#ItzOnWealthTech Ep 35: Putting the Human Advisor Front & Center

“The ones that will really excel in the next 10 years are those people getting back to that Socratic selling and skillsets that many of us grew up in the industry learning about because the tech was so bad. But now that the tech is getting so good, the hard part is putting it all together in an elegant, streamlined way.”

— John Yackel, Head of Strategic Initiatives, Envestnet

As Head of Strategic Initiatives at Envestnet, John Yackel leads business development, advisor adoption, and growth strategies at Fiduciary Exchange, LLC. As a 28-year veteran of the industry, he will be leading Envestnet as they work to incorporate the critical solutions required for advisors and institutions into the Essential Envestnet Platform. John earned a B.A. in economics from Bucknell University and holds Series 7, 63, and 65 licenses.

Now hit the Play button!

This episode of Wealth Management Today is brought to you by Ezra Group Consulting. If your firm is evaluating new technology or looking to improve your current wealth platform, you need to contact Ezra Group. Don’t spend another day using technology that doesn’t offer an elegant user experience. Your advisors and clients deserve better and you can deliver it to them with the help of Ezra Group.

Topics Covered in this Episode

  • Envestnet Credit Exchange
  • Agents vs. Advisors
  • Transparency in the Industry
  • Six Pillars of Essential Advice
  • Measuring Client Culture
  • Tools, Tech, & Training at Envestnet
  • Putting the Human Advisor Front and Center

Companies & People Mentioned:

Other Resources:

If you are interested in more information about some of the topics John and I discussed, these blog posts would be useful:


Complete Episode Transcript:

Craig: Welcome to this episode of the Wealth Management Today podcast. My guest today is John Yackel, Executive Managing Director of Envestnet who heads up their Strategic Initiatives. Hey John.

John: Hey Craig. How are you doing today?

Craig: Fantastic, man. Welcome to the program. So happy to have you here.

John: Excellent. I’m thrilled to be here and anxious to talk about the strategy that you’ve asked about today. This is great. I appreciate it.

Craig: No problem. I’m glad we could find the time to talk about this. This is something I’ve been really excited about and interested in. I wrote about it on my blog, I was excited then, and I’m getting more excited the more I read about it. This news really jumped out at me about the Envestnet credit exchange and also the insurance exchange. It was just a twinkle in your eye two or three years ago, now it’s something that’s live. Can we talk a little bit more about this news on the Envestnet credit exchange?

John: Absolutely. Just two years ago, it was a great concept, an idea. It’s not something that other firms have tried before. Previous firms I was at had been looking to provide a lending or credit facility to advisors, and what I was really excited about this time is how are we going to introduce this type of offering and solution, empowering the advisor to provide more comprehensive advice. To see how this has come together in the last 12 to 16 months and now out the door to these to our financial advisors, it helps provide a significant advantage to the advisor, to their planning process, to their practice and specifically in bettering the end consumer with better options specifically when they’re in a financial plan. I think that so many people in our space have a tendency to focus on the investment component within planning, and focusing in on both sides of the balance sheet is absolutely critical to help people achieve their goals. Spending is always something that’s been a hot topic in financial planning, but in managing people’s credit and their debt it’s always been the advisor to say ‘let your bank do that’, or ‘let me bring someone to the table to have a conversation about it’. So bringing that front and center and putting it into planning is something that we’ve been very thoughtful about while seeking different partners to bring to the table. This is going to be an inflectionary moment in the advisory space, especially around advisors seeking to provide unified advice.

Craig: I agree with you man. I mean, I saw this years ago where it was a static picture that insurance agents showed. I can’t remember what firm it was, but it was a small fund that did wealth and insurance and he had a great picture. It was a picture of a house and he said the foundation are your assets, but the roof is your insurance and you need to have it altogether. Otherwise, if one person is building your roof and someone else is laying your foundation, there’s no coordination. We keep throwing around these buzzwords like holistic advice, but f you’re not looking at both, how can you be holistic?

John: That’s right. Now, what I like about that analogy is, that general contractor, you expect them to be your advocate in understanding your goals, objectives, and needs in building and protecting that house. So the introduction of both credit and lending facilities, helping individuals manage their debt and providing that to the advisor in addition to the protection series. We’ve also had an insurance exchange that we’ve added into our overall strategy and bringing best of breed solutions into that financial plan, allows that general contractor, that trusted advisor to really be proactive with their client in providing that unified advice to say, ‘let’s look at the entire picture’. A lot of planners have been doing this for many years. It’s been very difficult to scale. Through our partnership with many of our banking partners and our insurance carriers, we are going to scale this business very much like we have done on our manager exchange that we’ve grown very successfully and turned into a very successful practice. But I like your analogy because you’ve got to build the house, you’ve got to protect it, you have to fortify it and continue to look at it from that perspective.

Craig: Another reason why I’m excited by this, besides the fact that I’m just a student of the industry, I love new stuff, but this is something that only could happen now. And let me explain what I mean. Envestnet, you’ve gone from humble beginnings. I’ve worked with Envestnet and I was working with the precursors to Envestnet, Net Asset Management in Santa Monica before you guys even became Envestnet, and insurance has been such a fragmented industry with no transparency, everything’s opaque. No one can really understand what the insurance policies are or compare them. And there was no incentive for the insurance companies to do that because why would they want transparency? Transparency drives down the price and they don’t want that. So they had no reason to do this. But since you’re the market leader now, you have the skill, you can go to them and say, Look, we’re building this with you or without you. You want to be on board and it’s going to, yeah, you’re going to be transparent, but it’s going to make your product better. It’s gonna make it better for the investors. Is that the way you guys saw it as well?

John: Yeah, we have. And so I will break it up into two categories. The insurance carriers, and the banks on the lending side. Legacy, I’ve grown up in the managed account business and the investment area for my entire 28 year career, and if you grow up in the managed account side, people would always look over to the other side of it and say, Well that’s an insurance agent and that’s a product and specialty, and people started to incorporate that into their practice. Still treated it many times over the years as you and I have seen, as just a product and it was also a complicated one for a managed account person to understand and vice versa. The insurance agent was having a difficult time understanding managed accounts and how to communicate that to their clients.

John: To your point, the reason that the perfect storm has hit us now is you provide scale and infrastructure to a wealth management platform. But the way that I look at it is financial planning and a planning-centric firm or organization truly provide agnostic views of taking a look at everything out there and it forces the advisor to have that conversation with the end investor. And moving forward from a fiduciary standpoint, that essential advisor, in our opinion, has to be able to take a look at every aspect of one’s life. That includes, spending, lending, credit, insurance, and how you’re protecting. The next pillar of what I call “essential advice” is legacy. Legacy is you’ve built your net worth, you’ve amassed these assets, you’ve built an elegant financial plan working with advisors that are now coordinated across your accountant, your attorney, your financial advisor in harmony. And now what? You have to look at that and say, what is our family legacy? Regardless of size of estates, most people think this has to be really large estates to get into trust, to democratize that and bring that down into an infrastructure and proper planning. When you have a nice harmony of investments, savings, financial plans, protection and debt management and lending, you naturally extend to say, how are we going to look at legacy? So to your point about the picture of the house analogy earlier, we really see that wheel coming together in a scalable fashion. Once again, it’s not something that has not been tried before as you and I have seen over the years, but now to get to a point where you can scale it and provide transparency as you mentioned before, which I think is spot on, provides a lot of discomfort to people.

John: And what I’m really proud of is, the partners that we’ve found to go to market with on the insurance and the credit side recognize that and they’re willing to be the market leaders and join this exchange and push that envelope, push the industry to the point of full transparency, openness. And I don’t think this is about just getting their product up on a platform of transact. Craig, it’s going to be already significant innovation going on by these banks and insurance companies that have been partnering with us to come up with new types of products driven from the financial plan and the end investor’s needs that. That to me is the spirit of this next decade of innovation. Just lining up these exchanges is not enough. It’s satisfying the end consumer’s rapidly changing needs through this scale and innovation with great partners. These carriers and banks that we partner with have really been pushing us in that category. I’m thrilled to be doing business with them.

Craig: Yeah, I’m glad to hear that because it’s been sort of stagnant for the last decade or so. Now we’re seeing a little burst of innovation from companies like fee-only annuities that you can slot into a managed account platform.

John: Yeah. And the fees on these because of the transparency and the innovation, you’re starting to see better price points for certain investors that had never looked at this. Just naturally as you go through it, and you and your firm are obviously grounded in research, you really start to look at what ultimately investors’ needs and stigmas are. And typically with lending, people naturally say, Yep, I’ll go to my bank for that. I’m not going to talk to my advisor. Insurance and protection? I’ll go talk to my agent for that. Legacy planning? I’ll talk to my attorney about that. But what you and I have seen over the years, the true trusted advisor in the center of that, having that conversation with the end investor, doesn’t need to do everything. But the power of what I’ve called the exchange, it’s more of a marketplace effect and that marketplace effect provides the transparency we talked about. But it has to be an ease of transaction to provide that for the advisor and the end consumer. It has to give them choice and flexibility. So when you get in there, advisors as you and I’ve seen over our careers, don’t like to just come in and say, Okay, I partnered with this bank for this product and or this insurance company for this insurance product and that’s what I’m recommending for you. The Envestnet strategy over all the years is really opening that up and providing that open marketplace for people to do business, and advisors have been clamoring to this because we’re letting the plan and the needs of the end investor truly drive the selection of solutions and strategies. Ultimately the product is underneath that. But when you drive by strategy, I think you have better innovation. And once again, we cannot do this without the partners, the insurance carriers and the banks that have partnered with us. We went through an exhaustive RFP. Craig you know, in my career I’ve always been on the other side of these RFPs. I have a huge amount of respect to see what the counter parties go through in these types of selection processes. But we went through that because we were very disciplined to find not only great solutions and products from these type of banks and insurance companies, but we had to find somebody with a like-minded vision about what we were trying to do about transforming the way advice is delivered and how their solutions fit into that. Ten years ago we weren’t going to see that. I think people are just naturally looking at how they can get more efficient distribution of their products and people that really believe in changing the way the industry is delivering advice. We are carrying on pretty strong and we’re thrilled that these partners are doing that with us. That’s a big part of who we selected.

Craig: At my firm we do a lot of RFPs for broker dealers and it’s hard to figure out if their vision aligns with your vision, sort of like measuring what their culture is.

John: That’s right. Sometimes it’s actually harder to truly determine because you can’t do that through the RFP questioning. It’s obviously your interview process and getting deep at the executive level, getting deep down into the managerial and product levels and then really going in and interviewing a lot of the people in their operations areas and administrative areas to see what they really believe. Marketing materials, as we all know, say one thing. But when you start to look at their employee base and how they interact within their communities, that really tells the story.

Craig: Yeah. And one thing you mentioned before is the difference between agents and advisors. We work with a lot of insurance broker dealers and they’re struggling with that, and they keep using the word ‘agent’ and they’re not agents anymore, because that implies they just sell insurance and they’re trying to move their people over to be real true advisors that are more holistic and not just thinking about insurance. And it’s part of the mindset and how you make people realize you’re not just selling a product. The proprietary product driven business model should be dead soon.

John: Yeah, I would agree. I think they said that it would be dead by 2020, great bold prediction, right?

Craig: Correct.

John: But when you start to look at where the asset flows truly are, true independence of looking at how advisors are open architecture, agnostic, planning-centric and planning-driven. That’s clearly where we see the market going, and not advocating proprietary product. Like I said, I agree with you 100% that it will be dead soon. And I’m surprised that when I look at it, it hasn’t come to a stop in certain areas in certain firms that are advocating just proprietary product —

Craig: The inertia of powerful force, John.

John: Yeah, I think is the best thing for the industry is to enforce the standards and commitments that we should have in this space and what we’ve all signed up for over the years. But it’s a welcome transition I believe.

Craig: It’s going to be a while until a lot of people that are focused on this retire, or a lot of firms that aren’t moving, lose enough market share to where they realize they’ve got to change. It’s a process.

John: I’m telling you probably what you already know because of the research you guys do, but the advisor population is aging. We have fewer people coming into the space. And when you talk about agent and advisor in the insurance space and advisory space, what happens is that the older we all get, the harder it is to process that change and take on something new. So it’s incumbent upon us not to go fight that trend and say, No, we’re going to make this easy for you to make this transition. Depending on what side of the fence you’re on. And it’s incumbent upon us to focus in on training adoption, growth strategies for the advisor, and say, How are you going to incorporate credit and lending discussions with your client? That will make you a better fiduciary and a better advisor. How are you going to have these conversations about protecting your clients’ future around income? If you really look at the future of planning, people always looked at it and said, Well annuity, annuity annuity, and it’s a bad word if you’re on the managed accounts side. And that’s foolish. It really is. Because if you do the plan and have the conversation to say when you retire, you know you don’t have the ability to choose what the markets are going to do when you retire. And the sequence of returns is going to have a huge impact on when you and I when go to retire. We can have this great elegant plan and if we rely solely on investments in social security, you and I will have to hope that we’re at the top of a bull market like we are right now because it gives you great confidence, and it’s a psychological factor, going into retirement. So while everybody focuses on credit and insurance, I look at this more of just pure retirement planning. And when you get into that, you’ve got to optimize any type of plan or infrastructure and get people to look at how their income will be generated while they’re in retirement. I believe this is a strong fiduciary standard that has to be discussed at the advisor level. Equal importance around the credit exchanges. You have to take a look at how they are managing their debt. The amount that people carry on credit cards is staggering. We do a ton of work on aggregation through one of our companies at Yodlee, and when we start to look at the data that’s going on revolving debt at extremely high percentages, the banks that we’ve partnered with actually see that and say, Hey, that’s great, that is a great money and revenue producing opportunity for us because it’s been a big business. But that’s a big drag on people’s financial futures and their retirement because they’re not managing their debt properly. And we feel that’s incumbent upon us. So the banks we partner with have come front and center to say, How do we take a look at that, restructure their debt and look at those lines and reduce that drag on their overall goal achievement into this? It keeps coming back to that goal and financial plan is where we’re moving in the future. The advisors that don’t embrace that are going to be the ones looking in the rear view mirror or looking ahead and saying, I missed the car. It’s already down the highway.

Craig: Exactly. We don’t want that to happen. Can you give me a quick overview of your background? I know you’ve been in the industry for a while and you’ve been investing for a while. Can you just do a quick 30-second summary of how you got to where you are now, John?

John: Sure. I started at SEI in the very early nineties, and was there for 15 years. Worked in several different divisions in different capacities, mostly in sales, sales management and strategy, and our bank and RIA divisions at SEI. Moved from there with a partner at the time and the two of us went to a company called Fortigent that was spinning out of Lydian Private Bank and Private Wealth Management. We started up Fortigent which was providing ultra high net worth research and aggregation and reporting in the very early days back in 2007 in that capacity. That business we built up and sold successfully to LPL, and at the same time, I was recruited and moved over to Prudential Wealth Management Solutions where I ran distribution, relationship management, business development strategy and in field sales support. So getting into that role we really focused heavily on working with larger financial institutions and bringing together a complex infrastructure and platform to large institutions. Along that journey, we had a couple of banks and large financial institutions that we were working and servicing on that we needed to look to some outside partners. We were at a point where we found the opportunity to partner with Envestnet and we actually completed a transaction and sold and lifted out the Prudential Wealth Management Solutions division that I was overseeing and running with Kevin Osborne, and we sold that to Envestnet back in 2013. So I’ve been here for seven years with Envestnet. My initial charter was running institutional business development with Envestnet and about a year and a half ago I moved over to lead strategic initiatives and focus on building up these various marketplaces and exchanges. For me it is a great culmination when I look at my journey and my career, looking at all the different channels that I’ve had the opportunity to work in different products and solutions, but to work at a company like this and be part of our venture capital vision if you will, to go say, where are we going next? How are we getting there? How do we do it in a scalable way and be consistent with our vision providing financial wellness and unified advice infrastructure to advisors and putting the advisor front and center to enable that? So I’m pretty fired up as you can tell in my voice at this point in my career to focus in, to do this with support from a company like this has just been an extraordinary period of time. Because this, to your point, it couldn’t be done.

John: I remember when Envestnet first started in 1999 and I was over at SEI and everybody’s like, Hey, who is this company? And then all of a sudden, within the first year put a major mark in the industry partnering with Fidelity. And we started to see a lot of asset movement from proprietary strategies and TAMP programs right to this open architecture model, and in a very short 19-20 year period, $3.5 trillion in assets. And you mentioned a word earlier, Craig, you’ve seen our journey over the years. One of the things that Bill and Judd have founded as part of our culture and one of our principles is to be humble, and that humility is still with us today in our culture. And in one of his interviews with Investment News, I think Judd was spot on, when he said he was always asked the question, Hey, if I told you that in 2019 that you had a mass $3.5 trillion and 100,000 financial advisors would you have said you won? And he goes, if you asked me that 10 years ago, I would absolutely have told you that, you know, the game’s over. He goes, the funny thing is is if you look at it here today, he goes, I feel like we’ve just gotten onto the highway and we have a responsibility and duty now to the marketplace more so than before. And we really haven’t gotten everything done yet, we have so much more to do. And that’s what Bill is carrying forward now at a very rapid pace for us to be able to grow in that capacity. And it’s an honor to work with my fellow executives in that capacity.

Craig: Yeah. I think it’s important to get things front and center for the advisors it easier for them to use these tools. I wanted to ask you about the credit and lending exchanges. So how are they going to be available? You said through the sponsor and advisor portals, but what does that mean exactly? How would advisors access these tools?

John: Sure, great question. So to make this as simple as possible, anything you introduced in the past to an advisor, desktop or any type of service or solution took a lot of time for them to adopt. We’ve all seen it in our careers. So what we’ve done here is we’ve actually provided a simple link right on a splash page that the advisor logs into every day and permissions by their home office. So you just don’t go and put it in there. The home office says, Yes, we want to have access to this. That link takes them directly in once they permission the data into a curated list of their clients that are now prequalified based on the standards provided to us by our banking partners for specific loans. The advisor doesn’t have to go in and say, Hey, I have to take a look at Craig’s account today and see if I might have to do a loan. It’s actually processing the information through our algorithms and the calculations back with our bank partners. It’s identifying where we believe there might be lending opportunities and it presents that directly to the advisor to engage. Now prequalification is not approved. The bank is the lender, the bank will service the relationship. We then have that tight integration to facilitate that prequalification and bring those two together so the advisor can now have the choice and the flexibility to use different banks on the exchange for different loan types. Eventually what we’ll tie in is, imagine that now when you’re doing financial planning and you’ve done aggregation and you’ve seen all this debt, you tie that in with all the prequalification and data and link them to the banks. You’re at a point now that the advisor in the planning process can open that door and say to Mr./Mrs. Client, we’re going to be able to optimize your entire portfolio, meaning your entire wealth plan. We’ve provided it right now that prequalification. When the advisors click on it, all of the paperwork on the client is already preloaded, pre-populated and automated. That goes directly to the bank. And at that point the handoff happens. The advisor has not been responsible for entering information, and so what we’ve done behind that is we’ve hired regional lending specialists, which as we talked about before, getting advisors to adopt anything new we understand is always a journey. As easy as you make it in tech, you and I have seen this, it’s that advisor that has to do something different at that point in time. So we hired lending specialists and people at that point of transaction to say, I need more information. And we’ve invested in lenders that will have that conversation, that are agnostic. But if the advisor wants to then marry it to that bank, we bring the bank specialist in at that point. But advisors want to talk to somebody and say, Hey, I’ve gone through this, I’ve played around with it. I want to have a little bit more understanding of the different options that are presented to me. And that’s I think a very important personalization that has to occur because we can’t rely on tech to do everything for us. It makes it easier and removes the friction, I call it from the advisors workflow and practice pattern. I probably went a little bit longer than you thought for that answer. I apologize. But like I said, I get a little bit passionate about this.

Craig: Long answers are good. That’s why I like the podcasting format, we can go into some longer answers. You mentioned earlier the marketplace effect and how it requires choice and flexibility, but it also requires, as you said, conversations between the advisor and the client. Are there any tools or tech or training that you’re offering to advisors to help them with these kinds of conversations?

John: Training is center to absolutely everything we’re doing here. So what will happen is, there are training modules that have already been developed and deployed so that through the journey of the conversation or the transaction, if the advisor has never done this before, we have training modules to help teach them how to have the conversation with the end client. If you take a look back in the past where people have offered lending and credit facilities, it’s typically with one bank, with a couple of limited products. We’ve opened that up by providing multiple banks with multiple loan types. By doing that, you need to be able to provide that training and education along the way because the more you add into that marketplace effect, you have to provide that education directly to the advisor in that capacity. So to be able to create materials that the advisor can use in that discussion has already been embedded into the overall presentation quality of the technology and the demonstration that it goes through and what gets created. But I think that the next big inflection point will be when we tie that back into the financial plan. And as you know, we’ve acquired MoneyGuidePro and that’s where MoneyGuidePro in their blocks do a lot of work around managing debt, taking a look at that within your financial plan. And we are linking those two together so that when somebody is living in a plan and needs to get there, we want to have education and training modules of the end consumer and the advisor, and then tie them to that exchange to be able to get in to whether it’s credit and lending or even insurance.

Craig: Nice. And I really like the MoneyGuidePro blocks. Taking an interface that works well in another industry and bringing it to wealth management, it’s a comfortable interface for a lot of people and it takes very complicated topics and presents them in a much simpler fashion.

John: I appreciate your comment on that because I don’t think people wake up and say, Hey, I can’t wait to go see my advisor to go build a financial plan. You know, we kid about that. But if the advisor can say, Okay, there’s two or three things I need you to go through that are going to help you get yourself educated as an end consumer. But that educational journey is actually gathering information, a building block of a broader financial plan helps the advisor in their discovery and their assessment process and then ultimately in providing thoughtful recommendations of what’s out there. To me, the power of structured data is really important in this engine. But that client interview to the end end investor, over the next decade because of all this introduction and advent of technology and integration, I think the element of the human advisor has now been put front and center and the ones that will really excel in the next 10 years are those people getting back to that Socratic selling and skillsets that many of us grew up in the industry learning about because the tech was so bad. But now that the tech is getting so good, the hard part is putting it all together in an elegant, streamlined way. And that’s our purpose and mission as a company. But when I look at things like this, I think the human advisor is going to be so much more important. We already see it happening, but things like blocks help the advisor enabled them to be better counselors, if you will, to the end consumer.

Craig: I think you just named this podcast episode, putting the human advisor front and center.

John: I like that.

Craig: I like it too. I wrote it down. So running out of time, I want to hit a couple of the other questions before we go. So privacy, with the pre-approved loan offers, do clients have to approve the use of their data to generate these pre-approved loan offers?

John: Yes. So in working with their advisor unilaterally, and typically the advisor, the way that they handle that in their privacy information and data have a consent capability, which is very simple and says, We’re going to present this, we’re not providing it to the bank until you authorize us to do that. So that prequalification process dovetails to their privacy of basic reporting and analysis that an advisor would do to say, I’ve analyzed your data and I’ve come to you with a potential recommendation and I want to initiate bringing in a partner. So that’s how the privacy laws are handled. And obviously during the RFP process with the banks, they are very stringent in making sure there is a wall around the private information that we have not only at Envestnet, but what they have on their side as well. So it’s very important that you have separate books and records. You protect the data that you have all the consent possible to get through it. But what we’ve been able to do is optimize that, that prequalification process by leveraging data that the client has already permission without doing anything with it.

Craig: Gotcha. That makes sense. And is there some message for the advisor or some compliance tool that’s going to monitor these? Because how do we know that the advisors aren’t going to be pushing these loans on clients and they may not be able to handle them? They may be qualified for a loan, but it may not be in the best interest of the client, so how do we control that or how do we let compliance see that over at the enterprise level?

John: Correct. So, suitability is absolutely front and center for our entire industry. And to your point about best interest, a couple of things come into mind. First and foremost, the banks will not take on a loan based on an automation of prequalification. They still require additional procedures, and let’s say that I’m the advisor for you, and you’ve been identified, the easiest way to look at loans is you have $1 million portfolio. Based on this, I’ve identified you for an SBL securitized back line of credit. And let’s say that it’s $400,000 by this bank at this particular rate. I then take that and I can look at it and then say, how do I want to optimize that? Because I recognize that you’ve got a lot of debt in other areas. So that process, I look at it from a suitability standpoint, falls back on the advisor. And the home office isn’t getting through to say, Are they, in your words, “pushing” a product or a loan, versus providing that back to advice and putting that back into the overall financial plan. So the facilitation of getting loans out there, as I said before, isn’t new. The suitability being front and center, what we are looking at is making sure that that’s put back into the planning tool or the Envestnet infrastructure of a wealth management platform asking, is this suitable or not? But we can’t take that on because we’re not the fiduciary working with the end advisor. But our training and rollout in education is to the firms, any of the firms that are home offices put in policies and procedures clearly documenting why they believe what they’re presenting here is suitable for a particular end investor in documentation notes and tracking that back to what the advisor has done. It’s no different than what we’ve seen when they’re starting to recommend different products on the investment side to make sure that there’s proper documentation on why they made that recommendation.

John: I think that’s an area that we’re going to look to disrupt further in the future by providing more transparency and ease of use for the advisor to identify what is suitable versus what’s not. Because whenever you’re going into a new space like this, adoption and growth are obviously very important, but it has to be founded in what is appropriate for an individual. Many of the advisors that are really comfortable and who have done this from a suitability standpoint, tracking with their home offices as they’ve gone after clients that are already obviously lending in a lot of different spaces, their cost of debt is extraordinarily high and they go after that. And that point is to say, I’ve reviewed Craig’s planning, he’s paying 21% and he’s got $40,000 out here. I restructured this into an unsecured line. He’s paying 8%. I’ve been able to take that 1200 basis points of interest. And I’ve calculated that value and I’ve seen this impact to his financial plan and this is where the benefit is. So that tech is already available for the calculation for the monetary side of it, but I think it’s incumbent upon the advisor from a fiduciary standpoint to talk about the elements other than just the financial reasons of it.

Craig: Indeed. You don’t want to be just focused on one point. Having the holistic view of the client is really where we’re driving all of this to, to make it more holistic and make it easier for the advisors to deliver the advice, and easier for the clients to consume the advice so they can have better financial lives.

John: When we take a look at different marketplaces that we bring to our clients, the advisors that we talked about before, like the advisor versus the agent advisors that have never done insurance need a lot more education, and they immediately go right to products. They say, Tell me more about the products available. And we say, no, we’re going to go through and talk about the strategies. Is guaranteed income an appropriate solution for your client? And more and more advisors are believing that I can’t guarantee all of their retirement income, but I can look at their investments, their social security, and I possibly can look at what guaranteed income options are available through leveraging annuities in my fee based plan. And that becomes front and center and once again in the conversation, less product, but at the training aspect of it, you can make it as easy as you want in tech, have great partners and great put products out there, but the training element is where we’re spending a lot of time and energy at our firm. And the great thing is, I’ve got the best partners to go to market with, with our eight insurance carriers and four banks, they’re putting resources with us you know, and helping us in that capacity and helping transform this business model.

Craig: And that is really where we’re going with this. It’s keeping transformation front and center, keep changing, keep adding more value. And that’s what’s keeping Envestnet a leader in the industry. John, thanks so much for your time and helping me understand what’s going on and helping listeners understand all these new changes with the credit and insurance exchange.

John: Absolutely. Craig, I really appreciate the time you’ve afforded for the conversation and you know, where I’ll end is where you just hit there, front and center with the advisor and the end client and, is the advisor providing more value to their end client? They’re always trying to defend their fee and really strong essential advisors providing that holistic advice. We’re just trying to enable that through these types of marketplaces and exchanges and make it efficient. And, you know, I think you’re affirming your value prop of what you’re doing, being a research-based organization and consulting institution. We expect you as well as the advisors to continue to push us to do what’s best for the advisors, the end clients, and for the industry.

Craig: We’re going to keep pushing you, John.

John: I love it Craig. That’s the only way we all get better, right?

Craig: That’s right. Thanks so much. I appreciate your time.

John: Craig. It’s been a pleasure, all the best to you. If you need anything, please let me know.

Craig: I will do that. You too.

John: Take care. We’ll see you soon.



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 craig@ezragroupllc.com