Come on in and sit back relax, you’re listening to Episode 191 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 series on RIA technology, where I speak to executives of fast-growing RIAs about their tech stack. My guests for this episode are two executives from Hollow Brook Wealth Management, Alan Bazaar, CEO, and Andrea O’Neill, Managing Director. Hollow Brook Wealth Management has around $1 billion dollars in AUM. We have a great conversation about their tech stack, how they made some of their decisions, how they built it.
But before we get started, if you are an executive of a wealthtech firm that’s selling software to RIAs, broker-dealers, asset managers, TAMPs or others, then you should run, not walk to our website, ezragroupllc.com and fill out the Get in Touch form on the home page. 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!
- Leveraging Technology to Serve Clients
- Financial Planning
- Portfolio Management
- Client Portal
- Optimizing Portfolios
- Build Versus Buy
- Digital Marketing Tools
Craig: I’m excited to introduce our next guest on the program. We have Alan Bazaar, CEO, and Andrea O’Neill, managing director from Hollow Brook Wealth Management. Hey everyone, welcome to the program.
Alan: Thank you, Craig. Nice to be here.
Craig: I’m glad you can make it. Alan, where are you calling in from?
Alan: I’m in our office in Katonah, New York.
Craig: Andrea, are you also in the office?
Andrea: I am in my home office just a little bit south in Ardsley, New York. Both are in Westchester.
Craig: Fantastic. I’m in New Jersey. We’re not far away, and we’re joining the beautiful weather of this latest spring, so I’m sure we’re all happy about it, but we’re all inside, unfortunately. But let’s kick things off. Can you please give us the 30-second elevator pitch for Hollow Brook?
Alan: Sure. Absolutely. Hollow Brook Wealth Management. We are a full service wealth management firm dedicated to all things related financial to helping our clients. Our business is focused on the ultra-high net worth and high net worth space primarily are a multi-client family office.
Leveraging Technology to Serve Clients
Craig: In this podcast, of course, is all about technology for advisors and advisory offices. Let’s talk about your strategy overall. How do you guys think about leveraging technology to deliver services to your clients?
Alan: That’s a great question. A long time ago, we spent time and energy thinking about our technology stack. When we started the business and being an independent RIA, it was a key focus, and it’s evolved over time. What’s interesting about it is we’ve worked hard at continuing to — way back in the day, we used to mail everything very simplistically, and we’ve continued to work hard at providing a much more holistic digital experience. What’s interesting about that is not every client wants it today, still today, some of our older clients, but we’re continuing to push that as a focus. Of course, the next generation is very savvy and is very accustomed to that.
Craig: Indeed they are. We’re seeing the exact same thing, and of course, as more and more younger investors come in, the G2 and G3 come into your practices. I’m sure they will take advantage of those digital experiences. Can you talk about when you mentioned digital, which areas are you seeing the most usage? Is it more your client portal is, do you have a mobile app? When you talk about digital onboarding, what are the areas where you’re seeing the most growth?
Andrea: I’ll take a stab at this. I would say the most growth that we’ve seen in the last couple years, especially since the beginning of the pandemic has been clients and investments that we make’s ability to receive electronic signatures, and that’s been huge for our client experience. Being able to onboard a client completely through, let’s say DocuSign a client able to make investments in a number of LPs or hedge funds, private equity investments all done. Electronic signatures has been hugely helpful for our clients.
Craig: Do you use DocuSign for that?
Andrea: We mainly use DocuSign. Yes.
Craig: Do you have that integrated into any other parts of your tech stack?
Andrea: DocuSign is integrated directly into our primary custodian where most of our clients have accounts, custody and that’s Pershing.
Craig: Pershing’s a good one.
Craig: According to your latest ADV you have a little over a billion dollars in assets?
Craig: I know your firm considers financial planning to be your core process for understanding a complete picture of a client’s circumstances. What financial planning software do you use and why did you select it?
Alan: Oh, quite a few years ago, we chose eMoney. It was a leader at that time with MoneyGuidePro, which shortly thereafter, I believe was purchased by in Envestnet. We do not at this time utilize in Envestnet. So we were left with e-Money as a leader as part of the financial planning process. Our financial planning process is very bespoke and customized to each client. We use different parts of it at different points in time but it’s been very useful.
Craig: I can imagine it would be perfect for a firm such as yours, which is mainly catering to high net worth and ultra-high net worth investors. Do you utilize the estate planning functionality any money?
Alan: We do for some of our clients. There’s a heavier lift for it but it’s just starting.
Craig: How are you finding it?
Alan: I’m not the primary user of that on our team. We have dedicated certified financial planners, so probably I’m very candidly I’m not the best person to ask that question. However, when we’re in all our team evaluations, the team is very supportive of continuing to utilize that software.
Craig: Excellent. We like to hear that. Moving from financial planning to portfolio management, trading, rebalancing, what’s the software you use for those features functionality?
Alan: We used Blaze that was recently purchased by LPL I believe.
Craig: It was. Have you noticed any changes in the platform since it was acquired?
Alan: Not substantial from our perspective.
Craig: We like Blaze, we’ve of course follow all the software vendors and all the different technologies in all areas. Blaze is an area we like. I know they’ve got some strong capabilities around algorithmic trading. What are the specific parts of the software that you use and what differentiated it from other — there’s a lot of portfolio management software out there? Why’d you pick them?
Alan: They were very cost effective solution relative to some of the larger established players to facilitate the type of trading that we do for our separately managed accounts.
Andrea: Another requirement was the ability to integrate with our performance reporting platform. We’re using Black Diamond for consolidated reporting for our clients, and Blaze was one of the better options that would integrate with that.
Craig: Excellent. We like Black Diamond as well, so you’re just using the Black Diamond for performance reporting not the full advisor suite.
Andrea: We use all of Black Diamond. We use the full suite, and we use the client communication portal. That’s where we send out our client reports. It’s integrated with Pershing, so clients can get brokerage statements if they’d like them there. We have some clients that we use that portal for sharing documents back and forth, but again, it’s on a client by client basis, so not everybody is utilizing it as much as others.
Craig: Indeed. On the client portal for Black Diamond, are there any features you wish they had that they don’t have?
Andrea: They are integrated with Pershing, but it’s not a direct integration yet. We have to click a couple buttons and statements will be populated, but there is a plan for direct connection with Pershing’s confirm and statements going forward, so we’re excited for that.
Craig: We have heard other clients talking about that, one 1099s and other forms from the custodian, whether it’s Pershing or Fidelity or Schwab to appear directly in the client portal. It is an issue for more than one firm. We’ve seen a lot of client portal related issues especially around bringing in financial planning data as well. Some portals allow the financial planning data to appear on the client portal as well. Going back to BlazePortfolio, you selected it because it integrates with Black Diamond performance reporting, which is important. Are there any specific features of Blaze that you like? I mean, how often do you guys rebalance? Do you rebalance on a frequency basis? Is it more of a drift away from the market or there’s some other timeframes you use or some other triggers you used to decide when to rebalance?
Alan: Our risk monitoring and rebalance process is we’re very long-term oriented in the way we approach things. We are not a heavy user of the automated algorithmic rebalance functionality. We do it on a very bespoke customized basis for each client portfolio.
Craig: Got you. Which makes sense. Yes, you’re not rebalancing hundreds of accounts at a time.
Alan: That’s true. That’s true. I mean our trade groups can have tens of accounts for sure. But we’re doing it. We’re going through that process on a very manual basis to ensure each client gets the attention they need.
Craig: It makes sense, and we know that Blaze does have a niche in multi-family offices for ultra-high net worth managers because of their ability to support bespoke investment strategies. It’s not surprising with anterior household models, legacy holdings. Do you guys support a wide range of asset classes?
Alan: We do, however, not in all asset classes internally. We’re open architecture, and so we will allocate out to outside experts in addition to supporting and allocation, let’s say a traditional long only equity. We’ll bolster use other parts of other experts in other parts of the asset allocation model.
Craig: Would that be SMA managers or TAMPs?
Alan: Not necessarily TAMPs, but other SMA managers are certainly part of it. Every asset class, if it makes sense is fair game. Everything from venture capital, private equity, investment grade debt, whatever might make sense at a point in time in a given investment cycle. For a given client what might make sense, whether it’s a liquid separate managed account, or even just buying a simple ETF we view all those things at our disposal to optimize the investment portfolio for the client.
Craig: Very good. Looking at your overall tech stack, how well are your applications integrated? Where do you see the best integrations and where are some areas we wish the vendors would integrate better?
Alan: You want to take the bottom one Andrea? Does anything come to mind in terms of improvement in integration?
Andrea: If we could integrate all the fund administrators for our investments outside of Pershing into our performance reporting platform, that’s the dream. It is certainly not the case right now, although there are more and more pushes to get data automated and uploaded to Black Diamond or other performance reporting tools. That’s the biggest pain point for us currently, but we’re hopeful that the technology’s going to get there.
Craig: We all have our fingers crossed. How many external or outside fund administrators are you working with?
Andrea: 30-40, Alan? What do you think? How many different funds?
Craig: That’s a good range. I mean over 30 funds is a lot.
Andrea: In addition to the fund administrators and recommended investments that we’ve worked with clients to make, we also have clients requested to add other investments that are not related to Hollow Brook to their performance reports. There tends to be a lot of different outside data sources coming in for our consolidated reports, whether that’s a bank account that’s held away from us, a private investment, real estate, jewelry, anything clients want include, we can do that for them.
Craig: Have you looked at any tools such as Canoe that can import PDF files from illiquid assets and other non-standard investments?
Andrea: I spend a lot of time looking at those types of technology platforms. They tend to be expensive also. They are not a hundred percent. There are still issues that occur with the uploading of information and having to be that person to clean it up after would be time consuming. There’s been a lot of interesting ones that we’ve looked at. I’m blanking on the most recent platform, but I think that the technology’s moving in the right direction, and that sooner rather than later, that will be the norm for RIAs such as ourselves. And I think the price is going to come way down.
Craig: I think you’re right. We’re seeing that across the industry. That’s just generally technology prices coming down, features are going up. Do you use anything else besides Black Diamond for performance reporting? Do they also generate the statements, the consolidated statements?
Andrea: The consolidated performance statements come out of Black Diamond. We worked long and hard on having the reports be exactly what we and our clients want to see. We have standard reports, but we also will make custom reports, as needed, for a client if there’s something specific that they’re looking for.
Craig: How do you find Black Diamond is when it comes to customizing reports on the bespoke basis?
Andrea: The system is pretty flexible already, so we found there hasn’t been that much that we’ve needed Black Diamond to go back and update or change their backend. Maybe we’re asking them to create a new segment breakout that we haven’t seen before. But other than that, it’s pretty customizable.
Craig: That’s what we hear. We’ve actually been using Black Diamond with customers at least 15 years now, long before they were acquired by Advent.
Andrea: We were a little later to the Black Diamond portal.
Craig: That’s okay.
Andrea: We were on Advent on Demand for a long time which was a workhorse. It did what it needed to do. Maybe the information in didn’t come out as pretty of a format overall but it was an easy change from Advent on Demand to Black Diamond considering SS&C owned both of them.
Craig: Do you use any other Advent products besides that?
Andrea: Not that I could think of Alan.
Build Versus Buy
Craig: Always curious. Great. How about any internally built software? Have you built anything on your own that you couldn’t find outside?
Alan: No, we have not. Everything in our textile is off the shelf.
Craig: Good to know. It’s nice to hear that we’re seeing a lot of firms spending a lot of money building very, very specific applications. The issue is, it’s cheap to build an application. You can usually find a programmer to build them, say anything you want, but the problem is maintaining it. That’s where your costs — because you just maintain it basically forever and that’s where the costs tend to expand.
Alan: Yeah. With the speed, the way we’ve looked at things is we want to be a beneficiary of the speed at which the market is changing and being able to have our technology stack be a beneficiary of those things over time.
Craig: That’s what we always recommend because by building it yourself, you lose that capability that the vendors have when they’re bringing in best practices from hundreds of clients that they’re merging into their software. You are now getting advantage of, was if you built it yourself, it’s just your best practices, which is not, cannot never be as robust as you would get from a vendor. In most cases, there’s still sometimes. Can we talk about how often you review your tech stack? You guys have been in business a long time. How often do you go back and take a look at your vendors and your tech to see, is it working well? Can it be optimized? Are there other vendors out there that we could use instead?
Alan: Andrea and I in particular in the firm are always communicating about things we’re finding in the marketplace, either through conversations with relationships or reading an article or what have you on a formal basis. We’re looking every six months we’re having a conversation internally in terms of is there anything we’ve seen, is there anything we’re doing different that should be done different in terms of our tech stack that we should be adding, evolving, changing. We have some outside relationships that help us think that through as well.
Craig: Terrific. We recommend doing that at least annually, but every six months is even better.
Alan: It’s an internal conversation to make sure we’re staying front and center given the importance of it.
Craig: Absolutely. Because we find some firms we work with some large RIAs similar to you, don’t look at their tech. Maybe years will go by and they haven’t even taken a look at their tech overall in a long time and things aren’t working well, it’s not optimized. Or maybe as you mentioned, there’s better things available that they don’t even know about. So glad to hear you are looking at things on a regular basis.
Andrea: Absolutely. I will say also; we would be much quicker to update internal software versus anything that’s client facing. We like to keep the client’s life as easy as possible. They’re not having to set up new portal login once a quarter because we found the next great thing. That’s something that we’re cognizant of.
Craig: I can understand clients don’t like change. And do you only have one portal or do you also have them going into the Pershing portal in any other portals?
Andrea: They could go into Pershing if they’d like to we’ll set them up with access and educate them on the differences. But for the most part, our clients, if they’re going anywhere, they’re probably just going to go to Black Diamond. More often than not, they’re going to reach out to me or somebody else on the service team and just ask for what they need directly.
Craig: Indeed. So Black Diamond provides the client portal, not eMoney?
Andrea: You’re right. Yes.
Digital Marketing Tools
Craig: Very good. Let’s talk about marketing. What external digital marketing tools do you use? Why did you pick them and what are you using them for in terms of building out your business and what type of marketing capabilities are you using?
Alan: Today we’re using HubSpot. We moved to HubSpot probably 18 months ago. Two years ago. We used it for our email communication and primarily today with clients.
Craig: Do you do any marketing campaigns to specific demographics to grow your business?
Alan: We do not specifically through any of the technology channels.
Craig: Does HubSpot integrate with your CRM? I forgot to ask, what is your CRM?
Andrea: We use Wealthbox for our CRM and HubSpot I believe does integrate with that. It also integrates with our internal communication tool, which is Slack.
Craig: Good to know. How do you like Wealthbox?
Andrea: We like it. We’ve actually used a number of different CRMs over the past 10 years. Wealthbox has been here with us the longest, and I definitely like it the best.
Craig: How long have you had Wealthbox?
Andrea: Probably five years. Alan, would you say?
Alan: Yeah, probably.
Craig: What made you select them over the other ones you worked with?
Andrea: I will say we were on — what’s the big one, Salesforce for a little while. What we found was well, it’s a very robust platform. It requires a lot of personalization and it coding and technology to have it be working the way you would need it to. We have found Wealthbox to be the simplest. Does everything that we need. There are a number of different areas in there as far as signing tasks. That’s where we do all of our opportunity lists to see what new client prospects we’ve got in the pipeline, and the integration with Slack has been huge as well.
Craig: Well, that’s excellent. Can you give me an example of how you use the Slack-WealthBox integration? What’s a use case or an issue that gets resolved quicker due to that integration?
Andrea: If Alan talked to a client who needs some money moved or needs to do something, a tax bill coming up, he will log that in the client’s page on Wealthbox and that’ll automatically share to a channel that we have set up on Slack. He doesn’t need to update me and the client’s page on the CRM system. It’s all done once and we can just jump on whatever the request is from there.
Alan: It’s been very useful in terms of the team communication and understanding if someone spoke to someone and Andrea’s example, it’s been very helpful for keeping everyone up to speed.
Craig: That’s terrific. We love hearing that. I love hearing when applications integrate and make things easier overall. Last couple questions. Do you feel you guys are more innovative in terms of cutting edge or do you prefer to stick with software from established vendors in general?
Alan: We tend to stick with established vendors. I’m sorry Craig. I didn’t mean to speak on top of you.
Craig: No, you’re good.
Alan: We want to be forward leaning and thinking about our technology stack in terms of adoption. However, we’re typically not adopting a something that’s not from an established organization.
Craig: Last question, do you have any plans to change any of your software in the next 12-18 months?
Alan: Not at this time.
Craig: Everything’s just working great.
Andrea: Yeah, until it’s not.
Alan: Until we figure out the seamless integration with outside administrators, that’s the big one for us.
Craig: Well, putting out a call to any vendors who have that option that can integrate multiple fund administrators, please give the team at Hollow Brook a call. Team Hollow Brook, Alan and Andrea, thank you so much for being in the program. It was fun talking to you.
Andrea: Thank you. Appreciate it.