Ep. 213: The Merger of Wellness & Wealth with Rob Rickey, StraightLine

Come on in and sit back and relax. You’re listening to Episode 213 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 Rob Rickey, Chief Growth Officer at StraightLine Group, which is an RIA with over a billion dollars in AUM based in Troy, Michigan. Rob has over 25 years of experience in the retirement industry, most recently as Head of Advisor Services at TIAA, where we played a pivotal role in bringing independent fiduciary advice solutions to individuals whose employer sponsored retirement plans were at TIAA.

We get into a lot of detail in this conversation. That was very interesting about how StraightLine had lured Rob away from TIAA and brought him on board to manage their retirement business. It’s an interesting trend. We haven’t talked a lot about retirement on this program. I know we have had Aaron Schumm, the founder and CEO of Vestwell on a number of times, but I thought getting more into retirement we’re seeing more RIAs get into retirement plans. I thought it would be interesting also, since Rob had built a lot of the tech over at TIAA to support their independent advisory channel.

But before we get started, let’s talk about tech stacks. At Ezra Group, we’ve seen tech stacks of hundreds of RIAs and let me tell you, most of them are loaded down with tech debt. So you shouldn’t feel too bad about yours. But let’s face it tech debt is like a giant anchor, holding back your business growth. If you want to free your firm for exponential growth, you should run, not walk to our website EzraGroup.com and fill out the Contact Us form. Our experienced team can evaluate your current tech ecosystem, deliver targeted recommendations, optimize your existing systems and operations or run an RFP and help you implement new software to take your firm to the next level. You can take advantage of our free consultation offer by going to EzraGroup.com.

Topics Mentioned

  • Career Transition to StraightLine Group
  • Role as Chief Growth Officer
  • Challenges in Higher Ed Retirement Planning
  • Financial Wellness Trends
  • Data Aggregation Challenges and Financial Planning Software Shift

Episode Transcript

Craig: Let me introduce Rob Rickey, Chief Growth Officer at StraightLine Group. Hey Rob, how you doing?

Rob: Good, man. Good morning. How are you?

Craig: Super fantastical here in New Jersey. We had a great summery week last week in the 70s and 80s and now we’re back to the 40s which is north New Jersey.

Rob: I’m actually on Long Island now so I hope you got out on Saturday, enjoyed that 80 degree day that we had.

Craig: As a matter of fact, I did. I was in the city on Saturday hanging around there. So enjoyed just walking down the street and feeling the sun on my face for the last time for a while. Can you give us a 30-second overview of your firm StraightLine Group? Yeah,

Rob: StraightLine is an independent RIA. We manage about just over a billion dollars. The firm has its roots in working with participants within retirement plans. While we have a traditional investment advisory business, we also have a focus on managing assets in what traditionally would have been called heldaway individual retirement accounts and employer sponsored retirement plans. So that’s the history of the firm and the roots of the firm.

Career Transition to StraightLine Group

Craig: We’re seeing more and more of our clients expanding into the retirement planning market. But you have spent your career at some very large asset managers. What drove your decision to join StraightLine Group?

Rob: It was an interesting decision and development over the last year or so I spent 25 years at TIAA. I’ve been in financial services for 30 years. The crux of my career at TIAA was building TIAA’s independent advisory channel which gave independent advisors the ability to work with participants in retirement plans, quite honestly, it was way ahead of its time. It was 1999, 2000. My whole thrust was the trend around independent advice was very entrepreneurial in terms of what I wanted to do, and wanted to help people get advice by getting access those independent advisors in the fiduciary model.

Rob: Fast forward 20 to 23 years, I leave TIAA last summer, I start doing some consulting work. StraightLine was a firm I had partnered with while I was at TIAA so I knew them very well, had helped them start growing their business in the higher ed space and saw the opportunity to join them and get on the other side of the table. Basically take what I was doing at TIAA and opening plans to access independent advice and do that now from the RIA side of the table. So a little bit more entrepreneurial for me being at a small firm. I was at the place in my career where I wanted to do something like that, and it’s just an exciting time.

Craig: Congratulations on the move for you as well. So you’re as Chief Growth Officer of an IRA, what’s some of your highest priorities?

Rob: First thing for us is setting StraightLine up for growth. So that means we’re taking a look at all of our services, the technology we’re using, our fee structure, our staffing, all of those things to get to the position where we can start to reinvest and rethink or modernize our strategy to grow going into 2024 and beyond.

Role as Chief Growth Officer

Craig: All that makes perfect sense considering you are the chief growth officer should be focusing on growth. Recently a survey in 401k specialists magazine, only 67% of higher ed organizations retain the services of the plan advisor consultant. That seems low to me, what are the other 33% doing? They just winging it?

Rob: It’s funny. It seems low, it doesn’t seem low to me, because I’ll tell you, I think it’s higher than that. You have to take a look back at the higher education space and the 403 B space in general, was very paternalistic. And for many years, even though now in recent years with legislative changes, it’s becoming more similar to the 401k market. It was very unique. So I think if you go back to the early 2000s, it was almost there was no consultant penetration in the space. So I think since the financial crisis, we have seen that market evolve in terms of consultants finding their way to that space.

Rob: I think what you’ve seen in the last couple of years, maybe that slowed down a little bit because of COVID and some of the challenges in the higher education space. Now there are some areas in that market where there are budgetary challenges, given the changes in enrollment rates and what happened with COVID. I think the trend is there, as a matter of fact if you look at RFPs in that space today, they’re almost entirely coming in 100% with a consultant on it, or an RFP for a consultant by those institutions.

Rob: The other thing is when you look at that rate 67%, you have to look within that number. How many of those people or how many of those institutions have very large higher education institutions, mid range size that are following those higher education institutions are large billion dollar plus ones that are almost 100% working with consultants. It’s the smaller end of that market that probably has less consultants are starting to bring them on but are also struggling coming out of COVID and some of the budgetary challenges they face with enrollment.

Challenges in Higher Ed Retirement Planning

Craig: It’s a complicated space. There’s a lot going on there.

Rob: It is becoming more like 401k space. By the way, a lot of the things that made it different are also starting to show up in 401k. Like the access to guaranteed income is the big trend, given the trends around Secure Act and all of that.

Craig: The same survey, showing here that it showed 77% of higher educational institutions currently offer a financial wellness program. That seems like a good amount. I mean, are you seeing more and more firms moving into financial wellness for their participants?

Rob: I think financial wellness is certainly a hot topic these days. And I think more and more plans are adding that certainly in the higher education space as well. It’s at the heart of what we’re trying to do in terms of our services as an RIA. We’re focused on providing general education, communication and advice services to plans and certainly we feel like that there’s an opportunity there to help those plans that have not gone there yet, and maybe help those that have done it and haven’t seen the penetration or the results that they would like.

Craig: Let’s talk FinTech Rob, on your platform and the StraightLine platform and in your career, you’ve worked with a lot of different applications and providers. And you mentioned earlier, talking about the retirement space. It’s a lot of data aggregation. That’s something we deal with a lot in our research on tech as data aggregation providers and the data around that. Can you talk a little bit about some of the work you’ve done with data aggregation, some of the challenges you’ve seen, that you’ve run into with them?

Rob: It’s a great question. They mean, so I’ve seen from both sides. When I was at TIAA, I built TIAA’s data aggregation or their data feeds to be sent down to independent advisors, direct clients on the platform because the reality is, you can’t serve those clients or those advisors if they can’t get the data. So data is critical. Whether it’s your custodian or a record keeper, you have to have that data.

Rob: Now on the other side, certainly we are dealing with data aggregation. At StraightLine, we have multiple vendors. A lot of advisors just have one custodian. And that may make it simpler, but for us, it’s complicated because not only do we have our standard traditional retail custodial relationship, we also work with multiple record keepers and we have to get data from those record keepers. So working with a data aggregation system that can consume that data from multiple platforms, and bring that in and do the appropriate mapping so that you can do the appropriate reporting for your clients.

Rob: For us, we use that data from multiple platforms to obviously give our clients access to those accounts to view them to do performance reporting, and to do billing critically. It’s important that that data is accurate and that has been one of my big learnings is when you are working with any data aggregation system, you have to take the trust but validate methodology, meaning a lot of FinTech talks about what their capabilities are. And until you start working with them, you don’t truly know what their capabilities are and you have to put the effort in to test the data as you’re getting the data and work with those, those FinTech platforms to help them improve it over time because it is not going to be perfect. Far from it.

Craig: So you mentioned you’re using data provided from the data aggregation vendors for performance. I found in the past that the data from many vendors isn’t clean enough for performance. Did you see that? And if you did, what did you do to resolve that?

Rob: I have seen that and I think the most important thing that you can do as an RIA is you have to have somebody who understands the data, because what’s happening there is whoever the vendor is that’s providing the data to your aggregator on behalf of you there, they’re sending down transactions on a daily basis. And the critical thing is how is that data aggregator map those transactions in terms of their impact on performance? The reality is, there’s a lot of transaction codes and those transaction codes have to be properly matched.

Rob: If you don’t understand how your transaction codes are being mapped, and you’re not regularly looking at that stuff, and talking to your data aggregator about enhancements and fixing that mapping, because they even change over time. You have record keepers. I know even from my experience at TIAA as a record keeper providing that data. Sometimes our transaction codes changed and if you’re not going back in as the data provider and making sure it’s mapping correctly, as a buy, sell or deposit, whatever it might be. It can have a negative impact on the advisors data.

Rob: It’s an ongoing battle to get your performance as close to perfect as possible. But it requires that type of work and dedication looking at the transactions and working with your partner. Indeed, it does, and you certainly can’t just assume that they’re gonna have it, which I think unfortunately, a lot of advisors do.

Craig: That’s why Ezra Group gets hired a lot is because we sit side by side with our RIA clients to help them know where the bodies are buried, so to speak, because we’ve worked with a lot of these vendors. A lot of firms, instead of going through some of these issues, we can kind of guide them around it but your point is valid. You got to look at the mapping and you got to stay on top of the vendors, you can’t trust them. I’ve been in the industry long enough to know everyone’s trying to do the right thing. But a lot of times it just gets not being done. The things fall through the cracks as a vendor. They have a lot of other clients that they’re working with and they may lose track of what you’re doing so you need to be the ultimate verifier and validator of your own business, your own data.

Rob: I think the other thing that’s important, I totally agree with that. And I think the other thing that’s important about that is you have to understand these FinTech firms, they have great technology. But a lot of times they don’t necessarily have the direct experience in our business. Like they’re technology people. And they’re learning our business while they’ve built a platform to support our business.

Rob: I think that’s one of the big challenges I have seen across the industry, on any technology or FinTech platform that I engage with and try to educate myself on to make an educated decision on choosing a technology platform. That is one of the biggest challenges I find you could spend the entire year reviewing technology offers in a certain area of your business, make that decision, and suddenly you’re three months into working with them and you’re questioning your decision because they’re not perfect. None of them are perfect. They all have they all have challenges.

Craig: As someone who spends a lot of time talking to vendors, Rob, I can tell you they all have challenges. There’s a lot of things going on behind the scenes we see under the hood. All the demos you see are all pretty all the websites are beautiful. Under the hood, it’s a mess. And a lot of these vendors have these issues. It keeps us in business. If the vendors didn’t have these problems, they wouldn’t need consultants like Ezra Group!

Rob: By the way, I think the biggest challenge for an RIA is how much energy do you put into the due diligence process? To the conversation we just had, I could spend three months, six months or 12 months reviewing data aggregating platforms, and quite honestly be in the same situation once I choose one of them. I think sometimes you may be better off just making a decision and going in and understanding that you’re going to have to work with that vendor to evolve their service right and their platform.

Craig: The one thing we tell our clients is when you’re choosing a new vendor, it’s like getting married, right? You’re going to be with them a long time, right? A minimum of 7 to 10 years, as most applications, especially the core, all the ones we’re talking about whether it’s data agg portfolio management, or financial planning as an example, as what I want to shift over to, you have just recently done a shift in your financial planning software. Can you talk a bit about that? Why you did it? What was the impetus behind it? Where you’re going from?

Financial Wellness Trends

Rob: Our intention in shifting to a new financial planning software was to start to get to our strategy of more of a digital experience and an interactive experience with clients around providing a collaborative financial planning process that was ongoing.

Rob: I think many of us grew up in the days of hey, here’s your financial plan, and it was like a binder was a beautiful packaged piece with a lot of color graphs and all of that stuff there. Twenty years later, like that’s not what financial planning is. It’s a living plan, collaborative, ongoing, and there are very good tools now to take that to clients and to work with them and in our environment working trying to work with participants in plans. We’re trying to balance between providing financial wellness as well as holistic advice because there are different participants in different points in their financial journey. That need different forms of advice. And I think for us, it’s a financial planning software that’s collaborative, and even potentially a technology around financial wellness that will ultimately help us bring our strategy together.

Craig: So what application if you don’t mind me asking, did you move to and which one did you move from?

Rob: We went from Naviplan to MoneyGuide.

Craig: And mainly because of the ease you mentioned, the digital experience, which part of the MoneyGuide, what did you like the best?

Rob: So there’s a couple aspects of it for me personally that I like, I love the goals based approach that MoneyGuide brings. I also love their blocks components in terms of the interactive piece that you can put in front of clients, the different ways that you can depending on the client, how you can get them engaged in the financial planning process. I think you can go old fashioned with them filling out forms, you can give them access to the financial planning software to enter the data in themselves.

Rob: You can use the blocks and what’s cool on the My Plan functionality to let them play with it in a simple way and then take that data and bring it into the final into the financial plan to begin that process on the advisor side. So you can differentiate between someone just having access to the tool using it themselves and then taking them into a financial planning engagement with you as the advisor in a collaborative relationship.

Craig: With your financial planning software, can you talk about or provide some best practices or lessons learned when you were looking at your financial planning software in deciding whether you should shift or not? What was it that pushed you over the edge like how did you get that how did you make the decision that you’d get there?

Data Aggregation Challenges and Financial Planning Software Shift

Rob: Well, it’s ironic because we just talked about data integration, but in particular MoneyGuide did have a data integration module with our data aggregator that we’re working with. So that plays an important point, because it goes back to my earlier point, we will look at all of the popular software’s, had it down to probably the three most popular today and they’re all great. They all have a tremendous amount of capability. So like that’s where it gets challenging to make a final decision.

Rob: You got to go with your gut sometimes, and I think the other thing is you’re going to find challenges in that integration. And by the way, perfect example of what we were talking about, Craig, one of our big decisions was well, we could take our clients from a data aggregation system and bring their accounts directly into MoneyGuidePro. Well, that was great. And and once we started trying to use that it didn’t quite work like we expected it to work.

Rob: Now, I engaged MoneyGuide Pro, I engaged data aggregator provider and we work together and they fixed that. So that’s a perfect example, we took three months to look at these different software’s. You start scratching your head and say, they all have great technology, you make a decision, and then you start utilizing it you find that certain things don’t work the way you expected. And you have to work with your providers to make that stuff get better.

Craig: One thing I always emphasize is you don’t want an adversarial relationship with your vendors. You want to think about them as a partner and we brought some people together, very large firms, very, very big broker dealers and their vendors and basically put them in a room and say, you guys have to work this out. We all work together on this rather than the constant finger pointing, it’s not going to help the business grow, the business grows, everyone’s happy, right? It benefits everyone if the business is growing. That’s where we need to be.

Rob: It’s a great point. And I will tell you that when I go into my relationships and my conversation with my data aggregator and MoneyGuide, my position is, if I can help you fix something, I’m not only making it better for us, but I’m helping you be better to the market to the rest of the advisory community. And that’s a strength of a good partnership. That’s the approach I take when I’m working with them. It requires you to be willing to put a little extra time and effort, honestly, but it’s valuable because one they respond nicely to that and they tend to maybe put you in a better position as you need things fixed as well.

Craig: Absolutely. What client portal are you guys using?

Rob: Our data aggregation platform is BridgeFT, and we’re using their Atlas platform to share accounts with our clients.

Craig: Are you bringing in data from MoneyGuide into the portal?

Rob: We are not yet. A lot of this is new and the portal is specifically to view accounts and we use MoneyGuide separately for clients to view their financial plan as they come in and we start to get integrate them into the financial planning process. So they have access to both to view their accounts that we manage and then the financial planning software to see their plan and use the blocks functionality.

Craig: So that’s something we’re seeing as well, we’re looking for the super portal, that everyone can have one portal for everything.

Rob: There’s a lot of platforms out there that are going to build they’re looking at the end to end capability to provide that. So as a firm, we’re not there yet today, I think providing our clients with access to their accounts, providing them with access to their financial planning tools, I think is working for us right now that might evolve over time. We may look to integrate those things into a single tech stack over time, but right now it’s working for us.

Craig: Excellent. And with your shifts to Envestnet MoneyGuide that left a lot of your clients with the old software plans created in the old planning software, did you do a one large shift or did you shift clients over to MoneyGuide slowly as they hit their anniversary? How did that process work?

Rob: That process is just starting to be honest with you, Craig, but we have we’ve maintained the relationship with both softwares in an overlap to be able to address that and to work with clients as we transition with them and we meet with them.

Craig: And that’s one thing that you can’t convert. You can’t automatically convert old financial plans to the new application’s format.

Rob: Correct.

Craig: One of the things that our industry never has gotten ahold of.

Rob: It’s a great point, and that’s why we made the decision to keep the access to Naviplan. And by the way, listen, like I said earlier, Naviplan is a great platform. And there are other great platforms as well on the planning side. I just want to your point that it’s a great point that when you make a change like this, you have to think about at least keeping the old financial planning software for six months to a year to be able to deal with those transitions and use that as a reason to get in front of those clients that had plans in the old system.

Craig: That is something we also recommend and you’re doing the right thing with any product, any application you’re converting. It always takes longer than you think. And oftentimes the plans we see don’t include parallel operations of whatever the other platform is. Especially financial planning, CRM, portfolio management, there’s going to be some overlap time we want both systems running just in case this is a backup. And just also for verification, especially portfolio management, validating that your billing is working properly, all your numbers are right before you shut it off.

Rob: All things to your point as we think about our growth strategy, those are all the things we were working on today, to put ourselves in a position to grow, so everything you just said. I literally got a call yesterday, looking at our first test bill run through our Bridge system, right. And it was good. I mean, there were things that we picked up on, but that’s the process you have to do that.

Rob: The other thing I would say is, you said the progress sometimes it’s slow, progress should be slow, right sometimes with this stuff, because you know, you do need to make sure things are right. And I do think the biggest thing I can tell any advisor is don’t take for granted that your vendor tells you that they do something and that they do it well. You have to you have to verify it. And that takes work.

Craig: It does. Is there any technology you’re looking at you’re evaluating now down the road to help your business grow to help to improve that you’re getting a decision on yet but you’re thinking about it.

Rob: We’re in the process. So part of the whole strategy for us is to go back to our niche and our routes around providing services within to participants within retirement plans. So we mentioned we talked about utilizing that financial planning software that would be more for clients who need the holistic financial planning. We’re all looking at how to marry our services with a financial wellness platform. So we’re looking at those technologies as we speak.

Craig: What would that entail? Bringing a financial wellness platform?

Rob: For me, what I’m looking for in a financial wellness platform is obviously the technology that can give broad scalable access to all the employees and a plan to do the basic financial wellness stuff, that tends to gear itself towards, creating better behavioral pattern habits for individual, dealing with debt, dealing with budgeting, saving all of those things.

Rob: But marrying that with coaching as well, it’s not just like you can have a technology platform and it can even leverage artificial intelligence. But I think what we’re finding is those systems don’t get the penetration. The education participants don’t get the level of education that we all think they should. And I think that’s because you still need the human side of that. And when you get down to the human side of it, there’s two aspects to that. There’s the clients that need coaching, which may be the younger employees. And then there’s those individuals that are more advanced that maybe are 10 years from retirement, have accumulated assets and need more holistic advice. So for us, our model is bringing that financial wellness to get scale to to address everybody’s need, getting them coaching, as well as then getting them access to our holistic planning and investment management services if they need it. So it’s marrying all that together in a package solution to bring to a plan sponsor.

Craig: That sounds excellent. I think if I was the plan sponsor, that’s exactly what I’d be looking for.

Rob: What I would tell you is I think I like to term it, like the full spectrum of advice. And I think what happens is, because people are at different stages in their financial journey and they consume education and financial advice differently. You need to have the full spectrum of advice that goes from everything from simple to target date funds to financial wellness, to maybe custom portfolios, managed account solutions, baked into the plan, to even holistic advice from independent advisors, all of that stuff. If you offer all of that in a plan, you have a better chance of getting more participants the education and advice they need. Instead of looking at silos, look at them as complementary advice offerings to reach a broader population within the plan.

Craig: Rob I have a whole bunch more questions I wanted to ask you, but we are out of time. Where can people find more information about StraightLine Group?

Rob: You can go to our website at www.StraightLine.com.

Craig: Fantastic. Rob, thanks so much for being the program, I appreciate it.

Rob: Thank you very much, Craig. It’s been a pleasure.

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ABOUT ME

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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