The WealthStack Podcast
00:09:54 · Shannon Rosic
[00:09:54] S1: It still blows my mind that Europe and APAC region are just feels like a million light years ahead of The United States when it comes to digital banking, but that's a whole other conversation. Yeah. But I do appreciate the background and context, but... And I wanna jump into our first segment, Mark, that I call stats all folks, and I pulled a few stats that feel relevant to this conversation. And one of them you actually already dropped, so I wanna come back and ruminate on that one a little bit because you found that advisers spend up to 80% of their time on admin, not clients. And another stat I found was that McKinsey estimates the industry could face an adviser shortage of an upwards of... We're looking at 6 figures, probably about a 100,000 by 2034 at current productivity levels. And you actually also recently shared a customer story saying its platform is saving advisers ten hours a week at a $25,000,000,000 RIA, which is quite impressive. So when you hear those numbers together, what do they say about the real bottleneck in wealth management right now, you think?
00:10:54 · Mark Swan
[00:10:54] S2: Yeah. So the McKinsey report, I think, is actually... As one of the most fantastic reports, which I think summarizes where that bottleneck is. And if you think about demand and supply, right, so what is demand for financial advice, right? It is accelerating, and in particular in The US, right? So wealth is just growing significantly, right? And that is both from a wealth transfer perspective, but also just like new wealth is growing, right? Recall that about, you know, the number of people who have more than, I think it's 500,000 in assets, or I think maybe it's either 500,000 or a million in assets is growing by eight times faster than the rate of the population. And people are just getting wealth more at a higher rate than just population growth. What that means is demand for financial advice is growing, right? People have more complexity. And even on the higher end, also clients are demanding more, right? So where your typical advisor might have just done almost like brokerage type style relationship. Now you have a full financial advice, financial planning, you typically get maybe doing tax planning, states, like things that were actually reserved for family office are now actually being kind of squeezed into the same 1% fee to clients today. And I think that will continue to grow. So there is one side, which is just like complexity and demand is growing on the demand side. And I actually don't believe that will ever change. I think that's just a chart that's just growing like this, right? And so then the question is, who's going to supply this? And on the last, I'd say, kind of ten years ago, the argument might have been that Robo will actually start solving this problem. So AI will replace the need for an advisor, and we'll be able to actually service clients. And I actually think that experiment has played out really unsuccessfully, actually. I think clients have voted with their feet, they don't want an AI managing their money. And I think that, you know, I always think of this as like in the war between performance and service, right? Like, that's the ultimate of two things that advisors provide. I actually think service is really why people stick around, right? Whereas Robo was maybe thinking that service was not important, and it was ultimate performance, right?
00:12:58 · Mark Swan
And so if you believe that service is important in the relationship, and you believe that humans are important in the relationship, then you need to bet on the humans essentially providing the supply for wealth management advice. And by tying this all together, you then look at, okay, how do we get more out of human capacity, essentially? And at the moment, the number of advisors who are retiring and leaving the industry is essentially the same as the number of coming in. It's actually, I think slightly negative actually, where there's more people leaving than coming in. And so on one side of the numerator, you've got all this demand. And on the denominator, you've got actually a decreasing number of advisors. And you have all this capacity gap problem, right? And the question is, is servicing this demand? And we believe that humans and advisors will still do that, but we need to actually unlock their time. And so coming back to your first bullet point on the 80%, what are advisors doing all day, right? And what are teams doing all day? And if you actually look at it, a lot of it is administrative work, right? It's sitting in emails, trying to service requests from clients. It is being able to then prep for meetings, do follow-up. It's then on their team side, typically not the advisor, but typically their teams like trades, doing cashiering, doing RMDs, like basically interfacing with custodial platforms, trading platforms, and so on. And the idea is that if you can actually help streamline all of that work that goes in around servicing clients, then advisors can actually start managing many more clients and actually having many more kind of touch points with the clients that they do have. So basically take that time back and help them redistribute that to more time saving things. So it's ultimately demand, supply and demand. The demand is there and is growing. And the question is just how do we unlock more human supply, essentially.
00:14:43 · Shannon Rosic
[00:14:43] S1: I love that. Unlocking human supply and capacity. I think that's a great way to put it. And quelling fears out there that AI isn't coming for advisers, it's really meant to, like you said, be more of that solution to be their copilot so they can do more because Right. At the end of the day, the human element is is incredibly important. The majority of this industry is based on human relationships. That's how things get done. And so there's always going to be that emotional and psychological element to money, where people are always going to feel better talking to another human than a machine when it comes to making those kind of decisions. So I'd... I would agree with you there. And I... I'm curious your thoughts because you're obviously making the bigger argument that AI should help complete operational work end to end. So let's get under the hood a little bit. What does that actually look like inside an RIA in practice? If somebody were to utilize the Nevis platform, you know, what could their ideal day to day look like?
00:15:35 · Mark Swan
[00:15:35] S2: Yeah. So let me explain, like, how Nevis works underneath the hood a little bit. There's two core products to Nevis. Right? And they solve, I would say, the two biggest problems that firms have. So the first part we have is what we call workflows, essentially agent builder product, and it allows firms to map their internal operational workflows. So say, a type opening or transacting on RMDs or reviewing compliance, these types of things allows them to build those building blocks, actually, essentially just using Nevis agents, we have connectors into many different systems, you can pull information, complete workflows, essentially build the building blocks of workflows, and actually help automate those steps end to end, right. So that's like part number one workflows, agent builder. And that's where firms are using that to map their internal operational processes, and help automate a lot of those steps using nevus solution. So that's the first part. The second is then you might have the best operational processes in the world, but you still need advisors to adopt those workflows. Okay. Now the problem exists today that advisors don't like going into take a Salesforce, an example to go and trigger a certain workflow, right? Why? Because it's typically seven clicks deep into triggering that workflow. At best, they might assign it to a team member, right, who then will do that work. But things get lost because where the context is happening, whether that's in a meeting or an email or even just in your head, it's like very difficult. The operational friction is too high to then trigger this back office processes. And so the second core part of what we build is an AI platform, right? And the AI platform is where advisors and their teams live all day, right? That is where they can see all their clients. That's where they can chat to the Nevis assistant and pull up any information they need on a client profile or create a task or trigger a workflow. That's where we have our own note taking solution. That's where we've got an email client where you can actually seal your emails and trigger tasks from email. And really, this is if you like the productivity platform for advisors, and really the value comes from having both. So how do you meet advisors where the context is really happening in email, in a meeting, and so on?
00:17:40 · Mark Swan, Shannon Rosic
And how do you then link that to the operational process side, which is really running on nevus workflow, Pagenta product. The last thing I just mentioned also in terms of how we have helped firms, right? I'd say the platform is 90%, a lot of the value, right? So like the core kind of product, but the last mile is actually by far the most complex part, right? So account opening on one firm looks actually very different from account opening on another, right? Their custodians might be different. They're the way to simple things like should disclosures be in the same DocuSign, should it not, right? Like all these things. And with the workflow builder that you can customize the flows to be specific to certain firms. And for some of our enterprise clients, we actually are building out and have scaled out four deployed engineering teams who actually work with those big enterprise customers to to do those deployments. And so actually remap and help customize a lot of the work so that the the way that they're building the agent builders is actually specific to their firm. And that's been a big part of what we've been doing as well. [00:18:41] S1: I appreciate that. And I wanna pivot a little bit because this certainly piqued my interest when I saw the news. But you actually recently acquired Leader AI, which seems like a pretty strong signal that you believe voice is going to become a much bigger interface in adviser tech. So why was that acquisition strategically important, and what does voice unlock that maybe dashboards and menus just simply don't?