“One of our calling cards I think has always been that we try and showcase some of those firms that don’t get a lot of attention. I get calls from probably 30, 40, 50 of those firms. We don’t want them all at T3 because a lot of them, we just think, don’t have legs. But the ones that do we want to bring them to the attention of the advisor public and to the ecosystem at large.”
–Joel Bruckenstein, Technology Tools for Today
In a world where the rate of change is constantly increasing, it’s become harder and harder to keep up with the latest innovative technology products. The T3 Technology Tools for Today conferences have been a boon to the wealth management industry, bringing in a huge cross-section of vendors and clients together in one place to improve the advisor tech stack.
I spoke to Joel about how M&A activity has been surprisingly high since the pandemic started to wane, about new events planned for this year’s T3 Conference, and a whole lot more on this very special, 100th episode of the WealthTech Today podcast.
Welcome to 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. If you are planning to attend the T3 Conference this September, use discount code EZRA2021 to receive $100 off your ticket price.
- Carson Wealth [20:20]
- Envestnet [10:21]
- Foundation for Financial Planning [24:23]
- FP Alpha [10:42]
- Holistiplan [12:20]
- InterGen Data, Inc. [21:57]
- InvestCloud [10:04]
- Mariner Wealth Advisors [20:11]
- Orion Advisor Technology [10:22]
- Redtail Technology [28:50]
- Salesforce [25:32]
- ScratchWorks [19:25]
- T3 Conference Overview
- Mergers & Acquisitions Change the Industry Landscape
- The Rise of Model Marketplaces
- ScratchWorks at T3
- The Foundation for Financial Planning
- Salesforce Expanding their Wealth Footprint
Complete Episode Transcript
Craig: I’m happy to introduce my guest for this episode is Joel Bruckenstein, producer of the T3 Conferences, consultant extraordinaire, co-author of the T3 Insight Information Technology Survey and the soon to be released, T3 Insight Information Conference Survey. Hello Joel.
Joel: Hello, Craig. How are you?
Craig: That’s the longest intro I’ve ever read.
Joel: I’m sure it’s not.
Craig: But well worth it. I’m doing great, man. How are you?
Joel: Great, good to see you. Good to talk to you.
Craig: Yeah, I’m glad you’re here. You were a guest on episode number one. And now you’re going to be guest on episode 100. How do you feel how does it make you feel?
Joel: I am honored. It’s like I’m honored to know that you have been a just about every T3 conference we’ve ever done.
Craig: Almost, I’ve done my best. I think I missed one or two of the very, very early ones, when copier vendors were still showing up but I’ve been to a lot. It’s a great conference, and it’s always brought out some great companies and great content and that’s why I went in the first place before I even knew you, was because of the content. I liked the sessions and the panels and then of course the networking.
Joel: Well it’s funny you say that because, going all the way back to when I was a chapter president of FDA or even before that when I was on the board of one of the local FDA chapters in the New York area, I always argued that content is king. If you have great content, that’s what people care about most of all. And one of the findings in our survey that’s coming out, basically confirms that. I mean, the good advisors, the ones that you want at a conference, they have almost an unlimited amount of content that’s available to them and so many conferences today. So what really motivates somebody to go to a conference? Yeah, it’s great to have good food, it’s great to have a great location but they can afford that on their own. What they want is real valuable information that’s actionable for them.
T3 Conference Overview
Craig: Exactly, so why don’t you give us a 30-second overview of what T3 is for anyone who’s listening who doesn’t know?
Joel: So T3 is the only true technology conference for RIAs that’s just technology. There’s a lot of other conferences out there that have a technology track that do a little bit of technology. From our founding the premise was, we want to do a conference that’s just about technology for advisors, and we don’t just want in the exhibitor booths, salespeople. We want developers, we want the people who run those companies. We want them to be able to interact directly with advisors and to have a conversation and to get real feedback. What I found early in my career as an RIA is you know I’d tell a sales guy something and it never got to the developers and certainly didn’t get to the developers the way I said it. And so I think it’s really important for the people who develop technology for advisors to actually see advisors at least once a year. That’s part of the premise, and the other part is, you know, we want to introduce new firms that we think really can make an impact on advisors lives. And the other thing we want to do is be the place where everybody in the ecosystem gets together at least once a year.
Craig: It’s important to get together and we’ve seen that as everyone’s felt that they’re missing stuff. With the pandemic everyone’s stuck at home, they’ve really felt that lack of human interaction, that lack of face to face, and you guys are changing a bit due to the pandemic you’re combining what used to be two conferences, the enterprise, and the advisor, so can you talk about that and how it’s going to change the feel of the conference?
Joel: Sure, so first of all let me say that a lot of my vendors for a number of years have been asking me to combine the two conferences, and we were a little resistant to it, but circumstances being what they are, and really not having an opportunity to do a conference in the first half of the year, we already had a space booked for the fall so we just said we’re going to wrap everything into one big conference. We’ll do close to a full week, Monday, Tuesday, Wednesday will be the advisor portion, and perhaps ScratchWorks which we can talk about in a second. And then the latter half of the week will be devoted more to enterprises, so it’ll be a full day, whether it’s two half days or one full day of enterprise.
Craig: Sounds like a good mix here because you’ve got all the vendors there and a lot of the vendors overlap so why not do it.
Joel: First of all, the vendors overlap and what we really found particularly over the last three or four years is a lot of the attendees overlap too. So historically, in the first, let’s say 10 years or more of T3 Advisor, we got almost no broker dealer/bank insurance company execs. Over the last few years we found a lot of them were coming to Advisor, and it wasn’t always the same people who would go to Advisor and Enterprise, but they would go to both for different reasons. So people coming to Advisor were trying to kind of gauge what advisors were looking for and feeling, and basically to gauge some of the startup firms, less mature firms. And really the focus of Enterprise was more on the more mature firms, and a lot of things around adoption and things that only really matter to the larger firms. The other thing we found is, because there’s been a lot of M&A activity on the adviser side, some of the very large advisors, some of their issues and problems were better addressed at Enterprise than they were at Advisor. So now the lines are a little more blurred, let’s put it that way.
Craig: I would agree because we work with a number of RIA aggregators or RIA consolidators and they operate very similar to how an IBD would function, the only thing is differences legally right they’re not under FINRA. Otherwise, in terms of their technology.
Joel: So they come to both, but they wouldn’t send the same people to both. People who are in charge of let’s say, finding new and exciting technologies would come to Advisor because that’s usually where the emerging technologies are, and then they would send somebody to Enterprise to deal with more of the maturity issues. How do you get implementation, how do you get people to actually use new software once you roll it out, those kind of things. How do you manage multiple licenses, how do you manage cybersecurity at an enterprise level versus a small firm level.
Craig: When you’ve got multiple RIAs under your purview, multiple independent firms that each need their own databases like their own CRM, they need to be separate. Their own permissioning. You tend to have the same problems as other enterprise firms that are very different than a standalone RIA would have.
Joel: Couldn’t have said it better myself.
Mergers & Acquisitions Change the Industry Landscape
Craig: So let’s talk more about that, we’ve combined Enterprise and Advisor, as you said, mergers and acquisitions are coming fast and furious, we don’t expect any shortage of those. I’m hearing from more PE firms, my company Ezra Group, we’re hearing a lot more from PE firms asking questions, poking around the industry, hey we’re looking to invest in FinTech now it’s a hot space now all of a sudden they want to get involved. Are we going to see more P firms at T3 and how will that change how things work?
Joel: Well I think we started to see that transition two or three years ago, and for a number of reasons. I mean, there are PE firms that own a lot of the companies that have starkly participated in T3, so they want to come there to support their investments if you will. And a lot of them are looking for additional investments. Last year for the first time, we also saw some stock analysts. And the reason you know primarily was the TD-Schwab merger so people were trying to figure out if it was going to happen, what it was going to look like, and if there was going to be more of that kind of activity going on.
So the mix has changed. When we started we were strictly T3 Advisor, strictly for advisors. T3 Enterprise was primarily for IBDs because there were a lot of them at that time, we knew there was going to be a lot of M&A activity there and that market was going to shrink. We’ve opened up over time to the roll ups, credit unions, we have some overseas banks coming now to Enterprise. So the mix has changed over time and particularly with Advisor, where it was all advisors. Now, advisors are still a great part of it, but the mature firms don’t necessarily come to T3 to get more advisors, they come to speak to their existing advisors because they come to T3, they come to do integration deals, they come to also check out the M&A space because a lot of the firms that have been coming to T3 for years, certainly, some of them have been acquisitive over the years. Look at everybody from some of the broker dealers the custodians, Envestnet, Orion, to name just a few. All of these firms have done acquisitions, so that’s where the ecosystem meets and all the magic happens.
Craig: True, and the I’ve noticed more startups at T3. I know last year there were a number of interesting companies like FP Alpha, that were just starting out and showing new technology, which I think is very interesting to people because that’s what they want to see. They want to see what’s new, what’s out there, they want to see what’s different, what they don’t have, and what they can either bring into their firms to give them a differentiator, or help to to launch some new products based on that.
Joel: One of our calling cards I think has always been that we try and showcase some of those firms that don’t get a lot of attention. On a typical year, I get calls from probably 30, 40, 50 of those firms. We don’t want them all at T3 because a lot of them, we think, don’t have legs. But the ones that do we want to bring them to the attention of the advisor public and to the ecosystem at large.
Quite frankly I think this past year has been very challenging for those types of firms, because it’s very difficult in this environment for them to get attention. And so I think there’ll be fewer of them than during a typical year. And some of the ones that we saw launch last year will be returning, and will get more attention this year. When you mentioned FP Alpha, I think is a really good example of a firm that was very raw last year but I think had a lot of potential, and since that time, they’ve come a long way. I think people will be impressed with the growth and the progress they’ve made over the past year.
The Rise of Model Marketplaces
Craig: Another firm I wanted to mention was Holistiplan, they were at your conference last year and I thought they were an interesting vendor with some new tech. Another thing that we saw that was new, was model marketplaces. Do you see a lot of model marketplaces coming to T3, and what’s behind that expansion of that particular distribution channel?
Joel: Sure, I think there’s a couple of things at play there. Software companies struggle because advisors don’t want to pay BPs for software, they want to pay a flat licensing fee. A number of firms tried to charge BPs and basically all of them failed with that model. So how do some of these firms hope to get paid something more than a licensing fee, well in asset management people do pay this. So, if you can put a model marketplace together and get enough advisors on it, you have some ability to create scale, and create some growth, other than a flat fee and having to worry about raising prices every few years.
So yes, we’re seeing more and more firms trying to roll out model marketplaces. At the same time, you have asset management companies who want to add value to advisors and typically in the past they had wholesalers and those wholesalers added value, today they don’t. It’s very hard to add value, because it’s become a commodity. So they’re looking for new distribution, and these model marketplaces are a great way for them to get distribution. That’s what’s happening, and because of that, a lot of firms have initiated model marketplaces over the last few years in our space. And I mentioned to you earlier, I think you’ll see at least two more roll out, if not more model marketplaces before T3 rolls around in September.
Craig: I would not be surprised in the least by that. We’ve done a number of projects for almost every type of firm that’s involved in model marketplaces, whether we’ve done for asset managers, for fintechs looking to launch model marketplaces, for wealth management firms interested in model marketplaces. We’re seeing model marketplaces launching and expanding in other areas, not just models but more and more marketplaces for annuities, marketplaces for alternative investments, and a lot of other products. It’s becoming a really a very interesting topic for people.
Joel: Those are a little bit different and you have to give Envestnet a lot of credit for that. I think they were the first ones that really got a lot of attention for it and were very vocal about some of those other marketplaces, whether it’s insurance, debt, what have you. I’ll tell you the only surprise to me, is that it’s taken so long. To me this is a natural extension of what advisors do anyway. Advisors never had much of a financial incentive to advise on debt, good advisors always did. Same thing with insurance, but advisors are in a better position to know what the client’s situation is and what the appropriate product mix is. If you’re looking at insurance for example or somebody who’s trying to extend loans, if you think about it, the advisor/client community is probably a much better risk pool, than the nation at large. And so they should be able to give more attractive pricing. It should be a win-win, I do expect it to expand across the industry, to me it’s a no brainer.
Craig: We see that definitely expanding. Just number of firms coming to us asking for help, asking for projects, looking to build out just tells me that it’s going to be an explosion. I don’t have any data on the market share, that these marketplaces are gathering, I imagine it’s low, but at some point there’ll be a tipping point where you’ll see a majority of assets flowing through because it’ll just be so many different marketplaces offering so many different products, that they’ll be tightly integrated into every aspect of an advisor’s technology.
Joel: Agreed. And with regard to the model marketplaces, the challenge I see is how do you differentiate? If everybody has the top asset managers, and we don’t need to name names we all know who they are, there’s no differentiation there so it’s just convenience that, hey, I’m using XYZ portfolio management and marketplace or custodian, it’s more convenient. But I think what you’ll see over time is people trying to differentiate to bring in some unique managers or unique asset classes that others don’t have in such a way that it differentiates you because right now they’re pretty much all the same.
Craig: True, everyone’s looking for differentiation. And that’s why I said that they’re bringing other products, other services or integrating into the platform so if I’m a wealth management platform, if I can integrate it into other tools like Envestnet is doing, like other firms are doing, you know look at InvestCloud. They’ve they rebranded Tegra as financial supermarkets. So they see the writing on the wall as well, and they’re looking to move into that to make it more of a marketplace-like experience rather than a monolithic platform.
Joel: I mean we’re getting a little bit away from technology but you know, I think part of the challenge has been with some of these marketplaces that the product manufacturers have not created the right products for the advisor marketplace. So for example, if you’re a fee only advisor and you want to advise on on life insurance, is there a product out there today that’s significantly superior. to what’s out there in retail, and that better meets the needs of advisor clients. And to date, to a large extent the answer has been no. There is some development out there, there’s a lot of talk about creating specific products for the advisor marketplace, and I think once the product manufacturers really understand what the advisor community needs and what their clients need, then it’ll really take off.
ScratchWorks at T3
Craig: So let’s shift the focus back to technology, let’s talk about a fintech accelerator that you have, at T3 called ScratchWorks. This is really exciting. I think it’d be a really great event at T3 for people who are there. Can you talk about how that’s going to work?
Joel: Sure, so I’ll just give you a basic outline, all the detailed information is on the website, the ScratchWorks website. They’re still taking applications, but there’s a screening process that these startups go through, and if you make the cut you get to the final, which will be at T3, and then it’s sort of a Shark Tank type of event, where you have some of the best people in the industry who are investors in these kinds of businesses. Marty Bicknell, Mariner Wealth Advisors, Ron Carson, to name just a few. And part of the process is if a shark likes them, the shark has the opportunity to invest in one of those firms. Obviously it’s not just getting the dollars it’s also getting the intellectual capital that comes with those dollars that I think can really help accelerate some of these firms and take them to the next level.
So it’s a tremendous opportunity for a firm that’s just starting out in the business, A to get some recognition, B to get some capital, and C to get some intellectual property from some of the best in the business. And we are just so excited about having ScratchWorks as part of T3, quite frankly I don’t understand why it wasn’t part of T3 from the beginning because it is technology focused, and it’s just a perfect fit for our ecosystem.
Craig: We always look back and so why did we do this earlier, it seemed like seemed like a no brainer. You don’t realize until you do it and it works out great. I think also publicity for a lot of the smaller companies can be very valuable.
Joel: Recognition for sure. And think about the people in the audience, the people in the audience as opposed to wherever they were before, it is a tech crowd. You’re reaching the type of people who are going to be the early adopters and most likely buy your technology, assuming it’s technology that’s focused on the advisor community. So it’s a win-win all around.
Craig: Or lots of partners will be there, firms that might want to connect to your API’s or integrate with your system to take advantage of unique features or functionality you have or unique ways you’re working with data, like InterGen Data was at your conference last year when they were really new and they cleaned up. Full disclosure, I’m on their advisory board, but that’s how I met them is through your conference and I would never have known that they were there.
Joel: I won’t hold that against them, that they put you on the board, they’re still a great firm.
Craig: Thank you Joel. Thanks for that warm vote of confidence. But as I see them as being another company that’s gonna do well.
Joel: All kidding aside, they are a great firm and they’re lucky to have you on the board, I really like them.
Craig: It just shows how think firms are changing the way people think about data in wealth management or think about how to use information flowing through the wealth management ecosystem in different ways to provide advisors and wealth management firms with more actionable intelligence.
Joel: For sure.
The Foundation for Financial Planning
Craig: Let’s move on to other aspects, the Foundation for Financial Planning is going to be at the conference this year, so that’s exciting.
Joel: It is exciting. I mean there’s a lot of organizations and things going on in the industry that we don’t intersect with a lot because for the first 20 years I was in this business, everybody thought we were this little technology thing on the side and we really weren’t part of the advisor community. But from the outset, from the beginning of T3, we have always realized that advisors were challenged by technology, they were going to need more technology going forward, and the whole ecosystem would.
You don’t necessarily think of a nonprofit like the Foundation, as a natural fit for T3, but they have some challenges with regard to technology. In other words, they don’t have technology, and they need some help in figuring out what technologies they need, how to become more efficient, how to deliver more pro bono help to those who needed so much, particularly in the times we’re in today with COVID. And so clearly anything that T3 can do and our partners can do to help them figure some of this stuff out, we’re very anxious to do. And so we want to partner with them to help them serve their community better.
Craig: That’s awesome. You got to give back, that’s what it’s all about. It’s all about helping out the industry, that’s one of the reasons why I started my blog and why I was going to a lot of conferences and just trying to give back a little bit. And I think that having the Foundation for Financial Planning at T3 is a great example of giving something back to the industry.
Joel: We really do want to help them and I think just exposing them to what we do if nothing else will open their eyes to the possibilities. And I think the catalyst for that is they have some great board members like Kate Healy, for example, Steve Larson, with T. Rowe Price, Eric Clarke is on the board. So we have some great board members who understand where theFoundation and some of their partners are lacking, and anything we can do to help them come into the 21st century technologically, we’re more than happy to do.
Salesforce Expanding their Wealth Footprint
Craig: One of the big vendors that’s going to be a T3 this year is Salesforce and they’re going to have a much larger presence than before. They’ve slowly increased their presence in wealth management over the years I’ve noticed, and that’s sort of mirrored in their expanding role in T3. What do we have in store from Salesforce this year?
Joel: Salesforce, when they first tried to attack the wealth management space, didn’t really have a good understanding of how it operated, and how to optimize their presence. And I think a number of folks that have joined Salesforce over the years, Andy Wang is one, and a number of his team members who came from other industry participants have a much better understanding. Slowly, they’ve been ramping up their presence at T3 they’ve done it strategically. They’re trying to work cooperatively now I think with some of the other vendors in the industry, much more collaboratively, and they’re encouraging some of their third party partners to come to T3 as well.
As you know M&A activity is taking place in our industry and as you have the rollups, you have these larger firms that really can benefit from what Salesforce has to offer. I don’t even think of Salesforce as CRM anymore I really think of it more as a platform. I think that’s part of the message they’re trying to get across, and what they’re really trying to do is to be a better partner to wealth management firms. So we’re really looking forward to their participation. I look at them less as playing almost a sales role, at T3 and more is playing a role as a thought leader in the industry, and trying to share their learnings from other verticals and trying to learn more about our vertical. I think that’s positive development that’s really taken place over the last two or three years with regards to Salesforce.
Craig: I would agree, we’ve seen them expand their ecosystem way beyond CRM to have so many different options. Their app exchange has hundreds and hundreds of options that firms can deploy software in every different aspect of the business lifecycle, all through Salesforce. They’re moving into different verticals, which is good news and bad news, it’s good because it gives our vertical more choices for firms, especially enterprise firms. Bad news for vendors who have to now compete against them, since they’re so tightly integrated and they’ve become one of the most popular options. Most of our enterprise clients use Salesforce for CRM, it’s almost table stakes, so why not use the rest of their tools?
It’s almost like Microsoft in the past when they built their suites of software, it’s like well why not just use Excel for free, you’re getting it. That it starts to become a de facto option for people and it’s it’s good that they’re showing up at T3 and making a presence and explaining more about what services they’re offering.
Joel: I think there’s really sort of a split in the industry, you have the larger firms going in one direction the smaller firms going in the other, and that’s reflected very much so in the CRM space. I mean Redtail is unbelievable. They have over 150,000 users and for the type of firm that can benefit from what they have, dollar for dollar, there’s no better CRM in the industry. On the other hand if you’re trying to build an enterprise, you need a different toolset, and you may need not just CRM, you may need a platform, and that’s going to lead you to something like Salesforce.
Craig: Joel. You’ve said it all, and I’m gonna have to wrap things up here, time flies, man. So, T3 conference one of the top advisor conferences over the past six years, recognized by Michael Kitces and Kitces.com, and there’s gonna be two tracks, the Enterprise and Advisor, it’s going to be from September 27 – October 1 this year at the Denton Convention Center in Dallas, beautiful place. So, if I’m a financial adviser or wealth management firm or technology vendor, how can I register for this fantastic conference?
Joel: Well you can sign up right now at the T3 website you can go to T3 Conferences, or T3 Technology Hub. There’s an early bird special that’s out there right now. I think we also just sent you for your listeners, a special discount code that gives them an additional $100 off. So you can publicize all that to your advisors, I think it just went out today.
I don’t know what else to tell you, we expect to have a great presence from advisors at T3 this year. We think there’s a lot of pent up demand for some live networking, and to your point, the last time we were in Denton. We just had a great time. I think everybody did, and we want to exceed people’s expectations this year. On a typical year I go to 30 conferences are more, and wow, I kind of went through withdrawal over the last year, so I’m looking to get out.
Craig: There you go. Thank you Joel, appreciate it thanks for giving that to all of our listeners and thanks for being on the program in Episode 100, 100 episodes since your first appearance and you’re still going strong.
Joel: I can’t believe it’s been 100 episodes already.It’s really amazing Craig, congratulations to you.
Craig: Thanks man, talk to you soon
Joel: Talk to you. Bye bye.