Come on in and sit back and relax. You’re listening to Episode 206 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 James Bogart, CEO and founder of Bogart Wealth. Let me just do a quick bio here, seasoned wealth advisor James Bogart takes personal pride in assisting executives, entrepreneurs and professionals pursuing their dreams through striking highly customized financial planning strategies. As principal of Bogart Wealth, he focuses both on maintaining the highest level of customer service and attention to detail possible and on seeking to deliver the most effective technology reporting tools and analysis to every Bogart Wealth client. James’s practice spans wealth plan design, investment management, estate planning, family legacy planning, business succession, charitable giving, asset protection and retirement concerns with a special insight and focus on multi generational strategies.
My interview with James is part of our series on RIAs and digging deep into their tech stacks, we love talking about that. We love working with our RIA clients and building tech stacks optimizing and improving. So we’re always bringing RIAs to talk about the tech stacks, how they got there, what the their challenges, we’re trying to share some information with you all if you’re out there trying to build a tech stack as well.
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.
- The Impact of Technology on Growth
- An Overview of Bogart’s Tech Stack
- KPIs and Dashboard
- Integration Challenges
Craig: Let me introduce our next guest. It is James Bogart, CEO, and president and founder of Bogart Wealth. James, welcome.
James: Thank you, Craig. Pleasure to be here.
Craig: I’m glad you could be here. I’m glad you are available to talk to me. Where are you calling in from?
James: Today I’m in the Woodlands, Texas.
Craig: Excellent. How’s the weather down there?
James: Hot. Hot and hot. We have three offices, one in McLean, Virginia, Woodlands, Texas, and then Houston, Texas. I get the pleasure of bouncing between our three offices.
Craig: That is a pleasure. I travel plenty myself. I’m in New Jersey and today’s the first day where it’s feeling cold.
James: Virginia is full on fall at this point. 55 I saw this morning. I’m actually eager to go back end of the week.
Craig: Hey, I’m a sweater on for those of you can’t see, if you’re not watching this on video, it’s a little chilly, but we’re going to power through this. Even though you’re hot and cold.
James: In Texas, they blast the air conditioner. I got the sweater on because of the air conditioner.
Craig: That’s something I do. I’ve learned over many years of travel is that whenever I go to Texas or Florida, I always wear long sleeves because every building is at 65 degrees and it’s cold.
James: This is the time of year I get sick down here. It is because you go from car to these covered walkways, you get a little bit of perspiration, then you go right back into 65-degree office building and on the immune system.
Craig: We can have a separate podcast about that. Let us jump in. Please give our audience a 30 second elevator pitch for Bogart Wealth.
The Impact of Technology on Growth
James: Bogart Wealth is a registered investment advisory firm. We are managing about 2.6 billion of client assets, approximately 1,300 households. Our core competencies are financial planning, investment management, tax optimization, as well as tax preparation. We have a very unique niche dealing with corporate executives that have defined benefit plans, pension plans, and we’ve found that in the very volatile interest rate environment, the need for advice around how to manage and optimize pension plan is probably at the utmost level of importance.
Craig: Absolutely. Especially for some executives that a large chunk of their wealth is tied up in that.
James: I mean, anyone who has a pension and if they’ve been at a company for a longer period of time, which by the way, we’re seeing less and less of that happen. But, some of these executives are there 35-40 years and it’s over half their nest egg, if not more in some cases. Generally, every 1% movement in interest rates is about a 10% reduction on a lump sum value that they would have. It’s real money.
Craig: Say that again. It’s a 10% reduction?
James: Approximately. As rates have gone up almost 300% in the last year and a half, it’s about a 30% reduction in some of these lump sum values.
Craig: I’m sure a lot of executives don’t even realize that.
James: Most don’t. And it’s been very insightful the last three years because we saw the movement down, and even that didn’t necessarily bring it to their attention as things started to rise back up a little bit, but it’s been more of layoffs and redundancies that have been the catalyst for people looking at it.
Craig: You mentioned you’re at $2.6 billion, you’ve had some pretty rapid growth the last three years. Can you talk about that and the impact on your technology and your internal processes?
James: Three years ago we were at $680 million, and since then, obviously we’ve had about $2 billion of asset growth. And all of that’s organic, by the way, so no M&A for us. But naturally, when you have that level of growth, it tests every system, every process. We went from 12 employees to 35 full-time employees at this point. We’ve got a couple contractors as well that we work with. But the point is that, we’ve been forced probably more than most to not only enhance efficiencies processes and redundancies, but also using technology as that pivotal integration point for all of our team. Naturally, when you have that many new staff members as well, you’ve got a training component to it. You’ve got different opinions of how to make things better, so all of that’s been part of the process, if you will.
Craig: It can be stressful on all your internal systems. We’ve seen it before. At Ezra Group, we work with a lot of RIAs and the ones that are growing fast. It’s a good problem to have that you’re growing fast, but then you need to take care of, as you mentioned, your processes, technology and your backups, because if you don’t, it’s going to come back and bite you.
James: A hundred percent. And even it’s some of the hardware questions. I mean, we launched the RIA in 2016 and now, for example, computers are starting to reach their lifecycle. And then do we want everybody to have laptops or the virtual environment, as we’ve been having to adapt to that as well and work from home policies, et cetera. It’s how do you keep your employees efficient? It’s an interesting dynamic as the company has grown and candidly, as our payroll has grown, I look at just marginal enhancements with technology can have a very meaningful economic enhancement to the company or specifically to bottom line. I mean, you just think about some of the expenditures a little bit differently in the sense of it might cost 50 to 100 and whatever the number is. But if it increases employees’ productivity by three, five, 10%, well then it was worth the upfront expense in order to be able to do it.
Craig: We hear that as well. It’s all about people. Many companies we work with realize, I mean, you want to think clients first, but it’s not, it’s your employees first. Because if you’re not focused on them, they’re not going to be able to serve your clients very well.
James: Without a doubt. And it’s a cycle that continues to have to happen as well. And frankly too, I’ve noticed the geographic sprawl even of our customer base has continued to change. We have three offices, which is a good thing and a bad thing. I joke that I’m sometimes like a traveling doctor that bounces between them, but I need to be able to just dial in and get up and not have to deal with 20 to 30 minutes of uptime or downloading something. It’s one where now we’re also seeing not only the employee base is spreading, but even our customer base is spreading. And candidly, the Virginia demographic versus the Texas demographic has been very, very different as well.
James: For example, Texas was very much an in-person environment, even throughout most of the pandemic. It never truly deviated to the virtual or cloud environment, or virtual meetings, for example. But if I compare it to Virginia, I mean, Virginia is the exact opposite where we had to go virtual very, very quickly. And even today, we’re three years in or three and a half years in now. Virginia still is for us predominantly virtual meetings. Whereas Texas, I’d argue now Texas is starting to get more virtual because I think the customers are seeing the efficiency of virtual meeting environments. It’s not necessarily because of perception of COVID or the risk of COVID, it’s more of of time management for them. It’s fascinating because me as the little, I don’t want to say gypsy, but traveling nomad that I am between the different offices, it’s like, well, do I need to be doing all the traveling that I’m doing now?
Craig: That’s a different question. I find running my company that I love Zoom calls. 2020 was our best year. We had a great year on the consulting side in 2020 because we didn’t have to travel. We were a lot more efficient in doing our work since most of it can be done remotely since we deliver advice similar to a financial advisor. It’s what we do, give advice on technology and strategy and operations. My advisor is in New Jersey. I’ve only been to their office once.
Craig: It’s all remote and Zoom and emails.
James: Well, and candidly, I’ll tell you, the growth for us was because of the adaption of digital mostly. Prior to the pandemic, for us, 2020 wasn’t necessarily our best year, but ’21 and ’22 were, because of the changes that we had made in 2020. And in a large part, it was the transition, and I know we’re going to talk a little bit more in detail, but the transition over on a digital platform. Whereas, prior to the pandemic, we were very much the traditional rubber chicken dinner advisory group from a marketing perspective where everything was live and in person. As we migrated to videos and the educational offering that we did in person now moving to digital, but we removed the geographic footprint. Again, it caused the sprawl of our customer base, but it also allowed us to target market customers that were in other parts of the world that weren’t previously being marketed to.
Craig: It’s a brave new world today with no geographic boundaries. Everyone’s seeing that. They’re realizing that they can hire people anywhere. They can get clients anywhere, and it’s been a boon for everyone, I think. But let’s shift gears and get into tech. Because we love talking about tech stacks here at the WealthTech Today Podcast. Can you run down your tech stack for us and provide a bit of insight into why you chose those?
An Overview of Bogart’s Tech Stack
James: Some of it is the same that we started with when we launched the IRA in 2016, and some of it has been getting revamped along the way. But the chassis for everything, for US technology is Salesforce. We’re specifically using the accelerate version of Salesforce, and I’ll talk about some of the iterations of that in a minute. But then we’re a Black Diamond firm. Black Diamond is doing our billing, our rebalancing, our aggregation features for us. It’s pretty robust, all encompassing. My logic when we launched the firm was I wanted something that was going to have more of an evergreen feel for us as we grew, that they were going to be able to grow with us. It took us to the evaluation of Orion, Tamarack and Black Diamond. And frankly, to me, Black Diamond was the one that just was satisfying all the needs and checking all the boxes.
James: They’ve grown so quickly as a company as well, that they’ve been able to adapt and listen well. It’s interesting because, some of the pieces of technology with Black Diamond that I didn’t even realize. But we’re some of the largest users of certain features that now they come to us and ask us what we want and they’re willing to look at ways of enhancing our tech stack even within them. What’s interesting, coming back to Salesforce, Black Diamond has their own version Salesforce called Salentica, but it’s very, dare I say, locked down, encumbered. One of the things that I love about the way that Salesforce is structured with Accelerate is that, we have the ability to customize it. And that customization, specifically the tasking, the workflows, the automation features has been paramount for us, and some of the tracking and the growth.
James: I mean, if you look at our business development pipeline, our marketing funnels, I’m going to argue the unicorn in the space. And it’s solely because we’ve been able to fully build it out the way that we need it in order to be very efficient along the way. Now we still have had to have human interaction associated with it. For example, I have a staff member that her sole purpose is owning everything related to Salesforce. Internally, I call her director of first impressions, but it’s because she’s responsible the transition from a prospect of client all the way into becoming a client and what that experience looks like. It might be that she has no actual interaction with the prospect, but she’s holding the hand of the advisors along the way, but leaning extremely heavily on Salesforce in order to be able to do so.
James: Then back to tech stack. We use eMoney for all of our planning and eMoney is the planning chassis. We are directly integrating tax, so we have tax performers that are done through our tax affiliate. Then for risk profile assessment, we’re using Hidden Levers. On the portfolio management side, we’re using Bloomberg. We have a Bloomberg terminal in house. We use YCharts. We use Morningstar. I’m probably forgetting a couple of pieces of tech we’re using on the PM side as well. But we’re pretty robust there. But the key theme is integration. I want all the technology talking to each other spend a boatload of time and money on getting that integration. But I’d say that that’s been one of the key reasons why we’ve been able to scale our growth is leveraging the technology.
Craig: That’s what we see. That’s our main deliverable. Deliverable is helping RIAs scale their growth with tech. So you guys have done a fantastic job. One thing you mentioned is, Salesforce Accelerate versus Salentica. And it is a big question. We get a lot from a lot of RIAs. The difference between the open Salesforce architecture versus, what we sometimes call CRM overlays, but are CRM customizations, Salentica, Practifi, Accelerate, which you can all also find on the Kitces-Ezra Group Advisortech map. They’re not overlays because you can’t just install them on top of Salesforce. They’re a complete Salesforce implementation. If you have Salesforce now, you can’t just deploy Salentica, you have to convert. It’s a conversion. Now, a lot of firms like that. They like Practifi, they like Salentica because of the way they’ve customized Salesforce. They don’t have the capabilities or the time or the effort or the resources as you guys have to customize the workflows and automations the way you did. How much effort did you guys put into to do your customization and build out what you liked about Salesforce?
James: Hours and hours and hours, and hours. I’ve been super blessed. I have a member of my team that he is my internal technology officer. He’s been with me since he was an intern, and he knows the firm inside and out. He knows me very well. And so now we have this synergy between the two of us where when I say to him, this is what I need. He’ll come back and in a couple days with, here’s the solution. I’m like, wow. And we talk about the growth. He’s an example of someone who grew from intern to financial advisor. But with being a small firm, you wear so many different hats. I’d argue he’s our technology officer as well, and I think that that’s a blessing and a curse.
James: Because he’s an advisor, he understands the client side so well that he’s able to build a lot of the integrations and a lot of the workflows from that. But at the same time too, he is also an advisor. Not necessarily having the dedicated ability to devote his time and energy into doing that. But, it has been lots and lots of time, but I’ve been super blessed to have him because he knows the business so well. I mean, frankly, he was part of the conversations when we built it in the front end, because he is passionate about it. He is more engaged about it than, I’m not going to say I’m not, but he is very willing to spend the time researching and looking at different options and how it can be impactful, both internally, but also externally. The comment that you made earlier, that it is very much about efficiency with our staff, so that they can be more directly impacting clients. You have to look at the technology in order to be able to do that.
Craig: Yes, you do. I’m glad you guys have someone and that’s not an uncommon example, that we’ve heard from the RIAs we work with, that they have an advisor on their staff that is just a techie and gets in the weeds and grows up into that technology officer role. It works both ways. Some firms bring in someone from the outside as their CTO or CIO, or Chief Information Officer. A lot of firms we work with, because we at Ezra Group act as their right hand. We call it a fractional CTO, but it’s a CTO support role that we play because they can’t do everything at once. And they’ve got a million things to focus on. Bringing us in helps them focus on the bigger picture while we do the implementations. Let’s say, of a new financial planning or new investment analytics, or a new portfolio management system, or improving operations. It’s good that you have someone who grew up at the firm and understands your messaging and your culture.
James: Well, and for example, one of the biggest things that I’ve noticed as we’ve grown, I’m less involved in the proverbial weeds as we used to be. There’s a level of anxiety that comes from that. I mean when you’re doing it all to then having to delegate it all, you don’t have the full visibility of it. Now we’ve had to build out all the KPIs and looking at how to assign metrics to success off of different elements of the business. I had said to him, I said, I’m losing sight. I’m getting a little anxious about it, frustrated sometimes, and he turned around and built me a dashboard, and this is all through Salesforce. We have the data, it’s already there. I just can’t see it in an easy way to interpret. And again, within 72 hours, I have a dashboard that I literally hit refresh on, and boom, everything’s there and populated and it’s my proverbial cockpit on the business, which is awesome. Then, related to that, now I can see historical tracking as well, which it’s all right there at the push of a button.
KPIs and Dashboard
Craig: Can you share a couple of the KPIs that you track on that dashboard?
James: The honest answer is it depends. But it depends on which department or which role that we’re looking at. But, for example, I have an entire business development funnel that we’re tracking. I can look at every single prospect by stage where they’re at. One of the things I do to manage the future and the success of the firm is I’m very cognizant of what our pipeline is, both at a 12 month, but also at a 36-month basis. I manage our business development process to have as much in the funnel as the size of the firm. Right now, we’re about 2.6 billion. In my funnel, we’re at about 1.6. What that says to me is that we got to ramp up some of our BD, and a lot of that has been capacity driven, just based on the growth.
James: We’ve closed a lot, so of course that’s brought our funnel down. But then we track everything from a number of financial plans that we do. I do this for Two folds, obviously, it’s part of the lead gen, but I also look at it from a capacity perspective. For example, when I see that we did 68 financial plans in a quarter, and that’s new business related activity. When it’s customary for us to do 23, well, that says to me, I need to be hiring more people, and helps us with some of the stack management work. But even on this, I’ve got all of our revenue metrics, cash on hand. We look at what our different models are. I’ve got KPIs for them. How are they performing relative to benchmarks? Looking at revenue per customer, looking at lost clients versus one client. We’re very blessed to have a client retention ratio that’s closer to a hundred than 99, which is awesome, and well above industry averages, if you will. But I think these are some of the things that I’m looking at to help us with managing the flows.
Craig: Fantastic. Thank you for sharing that. It’s important. I think a lot of firms are interested to hear what their peers are doing and how they’re tracking.
James: What I just related to that, and not to go too much into the weeds, but each of our directors is assigned KPIs. I just listed off a bunch of the ones that I look at as the CEO, but everyone, for example, my COO, she has her KPIs, my CIO, he has his KPIs, director of planning, director of advisory. Each respective one is being assigned KPIs. And again, I don’t manage to specifically the KPIs themselves, but they are directionally elements that I’m able to use to track. For example, with Advisory, I could see the number of meetings. And number of meetings per week is a very good indication of productivity. But it’s also an indication of what we’re going to need in terms of future staffing. To me, this human capital component is just as important as the technology is, and watching what we can do to make our team more effective, more productive. We were talking about that a little bit earlier, but that’s an integral part of the growth that we need to be having.
Craig: You mentioned integrations as an important part. What are some of the integrations you have built? What are some of the frustrations you have? Because at Ezra Group, we are all in on integrations. We even launched the WealthTech Integration Score as a research on the industry to help firms like Bogart Wealth understand how different vendors and applications integrate with other applications to make it a little more transparent. What are some of the challenges you ran into when you’re trying to integrate these different disparate applications?
James: Where I think we still have friction, I call frictions, friction’s in the process, things that slow things down. But where I still have friction is on investment proposals, relative to getting data from Salesforce directly into there. I like the ability to push a button in an auto-populates. We’ve got a full integration with Black Diamond, Salesforce eMoney, that all works. We haven’t had as seamless of an integration on the investment proposal side yet. And still working on a solution that, in my opinion, obviously is in line with compliance, but is more of an integrated approach. Part of our process with prospective customers, we come in, we do a financial plan, we understand their cashflow needs. We go through, we do hidden levers, risk profile assessment, it signs them a score, and then at that point we can build out an investment recommendation for them.
James: That’s where the rub still is in the process. And as recently as yesterday was interacting with my team on ways to enhance that process, and if it means that we need to find a new technology vendor in order to be able to do that, then so be it. But right now, that’s an example of one where we’ve built it internally and I don’t want to say archaic, but it’s using Excel Macros and then building out PowerPoint presentations associated with it. But it’s very clunky and not as streamlined as I think it needs to be. Again, as we were talking about earlier, to me, technology is about efficiency. It’s about enhancing the productivity of the workforce. If it means that we need to spend some money, but it ultimately will make the team more effective or more simply, if I can buy a piece of technology to replace what I would need to be spending on an employee to have them go do something that can be more impactful to value added for the clients in the future, then that to me is a very worthwhile expenditure.
Craig: I would agree a hundred percent. One of the things you mentioned about Excel macros, when we come into a new RIA that hires us for our fractional CTO, the first thing we ask is, if Excel went away, what would happen to your business? The often answer is, we would not be able to open our doors the next morning.
James: The thing I’ll say about my team is they’re very versatile and they would figure out a way to make it work. But that would definitely be friction.
Craig: Everyone would figure out how to make it work, of course. But the joke is that you have so many things you don’t realize till you sit there and do an inventory. We always do a current state assessment inventory of all the tech you’ve got and how everything’s connected and all the processes. And when you start seeing, well, Excel is here, Excel is there, Excel is here, and it’s so easy to bridge the gap as you’ve done, between different disparate systems that don’t talk to throw Excel in there. Whether it’s macros or manual excel or dropping in data or exporting, importing, it’s so common. Then you don’t realize after, even you’ve only been around since 2016, we work with firms that have been 20-30 years. They built up tremendous manual processes in Excel and emails and other things. You’re not alone in having these clunky processes, but at least you identify them and know you need to get rid of them.
James: Well, I think this is one where one of our core values is to grow. I don’t mean that solely in AUM and revenue, but I do mean in process enhancements. I think that the blessing and the curse of having a lot of new people is you’re required to constantly be looking at this stuff, and you’re constantly getting feedback on ways that it would work better. For example, some of these things in my opinion, are extremely basic, but all of the frequently used documents that we used to have on folders, on a shared drive that employees could have to go digging through to go get. They might be able to pin them, but now, all the frequently used ones are right on the landing page of Salesforce. The new household form or the retirement plan questionnaire or a budget worksheet, all these things, it is a very basic one, but I’m like, that little light bulb that went off. This is just a way that saves, and again, marginal efficiency, but if it saves somebody a minute from going to find it and to just click a button, then yeah. That’s enhancement to the process.
Craig: It’s what we used to call in the old days, the intranet homepage. Where you could go to find all the things you need for the company. Employee directory, all list of documents and forms and processes, and just one page we used to have on the intranet, Salesforce is your internal intranet.
James: We used to literally just have a whole folder system that every employee had access to. Then next thing you know, that thing has got a ton of data on it with all the client folders. Again, you’re talking about an example of how we’ve grown where we’re still using that to an extent, but now we’re integrating SharePoint with it. And then it’s layered where we’ve got specific drives for specific departments, and now of course we’ve had to gateway certain employees can’t have access to certain things.
Craig: It’s only going to get more complicated. You mentioned SharePoint. Is that your document management solution, or do you have others?
Craig: That’s where you store all your client documents and they can access them from there, like on a vault or?
James: Sorry. No, so that’s internal. Everything with client is going through Black Diamond’s vault. We’ve let Black Diamond be the chassis for virtually everything related to clients.
Craig: Got it. You mentioned investment proposals, that’s still a manual process?
James: It is using a combination of Excel macros with PowerPoint integrated with Hidden Levers. But that’s one where —
Craig: I was going to say, did you look at Hidden Levers. Because they’ve got an excellent proposal generation tool.
James: They do, it’s still clunky.
Craig: Got you. Good feedback. I’m sure they appreciate that.
James: Again, I think every firm has their way of doing things. By the way, it’s the same even on the financial planning side. We’ve got eMoney as the chassis that builds out all of the different reports, risk profile, excuse me, the cash flow management stuff. But we still have PowerPoint documents that we integrate with it. We’ve got proprietary tools that we’ve built on the planning side that we integrate with our plan. I mean, we’re still pulling a whole bunch of things together to build this digital document for a prospective customer.
Craig: Nothing, no application, I found. It has everything you need. There’s always a little bit more, you want to tweak it, you want to change it, you want to make it your own.
Craig: All right. We’re running out of time. Can you talk a little bit about some of the things that you have planned coming in the next 12 months?
James: Big thing is, as the firm has grown, we’re now bringing dedicated technology officer. Part of what we’ve had happen is, we had many people doing many things, multiple hats. As we’ve grown, we’ve now had the ability to be more focused, more specific. The main thing right now is bringing a dedicated technology officer on the team to be able to handle both hard and soft technology needs, for example, we’ve got computers that are at Lifecycle. We’re talking about if we want to move everything over to laptops. We’re building out a new office space, everything technology related to that. But then it’s coming back to these integrations. You can’t ignore AI in this environment, and I think anybody who is ignoring AI is just getting a little bit further and further behind the rest of the pack.
James: And so for me, over the next 6, 12, 18, probably even 36 months, it’s going to be a lot of utilization of AI. How do I enhance the process, make the workforce more efficient? We still have a regulatory component with AI that has to be watched, of course, for example, internal meetings. We can use some of the dictation services, whereas, meetings with clients where we’re talking about sensitive or private data, can’t do it yet. I still think that related to what architecture the AI is pulling off of still can create a little bit of friction along the way in the process. It’s not necessarily always accurate. We’re building up our databases and archives, then utilizing that as where we’re pulling from. But even just the workflows, enhancing that as well. I would say it’s a long-winded way of saying more technology.
Craig: More tech, that’s good. Good for consultants. We love more tech. Man; this time just flew by James. Tell everyone where they can learn more information about Bogart Wealth.
James: Bogart wealth.com, and happy to be a resource if anybody has any questions.
Craig: Appreciate your time and sharing so much about your firm with our audience. Thanks so much, James.
James: Thank You, Craig.