Ep. 174: Pershing X Goes All In On Financial Planning, with Ainslie Simmonds

Come on in and sit back relax, you’re listening to Episode 174 of the WealthTech Today podcast. I’m your host, Craig Iskowitz, founder of Ezra Group Consulting and this podcast features interviews, news and analysis on the trends and best practices all around Wealth Management Technology.

This episode is part of our ongoing series focusing on wealthtech startups, and I have a fantastic conversation with today’s guest Ainslie Simmonds of Pershing X. Pershing X is a new business unit that designs digital solutions for Pershing’s wealth solutions clients, including broker-dealers, RIAs and trust companies. 

Now, of course Pershing isn’t a startup. They might be the least start-up-y company in our space but they decided to take a big risk and launch a startup inside of their company and hire Ainslie.

Before we get into the interview, if you are listening now you’re an executive at a broker dealer, an asset manager or an enterprise RIA you should run not walk to a website, EzraGroupllc.com and fill out the Contact Us form on the homepage to meet with us about your technology platform issues. Our experienced team can assist with software vendor evaluations systems integrations, improving operational efficiency, software implementations and a whole lot more. You can take advantage of our free initial consultation offer by going to EzraGroupllc.com. Now, let’s kick this thing off.

Companies Mentioned

  • Conquest Financial Planning [00:30]
  • BNY Mellon [05:00]
  • iCapital [05:00]
  • Albridge [18:32]
  • FolioDynamix [19:08]
  • Investcloud [19:25]

Topics Mentioned

  • Conquest Financial Planning
  • An API First Platform
  • An Update on Pershing X
  • Direct Indexing Will Shake Up Our World

Episode Transcript

Conquest Financial Planning 

Craig: I’m happy to introduce my next guest on the program. It’s Ainsley Simmons, president of Pershing X. Ainsley, welcome.

Ainslie: Thanks for having me.

Craig: I’m so glad you’re here. This is exciting to catch up with you. I know you’re super busy. So let’s just jump right in. We’re going into some news that came out from you guys, which is a new partnership and equity investment in a company called Conquest Financial Planning. Can you talk about that, why you did that and what is the impact to the rest of the market?

Ainslie: At Pershing X, we are building an advisory platform, all the tools that an advisor would need to serve their client and one of those tools that everyone needs, at least today is a financial planning tool. And what we are super excited about is finding something as innovative and easy to use as conquest is so conquest, you probably don’t know the firm because they haven’t really been launched in the US yet.

Ainslie: Conquest Financial Planning is a firm that has been around for a few years, primarily in the Canadian and UK markets. Mark Evans is the founder. He is the former founder of Advisement so not his first rodeo. And he essentially built sort of what he wished he could have built if the technology existed many years ago, which is an AI driven financial planning engine that really allows an advisor to do plans very quickly, but extremely tailored to their end investor using AI. When I saw the product, so I’m the former head of product at LearnFast also another financial planning type software that was sold to Northwestern Mutual a few years ago, when I saw this product, I said, oh my goodness, that’s what I would have built if the technology had existed a few years ago. It’s extremely, extremely efficient, and it creates these super customized plans for clients. And then really, interestingly, puts the tasks to complete that plan back into the CRM, so the advisor can make sure that all the follow ups happen. And the action really happens. So that a plan isn’t just a stack of paper. In fact, in the Conquest world, it’s very much not a stack of paper, that it really becomes an actual set of activities that the client and the in the advisor agree on and then get put into into the “To-Do” land and sort of have reminders and follow up.

Ainslie: It’s a really terrific piece of technology. And so we felt super lucky to be able to meet Mark and his team to talk with them talk about what we’re doing on Pershing X, talk about their US ambitions and decide that we were going to be better together. The Conquest, technology matches what we’re trying to do, which is help advisors help more people by making their life easier. And we met we match what he’s trying to do, which is not just have financial planning as a standalone item, but have it sort of woven through the fabric of the advisor and client experience. So match made in heaven, I guess.

Craig: It certainly sounds like it. So why the investment? Why not just partner with him like you would partner with eMoney, MoneyGuidePro, to get the finished planning tool?

Ainslie: I think the equity investment is really important to us, because I think it signifies our commitment to Conquest Planning and their future. We could have just said we’ll just sort of have you on the platform and if it if it works, it works. It doesn’t it doesn’t, we could swap.

Ainslie: But what we’re looking for on Pershing X for opportunities where we can find like minded companies and individuals that we can then kind of get together and collaborate and use all of that sort of like minded energy to get to where we want to go faster. And when I say it’s a match made in heaven we had a lot of conversations were like, do you see the world this way or that way? Do you see the world this way or that way? And we really got comfortable that we see the world in the same way and we see the future of FinTech being platform driven, not tool driven. And that made a lot of sense to both of us. And so that’s why we did the equity investment and BNY Mellon has a long history of doing equity investments in companies like iCapital like that. You know, we really believe it. And we really believe in this one.

Craig: That’s great. So it’s not going to limit your ability to work with other financial planning tools.

Ainslie: No and the Pershing X story I think all the literature that’s out there, our website, everything would sort of attest to the fact that we want to be an open architecture system. We want to have our own what I would call native application the one that comes with the operating system, but then we are also going to be able to wrap in third parties and we’ve been very clear about that, because we understand people have particular tools that are their favorites. Somebody might like eMoney somebody might like something else for billing, I don’t know whatever the case may be. So we’re not trying to be a closed system. We’re not trying to be an all in one. We never have said that. That is our future. Our future is to be a platform. But we want to have really good native applications. And that’s what’s so exciting about conquest.

An API First Platform 

Craig: I’ve talked to the Conquest guys a number of times and got a couple of demos with the product. One of the things that I liked about it was it was an open API. And they claim they were an API first platform, is that something that helped you make the decision to work with them?

Ainslie: Sure. The nice thing about being sort of late to the party, I guess, is there’s certainly other credible platforms out there. But what the one of the nice things about being late to the party, is we get to work with the most modern tech and we definitely that was part of our consideration set is this platform built for the future. And we really believe what Mark and his team have built is is as future proof does anything counting.

Craig: You know what they say the early bird gets the worm, but the second mouse gets the cheese.

Ainslie: I like cheese better than worms.

Craig: Something you said Ainsley in your press release, “today’s advisors are data driven, yet time starved”. What does that mean and how does this partnership help that message?

Ainslie: Yeah, there’s some think it’s really data and I’m sorry, I don’t have it right in front of me and we can send it to you on follow up. You’ve probably seen this study that advisors spend somewhere around 25% of their time with clients and the rest of the time behind the desk. And there’s a set of activities, some of which are productive, like working on their practice and their business working on prospecting. And then there’s a bunch of stuff that isn’t productive, like re-entering data and trying to hunt down where a proposal stands. There’s a bunch of stuff that they’re queuing that is just busy work. What we’re trying to do is save advisors time? I keep talking about that, because I think if we could halve the time it takes them to serve as a client, they could double their business straight away without adding more staff.

Ainslie: I know you and I share a deep love of talking about interconnectedness and integration and I love watching the innovation you’re doing around helping advisors sort through what is a very confusing marketplace on do things connect. And I think we might sort of share some of that same ambition which is we got to stop the madness of building our tech stocks. They don’t work with each other and anyways, so that’s I might have lost my train of thought there, but.

Craig: No don’t worry, I’m following you. Thanks for the kind words I appreciate that. I recently moderated a roundtable discussion with some broker dealers and what they complained most about was the lack of reliable, bi-direction and vertical integrations across their tech stack.

Ainslie: Well, I do have some data for you there that I have in front of me. So InvestmentNews, put out a study called the Advisor Technology Study 2022. We’ll send you the link. And they said that 57% of advisors report their biggest pain point with tack is the lack of integration between the core applications and 44% say the lack of sort of cross application workflow. That is bananas to me, that really people’s biggest complaint is it doesn’t connect and you heard it in your roundtable, but the numbers absolutely echo that sentiment, for sure. That’s our biggest problem.

Craig: I agree with you 100%. I believe I saw that survey but please send it over just in case it’s different. The same numbers kind of echo across all the surveys I’ve seen that advisors and that’s very different than the advisor complaints 10 years ago. And the reason is that there’s more tech, as you said, you said if you’re late to the party, the more tech appears, it’s easier to build. So we’re seeing a flood of new applications, which advisors are trying and and trying to integrate in their practice and realizing that it’s missing is while they’re giving. They’re getting some interesting functionality. It’s disrupting their workflow.

Ainslie: Absolutely. Well, one more fun fact for you. And this was MMI information from 2002 their Advisor Expectation Study, that it’s not just an advisor problem now that study said 93% of advisors want to see more simplicity and integration over a more expansive set of features, but it’s also an investor problem. 84% of investors are saying they want greater simplicity and integration over more features. So the features arms race, I think is over. I think the new game is integration.

Craig: I’m going to disagree with you there. I don’t think there’s ever going to be enough features for people. There’s never enough features. There will always be added features. But you’re right about the second part that if you’re delivering features, without integration, more advisors are going to reject that when they realize that what am I going to do with this? I got a test which again to get there, and not now I’m doing 10 different tests, which is to do the simplest to set up a client meeting or to deliver a

Ainslie: Build a portfolio, run the analytics on it to see if it’s a good fit with my client to all the things that really are where they can differentiate themselves with clients, which is providing tailored advice.

Craig: Exactly, and that we’re seeing more advisors realize that their value add is not building portfolios. It’s understanding the client’s needs, understanding their their lives, understand what their kids want, their spouse wants, and helping them be more holistic about that information they give them which means you got to spend more time gathering that information and applying it in some ways you need that your system be able to capture all those goals and dreams and and how you use it.

Ainslie: Yeah, I think advisors should think of themselves as sort of tailors not fabric manufacturers, and if you take a really beautiful piece of cloth and you’re just tailoring it to your client and they feel like it fits them perfectly, you’re going to like your tailor and you’re not going to wonder why they didn’t weave the fabric themselves. You know what I mean? You that experience of getting bespoke clothing is the most premium wonderful experience. And we have advisors that think weaving is the game and I think that needs to move forward.

Craig: That’s a great analogy. I’ve never heard anyone use that one before. And I’ve heard a lot of analogies.

Ainslie: I’m looking at your jacket and I got inspired.

Craig: It’s my conference jacket.

Ainslie: It’s fitting you well.

An Update on Pershing X

Craig: Thank you so much. So let’s shift gears. Can you catch us up on what’s going along with Pershing X? Everyone’s excited about it that we hear a lot of news, what are we going to see it? What are we going to see and what’s gonna change? When, when, when?

Ainslie: I joined just over a year ago, I had my year anniversary a couple of days ago and we started with zero right and it was a “Here, Ainsley, please start a FinTech within the Bank of New York Mellon, go”. And in a year we’ve staffed I think we’re over 450 people now Craig, engineers, product managers, designers, client relationship, people, the whole gamut. Part of that came from the bank. We brought to sort of the NY Mellon Pershing brands into Pershing X Aldridge, our data, multi custodial data aggregation platform, and our Managed Accounts platform. So we moved a couple things in so that that got us going.

Ainslie: But we also attracted about 150, almost 200 net new folks who are super interested in this really hard problem that we’re trying to solve and we got them from startups and we got them from other places on Wall Street and we got them from fintechs it’s really been wonderful to see the influx of talent that this thing has attracted. We’re not done but we’re probably not going to keep building at that rate. That’s insane. We don’t need to but now we have everyone sort of settling in and, and building and what are we building? We’re building the platform. We’re building native applications where we think it makes sense. We’re partnering on native applications were like Conquest where we think it’s better to do that. And we are about to put out a private beta next month.

Ainslie: So what are we going to test with that beta? We are testing the operating system, the platform, and we’re trying to see if our take on this will make it easier for advisors to navigate across these applications. We only have a couple of applications in it, just to test the interaction pattern, the data layer, the framework, sort of an early MVP, startup style. Then we’re going to get feedback, we’ll probably make changes because I’m sure we didn’t get everything right. And then we have to add in the other applications, when we’re gonna announce that we’re sort of ready to go, I think depends on how that beta goes to be perfectly honest. I don’t want to be an idiot and say, Oh, I’m going to commit to a timeline and that we have a bunch of changes to make that are going to make the product better. And then I now am forced not to make them because I’ve told you some timelines. So I’m very much taking my startup training, which is test your hypothesis early, get it in the hands of users early, take their feedback, use it, and then we’ll talk release. So I hope I’m not being like painfully vague, but that’s the way startups work. I’m staying private beta for another little while.

Craig: I understand completely. Can you talk about who is testing it in private beta?

Ainslie: Some current Pershing clients, I’m not going to name names. Okay.

Craig: Can you generically describe what types of clients you’re working with?

Ainslie: I’m gonna be annoying here, folks that care about the advice, tech stack and delivering quality advice, and there’s a lot of those in the Pershing family.

Craig: Is there a specific size? Do you feel that Pershing X is more suited to RIAs or broker dealers?

Ainslie: We think our hypothesis is RIAs are going to get the most value out of this in the short term because it’s more difficult for them to spend the money to connect everything to have a consolidated data layer, like it’s just a lot, right? A larger firm and enterprise firm has probably already spent a bunch of money and has done some things. Trust me, none of them are happy. But they’ve they’ve made a lot of commitments. So I was just did a couple of large enterprise firms last week. And the the model for them is that they’ll probably take pieces and parts because they’ve got like things they’re already committed to. And that doesn’t surprise me. And we’ve built this so it can be modular that way. But that’s kind of the way it shaken out.

Craig: So being modular, would you think that you would start out just giving them certain apps to work with rather than taking over?

Ainslie: So the operating system sort of is the chassis and then yeah, they can opt in to this app for that app like we have. One of the apps that we’re building from the ground up is our trading app and our tax transition application. The early interest for those two is off the charts because of the multi- custodial easy to use. This application is something that a lot of people are shopping for. And there’s a couple of apps that people are asking for because they really need it and I think those might get out of the gate faster.

Craig: When you say trading is that also portfolio rebalancing?

Ainslie: Yeah, so we got rebuilt in there, too. 

Craig: It’s the Managed Accounts platform as well that you’re expanding.

Ainslie: We took that existing managed accounts platform that Pershing already had and we’re modernizing and adding to it. We took our existing Albridge platform and we’re cloud enabling it and upgrading it in many ways. But what’s nice about having those couple of things to start from and you and I talked about this in June. I showed up, I had to hire all these people, but it wasn’t a dead start. And there was a lot to work with, and I’m pretty excited about how that is going to accelerate our efforts.

Craig: I know a lot about your managed accounts platform, having been been a consultant to that group in the past. I know you rely on a number of key partners inside that platform, are you keeping those partners? Will the Foliodynamix (acquired by Envestnet in 2017) code still be used as the engine for block trading and rebalancing and will your UMA still run on APL (merged into Investcloud by way of Fiserv and Motive Partners in 2021) chassis? Or are you rebuilding them?

Ainslie: Well, there’s certainly a role for keeping all kinds of partners right and we have all kinds of partners old and new. We’re going to announce some new partnerships that are we’re excited about so there’s, there’s all kinds of roles for partners. Exactly, keeping partners where they are as they are. I’m not committing to that because there are certain things that our partners may or may not want to stretch into with us and I can’t answer that question. But there will be partners with us along the way, absolutely, and there are many of them today, and there’ll be many of them tomorrow.

Direct Indexing Will Shake Up Our World

Craig: What are some of the trends in the market you’ve seen that have changed the way you’re thinking about building the Pershing X platform?

Ainslie: I think the industry has been talking about the cool stuff for a while, such as having a scalable data layer and data lake, and partnering with world class companies to do those things. Direct indexing is a trend that is going to shake up our world so much so that I showed my commitment by buying a direct indexing provider (Optimal Asset Management). We already have relationships with alternative investment players like iCapital and CAIS that we can leverage for the alts trends. What’s beautiful about doing this at BNY Mellon is that the bank has its fingers into th heartbeat of every trend in every sector of the capital markets. And we get to leverage all of that digital custody, who digital asset custody, who knew right, the Bank of New York Mellon would be a leader there. I think that we have many ways to sort of stay current. But I think a lot of the talk hasn’t materialized yet into true value. And that’s what we’re focused on making sure that we’re going to turn these innovative things into true business building value for our advisors and their clients.

Craig: You just happened to mention digital assets, will Pershing X be supporting cryptocurrencies that are on your road?

Ainslie: Not in our first release or two, obviously, the mothership is gotta get going first. But again, really fun for us to be able to just jump on that train that’s already barreling down the road and I didn’t have to go build that. It just keeps coming back to the why, everyone always asked me why is like, why this in the bank? Why would you ever do that? Why, why why, why why it’s the question that like, I think is the most popular question. Isn’t it gonna slow you down? And I always answer with Sure, there’s some parts that let’s call it grease the gears and try and move as fast as possible within the confines of a regulated bank, but when it comes with it, is pretty incredible. So that’s the balancing act.

Craig: And we’re all anxiously waiting for that train to come into the station.

Ainslie: Yeah.

Craig: Ainslie, thanks so much for being here. We’re out of time. I appreciate it so much. Thanks. And hopefully talk to you again soon.

Ainslie: Thank you. 



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