Invest 2019 Conference

16 Knockout Concepts from the InVest Conference 2019

“The improvement of understanding is for two ends: first, our own increase of knowledge; secondly, to enable us to deliver that knowledge to others.”

— John Locke, English Philosopher (1632 – 1704)

I didn’t think it would have been possible to top last year’s In|Vest conference for quality of content as well as depth and breadth of vendors and industry attendees.

But they pulled it off.

This year’s In|Vest 2019 Conference was a two-day event delivering a wide range of wealth management-related knowledge including digital advice trends, opinions on RIA M&A and a 48-hour running discussion on advisors’ pricing models, custodians expanding into planning and wirehouse technology plays.

This is my Twitter-driven summary, which I’ve designed to provide you with a quick overview of the whirlwind of activity that included interviews, presentations, and two dozen or so panel sessions. If you made it to the conference, please add a comment below about your favorite speaker or panel. And if you missed it, go ahead and post a comment about which parts of the summary you liked the most.

RIA Business Models

Dynasty’s Strategy Unpacked

Have you ever seen those online ads for Master Classes? I see them all the time for things like How to Write Comedy (Steve Martin), How to Direct a Movie (Ron Howard) and How to be an Actor (Samuel L. Jackson).

We were all treated to a master class in How to Run an RIA Aggregator, by Shirl Penney, President and CEO, Dynasty Financial Partners.

Today’s frothy RIA M&A market sees 15 buyers for every seller, Penney reported. He encouraged RIAs to build out and stress-test a 5 year economic model so they can sell when times are good rather than being forced to sell during/after a downturn with depressed economics.

Their turnkey asset management platform (TAMP) business has $17 billion AUM, which puts them squarely into top 10 providers.  They offer custom allocation models, third party managers that deliver equity, fixed income and alternative strategies, as well as ESG and opportunity zones.

This comment reminded me of something similar that I heard from best-selling author Simon Sinek.  He said that your mindset should be on the long-term and avoid being distracted by what today’s competitors are doing.  Apple doesn’t spend any time at all looking at competitors’ strategy.  They put all their focus on what they’re planning to do in the market.

Penney predicted that the RIA custodians will be looking to move up the value chain and into the middle office space where margins are higher. He also expects more Goldman Sachs / United Capital type deals with incumbent banks acquiring RIAs.

The Pros and Cons of Subscription Pricing

Over the past decade, the average margin for advisors has risen 30% but productivity has remained flat at around 75 clients each, according to Anders Jones, CEO and Co-Founder of Facet Wealth, a call-center-based advice and planning firm, headquartered in Baltimore, MD.

Everyone has been talking about Schwab’s move to subscription pricing for financial planning. Alan Moore, Co-Founder of XY Planning Network believes that it was a defensive move for Schwab and more about marketing, since they’re under pressure from Vanguard and other competitors such as robo-advisors.  While they did attract $1 billion, it seems strange that they’re using AUM as a metric to measure the success of a subscription-based service, Moore exclaimed.

Speaking of robo-advisors, Moore is adamant that we should should stop using the term and should really be referring to them as “robo-allocators.” They’re just rebalancing software with a sexy UI, Moore explained, they can’t compete with true financial planning firms.

“You can’t look at subscription pricing in a vacuum,” said Anders Jones, CEO and Co-Founder, Facet Wealth. The shift away from asset management will continue and the market will adapt, he insisted.

Different pricing models, such as Net Worth + Income, Flat Fee, or Hourly Rate, enables more differentiation for advisors, Moore claimed.  This theory holds true in most other industries, but advisors will have to ensure they have a strong grasp of their business economics before changing models.

While more advisors are looking into subscription pricing, It’s shocking how many RIAs don’t understand their break-even point, which is the first step in the process, Jones explained.

Moore related an anecdote from an RIA custodian who said that 95% of their advisors have at least 50% of their clients in distribution mode. This can significantly reduce an RIA’s valuation. Moore believes that subscription pricing can help attract younger clients.

During the conference, news hit the wire that Bank of America was considering a subscription model for Merrill Edge.

Market Research

Deconstructing Wealth Advice: Drivers of Consumer Choice

I love data! The sessions where research firms share their data and point out market trends and analysis are my favorite at a conference. They not only generate lots of terrific and engaging content, but also make you think a little differently about the conventional wisdom you had been following up to this point.

The #1 reason consumers gave for not using digital advice was that they felt they didn’t have enough money to invest.  At 47.6% that’s a gigantic lift for digital vendors to overcome with marketing and education.  I was surprised but the number considering how much money the biggest firms have spent so far. But it just goes to show that people who don’t live inside the industry have a very different perception of investing than we do.

Another set of stats jumped out at me when I saw the top 5 brands based on social media impressions.  Acorns is #1 and Wealthfront is #4.  I guess social media isn’t as powerful a force for brand recognition as I thought. Or perhaps the breadth of Acorns social media engagement (63% share in March 2019) just powers them into the stratosphere while Wealthfront is just limping along (12% in March 2019) (See Acorns: We’re Not Just Gathering Assets, We’re Building a Brand)

World Wealth Report 2019

Abhishek Singh from Capgemini shared how to help wealth managers and HNWI clients to navigate these disruptive times using the results from their 23rd Annual World Wealth Report.

Despite the importance HNWIs place on digital capabilities, the personal connection is still important. Those HNWIs who feel connected to their advisor have nearly 2X net new inflows and are 25% more likely to provide referrals.

Artificial intelligence represents a huge opportunity to deliver significant value in enabling wealth managers to better meet HNWI client needs. Service quality remains THE top criteria that HNWIs use to select their primary wealth firm.

Historically, the resistance of wealth manager towards adoption of digital advice was a major challenge. But now wealth managers are demanding more tools and support to enable them to better meet their HNWI client needs. The biggest gap exists between what advisors’ see as their most important needs and the strategic focus of their firm.  The second biggest gap was in their Process and Support Structure.

The Ubiquity of Digital Advice

Everyone seems to be talking about this now.  Digital advice has become tangle stakes in wealth management, as I predicted a number of years ago. (See How the Robo Advisor Renaissance Pushed the Industry Out of the Dark Ages)

You know that something has become ubiquitous when even the wirehouses are telling you that they have it.

My simple definition of digital advice is a self-directed wealth management experience.  A more complex definition is also required as firms start piling in everything and anything and slapping a digital label on the mess.  Can you refer to a call center full of recent college grads with CFPs as digital advice?  Yes you can!

Activating Digital Hybrid Advice

This session highlighted best practices around commercializing hybrid digital advice models. Speakers were Randy Bullard, GM Wealth at SigFig, Patrick Rodman, WellsFargo Head of Digital Advice, UBS Head of Wealth Advice Leonard Golub and Salesforce Financial Services GM Rohit Mahna.

“Digital adoption is a one-way street in all markets. People don’t install Uber, try it, then delete it and say, ‘I’m going to go back to hailing cabs.’ That just doesn’t happen.” — Randy Bullard (See Ep 9: Digital Advice Trends with Randy Bullard)

I’d like to know how Gavin made it to both my CRM session and Randy’s digital advice panel when they were going on at exactly the same time.  Did he clone himself?

Leonard Golub from UBS Wealth Advice Center shares that guidance from advisors is key for investors to adopt their digital advice tool (90% of clients would not be using the tool without). is the mode and advice wins over pure digital

Let’s Think Outside the (Digital) Box

It was a pretty big chunk of industry market share that was represented on Seb Dovey’s panel on digital advice when you combine the assets of BlackRock, RBC, LPL Financial and Edelman.

Martin Small, Managing Director, BlackRock explained that it’s important to recognize what advisors and clients really want and stop trying to distract them if you’re not providing the value they’re looking for.  If a restaurant keeps telling you that they have great bathrooms with golden toilets, you’re eventually going to ask, ‘Well how is the food?'”

“You can overwhelm advisors with functionality, but in the end, it’s the integration that matters.”

— Rich Steinmeier, LPL Financial

Our industry is more about relationship management or information management rather than financial management, stated Rich Steinmeier, Divisional President at LPL Financial. Advisor adoption is the core inhibiting factor that limits the ROI on digital transformation, he added. All of the initiatives at LPL are evaluated based on whether they make advisors’ day-to-day workflows more efficient.

The holy grail for success in financial advice is the ability to scale personal relationships, explained Kelly O’Donnell, EVP and Chief Risk Officer, Edelman Financial Engines. It requires a combination of empathy and technology to achieve. (See Future Shock: Ric Edelman Predicts The End of the World As We Know It)

Edelman has over 1.1 million clients with average assets of $175,000, O’Donnell reported.  This is very low when compared to the industry average, but is probably weighted down by the 401(k) accounts that came in from the Financial Engines merger, which I would guess could be extremely small. BTW, average client assets are (per Cerulli Associates):

  • $459,000 for RIAs <$25mm in AUM
  • $644,000 for RIAs $25mm to <$100mm and
  • $2.5mm for RIAs $100mm to <$500mm

The technology includes AI and ML-driven personalization to be able to know more about clients than they may know themselves.  Predictive analytics will be leveraged to deliver personalized advice at scale, she predicted.

“When will we hear people describing the joy they find in financial services?” asked Seb Dovey.

What Does It Really Take to Modernize Advice?

Speaker: Michael Spellacy, Senior Managing Director, Accenture Global Capital Markets Practice Lead

Digital Advice v1.0 had serious shortcomings:

  • Lack of quality
  • Limited product offerings
  • Incomplete vision
  • Generic user interface

Despite the digital disruption in the wealth industry, Spellacy stated, the components of good advice remain the same:

  1. Perspective
  2. Client engagement
  3. Relationships

Betterment Still Wants to Win the Robo Wars

Betterment CEO Jon Stein came out swinging as he opened the Invest conference first day on the main stage.  Throwing grenades left and right he took shots at all of his competitors and the market in general. He also announced that his B2C/B2B Robo-advisor breached the $18 billion AUM mark.

Electronic onboarding was certainly the biggest innovation created by the robo-advisors, in my opinion.  An engaging user experience was the other. A lot of RIAs and broker-dealers are still racing to catch up. (See Advisor Group’s eQuipt is a Quantum Leap in Onboarding Technology)

“The future is not written by the incumbents.” — Jon Stein

Wirehouses Want to Stay in the Spotlight

JP Morgan and UBS were both sponsors of the event and took center stage to explain their vision for an all digital advice future.  Both are financial services giants that want to appear nimble and innovative to avoid being disrupted by a seemingly endless stream of fintech startups as well as the usual suspect FANG / Internet behemoths.

JP Morgan Wants to Get America Invested

Dr. Kelli Keough, Global Head of Digital Wealth Management at JP Morgan is interviewed by #1 Social Media Influencer, April Rudin, on how the bank executed on their 2015 digital strategy. She acknowledged that the digital journey never ends as they hustle to keep up with ever-changing client expectations.

JP Morgan is in the process of digitizing every part of their business to create an “ecosystem” for customers to live in— kind of like how Amazon, Apple, or Google do, said Keough.  I’m highly skeptical that a bank can design such an ecosystem that is anything like Amazon, Apple or Google.  Especially a bank that has 15 different lines of business, 250,000+ employees and as much entrenched bureaucracy as they do.  Well, they could eventually build an ecosystem that was like a snapshot of what one of those firms had five years ago. But but by the time they do, consumer expectations will have changed to whatever the more innovative firms have moved to in the future.

Keough claimed that her team introduced design thinking to an organization that didn’t really know what that meant.  If this can spread to other lines of business, it would lead to better products, services, and internal processes across the entire bank.

“We know we’re doing a good job on client experience when clients aren’t thinking about the technology,” Keough stated.  

I wasn’t sure what to make of this insight that Keough shared.  It raises a hundred questions in my mind:

  • Why would a customer walk into a branch to discuss something they interacted with on their computer?
  • Is that a sign that the online offering is insufficient to meet their needs?
  • Are they speaking positively or negatively about the online offering?
  • What is the average age of the customers that visit branches?  Maybe they’re just Baby Boomers who aren’t comfortable banking online.

Client Digital Experience: Lessons from UBS WMA

Speaker: Kraleigh Woodford, Managing Director, Head of Digital Client Experience, UBS Wealth Management.


Woodford explains that because UBS can build an app, it’s an example for other wirehouses to try & build something — but they’re still catching up to innovative startups.

Comments from #DesignTwitter about the UI/UX of UBS mobile app:

  • Design is circa 2010
  • Looks like a logic puzzle from a 1999 LSAT
  • Functional, but not exciting

Five Industry Trends Reshaping Financial Advice

An insightful and very informative presentation by financial planning guru Michael Kitces walked us through the history of the advice industry and the described how major events shaped the landscape that we see today.  A unique combination of university professor and TED Talk speaker, Kitces described the great convergence that took place across historically-separate industry channels, triggering a crisis of differentiation, a search for new business models, and rising pressure on improving the client experience.

There is a crisis of differentiation in wealth management, Kitces explained, with much of the the industry  focusing solely on Baby Boomers. The problem is that there are not enough of them for every advisor to build their business around!

One of my favorite lines from his talk (there are too many favorites to include them all here) was about how many advisory firms don’t understand the value of focusing on a specific client niche. Their marketing will say something like, “we specialize in Baby Boomers, divorced people, retirees, Millennials, Fortune 500 executives, startup founders and women.”  Unless you create a value proposition that appeals to a specific client niche, you’re going to have difficulty consistently growing your business. If you try and appeal to everyone, you wind up appealing to no one.

The problem is that there aren’t enough affluent households to go around with every advisor chasing after them. The opportunity exists for those advisors who can effectively communicate their value proposition.

As part of the ongoing search for new business models, Kitces illustrated that there is a move towards income-based fees for HENRYs who have debt and low assets but seem willing to pay 1-2.5% of income for ongoing financial planning support.

Professor Kitces gave an Ivy League-level lecture in the history of wealth management technology and its impact on the business model of financial advisors. Asset management is clearly become a commodity. So why do so many advisors still cling to it as their value proposition? (See 3 Reasons Why Model Marketplaces Are Taking Off)

Custodians Stealing the Spotlight

Not to be outdone by the wirehouses, RIA custodians both large and small invaded the Invest main stage to present their visions of the future of advice.

Charles Schwab

“The most important word in technology right now is integration,” explained Bernie Clark, head of Schwab’s RIA Channel.  We’re seeing this in our consulting practice from the largest IBDs with thousands of advisors a tens of millions in technology spending, down to the smallest single family offices.  Innovative ideas are being created at an increasing rate by startups and wealth management are grabbing them to try and increase their differentiation.  This creates integration issues as the new tools have to communicate with he existing infrastructure while not negatively impacting the advisor or client experiences.

Clark delivered the quote above in response to Jon Stein from Betterment claiming that the $1 billion that Schwab gathered with their new high-yield savings account was just moving money from one pocket to another and wasn’t really that much anyway. Schwab obviously feels differently about it.

Although, I believe that Stein is probably right, the goal of Schwab’s program has a big marketing component and Stein is playing right into it by paying attention to their announcement. Just another reason why Betterment will never be a major player in the wealth space since their asset growth will always have a ceiling. They’re just an online RIA.

A “high percentage” of Schwab’s new robo clients are millennials, and the average account size has grown to about $300,000 – $400,000, says Bernie Clark

To collect higher fees, advisors must deliver a broader range of services, said EVP Bernie Clark

TD Ameritrade Jumps into Bitcoin

Former Head of Emerging Technologies, Sunayna Tuteja, announced that she is shifting her role to focus exclusively on cryptocurrencies and Bitcoin.  While some Millennials are interested in these distributed electronic commodities, the main demographic seems to be 45 and older.

“Go where the customers are” drove TD Ameritrade to partner with WeChat (owned by Chinese Internet conglomerate Tencent) to deliver investment services and education to Chinese investors, Tuteja reported.

I interviewed Tuteja for my Winners of Wealthtech podcast back in June. (See Ep 16: Sunayna Tuteja, Head of Emerging Technologies at TD Ameritrade)

E*Trade’s New Game

Since the $275 million acquisition of TCA by discount broker E*Trade in 2017, the new custodian has been busy negotiating big name partnerships.  Referral deals with RIAs Mercer Advisors and Edelman Financial Engines make for splashy headline, but there needs to be actual dollars of assets flowing through to advisors for them to be worthwhile for either party.

I initially thought that E*Trade buying TCA was a move similar to TD Ameritrade’s acquisition of Scottrade, which also had a robust referral program.

The E*Trade executive know that they need to build up their name recognition with advisors if they hope to build assets beyond the second tier level where TCA has always played. Splashy partnership announcements are a low-cost method to generate industry buzz.

I doubt they can convert any of their 7 million accounts into fee-based advisory business, but you never know. Maybe there are sub-demographics of customers that are reaching a certain age  where they’re more likely to give up their self-directed investing and settle down with an advisor. Even a 1% conversation rate is 70,000 accounts, so it’s certainly worth a try.

Fidelity & The Future of Advice

Speaker: David Canter, EVP, Head of the Registered Investment Advisor Segment, Fidelity Clearing & Custody Solutions

Nice shout out for Facet Wealth, the un-robo-advisor that has designed their business model around flat fee financial planning services.  I would disagree that we’re in a bull market for advice, at least not advice as we have known it up until now.  We are in a strong market for new models of advice delivery, like subscription-based.

In the fist half of 2019, there were 67 RIA deals totaling $69.5 billion, which was a 55% increase over same time 2018., Canter reported

Live Podcasting

As the proud owner of a new podcast (Wealth Management Today), I was excited to hear that there would be a podcasting stage setup at In|Vest with live interviews being conducted during the conference.  John Siracusa from the Bank on It podcast was the host.

Some of the industry luminaries that graced the podcast stage included Barry Ritholtz, Jon Stein and Michael Kitces.

I’m looking forward to hearing the episode with Seb Dovey where he talks about how he built a successful research and consulting firm, Scorpio Partnership, which is best known for a widely-cited annual ranking of private banks.  Dovey sold Scorpio to Aon Hewitt in 2014, which allowed him the flexibility to spend some of his precious retirement time as the host of this conference.

Monetizing Data + The Intersection of Privacy

Cheryl Nash Cheryl Nash, President, Investment Services, Fiserv
Bob Miller 542 Bob Miller, CEO, Private Client Resources LLC
Tim Nagle Timothy Nagle, Chief Privacy Officer, US Bank
Lowell Putnam Lowell Putnam, Head of Partnerships, Plaid
Philip Watson Philip Watson, Chief Innovation Officer, Citi Private Bank


The definition of privacy is expanding to include analytics, geolocation, personal preferences, and smartphone data, stated Tim Nagle, Chief Privacy Officer, US Bank.  (See “Don’t Get Creepy”: Privacy in Wealth Management & Emerging Technology Trends)

Nagle believes that AI will deliver value when it can evaluate investments and identify patterns in customer behaviors that drives successful cross-selling.

“The sexier the tech, the least sexy the use case.” — Lowell Putnam, Head of Partnerships, Plaid (former CEO Quovo)

Trends in RIA M&A

Mergers and acquisitions have become a defining factor of the wealth management industry —whether it’s the consolidation in the RIA landscape or the tie-ups among the biggest technology players.

In our consulting practice, we have first hand experience with back-office and middle-office technology and other infrastructure that advisors don’t directly interact with, but have a tremendous impact on their experience as well as that of clients.  This is one reason why getting the IT folks in the same room to create a strategy for merging all of the software, hardware and data feeds of the two firms is crucial to M&A success.

According to Liz Nesvold, Managing Partner, Silver Lane Advisors, poor integration execution is the beginning of the end in terms of failed transactions.

Goldman + United Capital: How Tech Helps Clients Live Richly

Speaking of RIA acquisitions, the $750 million purchase of United Capital by white shoe investment bank Goldman Sachs, was the biggest deal of the year. While United Capital’s revenue is a like a flea on an elephant’s butt when compared to Goldman Sachs’ private wealth group, Goldman expects the Newport Beach-based RIA to become the fastest growing part of the wealth management segment.

“What we know is that by going through an honest conversation exercise, we end up with about 8 financial goals,” noted Jason Gordo, SVP, Head of Client Experience, United Capital.

I have seen a number of demos of the UC data gathering interface and I’m more impressed with it every time. It’s innovative and intuitive and gamified and gives helps to differentiate UC advisors from the other advisor down the street.  Very smart technology and a big part of UC’s success and ultimately their purchase by Goldman.

Implementing CRM

Everyone needs it, but implementing CRM is not a walk in the park. I gathered some experienced industry experts who have been working with three of the biggest CRMs for advisors: Redtail, Junxure and Salesforce.

Best of breed is a subjective term. Every piece of software can be considered best of breed if it meets your firm’s expectations. But it could be the worst choice for the company down the street because of how they run their business. That’s why I recruited people who chose different applications and elicited each one’s reasons for  software selection.

Securing support from the key leaders and decision makers is crucial to any new technology implementation.  But you also need enough support, including budget, people, time and buy in.  Without all of those, it is difficult to succeed.

Reimagining Retirement Planning: BlackRock & Microsoft

Speaker: Anne F. Ackerley, Retirement Group Head, BlackRock.  As the leader of retirement strategy for the world’s largest asset manager, Ackerley has tremendous influence on the future of millions of Americans.  She oversees the development of strategies and services for more than 60,000 retirement plans belonging to 15 million institutional and retail clients, including half of the Fortune 100.

“We will start in the US then take it global,” Ackerley makes it clear why not only US firms but international financial services providers need to act now or face huge competition from a BlackRock and Microsoft joint venture whose goal is nothing less audacious than reinventing retirement planning.

I’m going out on a limb and say that there are no Instagram stars who are promoting their successful 401(k) plans. Only 56% of Americans have started to save anything at all, according to Ackerley. We glorify our purchases and material things, not how much money we’ve saved.

This sounds obvious, but it is still an outstanding issue that needs to be addressed and most Americans are woefully unprepared.

There’s over 50 million Americans without access to a 401(k). It would be great if the government worked on universal access to these saving vehicles.

Invest 2019 Conference

And that’s a wrap, folks!  Whew!  4,500+ words is a lot of writing, even for me!  But it’s all for a good cause.

Invest is one of my favorite conferences to attend each year and I’m happy to share my thoughts about all the great content.  I never pick just one favorite part, but I thought the panel on subscription pricing was non-stop keeper quotes between Alan Moore and Anders Jones and Schwab’s Bernie Clark definitely generated the most media buzz. Of course, I’m biased and had a blast moderating my panel on Implementing CRM.

Looking forward to doing it all over again this December at In|Vest West in San Francisco!



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