tail of really focusing on educational selling. Yeah, I don’t know if you noticed this, but he had like no marketing budget all those years. He focused on integration. Let me just, I’ll work with you and what you’re doing. And then he focused on education. Let me educate the staff because he realized that was the key to adoption of CRM.

It wasn’t the advisor. The staff is doing 90% of the work. Exactly, yeah. And I run into this all the time, Derek, which is advisors just expect to spend their SaaS fee to buy a tech and it’s just gonna work like Facebook or it’s gonna work like some consumer app. And this is a technical app trying to make your business look better. An enterprise app is not designed like Facebook. It’s designed to do something really technical. And so they don’t spend the money on training. It’s such a waste. So enterprises typically spend two to three times the licensing fees on training alone and implementation. So they get the ROI.

And I think that’s where advisors missed that boat and Brian did it so naturally that- It’s almost like he was selling a subscription to university classes, right? Like the first year you were with Red Tail, you didn’t pay for technology, you paid tuition. Yeah, he paid for education. Yeah, your education. And then I switched over to tech eventually. Well, if you’re educated, you’re empowered. And if you’re empowered, now you’re actually dangerous. And that’s now you can actually add and contribute value to the business, right? If you’re not really empowered, it’s just some of the toy, right? I use it once in a blue moon. I don’t really know it.

I use 10% of it. I mean, financial planning gets this wrap all the time, Derek. All the time. Well, I use it like for retirement burned out. Did you use it for the Roth conversion? No. Did you show the family? No. Wait, you can do that? Yes, you should have learned what you’re paying for. Okay, here’s an action item. If you’re listening to this and you’re considering getting rid of a piece of tech, push pause, go learn the tech. You and your team go learn the tech. That’s even what Brian was saying. Like any tech, even like new ideas, AI, go learn about it. Like just hit pause, skip the nine holes of golf today and spend an hour or two on learning the tech instead.

It’s one-on-one time investment. That’s true. And then you’ll actually know if it’s worth it or not. You know, with everything on YouTube today, like there’s no excuse, right? There’s no on-demand learning. We even have an LMS system learning management system. You can like learn the whole thing at night in the middle of the weekend. Like you don’t need a human anymore. You can go at your own pace. So there’s no excuse to learning. And granted, I happen to think any advisor who’s got a business that’s generating $250,000 or more, they should have a budget that is reinvesting back in their own company and their knowledge.

Otherwise, why are you managing my money? You’re not growing yourself. You’re not bringing more value. Like come on, be more efficient. It’s ridiculous how many times advisors are like, yeah, just kind of like collect them the fees and it’s good enough. And they all have an accent, obviously, because that attitude must have an accent. Are they all from Philly? Are they all from Philly? Well, did I sound like a Philly guy? What? They all got their own fees. That’s the Southern accent. South Philly. That’s right. Southern Philly, yo. Yeah, that’s right. I sound like I’m from Philly. Anyway, that’s great. Well, what’s the wrap-up here?

I think this is really awesome to spend time with Brian. Just a great, great guy. And I believe Derek, I’ve said this before, he is the mascot of the FinTech industry. He is the red tail. That’s his dog, the dog he had when he started, right? So there’s actual real meaning behind that. That’s true. We’ve been lucky to call him a friend. Very lucky. He takes care of what we do. It was ironic that we ran into him there at Fearless and had the opportunity to interview him. So I always appreciate what he’s doing. Well, thanks for listening. Hopefully, you got a couple takeaways, or at least a laugh.

If you’re laughing at us, with us, I don’t really care as long as you’re laughing. That’s good. And until next time, take it easy. Keep making progress and we’ll see you later. Absolutely. Thanks, my friend. I’ll see you in the next one. 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. The content has been made available for informational and educational purposes only.