invest west conference

Invest West Conference 7 Minute Summary

As anyone who has sat next to me at a conference knows, I’m a hyperactive tweeter, sharing interesting tidbits and observations from the various speakers and panelists.  So, one would expect that someone who uses Twitter so much would think to check the conference hashtag before blasting out fifty or more tweets?

Not I, said the consultant sitting in the first row.

For those of you who were following #InvestWest on the first day of the In|Vest West conference and didn’t see any of my stuff, that was because I posted it all under #InvestWest2018.  Duh.

Needless to say, I was up late the first night reposting everything with the correct hashtag.

In|Vest West is the West Coast version of the hugely successful In|Vest (East) conference that has been held in NYC for the pasty four years. Based on the turnout of attendees, vendors and industry leaders, I would say that the West Coast version is off to a smashingly good start. (See Digital Digest from the InVest NYC 2018 Conference)

In case you were unable to attend, here’s my (roughly) seven minute conference review.

Personal Capital

Personal Capital started out as the un-robo, bucking the full automation trend popularized by splashier competitors Wealthfront and Betterment. Their hybrid option manned by advisors in a call center was initially sneered at and then quietly copied when it was clear that a significant percentage of investors preferred having a human voice on the other end of the phone.

Jay Shah, who took over the CEO job in 2017 from founder and startup legend Bill Harris, sat down for a chat with Suleman Din, Technology Editor for American Banker. (See Bill Harris Takes a Dive at MMI during His Personal Capital Promotional Tour)

Shah, who has overseen an almost 100% increase in AUM, believes that there’s now a greater distinction between pure robo-advisors and hybrid models. While new entrants will come and go, technology-assisted human advisors will be the winner, he predicted.

The call center based RIA has registered 50% growth every year since inception to almost $8 billion, Shah mentioned. Their average account size is around $450k, which puts them squarely in the mass affluent market, he noted.

The $100 billion “instant success” of Vanguard Personal Advisory Services was almost 90% inorganic, since they were just relocated existing assets rather than bringing in new ones, Shah insisted.

Will software eat the world? as venture investor Marc Andreesen once wrote. Will pure automated robo-advisors eventually take over the work of humans? Shah doesn’t think so because humans are highly emotional and prefer a behavioral coach.

He thinks advisors will continue to play a role and they are backing this up by hiring more advisors in their regional hubs across time zones to they can deliver a better client experience. (See Mission: Impossible – Choosing the Right Digital Advice Vendor)


An example of fortuitous timing brought a BlackRock executive to the Invest West stage only a week after they announced their purchase of a small equity stake in leading TAMP and wealth technology giant, Envestnet. (See Is BlackRock-Envestnet Deal a Tipping Point for Lite Financial Planning?)

Mary-Catherine Lader, the COO of BlackRock’s Digital Wealth unit, explained the strategy behind their recent string of investments that include micro-investing app Acorns, European robo-advisor Scalable Capital and alternative investments provider iCapital Network. The $6 trillion asset manager is looking to increase their exposure to different market segments, geographies and asset classes as well as improving the advisor experience.

Co-creation is a buzzword in fintech, Lader noted, which why their work with partners like Orion Advisor is so valuable to their mutual customers.  My opinion is that BlackRock’s deal with Envestnet will not negatively impact any existing partners since BlackRock’s goal is product distribution and that requires getting in front of as many advisors as possible.

Lader defines success in terms of BlackRock Digital becoming the default industry engine for portfolio construction. This is becoming a new goal for many asset managers that have realized the importance of having technology infrastructure that can help them better connect with advisors.

Edelman Financial

When one of the largest independent RIAs merges with the largest robo-advisor the market takes notice.

Edelman Financial CEO Ric Edelman spoke about scale and their growth objectives. Their goal was never to be big for the sake of size. They only grew to meet demand.

Their new partner, Financial Engines, is the original and largest robo-advisor used by 175 of Fortune 500 companies. They have the same market share as the #2-#10 competitors in the space, reported COO John Bunch.

Now that their merger is completed, Edelman declared that the robo-advisor wars are over and the hybrid advice model is the winner.  Does this mean they are planning to assign advisors to all 1.1 million Financial Engines’ 401k clients?

If so, they will probably need to increase their current staff of just 330 advisors who are servicing their $36 billion in AUM.

Edelman has seen tremendous success based on his consumer branding and marketing across multiple media channels: TV, radio and print. Over 150,000 consumers responded to their messaging in 2018 alone.  But the responses are skewed older, he reported, with 80% of inbound leads over 50 years old.

Millennials just aren’t listening to him, but he doesn’t seem to think it is a problem at the moment.

I see younger generations drawn to non-traditional, mobile first financial platforms like Acorns, Stash, and MoneyLion. (See Acorns: We’re Not Just Gathering Assets, We’re Building a Brand)

Also according to Edelman, advisors have a lousy reputation because most only care about their clients who have significant assets and ignore the smaller ones. This seems to tie into the

Custodian Battle

This was less of a “battle” than a pleasant discussion

I’ve heard Apex Clearing CTO Chris Fesler speak at a few other conferences. Every interview seems to ask the same question. Why did Robinhood and Wealthfront leave?

His answer is pretty straightforward. They were both terrific clients who reached a point in their business life cycle where it made more economic sense for them both to go self-clearing.  When Wealthfront launched in 2011, Apex was the only custodian who had the technology to build the platform they needed and support critical features, such as paperless account opening. But now they believe they’re big enough to support the in-house development needed to build new, innovative features to improve the customer experience.

The industry is moving from an investment-forward to experience-forward mindset, making technology a key driver of business success, explained Christina Townsend, Head of Platform Strategy at Pershing Advisor Solutions.

To emphasize this point, hybrid robo-advisor Personal Capital recently switched their $8 billion of assets to Pershing for custody and a completely digital experience.  This is a quick turnaround for Pershing, that only a few years ago was considered to be trailing their other Big Four RIA custodians in digital technology and API support.

While Pershing was busy expanding support for external integrations and customized solutions, Charles Schwab was taking the opposite approach, according to Andrew Salesky, Senior VP, Head of Advisor Technology Solutions.

Schwab built their Portfolio Connect product as a differentiated solution only for assets custodied with them but skipping any options for customization Salesky said. This made things simpler

There’s no race to add raw numbers of integration partners due to security concerns for , but key areas like move money & account opening will get deeper focus


I found MoneyLion co-founder and CEO Diwakar “Dee” Choubey to be quite an engaging speaker, especially his wealth of statistics gleaned from working with the app’s over 3.5 million customers.

Choubey co-founded MoneyLion in 2013 with the goal of combining AI and machine-learning technology with behavioral science to improve consumer finance.  His ambitious goal is to grow their customer base to 50-60 million, which would put them on par with largest global banks.

I was so taken by Choubey and his firm’s business model that I downloaded their app and signed up while he was on stage.  I finished the entire process and was a paying customer with plenty of time left in his session.invest west conference

MoneyLion not only offers a checking account and debit card, but has an aggressive personal lending product that will provide a $500 loan (at a unbelievably low 7%) almost instantly to anyone who signs up and links their checking account.  Through their research, MoneyLion realized that while the average American household is in debt, it is due to inconsistent cash flows.  There are usually nine months of small surpluses, but devastating deficits the other three months (i.e. Christmas). This is where their small, low-interest loans can be used to cover the difference.

70% of Americans can’t borrow from the bank where they have deposits because they don’t have a good credit score, explained Choubey.  MoneyLion has designed a holistic mosaic of consumer behavior and habits to enable credit evaluation without relying on traditional credit scores.

I’ve written about Acorns and how their business model is disrupting traditional financial services and blending it with retail marketing and branding. MoneyLion is doing something similar by partnering with health technology provider Fitbit to deposit $1 into customers’ investment accounts every time they walk 15,000 steps. (See Acorns vs. Stash: Why Micro-Savings Apps Are The Wave of the Future)

MoneyLion’s lending product has disruptive potential, in my opinion. Especially when targeted at Millennials and technology savvy others who are carrying high interest credit card debt.

There are other startups targeting the consumer lending space including Finicity, which analyzes consumers’ checking and savings account transactions to provide new insights into a customer’s creditworthiness.

If millions of consumers are able to easily swap their debt from the major banks like Citi and Chase into these new challenger banks and the default ratios are similar, we’re talking huge profits and subsequent valuations for the upstarts. Missed earnings and downgrades will be in store for the incumbents.

Democratization of Wealth Management

Technology is empowering access to wealth management and asset management, stated Lisa Frazier, Head of Innovation at Wells Fargo. While there are 100 million working people in the US without a retirement account, the ones that do have 3x the income of those that don’t, she observed.

“Disruption is a fact. Transformation is a choice.” Frazier warned.

Many larger financial services firms don’t recognize this disruption and don’t see a need to change their core business model, noted Kendra Thompson, North America Head of Wealth Management at Accenture.  These firms are letting apathy hold them back, she said.

We’re seeing a re-bundling of financial services to provide a better experience for the individual and avoid uncoordinated product silos, noted Lionel Le Meur, Chief Commercial Officer, Qapital.  Qapital started out as an app that helped people save money, but has since expanded into more of a challenger bank. This year, they added a checking account and debit card (outsourced to Lincoln Savings Bank) to their savings product (which is outsourced Wells Fargo).

How much opportunity exists for these banking/savings apps in the US market? Qapital has only 450,000 users, just a tenth of the base of competitors MoneyLion or Acorns. They will need to find a spark for more growth soon to make good on their recent $30 million funding round.

Facet Wealth

I have been waiting for flat rate pricing to start to make a bigger dent in industry market share, but it has yet to transpire. Why a client with $200,000 should pay twice as much as a client with $100,000 for essentially the exact same services should be questioned by more people.

Facet Wealth has jumped on this trend by building a hybrid robo business model around financial planning. They  charge a flat planning fee based on the needs of each client.  They do not charge any assets based fees or commissions. Prices range from $480 a year to $5,000 per year.

They’re big believers in financial literacy and a consultative approach to financial planning has been a key feature of their culture, reported Anders Jones co-founder & CEO of Facet Wealth.

On virtual delivery of financial planning: “many people prefer meeting with advisors virtually rather than in-person,” Jones claimed.

There are 33 million mass affluent households in the country that could use financial planning services and they built Facet Wealth to help this group, Jones noted.

Lenox Wealth

According to Lenox Wealth COO, Steve Reder, FinLife Partners has provided a more efficient way to work, it has given their advisors 50% more time to work with clients and prospects. I have been an admirer of the technology platform and methodology developed by United Capital.  It’s a differentiator for them and is attractive to advisor teams that are onboard with their planning-first philosophy.

But the skeptic in me questions the 50% time savings.  Not taking anything away from FinLife, but I’d like to know what system(s) Lenox Wealth was using before they switched?  Did they had standardized processes in place? Maybe they were just using them in an incredibly inefficient manner?

I don’t doubt the increase in revenue and referrals since a planning-first methodology and their gamification of the process is very attractive to clients and encourages increased wallet share.


Mimi Chan is the founder & CEO of Littlefund, a new intentional way for family and friends to contribute to a fund dedicated to a child’s future goals. For instance, instead of gifting clothing that’s outgrown or toys that will be donated, family and friends can choose to gift a monetary amount that grows at 1% APY in compounding cash rewards.

I never liked idea of “naming” generations which classifies groups of people based simply on the year they were born. But the media, analysts and industry pundits keep doing it, so we keep talking about them.invest west conference

The generation that was born after 2010, immediately following GenZ, has been dubbed Generation Alpha. And though the oldest ones have just about mastered their multiplication tables, innovative startups are creating new, parent-friendly custodial accounts to try and capture assets and eyeballs.

Chan founded Littlefund based on the belief that her generation’s values had shifted away from hyper consumerism, which created a need for a simple and clear alternative to material gifting.  Millennials are more financially conscious as they enter parenthood and prepare for Generation Alpha, Chan insisted.

Similar to a Kickstarter for Kids, Littlefund can help families build their child’s financial foundation, Chan explained. The app is designed to make it easy to contribute to a specific child’s fund. Family and friends can go onto the website and give a gift using just the parent’s email address.

It takes a concept that can be pretty overwhelming to think about at the start of a child’s life and can take some of the pressure off for parents and give them back more time to spend with their children, Chan noted. 

Bank Wealth Management

Every other major technology player is figuring out how to take in user feedback and respond more quickly. Financial services needs to catch up, says Gwen Jorgsens, Director of Client Digital Experience for RBC Wealth Management.

A valuable lesson that many firms fail to grasp is to avoid the sunk costs trap, warned Yvette Butler, Head of Wealth Advisory, Silicon Valley Bank.  Just because money and time have been invested on a project, doesn’t mean it shouldn’t be canceled if the circumstances that made it a good idea were to change.invest west conference

Butler, who joined SVB just five months ago after stints at Wells Fargo and Capital One, stated that just because a bank has a good idea, doesn’t mean they have to develop it all inhouse. Banks that hired software development staff sometimes wound up with “skunk works” that cranked out cool features but lacked proper documentation and support from the rest of the organization. Instead, it is often more efficient to partner with a technology vendor who is more organized in terms of technical support infrastructure.

Most banks should “stick to their knitting”, Butler advised, and focus more on providing outstanding customer service to differentiate themselves.

It’s important to figure out where your vendor partners are strongest and let them do what they do best, such as data management, rather than trying to do everything yourself, Jorgsens emphasized.  There should be a willingness to co-create, she said, since both parties have deep knowledge and expertise in how advisors and clients can best work together.

Being tied to legacy system can encumber critical data and make it more difficult to implement new features, Jorgsens stressed. Her team looks for ways to segment off the work on back-end systems and make front-end systems more responsive.

Almost seven years ago, Bank of the West changed their business model and launched a wealth management platform in Europe, according to Pierre Ramadier, the bank’s Head of Wealth Management.  They now have over $18 billion in assets and are growing at $2 billion annually, he noted.

Bank of the West had 13 non-integrated databases and it often required four weeks to reconcile data to respond to regulatory requests, Ramadier reported.  Two years ago they started to consolidate them into a new, wealth management data warehouse, he stated.

A single data repository is critically important to be proactive and predictive in wealth management solutions, Jorgsens added.

Big Bets in Wealth

Wealth management platform provider, MyVest, was purchased by their largest client, TIAA, in 2016.  TIAA recently added a digital advice channel running on MyVest technology. MyVest also provides some of the underpinnings of hybrid robo-advisor, Personal Capital.

According to an interview with TIAA’s Chief Digital Officer, Scott Blandford, one of the special sauce items inside the MyVest system is that it’s always been household-oriented. It allows them to manage portfolios based on customers’ goals, not only based on their account structure.

There are a number of trends that are at work here: technology improvements are enabling products and services that were formerly available only to institutional clients to be offered to retail customers.  Tools like MyVest’s unified managed accounts (UMA) platform enable wealth management firm to increase scale and support smaller account sizes without impacting profitability.

Banking Rebundled

Every bank seems to have a Head of Digital Wealth Management, but not so many understand the role or the need for digital wealth to tightly integrate across the organization. BofA seems to be on the right track.

Why more broker-dealers aren’t encouraging their advisors to focus less on investment management and more on holistic financial services is beyond me.  An advisor’s true value lies in understanding their clients’ goals and helping reach them. Investment management is becoming a cheap commodity that any robo-advisor can offer for a fraction of a traditional advisor’s fee.  (See Advisor-Managed Portfolios Knocked Out by Home Office Performance – Cerulli)

Citizens Bank & SigFig

Digital wealth technology provider SigFig expanded their roster of financial products when they launched CoPilot, a  platform for financial advisers that offers more than just software, but includes middle and back-office services, such as account onboarding, portfolio rebalancing, and compliance.

The San Francisco firm has had major success building retail-facing digital advice platforms for wirehouse including Wells Fargo and UBS. They recently announced that Providence, RI-based Citizen’s Bank is signing with SigFig for their digital product offering.

While the new CoPilot product won’t connect to SpeciFi, a separate SigFig system that Citizen’s Bank installed in 2017 that provides digital investing for retail banking customers.  So, the retail channel can’t be leveraged to cross-sell for bank’s wealth management group. According to Sha, this is because they target two different types of clients, and some investors prefer a purely digital experience regardless of asset level.

What a great way to end the event!



The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at