wealth management technology

Ep. 99: Digitizing the Back Office of Wealth Management Firms with David Knoch, Docupace

“When I say we digitized the back office of wealth management firms, the reality is we only digitized part of the back office of enterprise wealth management firms. So the question for me, having run Docupace for the past year, is do we change the statement or do we change what we do? And in my mind we change what we do rather than change the statement.”

— David Knoch, CEO, Docupace

When he was president of wealth management firm First Global, David Knoch set a strategic direction built around technology solutions that drove efficiency and scale. Now, after taking over as CEO of leading workflow and document management vendor Docupace, he’s starting the process of building a back office power house by acquiring Jaccomo, a provider of compliance, surveillance, and advisor compensation software. I spoke to David about the reasons behind their first M&A deal, his five mega trends in financial services, and a whole lot more on this episode of the WealthTech Today podcast.

Come on in, sit back, relax and enjoy episode 99 of the WealthTech Today podcast. I’m your host, Craig Iskowitz, the founder and CEO of Ezra Group Consulting. If you work for an enterprise wealth management firm, an asset manager, RIA aggregator, or at one of the many technology vendors in our space, Ezra Group can help you make better business and technology decisions. Check us out at EzraGroupLLC.com.

This podcast features interviews, news, and analysis on the trends and best practices all around the wealth management technology industry. A few housekeeping tasks before we start, be sure to subscribe to this podcast wherever you listen to podcasts so you don’t miss future episodes. And a quick shoutout to our sponsor, the SebastianStrong charitable foundation, you can find them at SebastianStrong.org.

Click here and schedule a Discovery Session to find out how Ezra Group can help your fintech firm grow revenue in the wealth management space.

Companies Mentioned

Topics Mentioned

  • 5 Mega Trends
  • Acquisition of Jaccomo & the Acceleration of Consolidation
  • Desire for Self-Authoring Driving Steady Flow of Breakaway Advisors
  • Proliferation of Targeted Technology Solutions for FAs

Complete Episode Transcript

Craig: And I’m happy to introduce on this episode of the WealthTech Today podcast, my guest David Knoch, CEO of Docupace. David, welcome.

David: Thanks, Craig. Appreciate it. Thanks for having me here today.

Craig: Glad you can be here. And you are calling in from lovely Dallas area, Texas, a place I really like even though I hate the football team, I love the people and the area of Dallas.

David: I don’t like the football team either for what it’s worth.

Craig: All right! We’re on the same page. Love it.

David: We might not be, as a New England Patriots fan you and I may not be on the same page.

Craig: You know surprisingly, not to digress from wealthtech into football, I’m an Eagles fan, so the Eagles don’t play the Patriots very often, but when we do, I’m happy when we win. But I’m also a Rutgers fan having gone to Rutgers University, and Bill Belichick has a soft spot in his heart for Rutgers players for some reason, I don’t know why.

David: Both my in laws are Rutgers grads.

Craig: There you go. I knew I liked you. Good. So, moving off of football talk, let’s talk wealthtech. So can you give us 30-second elevator pitch for Docupace?

David: Yeah, absolutely. Thanks Craig. So Docupace is financial technology that helps enterprise wealth management firms digitize their back offices. The goal of Docupace is to make sure that we take friction out of the process for wealth management. We want to make sure that the promise of financial planning becomes the promise of financial planning, well executed. So we help firms onboard new clients, convert them from prospects to new clients, onboard them, move all the documents, data, digital signatures, everything through smart, comprehensive, robust, workflows. Integrate all those workflows to their partners of choice and then ultimately have the documents and data at rest in an SEC compliant document storage facility.

Craig: One of the things that I found and learning more about Docupace, this is my job to know different companies, but for a long time I just thought of Docupace as being purely document managed document storage. And when you mentioned financial planning well executed, there’s so much more in terms of the workflow processes. Can you talk a little bit about that and how you guys have built that over the years to more of an ecosystem and infrastructure that firms can build their back office off of?

David: That’s a great point. I think you may know, but I actually started off as a Docupace client. My last firm we used Docupace for about a decade, we were one of the early adopters and in fact we adopted Docupace as document management, we started off with exactly the profile that you described. The business built itself out over time so document management, document storage, which was really critical to our business and to our clients business, kind of operated well and integrate became an opportunity for as you describe to build a larger financial ecosystem.

We got into the customer onboarding process because frankly, to do document management, a lot of it does start with new account opening. We also do it for account maintenance and other activities as well, but in order to be able to create this comprehensive platform starting at the beginning of prospect conversion which is really where a lot of our core work began, that became a huge part of what we did. So we got into the forms filling and new account opening processes, got deeper integrations with custodians and TAMPs and CRM providers and we can actually create today a pretty interestingly well integrated ecosystem, between TAMPs, CRMs, custodians, and to create one integrated experience no matter how many providers a firm has in each one of those major categories. And we do it for a lot of other financial technology as well but those are pretty uniform.

We’ve actually broadened that out, frankly, I mean one of the solutions that we provide, we do the most digital onboarding of new financial advisors or financial advisors to new firms because if we can onboard one customer, one client at a time, we can onboard one financial advisor at a time. Again, we’re the largest provider of digital financial advisor transitions in the industry today just as a result of that extension and part of our roadmap, and we’ll probably talk about this later is, we can do it for one advisor at a time, we’re looking at ways to be able to do it one firm at a time, right, to be able to take that onboarding and that scale that we’ve gotten really bring it to more firms.

5 Mega Trends in Financial Services

Craig: You had mentioned, I wanted to talk about your five mega trends that you’re seeing in financial services, can you explain what they are and how you see them impacting the industry?wealth management technology

David: From our perspective, there’s five mega trends that are relevant at least to Docupace and how we run. I’d be remiss in saying there’s probably more trends than this happening in financial services industry-wide. These are, I think particularly focused on their implication on financial technology firms like ours. The first one that’s on that list is the continuing trend of consolidation. I mean I think consolidation for the industry is showing up in two ways. The first one quite clearly is consolidation of wealth management practices. Part of the reason I just made the comment, well if we can solve for onboarding one client at a time and we can solve for onboarding one financial advisor at a time, how do we think about solving for onboarding one firm at a time? So as consolidation continues to happen, we’ve got some interesting projects happening right now that are helping scale some of that consolidation activity for some of our clients and prospects.

I think consolidation is starting to show up in the world of financial technology firms, our friend Mr. Kitces’ FinTech map’s got a lot of logos on it right, and there’s a lot of those logos in the blue emerging category. A lot more on that blue category than we probably would have seen if we looked at that FinTech map a year ago or a year before. There’s certainly a proliferation of very specialized providers, which I think it’s great for the industry but there’s a reckoning of that I think that’s ahead of us. And some might say as a reckoning event that’s here with us today.

We are starting to see, at least I think, an acceleration of consolidation in the financial technology space and in our perspective we do think there’s an opportunity for some of the best of breed specific solution providers like Docupace, to be able to come together with other best of breed specific solution providers to create even better, more robust solutions for the financial services industry. I think that the next big wave of consolidation is probably coming in the FinTech space if it’s not here already.

The second one which I think is relevant to the financial services industry and I think it’s driving a lot of the trends that are happening inside wealth management firms as well as how financial technology firms serve them. That’s what I described as the, you know continued desire for self authoring. So the self authoring trend I believe is what’s driving wirehouse advisors to move to independent channels if that self authoring trend is causing those independent financial advisors to drop Series 7s and start their own registered investment advisors. It’s the self authoring trend that’s causing the proliferation of very specific solutions and financial technology. Everybody wants a very individualized and personalized experience under their control, everybody’s very interested in best practices.

There’s this very strong desire for being able to run my business, my way. And I think financial technology providers are well situated to try to scale that. It’s one of the reasons why we think Docupace in particular can add value for the independent RIA community because self authoring tends to show up in that community, as custodial proliferation. We want to make sure that we can provide custodial choice for ourselves and for our clients and there’s no reason why custodial proliferation should create a bad operations process. We can give wealth management firms, we can give clients, back offices, the opportunity to have one experience regardless of how many different custodians they have. Rather than trying to I think, stop the self authoring trend or caution firms around the self authoring trend, I guess I would want to see particularly financial technology providers lean into it just ask the question, well how do we scale self authoring, not how do we make self authoring go away.

Acquisition of Jaccomo & the Acceleration of Consolidation

Craig: Let me jump in before you go on. I would be remiss if I didn’t mention your first trend, the acceleration of consolidation, you talked about best of breed providers coming together. I want to talk about your recent announcement that you’re coming together with another provider called Jaccomo, do you want to talk about that acquisition?wealth management technology

David: Absolutely. So, you’re right, we just announced the acquisition of Jaccomo. We’re really impressed with the team at Jaccomo, really impressed with their technology as well. The Jaccomo technology does two things for wealth management firms one, it scales their compensation processes so it lets them calculate and pay commissions in a pretty open architecture and robust way. One of the nice things about the platform is it can handle any method of paying financial advisors.

The second thing is because so much data is involved in the advisor compensation process, the firm’s actually got a really, really robust platform for surveillance and compliance, which we’re really interested in being able to bring that capability out to our clients. So I go back to the statement I made, you asked me for my elevator speech around occupants, and I said we digitize the back offices of enterprise wealth management firms. But the reality, Craig, is we only digitize part of the back office of enterprise wealth management firms. So the question for me then, in running Docupace for the past 11 months is or 12 months, a year, is well do we change the statement, or do we change what we do? And in my mind, we change what we do, rather than change the statement.

I think back to my prior life, running a pretty large wealth management practice, we had a great Docupace relationship but I also had a relationship with Envestnet, had relationship with Protegent, had a relationship with Broadridge M&O, all these other technology providers that were part of the back office and the reality is my business would have been better served by consolidating some of those together into a single back office and financial advisor experience. Our back office had Docupace open all day long, our field particular wealth management assistants had Docupace open all day long. Well what if they could get their compliance activities conducted in that platform? What if they could get their advisor compensation activities conducted are reported on within that platform? It just makes their life considerably easier by having this consolidated platform.

And with the Jaccomo acquisition we can start to deliver that. Now there’s more capabilities that I think we could deliver as part of this integrated back office experience and we’re going to go down that path, but being able to bring those capabilities to our clients, listen today we’ve got common customers with Jaccomo that want integrations. We want to deliver that integration but ultimately really want to go deeper and try to approach the market together solving for what I described as financial planning well executed, and really focusing on the back office itself and trying to deliver a really robust experience, well integrated with data, one platform for the people that we’re privileged to serve. And I’ll come back to Jaccomo in a little bit probably as we go through the conversation today but that’s the high level, that’s the thesis and the main focus for us. We’re really excited. Again I mentioned the team over there is just so smart. They know the technology so well, they know how to solve for these wealth management challenges incredibly well, so that’s a big part of the reason why we’re so excited, not just the tech but the people.

Craig: One thing I’m seeing with a lot of mergers or acquisition announcements in our industry is that they’re driven more by data than by tech. Do you see that in terms of what Jaccomo has, you mentioned their compensation data, payout data, which feeds surveillance and compliance. So how does their access to data, their ability to manage data, having a data strategy and being able to assess on the firm’s data, how does that help drive your vision for how Docupace is going to digitize back offices?

David: I mean, this is a really cool point for us. Docupace today already has a ton of data related to new account opening processes. We’ve got all the new account opening, all the maintenance, we’ve got a whole ton of data already related to that, we’ve got a lot of financial advisors using the platform. With Jaccomo it goes a level deeper, that new account opening data turns into transactional data because the business is processing all the data feeds from DST and Dazzle and custodians, it has all these data sources integrated into it to be able to do post trade surveillance, as well as paid compensation.

So, the place where I believe that we need to focus on data at least initially and this work is actually underway at Docupace, if I go back to the statement that I made about Docupace’s core purpose for us is to make financial planning become financial planning well executed. What I think we have the opportunity to do is to be able to create a lot more transparency into how well functioning a wealth management back office actually is. So Craig if you tried to open new accounts either for yourself or for your clients or on behalf of financial advisors, you’re probably going to want to know, how well am I doing this? Am I opening them fast enough, are my NIGO rates low enough, do we have bottlenecks in our process? You’ll probably be curious about some combination of how well optimized is my back office and how competitive is it. And I actually think Docupace is in a really interesting position to be able to provide that type of insight to the firms that we serve. So between the data that we’ve got at Docupace and the data that we’ll have with Jaccomo, particularly if we end up with the ability to aggregate and anonymize that data, report it back to firms as performance benchmarking ultimately on a real time basis. I think we can make a huge change and how clients are served by financial services industry.

Today, I don’t know that back offices are used by financial advisors or the IBD recruiters or RIA financial advisors. I don’t know if the back offices are used as a point of competitive differentiation. And I think we can change that. I think by creating transparency and back office improvement through that transparency, I think we can start to create a competitive environment for the back office. I think back office people become the heroes of the next decade if we do this well. If you imagine for a minute, if you’re the person running the back office at a IBD or a large RIA with centralized back office processing and all of a sudden you find out that you’re opening new accounts five times faster than the average IBD, what’s the first thing you’re going to do? You’re going to run your recruiting department and say stop telling everybody that, if they’ve got pain with the back office or the operations, tell them to come here, I can prove how good we are. And I think that makes, when I say financial planning well executed I actually think we can really do a good job with data on bringing that well executed piece to life, both through optimization as well as through transparency of just how well back offices are doing. Long answer to the question but I think data is critical for delivering that.

Regulatory Compliance Trends

So let’s get back to your five mega trends, we did the first two, so what’s your third mega trend that you’re seeing in the industry?wealth management technology

Regulatory compliance, not surprisingly, is a big part of it and I think in particular regulatory compliance has kind of been the thing that’s always been with us and I don’t know that administrations changed the level of regulatory compliance in a really big way. I think there may be some slight ebbs and flows to it but your regulatory compliance is something that always lives in the forefront of RIAs, IBDs, insurance firms. It’s something they spent a lot of time and dollars on and I think because regulatory compliance, most people would likely say, continues to increase in some way, I think what ends up being sacrificed in favor of regulatory compliance is innovation. It just sucks away a lot of the productive discretionary capacity inside wealth management firms and it’s part of the reason why I think you’ve got such a proliferation of financial technology providers because firms just can’t do it themselves. Regulatory compliance, I think, in no small part is part of the reason why firms are trying to figure out how to get away from legacy homegrown enterprise technology. Technology debt amasses pretty quickly if all of your available resources are being dedicated to solving the next new regulatory compliance concern that you’ve got. And that doesn’t matter if you’re an IBD, it doesn’t matter if you’re an RIA, we’ve all got to deal with how to deal with compliance in a way that is not just checking the boxes but actually creating a business that’s worthy of client service, it can stand out separately and different from everybody else. Innovation gets sacrificed when regulatory compliance activities are too high so good news is firms like Docupace and others will solve that for people.

Craig: Regulatory is driving a lot of spending in the industry, it even pushes out some other spending because nobody wants to get dinged by the SEC or the other regulatory bodies that they miss something so they’re willing to spend extra on a regulatory piece of software that’s going to hopefully give them a report that will make the regulators happy versus buying something that might generate more revenue or reduce costs somewhere else.

David: And to that point right last year, Docupace delivered a solution to marketplace called Tracker BI and it was basically a way for firms to be able to satisfy their Reg BI compliance. And the interesting part about Tracker BI is that satisfying Reg BI, the form CRS delivery requirement, solving for that was really just a use case for the platform, it was not the platform. What we’ve got now is a highly audit-able and trackable customer communication platform that we just happened to use for forum CRS delivery.

So I go back to that use case I mentioned to be able to solve for the consolidation efforts of large enterprise wealth management firms what you’re finding is Docupace for those engagements are actually combining together this core platform onboarding, document management, workflow, storage, the core Docupace platform, with our advisor transitions platform with our tracker platform. Bringing those together creates a scenario where we can gather data, communicate with clients, track that communication, integrated with account opening processes, move it through the custodians, leave the documents at rest. That by bringing together these three tools we have, we can actually solve some pretty large enterprise data conversion projects and we’ve actually got two of them kind of underway right now which is fascinating for me.

Low Interest Rates Trend

Craig: I’m sure there’s a lot going on. Let’s talk about the fourth mega trend.

David: The fourth one is just, I won’t spend a ton of time on it but I think it’s relevant to the clients that we serve and relevant I think to a lot of the clients that financial service industry serve and that’s low interest rates. It just has such a fundamental impact on the ability of firms to spend. As you know, particularly independent wealth management community, so much of the revenue is tied to interest rates that you when interest rates are low profitability comes down, the ability to retire technology debt comes down, the ability to spend on the next level of what firms need to do to create a better client experience or execute well it comes down and it’s a headwind I think for trying to solve for some of the challenges in the industry. Again, just because it’s such a big part of the buyers revenue source. Not a lot that financial technology firms can necessarily do about it per se but it is a mega trend.

The last one I see is a persistent consumer demand and it’s really not just in financial services but you know persistent consumer demand for more simplicity more transparency. We want to hire people who make our lives easier, and that’s not just the financial services industry that’s everywhere. We want people to make the complex easy for us, and particularly financial planning, we want to believe that this is something that’s really easy but it isn’t. I mean, it may seem easy to the client, and that’s the goal, to be able to take these complex topics and bring them down to a really simple, easy to understand process and I think financial technology shaping customer execution is a big part of creating simplicity. But the other thing is clients are I think sick of the opacity in their relationships. I mean, trust in part comes from transparency, and I think clients have a demand for transparency, they’re just not going to accept some of the opacity that exists in the financial services industry and I think not an insignificant part of what’s driving clients and advisors away from commissionable models into fiduciary or fee based models is not just the statement around fiduciary versus suitability but what that portends in the client relationship. It’s a drive for transparency as much as anything because customers will understand transparency more than they will a statement or a fiduciary versus suitability. Transparency, at least in part, is what resonates with them. And I think we’ve got to continue to drive in financial technology firms for being able to make things easy. I mean, if you were to look inside under the covers of Docupace, it’s an incredibly complex platform like you can almost do anything for anybody for any reason. By the time a financial advisor or wealth management assistant experiences it, it’s ultimately a reasonably simple platform for what it does. And that’s the goal is to make this incredibly complex workflow integration, data gathering, form filling process to be something that’s just button clicks, which is great.

I will say for what it’s worth, I do think the past decade or so, a financial technology, spend and focus has really been on the client experience and I’d actually say perception is almost a better statement than experience, but it’s the reason why costs have come down and financial planning has become the norm, not the exception. It’s the reason why UIs are as robust as they are, it’s the reason why model management shows up the way it does. Certainly if you think about a decade ago, what the client and financial advisor experience looked like, it’s radically different today, and it’s been really good for clients and advisors in the back offices to some degree.

What firms like Docupace recognize and I think others will see as well is what’s behind that is not nearly as well put together. That execution is still a challenge, you’d be shocked. I’ll give you my worst case example. So, the Docupace platform doesn’t need forms or signatures at all in order to be able to open new accounts. We can have everything be data, and have that data be you know sort of certified authorized digitally so we don’t need to have any documents or data. There are cases where we take fully digital, we turn it into a digital form. We turn the digital form into a PDF, and then we fax digitally the PDF to a custodian to open an account. It couldn’t be more arcane than that. You start on the front end with this is sort of what I would say, you have this beautiful sort of digital experience, and you turn it into a fax, because that’s the way the industry still operates and that’s not financial planning well executed. It’s the reason why financial clients are still saying, why did you get my name wrong and why does this take so long, like, the process for financial advisor and clients today, I don’t think industry wide, reinforces the good work that’s happened within the financial planning process and it doesn’t cause clients to want to come back and do more.

So a financial advisor builds a beautiful financial plan, delivers for the client, the clients hopes, dreams and aspirations have come true and this document, and it goes into implementation and takes too long and mistakes get made. When that client has a kid and starts saving for 529, are they ready to call the financial advisor? When you know it’s time for retirement, do you try to figure out how to do some of this yourself before calling your financial advisor because those experiences just didn’t go well? When I say financial planning well executed I want to take the friction out of the financial planning process and make people feel as good. Two years later, three years later, a decade later about their financial plan as they did on day one. And I think we play a role in delivering that.

Craig: You mentioned the behind the scenes and I always think that’s the dirty little secret that we all know about what goes on behind the client team, what the advisor doesn’t see necessarily is just often such a mess and it goes back to your regulatory compliance comment about tech debt and firms build up tech debt over many years, oftentimes through multiple mergers and nobody wants to address it because it’s easier to throw bodies at a problem than to bring in new systems and have to spend all that money so you wind up with what I would call the squirrels in the background running the circles to get things done, faxing and stuff, because the custodians don’t have the digital process as well so you’re kind of bridging the gap between multiple layers of bad technology.

David: I mean it’s satisfying and dissatisfying. We make the process better but we know how much better the process could be than it is today. I will say, some of it, I don’t think it’s paid enough attention to inside of all that’s trending is adoption. I just think about us, we probably have almost 90,000 advisors registered to use the platform, about a quarter of America’s financial advisors are registered Docupace users but I don’t have that many monthly active users in the platform. I probably get two thirds of that that are monthly active users. But I think back to my time at First Global I could deliver a ton of great technology to financial advisors and I think we did, but only about 50% of them actually used it. The problem with this for the industry and I don’t know how much we’ve solved for this is I think the chasm between technology haves and have nots is getting really really wide to the point where I don’t know how wealth management firms that are serving multiple financial advisors viably create a digital strategy when they can’t attach the digital strategy to enough of their financial advisors. I don’t know how financial advisors who have fallen behind in technology adoption and a lot of them have, I don’t know at this point how they catch up. And I don’t know how you start to drive in the industry for standardization and process and a great client experience when not enough people will attach themselves to it. I think there’s a big fundamental challenge that just comes from adoption. We can build beautiful stuff all day long but financial advisors and wealth management assistants just kind of kind of want to keep doing business the way they’ve always done it because they’re used to it. I do think that’s a legitimate and challenging headwind for the industry as a whole and I don’t know that any of us really know how to solve for that in a big way. I definitely don’t, not yet anyway.

Craig: We work with some of the largest the top 10 broker dealers in the country and they had the same issue, that they can’t get 100% adoption unless they force the advisors to do it by threatening not to pay them, like we won’t pay you, unless you do this. Then they get adoption but otherwise the advisors do what they want because they do things the way they’ve always done them and it’s very difficult to prove to them that investing the time and effort to learn a new piece of tech or change the way you’re doing things will improve because they don’t see that, that payoff down the road.

Execution is Key to the Back Office

David: Yeah. Back to the real quick back of this bigger fundamental shift I described on execution, at Docupace we’ve sort of decided that in order to really be able to step into this sort of focus on execution which I think will be the next decade or, I think we’ve got to really decide who are the deep partners for us. And then after that, you know, what do we want to do to incorporate the capabilities that aren’t in those deep partnerships, what do we do to incorporate those capabilities into the Docupace platform? So we’d say, CRM providers, financial planning software, the platform TAMPs and the custodians are really critical because they’re universally adopted, no matter if you’re an RIA, an IBD, a financial advisor affiliated with an insurance firm, you’re probably going to have a CRM platform, financial planning platform, a TAMP you’re working with and at least one custodian. It’s going to be a universal ecosystem and I think Docupace can pay a can play a pretty big role in unifying the experience together across that.

But it opens up the question well, for everything else into the back office that’s not those four things, how can Docupace play a bigger role? That’s what drives us to say, well, what about advisor compensation or what about compliance or what about money movement or securities movement or what about reporting or what about data warehousing? There’s so many other components that are part of the back office that are not solved by CRM, financial planning, platform TAMPs or custodians that I think play a pretty big role and to the extent that we’ll continue to be acquisitive and I suspect we will, we’re going to ask the question how do we create a great experience for the clients we’re privileged to serve and consolidate their back office experiences together?

Craig: Can you give us a two minute overview of how you got to where you are now? You’ve been CEO of Docupace for a little over a year. Congratulations, but you came from First Global where you were for over 18 years. So how did that experience set you up for what you’re doing now and how does that influence how you run Docupace?

David: I guess I’ll focus on a couple things there, one you know I spent a lot of time there and a lot of my time at First Global at least for the middle part of my career there was really building our investment advisory platforms and I got a lot of focus on technology during that time and it started pretty simply, which is when you’re trying to figure out how to scale our investment advisory platform in a meaningful way for our financial advisors. So we actually built a turnkey asset management platform at First Global in 2003. We built a model management platform, portfolio accounting system, reporting, billing, trading, customer portal, financial advisor portal, we had all of this built out, we built it in 2003 released in 2004 and I was pretty key and developing and releasing that. And as a result we turn that business by the time that we sold it, about a quarter of our revenue was coming from our home office, which is unheard of. For most people it’s 3%. For us it was 30%. Home Office TAMP was on the verge of being the biggest advisory platform at First Global, this is a nearly $20 billion platform. So you know I got to know a lot about technology scale automation process serving financial advisors through that experience of building out that platform.

Along that journey we had a belief that part of our service experience to financial advisors was creating a frictionless back office. The financial advisor experience for us was tantamount, particularly in serving CPA firms, as we did at First Global those relationships with the CPAs had were decades in the making prior to them becoming wealth management clients. Operational service process failures could damage a three decade relationship for a CPA firm, there was no tolerance for getting that wrong. So we really had to focus on creating this back office experience.

And we used Docupace as the core technology to do it, we were opening accounts in three hours on average, advisor satisfaction with the back office was 97%, we really created what I think is a really beautiful consolidated advisor experience. Docupace was integrated with Redtail and Envestnet, and National Financial and it was this hub of connecting all this technology together. Just from a technology and operations perspective, we’ve got a lot of experience trying to drive advisor satisfaction by using tools like Docupace.

The other piece which is relevant for me as a person is trying to think about higher purpose of business. And I tried to bring that to First Global and I’m in the process of bringing that to Docupace, but I do believe the purpose of business is to make people’s lives better. That’s the reason why we exist. And it’s not to say that profit isn’t a part of the motivation, profit is what keeps the business growing and serving and doing work but if you lose sight of the fact that the purpose of your business to make people’s lives better, bad things start to happen.

I’ve had the opportunity to spend some time with founders of the Conscious Capitalism movement, I’m part of the advisory board here in Dallas and it’s sort of built on four fundamental principles. One is the higher purpose of business, at First Global that was to enable intentional living, at Docupace today that’s to make financial planning, financial planning well executed. And then the next piece is our stakeholder orientation. I think that’s really relevant in the financial services industry, the idea that your relationships with all of the business’ stakeholders are designed to elevate everybody’s experience. So a practical version of this is well you can go take $1 away from your clearing partner and put it in your pocket by negotiating a better contract, but what if that makes your clearing partner weaker which in turn makes your service experience for your clients weaker? At some point taking money away from your partners doesn’t make your experience any better for your financial advisors. I’ve always known that my business partners I may not be able to be their biggest partner relationship but I could be their best. That’s a big part of how we run the business.

One of the ways we gauge success at First Global we do at Docupace it’s just by having a very simple four part stakeholder model which is being great to our employees, or being great to each other, being great to our clients, being great to our prospects, the people we would have the future privilege to serve and being financially great. If you can make sure you’ve got a good allocation of time, energy, dollars, everything into those buckets, not to say they should all be 25%. Some years, some get a little more attention than others but no one should ever be zero. If you can keep those things in balance, reward an executive team to be focused on those four things, the business will grow in the right way over time.

And then the last two tenants of Conscious Capitalism which are important for me and I can learn this and practice it at First Global is conscious leadership and conscious culture. To be focused on being authentic in your leadership and having a culture that you know what it stands for and you work on it. I think we did that well, my last firm. And I think we’re doing that well at Docupace today and as part of the Docupace journey. So, long, long answer to your question but I took two sides of it what I learned about technology, what I learned about culture and bringing that to Docupace.

Craig: This podcast is made for long answers. We like long answers. We’ve covered a lot of ground, and I appreciate you being here, we’ve run out of time. So, David, thank you so much for being here.

David: It went by incredibly fast Craig.

Craig: I like that because everyone seems to be happy and enjoy talking about these things that we like to talk about, and that we’d like to share with our audience. And as I said earlier, I like to talk about things that I find interesting and it seems to overlap with a certain segment of the industry and that’s good for us. So thanks a lot David for being here, I appreciate your time, man.

David: Craig it’s been a privilege. Thank you.

Click here and schedule a free Discovery Session to find out how Ezra Group can help your fintech firm grow revenue in the wealth management space.

%d bloggers like this: