Full Transcript for Fostering Trust Between Advisors & Clients with John Thiel.

that refreshing. 00:02:38.400 --> 00:02:47.439 The firm thought that I had more to give as it relates to leadership than my personal productivity, which, you know, maybe they were right. 00:02:47.599 --> 00:02:49.199 As it turns out, I think they were. 00:02:49.360 --> 00:02:52.960 So I went into leadership really because I thought I could make a bigger difference. 00:02:53.120 --> 00:02:57.120 And I did that in 1995 and spent several great years. 00:02:57.199 --> 00:03:00.159 And all of those experiences were wonderful experiences. 00:03:00.240 --> 00:03:02.719 I lived in Chicago, San Francisco, and New York. 00:03:02.879 --> 00:03:06.319 So I got a lot of different perspectives. 00:03:06.560 --> 00:03:35.360 And the thing that I think I felt great about was not only helping team, advisor teams, helping them build teams, help them think about workflow and efficiency, but it was also an opportunity to get to know clients of other advisors on a deeper basis and be, let's just say, sort of that objective person, obviously supporting the advisor, but be able to really have conversations with them that maybe perhaps the advisor couldn't have that kind of conversation with. 00:03:35.439 --> 00:03:38.000 And it ultimately helped both the advisor and the client. 00:03:38.080 --> 00:03:43.280 So those were some of the highlights, other than living and also living in some really interesting places. 00:03:44.159 --> 00:03:44.800 That's cool. 00:03:44.960 --> 00:03:49.840 So what kind of things did you think you could talk to clients about that like you wouldn't as an advisor? 00:03:50.080 --> 00:03:51.280 Well, estate planning. 00:03:51.439 --> 00:03:52.479 You think about it, right? 00:03:52.560 --> 00:03:56.080 I'm a I was a CPA, I kept my license until 1995. 00:03:56.240 --> 00:04:01.439 And in the insurance business, I learned an enormous amount about different planning techniques. 00:04:01.599 --> 00:04:17.120 And so to be able to have those conversations comfortably, because we weren't, think back then, really training advisors in wirehouses for sure, about you know, insurance solutions other than perhaps fixed annuities. 00:04:17.360 --> 00:04:25.279 And so it was a real opportunity to take a little pressure off the advisor and think more holistically about what the purpose of their wealth was. 00:04:25.519 --> 00:04:26.560 Yeah, it's been interesting. 00:04:26.639 --> 00:04:35.680 I mean, you and I have both been around financial services long enough to kind of see this evolution of the advice model in very high-level generic ways. 00:04:35.839 --> 00:04:39.439 I mean, the financial advisor almost, you know, grew up as a broker, right? 00:04:39.519 --> 00:04:46.000 You know, basically a salesperson, individual stocks, mutual funds, who's the hot manager? 00:04:46.160 --> 00:04:49.199 You know, can I get you into Peter Lynch's Magellan fund? 00:04:49.519 --> 00:04:52.399 What can we do to basically sell you product? 00:04:52.639 --> 00:04:56.160 And

the idea was just simply about wealth accumulation, right? 00:04:56.319 --> 00:04:59.439 And how much money can we build for you in your wealth? 00:04:59.600 --> 00:05:06.160 And it's really been kind of a slow evolution to actually that's not what it's all about. 00:05:06.319 --> 00:05:07.920 You know, there is this planning notion. 00:05:08.000 --> 00:05:13.120 There are insurance and risk management issues, there's estate planning, there's all kinds of things. 00:05:13.279 --> 00:05:19.120 I think probably driven up from the client, you know, looking for more services from their advisor. 00:05:19.279 --> 00:05:24.800 And kind of, you know, what was your experience kind of firsthand in Merrill as that as that world evolved? 00:05:25.199 --> 00:05:26.720 That absolutely was the case. 00:05:26.879 --> 00:05:28.319 Clients were looking for more. 00:05:28.480 --> 00:05:31.279 I think advisors were looking to do more for their clients. 00:05:31.439 --> 00:05:40.240 And I really think, in one instance, the certified financial planning designation really caught hold as we we emphasized financial planning. 00:05:40.319 --> 00:05:44.480 And we tried to encourage our advisors to pursue that designation. 00:05:44.560 --> 00:05:47.199 At one time we had over 3,000. 00:05:47.279 --> 00:06:00.240 I'm sure there's more now, see of the advisors as CFPs, and really make it more like a profession because of the continuing education, the barrier, you know, the test and code of ethics, right? 00:06:00.399 --> 00:06:09.120 All important elements to a to a client who's trying to come up with an objective analysis of one's skill set and talent. 00:06:09.199 --> 00:06:11.120 That was a, I think it was very helpful. 00:06:11.279 --> 00:06:22.079 And obviously the advisors were very capable once they passed that exam of understanding some of the more nuanced elements of you know wealth accumulation and wealth decumulation. 00:06:22.399 --> 00:06:28.800 Yeah, I I spend time now, I volunteer with the CFP board on their standards resource commission. 00:06:28.879 --> 00:06:34.399 And I've always thought very highly of the CFP board and creating that professional designation. 00:06:34.639 --> 00:06:37.360 But working with them, I have even more of an appreciation. 00:06:37.519 --> 00:06:52.319 Boy, it is extremely thorough how you know we vet through issues for financial advisors before putting guidance out there, how you should handle different situations or clients or assets or technology, whatever it might be. 00:06:52.480 --> 00:06:57.199 It's been a great eye-opening experience for me in a very positive way. 00:06:57.360 --> 00:07:03.519 And you know, I helped develop the standards on insurance and how CFPs you know look at the review of insurance. 00:07:03.759 --> 00:07:07.439 Well, and I give the industry a lot of credit that we committed to and made available. 00:07:07.600 --> 00:07:15.199 The advisors always wanted to do more, they wanted to be as relevant as can be, and you but you've got to make it easy for them, easier for them to do that. 00:07:15.279 --> 00:07:17.839 And I think I think people responded effectively. 00:07:17.920 --> 00:07:36.879 And that's all to me for better outcomes for clients, because that and the other designations that have have come as a part of that, whether it be C-Mur, C PWA, of course, CFA, I just think it all says to the client that I've I've taken extra care for prepare to be as you know as helpful as I can be to you. 00:07:37.279 --> 00:07:38.079 Absolutely. 00:07:38.399 --> 00:07:46.879 So as you've now gone into the independent space, you know, launching you know indivisible partners, what's your vision for indivisible? 00:07:47.040 --> 00:07:49.680 And so you it's kind of nice when you've got a blank slate. 00:07:49.759 --> 00:07:49.839 Yeah. 00:07:50.000 --> 00:07:52.480 And you can just say, I can build whatever I want. 00:07:52.560 --> 00:07:54.959 And so what's kind of your vision for indivisible? 00:07:55.199 --> 00:08:06.879 Well, first and foremost, I want to make sure we want to make sure that the advisor and the advisor-client relationship is put out front and invested in and made the priority. 00:08:07.120 --> 00:08:12.240 I just feel like perhaps that slipped away a bit over the last many years. 00:08:12.319 --> 00:08:23.759 And we've certainly had our fair share of existential events that have put a lot of pressure on all aspects of life, but certainly the that relationship between the advisor and the client and the firm. 00:08:23.920 --> 00:08:37.440 And so we really want to celebrate the advisor and that relationship with the client, which we think is the most enduring in for sure financial services, but maybe in business, and invest in it versus other components. 00:08:37.679 --> 00:08:50.720 Helping the advisor have as efficient a platform as possible so that the workflow is automated to the greatest extent so that it's easy to process the workflow that's necessary with that. 00:08:51.039 --> 00:09:01.360 But also create real customization for that experience for them and for the client, because each advisor has a preference as to what they view when they come in in the morning. 00:09:01.600 --> 00:09:06.639 Each client associate and service person on your team is going to have a different point of view on that. 00:09:06.879 --> 00:09:21.360 And then as a client, which I have been for you know the last 15 years and the last seven years a retired client, the ability to see my information the way I prefer versus the way the firm would curate it. 00:09:21.519 --> 00:09:25.279 And so that customization capability is really important. 00:09:25.440 --> 00:09:49.200 We want the advisors to own 100% of their business, and we would want to be their partner and create this partnership where not only do we work together to curate this platform to keep ensuring that it's the best that it can be, but it's just, you know, it's important for us to have that

relationship with the advisor that they know that we're in it together. 00:09:49.360 --> 00:10:02.639 And so the advisor, while they own 100% of their practice, they also own a piece of everybody else that's on the indivisible partners platform because we grant them profit interests when they join the organization. 00:10:02.799 --> 00:10:09.679 So everybody theoretically and is cheering for one another to do well because everybody owns a little piece of everyone else. 00:10:10.000 --> 00:10:10.799 That's tremendous. 00:10:10.960 --> 00:10:17.120 And and I know we got connected through David Cantor, who is Fidelity. 00:10:17.360 --> 00:10:26.320 And you're, I've been, as we've worked together, been just incredibly impressed with your team and not only their current capabilities, but what everybody's done in the past. 00:10:26.399 --> 00:10:34.879 I mean, you've you've kind of assembled uh a bit of an all-star team there at the executive level as you're setting up this platform for advisors. 00:10:35.120 --> 00:10:43.519 Yeah, we were fortunate that life sort of met at the intersection of all of our experiences back in a similar situation. 00:10:43.679 --> 00:11:02.799 So, John Hoverty and I, who was the COO for the wealth management business at Bank of America and Merrill Lynch, and I have been retired for seven years, but constantly thinking about what was yet to be done, just really understanding that, you know what, a job is never really complete as much as the world evolves. 00:11:02.879 --> 00:11:06.960 And we felt like there was more we could do to help advisors help clients. 00:11:07.279 --> 00:11:13.679 And we also had that view of being a client ourselves, as well as all the experience we had. 00:11:13.759 --> 00:11:19.360 So we got together and then some other folks had retired that we worked with and thought very highly of. 00:11:19.440 --> 00:11:27.600 And our philosophy kind of was we want to work with people we know, like, and trust, first and foremost, if foremost, if we're going to do something else. 00:11:27.840 --> 00:11:31.519 And we wanted to work with a team that we knew we could operate together. 00:11:31.679 --> 00:11:40.720 And we just found that several of our former colleagues were in similar situations at this stage of their life where they had a lot of gas left in the tank. 00:11:40.879 --> 00:11:46.879 They kind of wanted to do something, wanted to do it the right way versus the way someone else might think is the right way. 00:11:47.039 --> 00:11:55.039 We feel very strongly that we know how to do this well and proven it, as you suggest, with our experience at Merrill Lynch and Fidelity. 00:11:55.279 --> 00:12:04.480 And so it's an opportunity for us to sort of recast and do it in a way in which we think we can make a big difference for the advisor and their clients. 00:12:04.799 --> 00:12:05.759 That's terrific. 00:12:05.919 --> 00:12:12.960 So, one of the things that I think of immediately with a team like that is the plans and the goals have got to be big, right? 00:12:13.120 --> 00:12:16.639 You're not looking to do something small here, you're looking to do something big. 00:12:16.799 --> 00:12:18.720 So, you know, tell me a little bit about the goals. 00:12:18.879 --> 00:12:22.799 What are you envisioning for indivisible partners over the next three, five years? 00:12:23.200 --> 00:12:27.519 Well, first and foremost, whether it's big or small, we want to be great. 00:12:28.240 --> 00:12:34.559 And we want to demonstrate to the industry what's possible for advisors and clients and how they interact. 00:12:34.960 --> 00:12:54.399 So that includes obviously curating a tech stack that is as functional and efficient as it possibly can be for the advisor, that allows for this customization, that allows, and this doesn't get talked about enough, in my opinion, the ability for the client to collaborate with their advisor more completely. 00:12:55.039 --> 00:13:04.240 Because there are a lot of us who are clients who want to spend more time on our own scenario planning without quote unquote wasting the advisor's time. 00:13:04.399 --> 00:13:10.000 We understand they're busy, but that's hard to do at most places, and we want to make sure that that's included. 00:13:10.240 --> 00:13:31.919 And then as far as the size, you know, we just want to attract quality advisors, credentialed with a clear investment process and a service standard that meets client preferences and that is open to a fiduciary-only relationship where we're transparent around fees, around risks, and most importantly, around outcomes. 00:13:32.240 --> 00:13:42.720 And so we we think a relatively conservative financial plan, but one that will reward the advisors and the clients and then the shareholders of our firm. 00:13:43.039 --> 00:13:43.840 That's terrific. 00:13:44.000 --> 00:13:46.320 I love the client-centric focus. 00:13:46.480 --> 00:13:50.879 I mean, I think of myself as a consumer advocate, very client-centric. 00:13:50.960 --> 00:13:59.039 I've spent my career trying to reduce costs from you know effectively product manufacturers to give clients better, you know, better ultimate products. 00:13:59.200 --> 00:14:02.320 And I love thinking about the client first. 00:14:02.480 --> 00:14:04.960 And as my background, I'm a marketer, right? 00:14:05.039 --> 00:14:10.320 And marketers are always like thinking about what the clients need and how do you message the clients what their needs are. 00:14:10.559 --> 00:14:15.279 And in financial services, I've found it like not to the same extent. 00:14:15.440 --> 00:14:17.279 It's not everybody is focused that way. 00:14:17.360 --> 00:14:23.519 A lot of advisors, firms are like, here's what I do, and here's why it should work for you, and here's why it's okay. 00:14:23.679 --> 00:14:30.879 And here's let me explain to you why what I do is good and why it's smart and why it works rather than talking to the client. 00:14:31.039 --> 00:14:39.360

There's maybe they do a risk management questionnaire when they take them on and then they say, okay, you fit into this lane or that lane or the other lane. 00:14:39.600 --> 00:14:44.639 You know, so tell me a bit about client-centric and all that it means to you and indivisible. 00:14:44.960 --> 00:15:03.120 Well, and it's you know, candidly why we chose to work with you, David, is that we sense that we see actually your ability to demonstrate sort of best interest with the types of solutions that you offer and the way in which you price them and the way that the clients benefit and the advisors benefit from that. 00:15:03.279 --> 00:15:11.039 And it's clear, it's transparent, which is to me sort of another way that we build trust with clients. 00:15:11.200 --> 00:15:34.799 And so we're very curious as to what advisors and clients think, and we will set up formal routines to capture the advisors' points of view, the advisor's opportunity for us to improve, but also what we'll do the same for with clients, to talk to those clients, to understand what it is that we could do to be more relevant to them in concert and partnership with their advisor. 00:15:34.960 --> 00:15:38.399 So we'll set up formal mechanisms to gather that feedback. 00:15:38.639 --> 00:15:48.879 To me, it's one of the most fun things to do is to really build relationships and learn because there's really many clients that we serve are not surveyable, if you will. 00:15:49.200 --> 00:15:50.480 You're a marketer, you know that. 00:15:50.559 --> 00:15:54.879 They're not gonna show up for a diet coke and 500 bucks. 00:15:55.519 --> 00:15:56.000 Right. 00:15:56.320 --> 00:16:00.320 So we've got to do something more unique and differentiating to get their feedback. 00:16:00.399 --> 00:16:17.200 And what I've found over really 15 years that they really welcome it, especially when you make changes based on their recommendations, which I had done and will absolutely be willing to do as we continue to build this platform. 00:16:17.440 --> 00:16:18.320 Yeah, that's great. 00:16:18.559 --> 00:16:23.279 Recognition that you heard them by making whatever change you guys had talked about. 00:16:23.440 --> 00:16:26.320 Yeah, that's a great way of solidifying relationship. 00:16:26.399 --> 00:16:30.320 And I've been working with advisors for you know 20, 25 years myself. 00:16:30.399 --> 00:16:42.240 And one of the things that always struck me as a disconnect here, too, was advisors talk about, particularly when the market's going a little haywire, and there's you know, volatility, like we've had you know much of this year. 00:16:42.399 --> 00:16:46.000 They say I'm I'm playing psychologist more than financial advisor. 00:16:46.159 --> 00:16:52.320 I'm trying to talk my clients off the ledge, stay the course, you know, don't do anything rash here, you know, everything's gonna be fine. 00:16:52.399 --> 00:16:54.080 It's it's like psychological. 00:16:54.320 --> 00:17:10.000 But on the other hand,

it's like maybe to me, there's a gap between maybe the service or the investments you've provided and their psychology, you know, where maybe you didn't hear them, maybe they're not okay with the market volatility. 00:17:10.160 --> 00:17:19.440 Intellectually, you should be, but emotionally, as a client, when it's your money, and particularly when you're near retirement or in retirement, not so easy to stay the course. 00:17:19.599 --> 00:17:31.680 And so I always thought that was a bit of a disconnect, you know, for advisors who think it's on the client to adapt to what I'm doing rather than think about maybe I can alter my strategy. 00:17:31.839 --> 00:17:40.880 And I think since you came out of insurance, at least for the early part of your career, you know, risk management is something I don't think advisors pay attention to enough. 00:17:41.119 --> 00:17:43.440 But you hear all of these things, right? 00:17:43.519 --> 00:17:45.279 And for me, it's always perplexing. 00:17:45.359 --> 00:17:48.000 Like, well, why don't you pay more attention to risk management? 00:17:48.240 --> 00:17:55.279 Because you hear about the psychology and having to deal with clients who are who are iffy and worried during volatility. 00:17:55.440 --> 00:18:00.319 And then you hear about how most clients hate losing money more than they like making money. 00:18:00.559 --> 00:18:06.480 And yet most advisors are focused on accumulation and building wealth and not risk management. 00:18:06.720 --> 00:18:07.119 Right. 00:18:07.359 --> 00:18:11.039 Well, it's it's you're you're describing well behavioral finance, right? 00:18:11.119 --> 00:18:29.039 And how we think it's really important to have those conversations, and it requires a mindset shift for many advisors to have that, let's call it a pretty vulnerable conversation with clients and and really make help them get comfortable enough to share what those concerns are. 00:18:29.200 --> 00:18:36.720 It's why one of the questions that we love to make sure that clients get a chance to answer is what's the purpose of your wealth? 00:18:36.880 --> 00:18:44.240 And really understand what is it you're trying to accomplish with it, not necessarily assume they just want to grow it at all costs. 00:18:44.319 --> 00:18:49.680 And it has a job to do, and risk is the threat, right? 00:18:49.839 --> 00:18:52.319 That that you can't complete the work. 00:18:52.559 --> 00:18:54.480 I always felt it was really important. 00:18:54.559 --> 00:18:58.799 And clients, I think, generally can understand what the concept of risk is. 00:18:59.039 --> 00:19:03.599 And do you pass that risk to someone else or do you own that risk? 00:19:03.759 --> 00:19:07.359 And I think they're capable of understanding the difference between those two. 00:19:07.519 --> 00:19:12.960 And you know, someone who has you know been retired for seven years or was, it was wonderful. 00:19:13.119 --> 00:19:19.680 We know we retire on our balance sheet, but turning that into cash flow, not quite as easy as it seems. 00:19:20.319 --> 00:19:28.799 And it becomes that what you worry about versus how big the pile is, because ultimately you live on cash flow. 00:19:29.039 --> 00:19:33.359 And so those are risks that need to be addressed. 00:19:33.440 --> 00:19:45.920 Uh, and you need to have that conversation out in the open about what you know, what it is that I need to support my lifestyle and how do I do that, and the most efficient being from a risk management perspective, way possible. 00:19:46.160 --> 00:19:57.119 Yeah, and it's been, I think there's been an evolution that I've seen, which I don't think is a good one, in from, I don't know, 07 when interest rates really started to decline. 00:19:57.440 --> 00:20:01.599 And at the same time, you're getting life expectancy going longer. 00:20:01.839 --> 00:20:07.839 What's happened in like when I came up early in financial services, it you know, you used to know this glide path, right? 00:20:07.920 --> 00:20:19.440 You're invested 70-30, maybe 60-40 early while you're accumulating, and then you're moving to 3070 stocks to bonds, you know, as you get into retirement, you have to de-risk. 00:20:19.759 --> 00:20:21.759 And that doesn't happen as much anymore. 00:20:22.000 --> 00:20:27.839 It really, you know, 6040 is now considered a conservative portfolio, not the inverse. 00:20:28.160 --> 00:20:35.920 And it's because interest rates went down and you weren't yielding anything from fixed income, and also then you have this life expectancy. 00:20:36.000 --> 00:20:40.319 So you can't you need to you know fund more cash flow in some fashion. 00:20:40.480 --> 00:20:49.519 And so I think those are both bad things for the typical retiree who's worried about risk and income in retirement. 00:20:49.599 --> 00:20:57.359 And that's why I always read with amusement, you know, people who talk about funding retirement and income, and they never mention an annuity. 00:20:57.519 --> 00:21:04.640 And an annuity is a tremendous way of helping fund retirement and de-risking and handling some, you know, some things like that. 00:21:04.880 --> 00:21:12.559 But I've seen that as you know as a problem ultimately for retirees as they're taking on more risk than they're comfortable with. 00:21:12.799 --> 00:21:25.200 Yeah, no, I I think it's it's really important that they understand that source of income and how reliable that source of income is and incorporate into that things like Social Security and their future earnings potential. 00:21:25.279 --> 00:21:37.519 But that and tools are available now to help quantify that for clients and demonstrate why, you know, in your case, in this case, using an annuity might be the best outcome for that portion of the portfolio. 00:21:37.839 --> 00:21:43.599 Because sometimes you just need to run the numbers to show people and give them comfort that can work. 00:21:43.680 --> 00:21:48.240 And then obviously your counterparty, which is important, it

will guarantee it. 00:21:48.319 --> 00:21:50.880 And the states will ensure that that that happens. 00:21:51.279 --> 00:21:59.759 So, you know, insurance products do play a role, and I think that's part of what we're trying to drive at at DPL because I saw this issue with. 00:22:00.079 --> 00:22:15.599 Where you have fiduciary advisors in the RAA space, you know, where and their fiduciaries obviously in other channels, but the who couldn't use insurance products, including you know annuities and life, in their business model, you know, in their compensation model. 00:22:15.759 --> 00:22:19.039 And it had been happening all across asset management already. 00:22:19.279 --> 00:22:26.480 People moving away from transactional commissioned revenue to fee-based revenue, getting paid for advice, not sales. 00:22:26.720 --> 00:22:30.640 And it wasn't available on a widespread basis, you know, in insurance. 00:22:30.720 --> 00:22:43.519 And we're trying to knock down that barrier so that advisors wouldn't have that financial conflict of recommending risk management products and it affecting their income, yeah, which you've got to be a real fiduciary to do. 00:22:43.680 --> 00:22:52.559 So we helped you know try to knock down those barriers and continue to educate and drive adoption of the products, which is a very interesting proposition. 00:22:52.720 --> 00:22:59.519 You see advisors who are like, hey, finally, this is fantastic, and others who are still very much investments only. 00:22:59.680 --> 00:23:00.799 It's what we do. 00:23:01.039 --> 00:23:05.519 And it's great to work with advisors who see the full picture. 00:23:05.839 --> 00:23:10.960 Well, and my, you know, personally, my parents lived till 92 and almost 91. 00:23:11.119 --> 00:23:14.079 And I saw that the pressure that that created for them. 00:23:14.240 --> 00:23:18.640 Fortunately, I did well enough to step in and to help when necessary. 00:23:19.200 --> 00:23:20.799 It actually motivated me. 00:23:20.960 --> 00:23:51.119 The idea of living long motivated me to, you know, in my case, really think about long-term care, the cost of that long-term care, which I was seeing as we looked for a place for my father who had dementia, and thought, well, why would I take that particular risk if I could offload that risk and for a modest amount of money, create, you know, in my case, six years of really meaningful income from that insurance solution to pay for that. 00:23:51.200 --> 00:23:55.200 That's one that doesn't make sense for me to self-fund because of the own known. 00:23:55.359 --> 00:24:02.319 And then to see what the alternative is from a care perspective, if you can't afford it, it's really pretty sad. 00:24:02.480 --> 00:24:02.720 Yeah. 00:24:02.960 --> 00:24:07.680 The sit the difference in level of care, the cleanliness of the facility, and all those. 00:24:07.759 --> 00:24:13.759 So all those life issues come into play when you're making a decision like that. 00:24:14.079 --> 00:24:14.720 No doubt. 00:24:14.880 --> 00:24:23.839 And one of the positive things in many ways I've seen happening in the RAA space is really the advent of bigger firms. 00:24:24.000 --> 00:24:26.480 And it's not that there's anything wrong with small firms. 00:24:26.559 --> 00:24:31.920 You know, smaller boutique firms will always have a place, and there are clients who will always want that. 00:24:32.160 --> 00:24:39.839 But in many ways, what I've seen is 20 years ago, a billion-dollar firm was a big firm in the RAA channel. 00:24:40.000 --> 00:24:46.079 Now, today, I don't know what you'd consider a big firm, 25 billion maybe, you know, might be considered a big firm. 00:24:46.240 --> 00:24:50.559 But what's happened is the expansion of services for clients. 00:24:50.720 --> 00:25:00.559 So, you know, when you have a small firm that has five employees, you know, it's hard to have all the diverse expertise you need to serve all the different client needs. 00:25:00.640 --> 00:25:05.039 And it's not that they can't deliver the services, though they can outsource and you know and find partners. 00:25:05.119 --> 00:25:08.240 And we partner with many of those firms in great ways. 00:25:08.480 --> 00:25:18.720 But I think having you know building a firm and having a broader set of expertise has really been a big trend we've seen in the RIA channel. 00:25:18.960 --> 00:25:28.160 Well, it's the way I look at it to unpack all that, the easiest way for me to think about it is our clients bring complexities. 00:25:28.400 --> 00:25:31.759 And they're varied and different depending on the client. 00:25:32.160 --> 00:25:43.200 And you need to have either on that particular team or available in the organization the capability to face off against that complexity. 00:25:43.759 --> 00:25:52.400 And that's really critical, we I think in delivering the best chance to deliver the you know on the outcomes that that client wants. 00:25:52.559 --> 00:25:53.599 And it's necessary. 00:25:53.759 --> 00:26:04.960 So whether that be tax, estate planning, or more blending, more sophisticated investment solutions, whatever that might be, the clients have the complexities. 00:26:05.200 --> 00:26:12.319 We owe it to them to make sure that we have the capabilities to really help them address those complexities. 00:26:12.640 --> 00:26:13.359 Absolutely. 00:26:13.599 --> 00:26:16.319 And so what do you see happening in the RAA channel? 00:26:16.480 --> 00:26:20.799 We're in the RAA channel, you know, a lot of people say the world's cyclical, right? 00:26:20.960 --> 00:26:24.160 The same thing happens, maybe just a little bit of a different iteration. 00:26:24.400 --> 00:26:34.319 I think if you look at the Wirehouse channel, you'll probably know better than me, but the name of Merrill Lynch isn't Merrill Lynch, it's Merrill Lynch and like six other last names, right? 00:26:34.480 --> 00:26:39.440 It wound up being something that was a result of a lot of consolidation and

acquisition. 00:26:39.680 --> 00:26:42.720 Do you see the same thing happening in the RIA space? 00:26:42.799 --> 00:26:46.960 I mean, obviously it's starting to go on, but do you see it getting to that type of scale? 00:26:47.279 --> 00:26:47.920 I do. 00:26:48.319 --> 00:26:49.440 It's funny. 00:26:49.680 --> 00:27:03.200 In 2005, we had Moss Adams come speak to us about considering an alternate channel, which others had done, obviously being potential, you know, sort of quasi-independent. 00:27:03.359 --> 00:27:14.799 And I just recall turning to a colleague of mine and saying, you know what's going to happen is they're going to go out and do this and they're going to get big and they're going to end up looking just like what it is that they ran from. 00:27:15.039 --> 00:27:15.519 That's right. 00:27:15.839 --> 00:27:17.279 So it's come true. 00:27:17.440 --> 00:27:17.839 That's right. 00:27:18.000 --> 00:27:18.240 Right. 00:27:18.400 --> 00:27:30.480 And there's an enormous amount of capital ensuring that it's almost inevitable because of the aggregators and you know, and private equities interest in our business. 00:27:30.720 --> 00:27:46.799 And that actually, when I talked to a lot of RAs as we were putting this idea together, realizing how distracting it actually is how many calls they get per week for them to sell or to monetize or to merge into other people. 00:27:46.880 --> 00:27:49.920 And it's happening and it's going to happen. 00:27:50.079 --> 00:27:52.000 And we operate it at scale. 00:27:52.160 --> 00:27:54.720 We know what it takes to operate at scale. 00:27:55.200 --> 00:28:16.000 And what we plan on doing is bringing all the benefits of scale without the lowest common denominator approach to running and supervising an organization because that's ultimately what I think the risk is, is that you just you have so much variability in the way people deliver that you end up having to limit the offering. 00:28:16.079 --> 00:28:18.400 And that is not at all what we plan to do. 00:28:18.559 --> 00:28:29.119 We are going to create that opportunity to curate and be relevant to clients and not get to that point where we have to close down ideas. 00:28:29.440 --> 00:28:39.200 Yeah, I think that like the experience that your team and you bring is really valuable because we get a pretty unique seat in working with many different firms. 00:28:39.440 --> 00:28:53.440 And lots of the acquirers and aggregators, and many of them are outstanding, but they're they might be acquiring 20, 25 businesses a year, which is a different job than managing an RIA, right? 00:28:53.519 --> 00:28:56.400 And that's a very specific expertise. 00:28:56.559 --> 00:29:00.160 And doing that well is really, really difficult. 00:29:00.480 --> 00:29:04.000 So that the client doesn't suffer, your operations don't suffer. 00:29:04.160 --> 00:29:05.200 That's a big challenge. 00:29:05.279 --> 00:29:08.079 But like you said, that's where the industry is driving right now. 00:29:08.160 --> 00:29:09.039 It's like a race. 00:29:09.279 --> 00:29:19.759 And to complicate it, one of the reasons we did this, we saw a couple sort of lingering issues that we wanted to help address, which one was organic growth is a challenge. 00:29:20.000 --> 00:29:22.640 We think we're pretty good at helping teams grow. 00:29:22.720 --> 00:29:28.160 We have a long history of doing that, and the ways in which and the markets in which they can grow. 00:29:28.319 --> 00:29:40.720 But the other one really is this sort of lack of coherent succession plans for the reality of our advisor force, which is an aging advisor force. 00:29:40.799 --> 00:29:45.279 I mean, McKinsey just put out that a third of the advisors will retire in the next 10 years. 00:29:45.359 --> 00:29:47.279 It's over 100,000 advisors. 00:29:47.440 --> 00:29:52.720 That's a substantial portion of the people that are out there working with clients. 00:29:52.960 --> 00:30:04.799 And so we are built to help them with that conversation and help them build and develop that next generation so that they ultimately realize the value of their life's work within their practice. 00:30:05.039 --> 00:30:06.720 But those are all challenges. 00:30:06.799 --> 00:30:20.319 And so not only are you transitioning these businesses into your business, but you you better stop and make sure that they're prepared for the next event, which is them passing that business on to somebody else. 00:30:20.559 --> 00:30:25.039 And I think that the firm has a responsibility to help advisors do that well. 00:30:25.359 --> 00:30:26.079 Absolutely. 00:30:26.240 --> 00:30:32.000 So I'll test your, we won't know this answer for a while, but I'll test your uh prognosis capabilities. 00:30:32.160 --> 00:30:39.279 You know, a lot of people talk about there being a trillion dollar RIA, like warehouses are you know many trillions of dollars. 00:30:39.440 --> 00:30:45.279 I think Merrill's probably six, seven trillion in assets under management, something like that, probably. 00:30:45.519 --> 00:30:47.440 Do you see a trillion dollar RIA? 00:30:47.519 --> 00:30:49.200 And how far off do you think it is? 00:30:49.519 --> 00:30:50.480 Well, no, I I do. 00:30:50.559 --> 00:30:53.839 I think there's just the compounding is gonna make that happen, right? 00:30:53.920 --> 00:31:01.119 It's because they're getting bigger, and you know, the markets typically provide rates of return, so could they grow at 10%? 00:31:01.519 --> 00:31:05.279 Yeah, and so that's gonna double in in seven years. 00:31:05.440 --> 00:31:09.119 And so, yeah, I do think that's gonna happen, and I'm okay with it. 00:31:09.200 --> 00:31:10.079 I think it it's great. 00:31:10.160 --> 00:31:19.519 I don't that's not really our goal to build that quickly, to do something more for us that feels right and the right size. 00:31:19.680 --> 00:31:29.359 But yes, I think that's gonna happen, and I think that's okay because the infrastructure, the technology, the

custodians, it's all there to provide that. 00:31:29.440 --> 00:31:31.920 I think Fidelity has almost$15 trillion. 00:31:32.480 --> 00:31:34.880 So yeah, it can absolutely happen. 00:31:35.200 --> 00:31:36.240 Yeah, I think so too. 00:31:36.319 --> 00:31:43.359 And I I think it's it's gonna be at least three years, but maybe within the next five years, and I think it's gonna be probably more than one. 00:31:43.519 --> 00:31:49.680 The big guys are gonna start acquiring the big guys, and you're gonna get some you know, scale through that as well. 00:31:50.000 --> 00:32:00.480 Yeah, and they need to be set up to be relevant to the next generation of clients, not just advisors, because there will be eventually this wealth transfer will take place. 00:32:00.640 --> 00:32:01.440 I don't know when. 00:32:01.599 --> 00:32:02.000 That's right. 00:32:02.160 --> 00:32:05.119 I'm not looking to transfer mine anytime soon. 00:32:05.200 --> 00:32:15.519 I but uh there that reality is gonna happen, and that's gonna whoever can capture their fair share will make that happen sooner. 00:32:15.839 --> 00:32:18.559 Yeah, it's gonna be interesting to see how it evolves. 00:32:18.640 --> 00:32:26.960 But there's certainly, to me, having been you know working in the RIA channel for about 20 years, the evolution of the channel is amazing. 00:32:27.200 --> 00:32:33.119 It used to be you know, you had one technology that you got from your custodian, it was probably pretty limited. 00:32:33.279 --> 00:32:37.839 God knows how many technology options you now have as an RIA firm. 00:32:38.000 --> 00:32:43.839 The ability to have people help you launch and find different models within what you might be looking for. 00:32:44.079 --> 00:32:49.039 The support for the channel is just night and day, you know, from what it was 20 years ago. 00:32:49.359 --> 00:33:02.160 It was one of the most exciting and pleasant observations is to see how far innovation has come within the technology capabilities. 00:33:02.400 --> 00:33:04.160 We ourselves, you know, you're part of that. 00:33:04.240 --> 00:33:13.680 We've curated, we have our platform provider advice on, we've integrated your opportunity set within us so that it's single sign-on, that it's interoperable. 00:33:13.839 --> 00:33:23.839 So when there's data change, I mean, to think about how efficient that can be is for advisors and their clients, is it's really remarkable how much it's come along. 00:33:23.920 --> 00:33:44.160 And we think it's, you know, you hate to sit there and do a tit for tat, but I we think our technology stack is very unique in that sense, is that it's got end-to-end capabilities across any sort of significant need that a client has, and it's all integrated and it's interoperable, and it all comes back to a single client record. 00:33:44.319 --> 00:33:53.200 So reporting is easy and viewing and customization, all the things we talked about earlier are all there for the client so that they can consume it the way they want. 00:33:53.440 --> 00:33:54.400 Yeah, that's fantastic. 00:33:54.480 --> 00:34:03.279 That's another example of the cyclical nature of the RA used to have one consolidated system, then all these point solutions came about. 00:34:03.359 --> 00:34:20.480 And then because I need a better planning system or a rebalancing system or whatever it is, and then you have all these systems that don't talk to each other, and it gets incredibly inefficient, and then people say, Well, now we need more integration, we need things to work better together, and I think that's been a huge drive. 00:34:20.800 --> 00:34:22.239 And guess what that costs, right? 00:34:22.400 --> 00:34:23.840 That costs a lot of money. 00:34:24.159 --> 00:34:24.719 That's right. 00:34:24.960 --> 00:34:27.360 It not only costs money, nobody likes to do it, right? 00:34:27.679 --> 00:34:29.199 Particularly if you're a financial advisor. 00:34:29.440 --> 00:34:31.679 It's why the innovation with APIs is so important. 00:34:31.760 --> 00:34:36.960 You know, you can unplug and plug back in something that's more effective for you at any time. 00:34:37.119 --> 00:34:45.360 There's certainly integration work, but it's not nearly what it would take if you had a legacy platform and how much you'd have to spend because I know because we had to. 00:34:45.840 --> 00:34:46.320 Right. 00:34:46.639 --> 00:34:47.440 Terrific. 00:34:47.760 --> 00:34:50.639 Well, it's been great having you on the podcast, John. 00:34:50.719 --> 00:34:54.480 And I don't know if you have any you know parting words you want to deliver. 00:34:54.639 --> 00:35:01.920 And again, we're super excited about the partnership with Indivisible and you know, very excited to see how you you build and grow the firm. 00:35:02.239 --> 00:35:16.960 Well, we just appreciate so much your partnership and how you've innovated and you've really, I think, taken some of the things that held back people using risk management and using those products and services more effectively. 00:35:17.039 --> 00:35:21.920 You've taken a lot of the friction out of that and allow us really to be that fiduciary. 00:35:22.079 --> 00:35:28.000 So I just applaud what you've done and I thank you for your partnership, and I look forward to a lot more with you. 00:35:28.320 --> 00:35:28.960 Terrific. 00:35:29.119 --> 00:35:34.559 I appreciate those kind words and uh I look forward to uh getting out on the golf course with you at some point. 00:35:34.719 --> 00:35:36.159 That sounds wonderful. 00:35:36.960 --> 00:35:38.000 Thank you, David. 00:35:38.159 --> 00:35:40.079 All right, gentlemen, thank you so much. 00:35:40.320 --> 00:35:41.199 Take care. 00:35:44.239 --> 00:35:45.440 Thanks for listening. 00:35:45.599 --> 00:35:52.320 To hear more advisor revelations, go to dplfp.com and subscribe on your favorite podcast streaming app.