independent broker-dealer technology

Ep. 92: Taming Your Company’s Technical Debt with Alex Sauickie, CircleBlack

“The fact that we’re new technology and we have very low tech debt, our tech debt is measured in weeks not months or years, decades, in some cases with older companies, we think that’s an added advantage. With RBC BLACK, they’ve certainly taken advantage of those functions, they white label and they’ve taken advantage of specific third party integrations that they want to offer their advisors.”

— Alex Sauickie, CEO, CircleBlack

When Alex Sauickie took over as the CEO of CircleBlack from his mentor and friend John Michel, he was determined to continue the legacy that John built. By investing in new technology products, Alex plans to expand CircleBlack’s presence in the RIA market and become the leading provider of integration and data services. I spoke to Alex about CircleBlack’s new API based data platform, their aggregator of aggregators technology, and a whole lot more on this episode of the WealthTech Today podcast.

Come on in, sit back and enjoy episode 92 of the WealthTech Today podcast. I’m your host, Craig Iskowitz, and the founder of Ezra Group Consulting. If you work for an enterprise wealth management firm, an asset manager, RIA aggregator, or one of the many technology vendors in our space, then Ezra Group can help you male better business and technology decisions. Please take a look at our products and services on our website.

This podcast features interviews, news, and analysis on the trends and best practices all around the wealth management technology industry.

Click here and schedule a free Discovery Session to find out how Ezra Group can help your fintech firm grow revenue in the wealth management space.

Companies Mentioned:

Topics Mentioned:

  • The Roku of Integrations
  • Universal Widgets
  • Aggregator of Aggregators
  • Alternative Ways to Leverage Data Feeds

Complete Episode Transcript:

Craig: Alex Sauickie CEO of CircleBlack. Alex, hey welcome to the program.

Alex: Thanks, Craig. It’s really, really great to be here.

Craig: I’m glad you can make it. This is actually going to be our 92nd episode so I’m glad we could squeeze in before 100 because that’ll be a big milestone. And we were talking earlier about some of the things we’re going to discuss on the podcast. So I want to spend a little bit extra time going into what CircleBlack is, so first if you can just give the 30-second overview of CircleBlack.

Alex: CircleBlack is what we believe the unified best of breed advisor platform. We’ve been compared to your traditional all-in-one in that we do offer a lot of the different verticals or functionality within the traditional all-in-one, including CRM integration, financial planning, risk and compliance. The difference is that we offer it in terms of the ability to give you the third party applications that you use every day integrated within our platform. Your traditional all-in-one typically is more of a one stop shop, you go there, you get a lot of those same functions but you get theirs. You got the ones that they have, whether they built them themselves, or they’ve made them their own by way of acquisition. Our model’s a little different in that we provide you a basic platform with what we consider table stake pieces of functionality like portfolio management and performance reporting, but then we offer you the ones that you use the most. For CRM, for example, we have Salesforce, Wealthbox and Redtail as integration partners. So that’s really the big difference is we’re more of a unified platform than we are an all-in-one.

The Roku of Fintechs

Craig: I spend a lot of time explaining what what CircleBlack does when people ask me about it, because you kind of a very different breed of company that I feel in the market than most firms, saying here’s what we do and we also do integration. But it seems like your product and your core focus has always been, we are integrators and we make things work better through our integrations. So can you elaborate a little bit on that, specifically around like the RBC BLACK product and other product other platforms that have used your core technology as sort of the glue to hold their systems together?independent broker-dealer technology

Alex: Absolutely. First off we’re a fairly new technology so we’re using the latest and greatest technologies which, we think is an added advantage over some of the others out there, in that you we have the ability to integrate quicker. Our typical integration partnership takes four to six weeks, not months or years. We scale much better so we have the ability to support very large clients like RBC clearing and custody, which is, as you mentioned, a client of ours. And that integration is bi-directional. A lot of companies can claim that they have integration which means, typically that they can frame up the application within their platform. Our integration is bi-directional meaning if you make a change within our platform, that change will be in your Salesforce application for example, when you go to work late or if you do. If you make a change in Salesforce it bi-directionally updates within the platform. So, the fact that we’re new technology we have very low what’s called tech debt, our tech debt is measured in weeks not months or years or decades in some cases with some of these older companies, and we think that really is an added advantage for us.

With RBC BLACK, they’ve certainly taken advantage of the those functions. They white label, which is why they’ve labeled it the way they have, and they’ve taken advantage of specific pieces of third party integration that they want to offer their advisors. So they really have a choice, they can bundle it, and offer a specific CRM, a specific risk and compliance tool, and a specific planning tool if that’s how they want to roll it out, or a custodian like an RBC can also roll it out and allow the advisors who are their custody advisors or correspondents, can choose which bundles they want, very much like Roku, that seems to be resonating well we do explain it, and you’re right sometimes it takes a little bit to explain it. But it seems like people get the Roku model, very similar to what you have in TV, in that you can go in, get a platform, get some basic functionality that are table stakes within the Roku platform, and then add the channels if you will, that you want to choose, you’re not being forced to choose one of your traditional cable companies like Comcast or Optimum might offer, it’s a similar model here.

Craig: Yes, let’s expand on that so I’m not sure if everyone knows what Roku is, Roku is a digital media player but one of the reasons why Roku became popular, was they were one of the first to basically bundle up streaming services in one place, so you could get Netflix, which was the first one they did, they’re a bit ahead of the curve. And then Roku started becoming the place to go everything streamed in one place. Now they have Hulu, and every other streaming service, so you’re looking at yourself as a bundling solution for other services, would that be a fair statement?

Alex: You’re right, just like Roku, when you first open Roku and you log in, you get the Roku channel so they give you some basic programming and functionality and you could stop there, right. The same applies with with CircleBlack, we provide your platform, we provide your portfolio management, data consolidation of multiple custodians and third party data, and performance reporting primarily, we have other features as well. But then if you also, like Roku, if you want to add the Disney Channel, you add the Disney Channel, you want to add AppleTV, you want to add, Netflix, as you mentioned, those are all your choices and they’re your preference and everybody has different preferences, right. The same thing applies in CircleBlack, you come in and you can then choose which additional features you want to add, if you need CRM, not everybody wants to use Salesforce, we have Salesforce integrated, Redtail integrated and Wealthbox integrated, and you know as clients needs demand it we’ll continue to add in that category. Risk and compliance, you know you have one of as many as six to choose from, and the same applies in all these other different verticals, but very similar to Roku in that experience, that’s what you have in CircleBlack.

Craig: I wanted to go back a little bit, so before you were the CEO of CircleBlack, you were president and COO of another really cool tech firm called Scivantage. So there’s some things you’re bringing from your experiences at Scivantage, and I really liked some of their products like their client portal, their self directed trading tools that were leveraged, where I think were industry leading. What are some of the things you learned at Scivantage that you’re using in your new role at CircleBlack?

Universal Widgets

Alex: Yeah, probably one big one is widgets. Historically, CircleBlack hasn’t had the capability within its products to really offer its services to some of the larger financial institutions, and the difference being that most of the larger financial institutions like your bigger banks, for example, tend to have their own front end, they’ve created it themselves, they want their IT folks to handle all the changes, and they really want to control that client experience. They’re really not looking for the full solution that historically, CircleBlack has offered, so today we offer our front end, our client portal, our advisor portal, and all the functionality embedded within those portals and for the majority of our client base that type of solution is needed. However, with widgets, we now will have the ability to offer pieces of functionality that those large financial institutions that own their front end can actually embed anywhere within their front end, so they’re actually taking pieces of functionality. For example, if they wanted a performance report, a benchmark graph that compared the portfolio results to the actual benchmark, they could literally just take that tile or widget and embed that anywhere within their platform. That’s something we’re adding new this year, it is something we did at Scivantage to your, your point about the products there, and we’re re-architecting as we speak to offer that functionality as early as Q2 of this year.independent broker-dealer technology

Craig: Is there specific technology that the vendor or client would need to plug in these widgets? Are they are they universal, how do they work?

Alex: Yeah, they’re universal, and the way we expect to offer that is within a developers lab or workshop, if you will, where we present a area within our product that a developer can come in, find the specific widgets, understand what they need to do to write to it, and we’ll provide all that information, including documentation that sort of thing. So it should be fairly straightforward for anyone who’s used to doing this type of work, but we’ll set it up to make it easy to use, and something that you can, again, you can choose which ones you end up wanting to use now, where you want to put them and you can always come back later and grab additional functionality, embed somewhere else.

Craig: Excellent. So along with your third party integrations and your widgets and the other core of your platform, I know you’re building out a data platform that will allow these integrations to plug in to what you might be calling a single sheet of glass or a single data access point, and you’re building API’s around that. So can you talk about how that type of high quality data though the way you clean up and export your data and be able to provide it through API’s is going to change the way firms are working now?

Alex: First and foremost, our goal is to provide pristine data. It doesn’t make sense to have more data, if it’s mediocre, advisors I think would rather have less data and it’d be pristine than the opposite. So, in addition to the amount of data that we already consolidate and we expect to expand our breadth of data, we’re also continuing to improve our overall data quality. So we’re taking steps, not only with putting people around it but systematic steps to proactively identify and resolve and reconcile data in a way that we haven’t done in the past and we’re really taking it to the next level. And then with respect to access to it, our expectations are that you can consume that data obviously through our platform, which the majority of our clients do today, but we also expect to be able to provide that data, either through API’s or through even somewhat of an older technology with exported data where we provided it in a flat file format, where users could then reuse that consolidated clean data downstream in other systems. So if you needed to receive that data and put it in your own compliance tool, you have a proprietary compliance tool if you’re a large bank or broker dealer, we will, we will provide that ability to get that data and use that golden copy of data, if you will, throughout other platforms and systems that you might have internally.

Craig: I think that can be revolutionary and something that a lot of firms don’t realize is when you’re bringing in this they think, well let’s just bring in outside data, let’s bring in aggregated data for example, and it’ll be great. They don’t realize that a lot of it isn’t clean, a lot of it isn’t up to date. It may be bringing in data for you bring you from thousands of sources, and they all have different standards as to what “clean” means.

Alex: That’s right.

Invest In Others

Aggregator of Aggregators

Craig: So talking about your data and I’ve talked about this with you guys a lot. I mean, when it comes to data aggregation, you don’t just bring in one data aggregator, you bring in a bunch of data aggregators and you aggregate the aggregators and provide a consolidated feed, can you explain a little bit about how that works?independent broker-dealer technology

Alex: Yeah, so we have feeds that we’ve developed for the major custodians, we are multi custodian, which is I think an advantage not everybody is, and we can bring in data from multiple custodians especially if you clear multiple custodians. And then we also have feeds to DST FanMail, DAZL and other third party data aggregators. And to your point about data quality, each one of them could have various reasons for anomalies in their data including operational, it could be simply an operational issue or a human error. So we have to account for all of those, and when you’re bringing in millions of accounts daily, hundreds of millions of transactions and pieces of data including things like prices, it’s a lot, and you really need somebody that you can trust to be on top of that, to be proactive to account for things like corporate actions, which if you spent any time there those in themselves can be quirky if it’s a split or a spin off, for example, those tend to be a little problematic in our business. But if we’re doing what we’re supposed to do across that it should be fairly seamless, and we do it every night. So, we’re doing it overnight typically in a combination of flat files and API’s and we make sense out of it and hopefully have it ready to go long before the market opens the next day.

Craig: I was reading that you have a patent pending on your multiple data aggregation is that’s still true, did you get that patent yet?

Alex: It’s still pending, we’re hoping to get that but these things seem to take a long time so hopefully that and we may have some others in the future, we’ll see.

Craig: I also have some notes here that one of the unique things about your data aggregation solution. Most companies can’t do accurate reporting on held away accounts because the data isn’t clean and it’s not transaction level clean, whereas you build a brokerage accounting platform for each client to track every account and perform recon on it. Is that a true statement?

Alex: It’s true. That area always has some concerns and it really depends on the technology of the partner that we’re integrating with, Yodlee being one that’s very well known, but that is a challenging piece of technology and a challenging way to bring in data. It started out as I’m sure you know as more of a screen scraping type of function and historically the problem with that has always been, if the financial institution that the client enabled within that product changed their screen in any way, it broke the connection. We’re seeing challenges there now with MFA, with multi factor authentication, being so widely rolled out right now that while the security is important, without a doubt, that MFA and that extra step seems to be causing some problems in that area. So it’s something we’re working with our partners on and looking to ensure that we keep the client experience good in addition to the data quality as clean as we can participate in making it.

Craig: It’s more important than a lot of firms realize, especially from an independent provider such as yourself that you’re not in the data aggregation game on your own, you’re just bringing in these other vendors and providing an objective viewpoint, here’s what we think is the best data, we’re bringing in from Yodlee and Quovo and ByAllAccounts and these other firms as you mentioned, and we’re providing you with the best feed from across all of those. So why would that be important, why not just pick one and use the data from one of them, why is it important to bring it in from across all these different vendors?

Alex: Well, like everything else on our platform, a lot of it is preference, each product has their own different nuances and features that clients like some better than others. Whether it’s user experience for financial institutions that they can add via one versus the other. And again, from our perspective we’re indifferent to which product a client chooses, we look at any partner that we choose needs to be value add to our platform. They need to be around, right, we definitely don’t want to integrate with a partner that may go away at some point and cause disruption to our user base.

But we look at different aspects of all partnerships including this area where we first determine what’s the client need, what are clients using. And then we’re also looking at different options, there may be a “higher end option” within a particular space for example, you may see Salesforce as the high end option within CRM and another CRM as a more inexpensive less feature rich option, and that’s okay, you know we have clients that may want the super feature rich option of Salesforce, and maybe just something basic for client management and contact management on a product that’s a little less feature rich and maybe a less expensive. So we think about those things when we consider any partnership in any one of those verticals and we will continue to let clients drive it, and we expect to expand our number of partnerships and integrations fairly dramatically this year and going forward.

Craig: When we spoke earlier you said that you were adding Addepar this year. Is that still going to happen?

Alex: Yes, that is started. We’re adding Addepar as a data feed, very similar to what we do with the custodian and third party data aggregator feeds. We just finished BlackDiamond as a feed so where some may view both BlackDiamond and Addepar as a competitor, we embraced it. If you decide that your data aggregation through a BlackDiamond or an Addepar is the way you want to go and maybe you’ve been working with them for a couple of years but you see other features that you need from the CircleBlack platform for things, most notably, like our investor portal, we can take that data feed in, keep it consistent, meaning that’s kind of your golden copy of data that you use within those platforms, we’ll take the same feed and load it into our platform and then you can take advantage of features within our platform like the investor forum.

Alternative Ways to Leverage Data Feeds

Craig: Those two vendors you just mentioned are very different in terms of the data they provide. Addepar, their strength is illiquid assets, private partnerships, limited partnerships, private equity, and those types of things, whereas BlackDiamond, it’s more of a consumer focused mass affluent type of product. So how would a firm use those data feeds, is that just performance reporting, are there other ways that they could those feeds can be used through your product?independent broker-dealer technology

Alex: Well, primarily through performance reporting and that includes basic householding type of accounts. But where we can provide performance on the data, we will. Whether it’s provided to us in the feed, which we can take in data that’s already been reconciled and performance added to it, or we can perform performance on the data ourselves, and it’s really just about, like you said, the differences in the underlying data, and what ultimately we would need to do to add to it. So if we’re not getting performance from a particular provider, we’ll be able to calculate that performance if in fact performance is provided, we’ll take it in and we’ll display that as a result. So there’s various ways that we can extract and load and present data, it really just depends on the feed and that’s not just BlackDiamond and Addepar, it’s really across the entire database. Whatever form the data is coming in, we have to consider it and in a lot of cases make adjustments to our own feeds to to account for it appropriately.

Craig: I think that’s something else that differentiates you from a data aggregation vendor, in that you bring in the cash flows and transactions so you can run performance. As opposed to most vendors they’re just doing holdings, just positions, which is what you see normally on a held away account on a client portal, here’s what you have, but they don’t run performance on that so that gives you a bit of an advantage. So how would firms take advantage of that? For example, would it help me if I’m doing consolidated reporting, if I’m using multiple systems, but I want to report it on one statement, would your feeds help that?

Alex: Oh, without a doubt. In fact I’d say that’s sort of the secret sauce, our back end and our data consolidation. It really is going out to all of these disparate data sources, and understanding the firm, the advisor and the investor relationship, and all the accounts and transactions that go along with that. And you’re doing it in massive, massive quantities, hundreds of millions of transactions, millions and millions of accounts, and across multiple client bases and sources. So the ability to bring that in, make sense out of it, create the relationship across, again, all of these different data sources is really key to what we do. In fact I’d call that probably the biggest value add that we have, it all really starts there. And of course then making sure that that data is in really good shape, virtually pristine, is really what we strive for. And everything else that comes with it starts there, so you’re not going to love your performance reports if the underlying data isn’t in good shape. The fact that we can do that and get that right, is really key to everything else.

Craig: This is a problem we’ve seen with a lot of firms that we work with, where they don’t understand the complexities of the data. Either they’re trying to convert data from the vendor and think it’s going to be easy, they’ll just move it over and it won’t be a problem, they wind up spending weeks or months cleaning the data because they messed up the performance, especially for firms that have 10 or 20 or even longer year relationships with clients, that’s a lot of data. And if you mess up that data or it’s not calculated correctly, it could take a long time to to fix. I’ve heard some firms talk about, well we don’t do daily but we’ll do monthly, but then if you try to do a report intra month, between certain days of the month you can’t because you’ve dumped all that data. So is that something you provide? How would a firm work with you if they wanted to do that, and wanted to get their performance reporting from multiple places using your technology?

Alex: So that occurs today in that different data providers provide different time schedules. For example DST FanMail provides monthly position files, rather than weekly or in some cases even daily positions from service providers. Having both transactions and positions, makes it much easier to confirm the data quality you’re comparing all the transactions that you’ve added up since the last position file against the most current position file. So in the case of a provider that does it on a monthly basis, we have to do the calculations based on getting the transactions correct. So we’ll get a position file at the end of February, everything that happens on a transaction basis then would need to be calculated, all the buys and sells that came in on what was 100 shares of IBM, at the end of the month should add to 200 shares of IBM if we did it correctly, and then the position file that came in at the end of the month should confirm that. So it’s important that we actually get all of that data in between correctly when you see less frequent position files to confirm it against. So that that’s an example of where we really have to be good at what we do, and take steps to help make the data as good as it can be.

Craig: Alex, would you mind if I asked you about John Michel?

Alex: No, not at all. Okay.

Craig: So Alex, you took over CircleBlack as CEO after the death of their founder and CEO John Michel, can you talk a little bit about the legacy that John left in building the firm to this to the state it was in when you took it over and and how that sort of changed where the industry is going?

Alex: Yeah, well, you may not know, but I actually knew John Michel, and he was a really a behemoth in this space, literally. He was a big man, and when he entered the room, you knew it. I was lucky enough to actually work with John back in the 90s at Merrill Lynch, and it’s a crazy thing how small this this financial services industry is that we work in, John and I work together on a project that was his idea back in the 90s, and it grew into what is now called Merrill Edge. It was his idea, I was actually hired to execute on that idea and build it. So it’s not lost on me that here we are 20, 25 years later, and I’m sort of doing the same thing again and just by pure coincidence, it really is something when you think about it.

What John left though, was a great company and a great product. When I was first asked to interview with CircleBlack, what really grabbed my attention right away was it’s a product that solves a problem. And anytime you have that you’re in pretty good shape and not only does it solve a problem, it solves a problem better than most. The fact that he left a product that is so open in its integration, its ability to work with partners and integration partners in a quick way, I mean, weeks, 4-6 weeks for an integration with a world class third party is unheard of, frankly. And I’ve been doing this for a long time and and to see that that ease of integration and the client experience that it creates is really something. He not only left me a good company to work with, he left me a great group of people to work with. All the folks that were here when I got here are still here, which is a testament to the folks that John surrounded himself with, and they all have a lot of passion for this company and I hope they see I’ve embraced that passion as well. And we’ve done a lot of good things in the first six months since I’ve been here, but I really feel like we’re just getting started.

Craig: Yeah, I was lucky to meet John as well and I knew him for a while and I interviewed him on my podcast, he was one of my first Winners of WealthTech, I did a whole hour long interview just on him. How he got to the industry of starting at Merrill and his time at West Point and so it was really interesting to hear because you don’t really learn this stuff when you just read the news about people, if you meet him at a conference. So to be able to spend the time to really get into who he was as a person, how he got this way, who were his influences, I thought was really valuable and I was lucky to have the time to talk to him. And I was lucky to have the time to talk to you and I appreciate you spending the time to talk to us here on the podcast and and share all this with us.

Alex: My pleasure, and I’d love to come back sometime.

Craig: I have another 20 questions to ask you that we didn’t get to, Alex, so we’ll definitely get you back on. Thanks so much.

Click here and schedule a free Discovery Session to find out how Ezra Group can help your fintech firm grow revenue in the wealth management space.



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