Podcast: Play in new window | Download | Embed
Come on in and sit back relax, you’re listening to Episode 182 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.
My guest today is Brad Genser, Founder and CTO of digital advisory firm Farther. I was a little confused as to what Farther was, I wasn’t sure if it was a robo advisor, was it an online firm, wealth management firm? What were they doing? So Brad did provide a good answer which you will hear in the interview.
Now Father, received the $15 million Series A round of funding back in July of 2022 from some pretty impressive VCs including Bessemer Venture Partners, Coastal Ventures, Mass Mutual Ventures to name a few. Brad founded the firm four years ago. Before that he was at Goldman for five years, before that he was a US Army officer for five years.
Brad has a BS in mechanical engineering from the United States Military Academy at West Point, very impressive, and his Master’s in mechanical engineering and an MBA from MIT.
If you’re impressed by that and 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.
- What Does Farther Do?
- Recruiting Advisors
- Working With Multiple Custodians
- Alternative Investment Marketplace
- Too Many Portals
Craig: I’m excited to introduce our next guest on the program is Brad Genser, founder and CTO of Farther. Welcome.
Brad: Thank you, Craig. Thanks for having me. Excited to be here.
Craig: I am excited to have you here. Where are you calling from?
Brad: So I’m calling in from my home in New Jersey, and I’m just outside of New York. kind of split my time between the office there and in my house these days being remote and being flexible. It’s a good thing.
Craig: Indeed, it is. And you’re in now snowing, New Jersey.
Brad: Snowing New Jersey the first time this year. I actually got excited a little bit to go out and shovel some snow this morning. That’s very satisfying it’s not satisfying every day of the week, but couple times a year.
Craig: If it was satisfying every day of the week we’d live in Buffalo.
Brad: There are places for people to find it to be satisfied every day.
Craig: Exactly. I’m usually right near you in New Jersey, but I’m the past couple weeks I’ve been in London so we’re gonna do this international podcast episode.
Brad: How’s the weather in London?
Craig: It’s much better than New Jersey. It’s not it’s still very gray in the 40s but it’s not snowing, but it’s not New Jersey, which is way better. So I’m excited to be here. Excited to be on the program. So take us off with a 30-second elevator pitch for Farther.
Brad: So Farther is a new type of financial institution. We are a wealthtech firm but really we are a financial institution. We’re an independent advisory firm we have advisors who are employees at Farther and work and Farther and right at our core is it is a wealthtech platform. It’s really designed to bring everything in one place, tie together planning and action. So there’s a big gap between planning and action in our industry and provide clients with broadest access to solutions. And what really differentiates us is technology gives us the ability to provide a little bit better service, more client focused service. It allows our advisors to be boosted and kind of be more scalable and thoughtful about their business. Which is pretty exciting for clients and advisors.
What Does Farther Do?
Craig: So independent advisory firm, of course, everybody’s different has wealthtech. But what’s the primary function of your service? So looking at the website and marketing, I mean, we see a lot of different things going on and you have a lead gen tool, end to end digital wealth management platform. What is your primary delivering service?
Brad: If we had to use current day industry terms, it’s different. The industry is going through a big transition and in its history and I like to give this kind of overview for people a little bit who might not be as familiar with the industry. Every wealth management firm spun out of a corporate focused investment bank at first and then we started seeing the rise of independent advisors who were more focused on clients and that was the right move. It just wasn’t a scalable move.
Brad: At the end of the day, it was people plugging away at spreadsheets and the technology that was available at the time. And then we had robo advice and more scalable solutions, but they were missing some of that human element. And we at Farther are really here to bring together a solution for people of complexity. Typically in the industry we would say high net worth clients and advisors who focus on high net worth clients. So the full suite of investments, trust and estate tax aware we’re kind of planning is all here at Farther and every single aspect of what an advisor does and what clients do is integrated into our tech platform and likewise, our tech platform is built around people, not the other way around.
Craig: That’s good to hear you definitely want tech platform built for tech. You definitely want people using the platform. So on your website you have advisors and clients as separate sections of the website. Do you sell direct to consumer or is it only through advisors?
Brad: We grow primarily and mostly by focusing on advisors, so advisors are currently at other independent advisors, they’re big, larger financial firms, and they’re saying, Hey, I think there’s a big thing happening in wealth these days. I think we can serve our clients better by having a more tech forward experience. I believe I can have more of a focus on clients if I really can use an integrated technology solution. We provide that platform here at Farther. And something that you said is everyone every sort of wealth or independent advisory firm has some tech right, but it’s typically unintegrated it’s typically not built from first principles. Architect is custom it was built for we have built every building block of it. And that is all synchronized so that we do we can do things that other wealthtech firms cannot we’re not stitching together in bolting together solutions here.
Craig: Indeed, there are some advantages to building everything yourself. You get exactly what you want.
Brad: You get exactly what you want, and you get exactly what clients wanted, which is what we’re here for at the end of the day.
Craig: The downside of that is that you don’t get the broader access to other information. For example, if you’re buying a product from a vendor, they’ve got hundreds of other partners who are then giving them information and updating their product. So you don’t have access to that how do you maintain that those capabilities and things you’re not getting from thousands of wealth advisory brainstorming pitches to a third party?
Brad: Well, I think that there’s sort of a difference. I would say maybe I’ll sort of go back and say, we felt we really are building the experience layer to the financial system. What we do is we actually reach down for best of breed kinds of solutions. So there’s no need for me to build a performance calculator, for example, there are plenty of plenty of places that do that quite well. I’d rather reach down to them but integrate them into experience that feels totally seamless for the clients and advisors. And that’s how we sort of go about things. We are hungry, but we are also humble. About what we can and what we should build and very selective in sort of what we do. But we do want to own that client experience and that advisor experience and make sure that it’s it is truly flawless.
Craig: Hungry and humble. That’s a good teacher. You guys can have that, that’s a great one. You didn’t build your own performance calculation software, you’re using that from some other vendor?
Brad: That’s right. That’s right. I won’t name vendors that we use but they are the top vendor in the industry. Lots and lots of experience and I’m sure that as you know many of our listeners here know, bringing together data from multiple custodians and we are a multi custodian platform is very difficult and and job performance calculations is needs to be done carefully and that allows people to do that very well and we are happy to partner with them.
Craig: This is a tech podcast, you can mention names of vendors, they’ll be very happy to be associated with you. Which other parts of your tech did you outsource?
Brad: Rather than focusing on what we what we outsource, I think it’s more interesting in talking about what we actually get to do now. There have been a lot of problems that had been waiting for an integrated integration there. So we just talked about performance and the ability to read data. Well performance is actually solved for managed accounts at custodians. But we also have to add in things like alternative assets that are typically manually tracked, and we have to build a process to bring those together and add them into performance. We have to add in other accounts and have the ability to bring in things in other accounts, we have things like Plaid and other aggregators, in order to to see the whole picture so we can’t move 401ks your current employer, for example, but we can see it and based on that we can actually build sort of recommendations in an automated way or quantitatively driven way and take accidents based on on the entire picture, which is a neat thing that we get to do versus other vendors who are trying to like you know, who are typically very focused on one narrow area. Wealth is about people. It’s about accounts and assets, service professionals within advisors, and you have to bring all this all these things together in one place. And we do that through Farther’s platform.
Craig: Building recommendations in a way sounds great and definitely people accounts, assets, advisors are all the four pillars. When you’re going out to bring advisors onto your platform view, if an advisor comes to work for you, do they have to bring all their assets to can to keep some assets with their former business or if they’re running an RIA and pawn the rest or is it all or none?
Brad: It’s really all or not and I think that speaks to where we are as a company. Like I said, we’re hungry. We have big ambitions here at Farther to build the next great financial institution. But where we are today is we really are looking for those foundational advisors who are all in on changing this industry. We have largely been able to recruit those types of people. So we’re saying no to a lot of people too.
Brad: If you are here just to sell your book or portion of your book or just use a little bit of the technology. That’s not what we’re interested in right now as a company. We’re interested in advisors who are all in and will bring their entire book and will contribute to the growth of this industry and our platform.
Craig: Where most advisors who join Farther comes from I mean, mostly independent RIAs and broker dealers, wirehouses what’s the source?
Brad: Well, the the good news for a company like ours is that most most places where advisors live today, they have created conditions for discontent to some degree so we actually see a pretty even split between independents and wirehouse advisors at this point. I think functionally right now, independent advisors are a little bit more focused. Typically we see a couple of modes there. One is sole proprietors who are looking to scale so it’s really hard to run you’re running a business, but when you’re when you’re an independent advisor, you’re doing all the marketing, all the compliance, all these other things and while there’s solutions that for each one of those verticals, you have put it all together and it’s really hard to do. So we’ve kind of see it advisor like I just want to focus on clients and grow coming to us and saying but I want to retain my independence and self guided nature. And we’re perfect for that. That kind of advisor and likewise, junior partners at small IT firms who are really looking, we’re making their leap to say I’m ready to go independent and trust myself and trust my clients, those types of advisor who perfect for us right at this moment, and it changes over time.
Craig: I’m sure it’s everything changes. We wouldn’t want things to stay the same. So how do you compete? There’s lots of companies out there lots of independent advisors competing for the same pool of advisors to attract them to their platforms. How do you compete with other RIA aggregators are very growing RIAs like obviously Hightower and other firms. Who’s your biggest competitor?
Brad: Right now you can go to a wirehouse, you can go to another independent advisor, less tech enabled than we are or you can go to an aggregator aggregators are going to be more of a financial motivation typically. And like I said, we’re really looking for those advisors who are looking to change this industry and looking to grow and are really client focused. That’s really important to us. And I’m not saying that the advisors who join aggregators are not client focused necessarily. Aggregators are not a bad thing, wirehouses are not a bad thing. But right now, we don’t see any competition for the tech enabled wealth play that is truly integrated from the ground up. We are the only ones at this point.
Craig: A tech-enabled wealth play.
Brad: I think that the key kind of differentiator there is that as much advisors as we are technologists and quants, we have teams. We have teams of developers developing custom software and bridges that actually make a great integrated client experience every day. And you can sit down video and we can chat about everything from everything from asset allocation. All the way down to done two types of programming paradigms and the like, and that’s pretty rare at an RIA.
Working With Multiple Custodians
Craig: Do you have any robo advisor Digital Advisory Services or every client comes into Farther gets assigned to an advisor, a human advisor?
Brad: Every client who comes into Farther in the crowd has an advisor and this is one of the things that we fix. We believe that a great client experience requires an advisor. The types of clients we have are very complex and even the ones who are more technologically-oriented quickly find that with matters around taxes, trust and estate planning, the whole picture of wealth and it becomes very complicated and overwhelming. And advisors are the only ones who can really step in and and guide that conversation. At that point. I believe that will always be true. By the way, we can always make advisors more effective. We can move certain things to client service, sort of client self service, and that is preferred because it introduces some kind of interesting, new relationship types and trust models but but advisors we believe are always at the core.
Craig: Well, it’s great. The you said your multiplicity. Is there a reason why you start that way would you add it because attractive advisors will be able to track their books and to decide which which custodians you use?
Brad: Custodians, the great custodians. I think they’re really interesting because we think of them as being uniform, but they’re actually quite diverse in what they offer and the various kinds of qualities that they’re offering. There’s these supermarkets have kind of financial awesomeness in a way but each one is different. And we look at each client and say, what is what is the what are the needs of the client? I can just go sort of like down the list Apex, Pershing, Fidelity, and Schwab all fantastic. In their own in their own way. And I’d say Apex is very tech forward, everything is fulfilled digitally. So it creates a really nice experience for the right types of clients. And then you have people who have very, very complex wealth and lending and the like Pershing is just fantastic in terms of of lending and and they are also very, very highly technical these days and continuing to do so. Fidelity, they are just extremely well trusted. They hold a lot of assets already. They have great transition teams and and really know how to make a great experience when we’re onboarding users. So we really look at each client and say, Where does this client need to be? And what services do they need and and place them at the right place?
Craig: That’s a very unique explanation of how to work with custodians, which one of these custodians before you have the most assets on?
Brad: We currently are I think pretty evenly split across the board. Believe it or not, like I would love to say like the reason why is this but again, clients are driving everything that we do. So it’s really about like out of the I guess out of the process of the simple process of analyzing clients and saying Where do they need to be emerges, even split but I think that shows you kind of how good the custodians are and like in various things and they each have their own kinds of niches and sort of like things they do well and things that they they they are have a comparative advantage.
Craig: That’s true, they all are building out tech at a pretty fast rates. They realize that’s one of the differentiators is how well their tech works and how long and integrate these ones is.
Brad: I have to say that like that. I think there’s a lot of there’s a lot of like old versus new and look at what those people are doing. But I think I look at us as occupying different sort of, I guess time phases and roles in the ecosystem. And every big financial institution is really good at what they do. They’re highly optimized. Something I’ve noticed the last few years is they’re very, very motivated to to improve. And, and sort of like looking for, hey, where can we plug in and sort of like what can we do to be a better custodian, and it’s great. It’s an awesome time to be sort of at that level about custodians where we’re at the true kind of intended client experience level.
Alternative Investment Marketplace
Craig: You mentioned alternative investments earlier. Do you support that on your own internally when you have a partner marketplace or another vendor that you must manage or provide the alternative investments?
Brad: The alternative investments are going through, not a renaissance, I guess it’s a birth for a lot of people versus a rebirth. And if we think about what’s happened, so we have had the rise over over a few years of kind of aggregators of of us alternative assets like case and high capital, we we access alternatives through them. We also have seen a lot of like, something that’s a little bit more interesting to us and are a little bit more differentiated as we’ve seen a bunch of kind of point plays in assets. Everything is being securitized, it feels like these days are everything is being granted access and democratized assets. So we actually have a robust and growing all parents marketplace you can access you kind of more traditional investments through places like case you can also access things like direct investments in startup equity, through our marketplace, and there’s artwork and all of these various things that are coming up every single day. And we have a team that’s just sitting there looking at them and saying, is this good is good for our clients is something our clients are interested in? Making sure that they are legitimate investments and it’s just a phenomenal time to be able to provide and to provide access to tech alternatives.
Craig: That’s super interesting. So you built the Farther alternative investments marketplace, where your clients invest in securitized assets, like art or solid equity?
Brad: That’s correct. And that is always broken, that that marketplace is always growing because there are lots of people on the ground doing the kind of individual work and each asset class or each each kind of investment area and there are new ones every day. Which is which is really great and again, the kind of the kind of game of hardware is bringing all these things together in one place. You don’t want to have 50 logins to see all your investments, you just want to be able to access them.
Too Many Portals
Craig: That is a problem with the industry. There’s too many portals there’s one for your custodian, one for your financial planner, and one for your held away assets, one for your insurance when your alternative investments and so on and so forth. So, certainly having in one place there’s a huge demand.
Brad: The TMP problem, too many portals problem, that’s a new T shirt as well.
Craig: I’m working on an article and publishing it was called don’t bring me another client portal. This is a quote a direct quote from a broker dealer almost.
Brad: Because it’s really it’s really overwhelming and the hardest part about starting a starting place like Farther is we are focused on holistic wealth. So that’s a lot of areas and that we have to cover. We were able to cover them and do it very, very efficiently. And a lot of that is a lot of planning and sort of a lot of design system design, that kind of work. But at the end of the day this is a major pain point. It seems easy just to handle the portal just enter the portal but then you have 16 portals and you’re like oh my gosh, there’s too many portals.
Craig: It is so big focused on holistic wealth is something we push our clients to reach our vendors to help support. So within your drive towards almost as well. I saw in your article, your reporting you were mentioning of $250 million than you are what is it now? What’s your goal by the end of this year?
Brad: So we just passed so just a little bit of a growth trajectory kind of thing. So we started Farther, and it was just me and my co founder Taylor, who is our CEO, and he’s based out of San Francisco. When we started Farther it was it was just so we know that this is a trust based industry and of course we continue to grow the team and particularly focused on growing the technology and building them into mobile Apple product to serve holistic. It took us a year and a half and doing nothing but actual tech to grow. And so we were just aggregating alpha clients and beta clients and beta advisors and we just continue to grow, last year we surpassed 70 people, 35 advisors and and our as you can imagine our assets are growing quite quickly. All the clients say what actual asset numbers are growing but we’ve more than 10x last year well, we’re on track to kind of do the same over and over again. And that’s something beautiful about technology, too, is you can add a lot more scale.
Craig: If it’s built right, it scales.
Brad: That’s right. Building it right. It’s hard but we’re on the right we have proven that we were able to scale it up at this point. And feel very proud of the team’s accomplishments.
Craig: Do you have an account minimum? What’s the minimum client needs to open an account and Farther and what’s your medium?
Brad: So minimum, so on this and this is something where we get to think a little bit about a little bit differently. Minimums are an expression of operational constraints. I used to be an advisor and in the ultra high net worth space. We used to have minimums and the reality is that we just couldn’t provide a service that was that was the right type of service for clients below a certain threshold. We are now unconstrained from operational constraints, because technology moves so fast and so quickly. And so much of this is quantitative. So we never have to say we can’t serve a client because of operations, which is really great.
Brad: However, we are appropriate for only certain types of clients and realistically we are focused on complex clients. Most of our clients are kind of high net worth or near net net worth. And and I say near high net worth, it’s those people who are in the, in the building phase well entrepreneurs, executives at or have like a lot of RFQs and stuff and big firms. So typically, the marker for us is less minimums than complexity. And the types of services that we can provide. We want to be able to provide outstanding value to our clients and those are the types of clients we can provide outstanding value to
Craig: One question I had to ask the marketing, the domain name, Farther.com is such a great word. It’s hard to find English words that are not the word “wealth” or “invest” or “advisors”. So you need something that people can grab onto like the word Farther, that’s a cool name. What did it cost if you don’t mind me asking to buy Farther.com?
Brad: Oh, actually a really funny story. At the end of the day, it did cost us some money. It wasn’t some exorbitant fee. But I think it was more so that Taylor had to actually go do this negotiation with a business owner in Ohio, who was retiring and it was just kind of a funny situation because everyone’s squatted on the words on real words in the earliest days of the internet. It’s sort of hit him up and that’s why we had things in Silicon Valley and they’d like quickly and durably and all these kinds of names, so we were actually really psyched to get a real aspirational word and negotiate hard for it.
Craig: Yeah, that’s a great word. Imagine what you spend on knowing some other firms, I listen to a lot of other podcasts and Reid Hoffman and other startups talking about that they’re telling their company so you just got to buy it. You got to swallow your pride and buy that name. You need it. Without that word you will not survive. So it’s great that you got the domain. Where you see the business in two to three years from now, what can we expect from Farther in terms of success in terms of growth in terms of technology?
Brad: I would say that in the next couple in the next couple of years we are really at the phase where we’re hitting our stride and we have been just had our ear to the ground. Constantly and had a talented team listening to adviser feedback, client feedback, and just integrating all the things into our platform. And we are really at the point where our learning rate is still very high, but we’re really starting to scale this up right now. So you’re gonna see hundreds of advisors on the Farther platform and many, many, many more clients, but I think that very importantly, you’re going to see us setting the standard in terms of what it means to have a true complex wealth experienced and you’re going to see a lot more personalization you’re gonna see a lot, a lot better kind of performance operationally and and a lot of that closer to your ability to act actually flows through to kind of returns for clients as well. So we’re really fun phase where we have, we have put in the work to do kind of dirty work to do to have a truly enabled a tech enabled experience. And now we get to really start composing that into higher level things, but I’m pretty excited about what’s coming in Farther.
Craig: Well, you’re growing pretty fast and I know you’re expanding your exec team just hired a new Chief Operating Officer. Congratulations. That’s a big step in your growth, new growth as you build out your executive team. And I just want to thank you for being on the program. We run out of time. Where can people find out more information about Farther? We all know the answer but I want to hear you say it, where can we find out about Farther?
Brad: Farther.com, go Farther.
Craig: Go Farther.
Brad: Just father.com. You can also chant “Go Farther” in the New York area, I’ll probably appear. It will be like the bat signal.
Craig: Thank you so much. I really appreciate it.
Brad: Thanks so much Craig. I really appreciate you having me on.