Ep. 205: Data Aggregation as a Service: The Future of Holistic Advice with John Prendergast, Blueleaf

Come on in and sit back and relax. You’re listening to Episode 205 of the WealthTech Today podcast. I’m your host, Craig Iskowitz, founder of Ezra Group Consulting. This podcast features interviews, news and analysis on the trends and best practices, all about wealth management technology.  

My guest for this episode is John Prendergast, CEO and co founder of Blueleaf. John is an active startup advisor. He’s also an experienced entrepreneur and senior executive. As part of six founding teams, he has led the product management, marketing and finance functions. His background in banking and wealth management has shaped the vision for Blueleaf and I’m excited about this interview was a long time coming and we have worked with Blueleaf for a while with some different clients and we really like your technology. So it’s exciting to have John on the program talking about a new product they’re offering called aggregation as a service. Anything around data and wealth management interests me and interest Ezra Group. Looking at data aggregation, one of the areas that I’ve always found is it is a bit opaque when you try to compare different aggregators to each other. There’s no real way to do that and to look at and see, well, here’s how one works with these different financial institutions who provides this kind of data at this level of accuracy versus vendor B provides coverage of these vendors or these financial institutions in this data. So there’s a lot going on there.

But before we get started, if you are an executive at a broker-dealer, enterprise RIA, family office or a TAMPs, your tech debt is holding you back. Your old software platforms are rusty and falling apart and they need either a complete overhaul or to be replaced entirely. Your disparate systems don’t communicate with each other and it’s driving your operations staff and advisors crazy with manual processes and other errors. If this describes your company, you should run, not walk to our website, EzraGroup.com and fill out the Contact Us form on the home page. Our experienced team can evaluate your technology ecosystem, deliver targeted recommendations, optimize your existing systems and operations, or run an RFP or RFI to help you implement new software to help take your firm to the next level.

Topics Mentioned

  • The Podcast Tools Revolution
  • Streamlining Podcast Production
  • AI in the Media Industry
  • Data Aggregation as a Service Simplifying Wealth Management

Episode Transcript

Craig: John, now tell me your podcast tools. I’m very interested to hear what these are.

John: I love this idea, podcast about podcasts. What I was talking about earlier was this editing tool we’ve run into and there’s a few of them now, that allows you to edit the video and audio based on the text. Imagine having a transcript of your podcast and I delete a word or phrase, a sentence, and suddenly the video’s edited and the audio’s edited as well.

Craig: No way.

The Podcast Tools Revolution

John: Yes, way. And where I just did the, um, and the uh, there, it’ll auto detect all of those things, and it will delete those or silence them depending on what choice you make. It makes you sound good, like you’re smart and never hesitate and always know exactly the word that you want to say. There’s no um, uh, I, any of those kinds of things. Fantastic tool called Descript.

Craig: I’ve heard of something like that. I found something that did the ums and uhs, but it didn’t auto also edit the video. It was only for audio.

John: Yes. It’s Descript. It’s the latest version of Descript.

Craig: I’ve heard of Descript.

John: The latest version is good and in addition, it makes editing clips and pulling things out as easy as copying and pasting text.

Craig: Now you’re in a rabbit hole again, John.

John: I know. I did the same thing and I tend to do that. It’s a geek thing, I think but fantastic tool and Premier Pro which is a video audio editing suite.

Craig: Yes. Adobe.

John: From Adobe, which is fantastic. It’s what a lot of the pros use and we use it and they introduced a similar tool, but the tool’s too complex to make it work well. So what we tend to do is we build the whole episode in Premier Pro, and we will have already processed some of the audio in Descript to take out the ums, the uhs, the pauses, what have you. And so that cleaned up audio will already be in there. Then when we want to work on pulling clips, we’ll export it, pop the whole thing into Descript, and we’ll cut and paste the text, and now we have cut videos. Then even for any of you who’ve done any video editing, going from portrait, which we’re likely in now, if you’re watching on video to landscape or landscape to portrait, is painful, and this tool also makes that incredibly simple. We like Descript. We’ve been able to take a 45-minute video and instead of a painful several hours to get a couple of good clips, we can knock out 20, 25 cool micro clips in under an hour total.

Craig: That’s terrific. We were just chatting about podcasting, and we started four years ago, and it was no tools at all, so we just used Zoom and then edit, and it’s a pain.

Streamlining Podcast Production

John: Totally manual by at that point, right?

Craig: It’s still very manual. So we have been looking for a tool. I looked at Descript a couple years ago, but I’m going to look at it again. And it looks a lot better already because trying to automate and make things quicker and more efficient because we’re not a media company. We’re a tech consulting firm. You’re not media company either. Are you a software company?

John: We’re a software company. But I guess everybody is a media company nowadays, right?

Craig: Everyone’s a tech company. Everyone’s a media company.

John: It’s crazy. Everybody’s an everything company, which makes life challenging. But I think you have to communicate in audio and video nowadays. The written word just doesn’t go as far as it used to. Pure blog writing is great, and its important part of everyone’s media strategy, and it should be. I love the written word and it’s critical, but video and audio just reaches people in a different way. And, the inflection in my voice and the fact that John Prendergast says, you know a lot, those quirky nuances that allow people to get to know you personally. The only way you can do that is through audio and video and a live recorded situation. I think that’s great. The thing that I love that’s happening now are all of the tools that are being enhanced by AI, Descript is among them.

John: But there’s also great video editing tools that are being enhanced by AI, and people talk about a variety of these things where it makes up video. But honestly, some of the best tools are pretty simple. There’s a plugin, I’m going to forget the name, for this Adobe Premier Pro, which allows you on a multi-speaker setup. Let’s say I’ve got three speakers that I’m recording, three tracks of audio as well. When someone’s speaking, it’ll cut to me. And then when you speak, it’ll cut to you on the video and audio. It’ll automatically do a bunch of these cuts that make the video more engaging. And it does it in about 30 seconds, where by hand doing a hundred cuts might take a couple hours.

John: It’s just an amazing evolution of the tool set and as one geek to another, I think it’s a great time to dive deep and find these tools. Because I think it accelerates what you’re able to do and how you’re able to communicate. I think about the financial advisors that might be listening. There are enough tools out there now that can make you as a solo advisor capable of delivering high quality audio and video messaging to your clients, to your broader audience in a way that you couldn’t before. You just couldn’t do it at that level of quality. Maybe it’s time to check it out for all of you.

AI in the Media Industry

Craig: I think they should. We’re always hearing about how AI is going to kill jobs. All technologies reduce some jobs or eliminate some jobs. But a lot of it is eliminating just manual work. If you’re talking about audio editing that AI can do, you think, what are the audio engineers going to do? But what did the audio engineers do 50 years ago when Steely Dan was recording, Can’t Buy a Thrill. They were splicing tape together to do clips.

John: Oh, I remember this.

Craig: A long time to do it.

John: I’ve literally done that with the razorblade, right?

Craig: Razor blade. What does pro tools and other audio technology enable? It doesn’t get rid of the sound engineers. It gives them a lot more capability and flexibility and creativity. It creates incredible amount of opportunities for creativity.

John: Absolutely.

Craig: And it takes a lot of the mind-numbing workout and allows people to be a lot more creative.

John: Absolutely. And what we’re talking about is this most recent revolution in generative AI in particular, which got people’s attention, and it should. But to your point, it’s mainly going to be an enabler. I was listening to a podcast, I think it was a New York Times podcast about AI, and they were talking about writing. And writers are pretty nervous, but AI as a writer is poor. I mean, it’s not a great writer. What it is, it’s a junior copywriter, but it needs editors. If you’ve got an infinite number of junior copywriters, you need a lot more editors to sort it out. It just changes the nature of the work you’re doing, as opposed to eliminating it entirely. Humans still have to have the ideas and when you think about the way the generative AI works, it’s a kind of mimicry. It’s powerful and man, it can do a lot of stuff and we’re using it in very precise ways within our own company, Blueleaf. But it’s not eliminating any jobs, I can tell you that. Not right now. It’ll eliminate some at the low end, create more at the high end. I’m not sure it’s going to create massive unemployment. That’s not what’s happening.

Craig: I don’t think so either. There’s so many opportunities and we’re seeing it as well. And we use it on a marketing side and all of our customers are asking us about it. We’ve been doing webinars, and I’ve been meeting with the boards of directors of a number of large firms almost every week. The question’s always, what should we be doing? What are our competitors doing? What are some low hanging fruit that we can or some quick wins that we can use AI for that doesn’t impact compliance and there’s so many of them? That’s a whole different podcast talking about AI. Here, we wanted to talk about where we originally started the idea of this podcast. I wanted to jump in and talk about your new aggregation as a service, a data Oh yeah. Service, which I think is interesting. But if you can just do a 30 second elevated pitch for Blueleaf to get us started.

John: Sure. Blueleaf is an all-in-one wealth management platform that delivers reporting and client experience, delivers billing and invoice and trading and rebalancing. In that respect, the very high level, 40,000-foot respect we’re similar to a lot of all-in-one platforms. What makes Blueleaf unique is we are designed ground up to be measurably engaging to clients and advisors. If you’re an advisor and you care about delivering an engaging experience, and there’s a lot of reasons you should, Blueleaf will help you engage 70 to 90% of your client base every single month. Measurably, we put it right up front. We show you that and show you how to do that. Whereas typical client portal, which is what people would think of for client engagement, might connect with 10 or 15% a month that’s more typical. And we use approaches that are driven by major media and think about major digital media and how they engage their users, Netflix, Facebook, this kind of thing. It’s a much broader system of engagement. We take that and we bring that to bear on wealth management for clients and advisors both.

Data Aggregation as a Service Simplifying Wealth Management

Craig: Talk to me about the data aggregation as a service. There’s something we’re very interested on our research side, we do a lot of research on technology for wealth management firms. And data aggregation has always been a bit opaque for us, and that it’s hard to know which vendor does what, which data you can get from where, it’s another rabbit hole you have to dig down into. First of, what is this service and what made you guys launch it?

John: Absolutely. Aggregation as a service is a combination of things that we felt we needed to step in and deliver in order to solve some of the real challenges that our customers were having with aggregation. One is the fact that no single aggregation provider covers the entire spectrum of institutions. No single aggregation provider is successful on all of those institutions, or has same data quality across all of these institutions and so there’s a bunch of things about coverage and connectivity that you just can’t solve with a single data provider. Not none of them. Our concept was, well, what if we combined them and had that Venn diagram overlap in a way that we could get better coverage? And wouldn’t that mean if one data provider fails, you could fall back to the other so that you’d have better recoverability when something does go wrong, which will happen with aggregation.

John: And we built a whole new infrastructure to make that possible, both on the front end where you got to juggle which aggregation provider you’re talking to, and on the backend bringing that all together and normalizing it. But in some ways, the biggest thing that we do is we directly service the end user, the client of the advisor. We support them directly, so the advisor doesn’t have to. Their firm doesn’t have to, and the enterprise that may be in the mix in some of our cases, doesn’t have to provide all of that support. The end client gets better, faster service from actual experts in aggregation. The aggregation providers we partner with don’t have to deal with the game of telephone from client to advisor to firm, to enterprise, to provider and all of that problematic change of information and the delay that that introduces. Aggregation as a service is the combination of multiple aggregation providers and consumer service.

Craig: How does it manifest itself? If I’m an advisor, what do I see? If I’m a broker dealer or an RIA, what am I seeing differently than if I just directly work with an aggregation provider?

John: It’s a great question, because in some ways it’s quite transparent. And if you think about it as a client, you don’t want to know much about this. You don’t want to force the client or the advisor to make choices. Many of our colleagues in the marketplace, other software providers will make an advisor make a choice, or a firm make a choice about which provider they want to use. We don’t do that. They’re just surfaced within the interface, and it’s a guided experience. The client doesn’t have to know much about who is in the background. They just go in and we ask them, do you want to connect an investment account? Do you want to connect a bank account? They make the choice. They search for the institution and go through the process.

John: They’re made aware of the ultimate data provider as part of this, and there’s actually some interesting benefits to doing that. But they don’t have to manage a wildly different experience. It’s as seamless as using a single aggregator, which is very much by design. You just don’t want to introduce any more complexity. But the other real difference is when anything goes wrong or some challenges come up and the client is in that system and they go to the help button, they get our team acting on behalf of the advisor’s firm. We become an extension of their firm. We handle that support request for any aggregation challenge or any technology challenge with Blueleaf more generally, but specifically with the aggregation as a service, we handle that. The advisor, the firm doesn’t have to. We relieve that support burden. That’s a big change in experience. If you’ve ever used aggregation and had a problem that you had to deal with as an advisor, you don’t have to do that with this service.

Craig: I found this to be revolutionary because we have worked a lot of our clients, whether they’re RIAs or broker dealers, we have an outsource CTO service, another outsourcing for technology strategy and support and data aggregation is always an issue at some point. It comes up either integrating it, getting the data out, doing performance reporting, doing other types of reporting on it. And it’s always a rabbit hole as we keep talking rabbit holes. It’s trying to figure out where the problem is and why this data is wrong, and trying to get the right person at the aggregator to talk to you about it is always an issue. How did you do that and what’s the logistics behind this? You have contracts with every data aggregator, or if I’m the RIA, do I now have to have contracts with every data aggregator? How does it all work?

John: Yes, sure. How and why we did this is, you know, I’ve been in this hot seat dealing with aggregators for the last 12, 14 years. And it’s every bit as painful as you described. They’re one of the toughest data providers that we deal with. In some sense, it’s inherent in the technology. We’ve got a long way to go before this technology makes the generational shift to more of the direct connections. We’re only talking about 20 or 30 new ones of those a year out of 15,000-20,000 institutions, so we got a long way to go there. We had to scratch our own itch. We were desperate to support our own customers and fix this, and we just weren’t willing to throw up our hands at it.

John: That’s why we went after it. And having spent so much time directly dealing with these folks, and we had often delivered the end client service, we realized that that was a real advantage for us. But with a single aggregator, it wasn’t enough. We got after this idea, and then we contracted with multiple aggregators. No, we don’t currently have contracts with every aggregator, though the list is continuing to expand. I think right now, examples of who you contract with or, Plaid, Yodlee, ByAllAccounts, and the list does go on, and we’re adding more. There are other sources that we’re adding to this mix and so we built it out. If you can imagine that each aggregator acts quite differently, their quirks, the flow of the data is even different couple of examples.

John: One aggregator gives you sort of a full set of data every single day, and then on non-market days, you get maybe 20% of the data of these other market days. Then it suddenly it increases again, other data gives you a full set of data every single day. But for market stuff, it’s giving you the last market value. The data flows are all different. The interfaces and how they work are all different. Some work by being a push system where they shove files at you, some work by being something called the web hook where they hit you with a signal that says, this data is ready, and then you go pull it. There’s a variety of ways that they work, and then the shape of the data, if you think about what you get in a file, all looks different. The way that the data is categorized is all different. Then you have to have a pretty strong backend system to do data normalization, transforming the data into a normalized single format that then we can move on to an enterprise that might want to consume it or into our own applications. That backend is the iceberg. That’s the 80% that’s under the water that no one sees. That’s where a lot of the work to make this happen went.

Craig: I know for a fact that’s a lot of work. Because we’ve done that with half of our clients are RIAs, broker dealers, asset managers, tamps, the other half are Fintech vendors who have to deal with the data aggregation providers, and it’s always an issue. There’s always something wrong that APIs don’t work quite right. Trying to pull the data in as an issue, as you mentioned, getting past the first one, now you’ve learned how they operate. But then when you get to the next provider, as you said, they have a whole different way of delivering data.

John: Exactly.

Craig: API set up, and as you mentioned, all the data has to be normalized, which understand, but it happens behind the scenes. But if you don’t do that, it wants a gigantic mess.

John: It’s a mess. That was the other thing that we saw in the industry. As we were starting to solve this for ourselves, we observed the same thing. All these Fintech providers were essentially building redundant systems, the same system over and over to do the same thing. Only they couldn’t commit full resources to it because it’s only a little part of their business and we thought, what if we eventually could solve this for everybody? What if we could deliver a much simpler way to integrate with all of these folks a much faster way to get up and running in a much simpler way to consume the data? What if we relieve the burden of managing all that infrastructure and supporting it and supporting the clients and customers? That was the concept, and we’re up, we’re running. It looks great, lots of success and we’re improving every day. We’re thrilled, and our customers are telling us that we’re doing a great job. We’re pleased with that, and we’re continuing to try and improve.

Craig: And this is included free with the Blueleaf subscription?

John: It is included with our small and medium business packages. Yes. What you see on the website. The short answer is yes. The longer answer is for enterprises we customize, as you might imagine. So in some of those instances, they’ll pay for that separately or by itself just as a service independent of the rest of Blueleaf.

Craig: Walk me through this. I’m an RIA and I’ve already got Plaid, for example, and now I want to work with you guys because Plaid’s —

John: Through who? Who do you have Plaid through?

Craig: Well, I could go direct or I could get it through another vendor.

John: I mean, realistically there are very few RIAs that go direct. Something the largest might, but it’s pretty rare. So I’d say it depends on the situation. You can buy Blueleaf and get it incorporated if you’re large enough that you’re actually running your own aggregation, then you can buy Blueleaf manage service, the aggregation as a service package from an enterprise perspective and incorporate it and replace the other aggregation provider. It can still include Plaid but then you’ll get the benefit of our support and other aggregation providers mixed in.

Craig: That’s great, and so it would be transparent to me.

John: Yes, absolutely. And for enterprises we’ve got two scenarios. There are scenarios where people come in and use our contract with the aggregation provider so that they just deal with Blueleaf and they don’t have to worry about Plaid or Yodlee or whoever. There are other cases for large enterprises where they want to manage their own relationship, and we just wrap the technical and personnel services around that.

Craig: That’s what I was wondering about the contract. The contract with you guys, again, as you mentioned, a lot of on the RIA side, they often don’t even know where their aggregations from. They might get it from their financial provider built in, or they get it from their financial planning software. If they’re eMoney, they’re using eMoney’s aggregation as example, so they — or if they’re using MoneyGuidePro, they’re using Yodlee, but they don’t necessarily know that, so how would you work that? If I’m MoneyGuidePro client and I’m getting my aggregation through Yodlee, how would that work with you? I do need a new contract or would I transfer that to you?

John: Great question. In that case, let’s presume that this is a customer that then purchases Blueleaf, because we integrate with MoneyGuidePro, we integrate with RightCapital, e.t.c. In those instances, you’re just using the Blueleaf side to do the aggregation, then it just flows through to those platforms.

Craig: Right now, I’m getting my aggregation from Yodlee through MoneyGuide.

John: Depending on the level of success you’re having, there’d be a transition that would happen. You’d stand up Blueleaf for your clients and you’d start to aggregate through Blueleaf and then all of that data. In that instance, all of your direct data as well as your aggregated and held way data would all flow from Blueleaf into Money Guide Pro or Right Capital, or who have you so that you’ve got one throat to toe for data. One of the challenges with using a planning tool as an aggregation source is it’s not meant as a distribution system. You want to have your data in a place where it can then go out as a hub and spoke system and the aggregation that you get with a Money Guide Pro or with another financial planning tool like Right Capital, who we also partner with, those systems are designed to use and consume the data internally.

John: They’re not generally designed as a distribution system for data. So I’d say, I don’t want to get in your business, Craig, but you got to think about your data architecture for your firm and where the data should be coming from and how you want to manage it. I think the challenge for small RIAs is this all happens incrementally. And so you have one layer built on top of another for firms that are larger, you’re often more thoughtful about how that data architecture should look and work, and then that that’s an easier scenario. But we’ve done a lot of work with customers that have those systems and we find that the transition isn’t that big a deal, because often as is the problem with aggregation generally, often they’re having success rate troubles with that aggregation. And so for most of those customers rather than reconnecting at those systems, you just reconnect through belief and now the data flows and you’re good to go.

Craig: John, I think you would have made an excellent consultant.

John: Thank you. That’s a high compliment coming from you, and look, I love to teach and this is something we do with our customers all the time. Whether it’s business consulting, I did M&A for a living, so we talked a lot about valuation and how you drive that and growth drivers and we try and consult holistically with our customers. I love sharing what I know, and as we’ve established before, we are both geeks. Getting to a pretty deep dive on technology and think hard about the best way to assemble it, not just from a Blueleaf perspective, but from a firm perspective. How do you think about running this as a business?

Craig: We did establish that, and we also established that we have limited time in this podcast, and now it’s up. But, thanks for sharing everything about your aggregation as a service. Where can anyone listening find more information about this?

John: Sure. The simplest thing is info@blueleaf.com. Our fantastic support team and success team monitors that and can route any inquiries to the right person. If you want to get at me personally, obviously I’m on LinkedIn, John Prendergast, I’m on Twitter @JohnPrendergast, I’m sorry, X. I don’t think I’m ever going to get used to that. I’m pretty easy to find personally, and obviously the company is www.blueleaf.com.

Craig: Awesome. John, thanks for being here, I appreciate it.

John: I love the conversation. We’ll have to have you on the augmented advisor.

Craig: I’m there. Just send me an invite.

John: You got it.

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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

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