Transforming Advisor Onboarding and Transitions with Feathery’s Data-Centric Approach

• Beacon Strategies, LLC
• LinkedIn: BeaconStrategies
• LinkedIn: Chip Kispert

00:02 RJ Malyk
Welcome to the BPN Insights Podcast .I’m RJ Malyk, your producer, and today Chip sits down with Peter Dun, Co-founder and CEO of Feathery, the platform quietly becoming the operational backbone behind advisor transitions and account opening at some of the biggest RIAs in the country. They just closed a new funding round, and today Peter tells us what is next. Chip, it is all yours.

00:27 Chip Kispert
RJ, thank you for that lovely introduction. I am super stoked today because I get to talk with one of the leading idea drivers and development engines and be able to really look at advisor transitions and account opening. And I think it’s also kind of cool that our guest has a third of the Barron’s top 30 RIAs as customers.

And as RJ just said, they closed a new round of funding. Peter Dun, welcome to BPN Insights.

01:07 Peter Dun
Thank you, Chip. It’s a pleasure to be here. I’m looking forward to the conversation.

01:11 Chip Kispert
We are, so we got a lot to cover and, you know, our window’s always a little smaller than we anticipate, but we’re going to get through this. So first, Peter, you led client onboarding at Robinhood and your co-founder, Zach, scaled high touch from zero to 15 million ARR. Really two different angles in terms of how you guys look at a similar problem in many ways.

What did you both keep running into that most people in our business, wealth management business, we’re still missing, are still missing?

01:52 Peter Dun
Yeah, that’s a great question, Chip. and it really ties into why we started Feathery in the first place. So I looked on onboarding Robinhood, you know, I saw the company scale from, you know, in the thousands to the millions of users. And I sort of saw all the work that we had to put into making the signup onboarding flow very seamless at Robinhood. Obviously, at Robinhood, we’re a little more retail facing than institution facing. But at the same time, the stuff that you have to do to improve the client experience, enhance the conversion rate, make sure that people aren’t dropping off in the funnel. When you sign up for Robinhood, it feels very simple to you, very seamless.

Like a few questions, answer them. It’s very easy to understand what’s going on and then you get in there. But what you don’t see is the complexity under the hood. Right? The suitability checks, the AML and KYC checks, the synchronizing data into the different systems ,the strategic pulling of information so that we can avoid asking the user certain questions where we don’t have to. The way we even order and the way we frame questions, everything there goes into ultimately the onboarding experience at Robinhood and the experience of opening up the brokerage account. And so Robinhood, you know, very tech forward company, large engineering team.

Yet at the same time, we saw so much pain and it took so long to actually get this up and running and at scale. And so really the insight was like, hey, we did this at Robinhood. How are we able to do this for the rest of the wealth management industry without having this massive engineering team and getting it done in a fraction of the time and giving every client, their own personalized and conversational experience. So that was really sort of like that main inspiration behind starting Feathery in the first place.

03:48 Chip Kispert
Well, that’s great. And I love how you kind of went through the use case. I have a Robinhood account, super easy to use. One of the outliers is they just picked up TradePMR which I find interesting. And, you know, seeing those two kind of get together and building on that retail side, it’s interesting.

04:13 Peter Dun
I’m really excited about that, just from a personal perspective. Obviously, you know, that was a little bit after my time at Robinhood. But again, historically, Robinhood has been very retail focused. I think TradePMR was one of their kind of biggest first steps into the custody side of the business. I think there’s a lot of innovation that they’re bringing to the table here on the custody side .And so, yeah, I think it’s a really exciting shakeup for the industry.

04:43 Chip Kispert
Yep, and I think we’re seeing more shake-up now than I’ve seen probably in a decade, if not more. So, which leads me to our next question, to my next question. So, you use the phrase data-centric versus form-centric. And, you know, at first blush, on the surface it sounds like a distinction without much difference. Help me understand that difference.

And let’s do some deep thinking here.

05:19 Peter Dun
Yeah, I totally understand where you’re coming from there, Chip, with that. And yeah, that is a phrase I love to use. Data-centric product software workflow design versus form-centric. Speaking of shakeups, right? Like, I think the Wealth management, wealth tech industry around account openings has historically been much more form-centric. And the way I describe what Feathery is doing is much more data-centric, which is the more modern way of doing things.

05:51
When I say form, what I mean is, you know, that PDF, you know, you’re filling out to open up an RIA account for your clients at a Fidelity, right? So there’s that form, you have to fill it out, then you have to fill out the money movement form or an asset transfer form. Everything has to be e-signed, sent to Fidelity. And historically, providers in the client onboarding account opening space have really designed their software around these forms. You’re filling out this PDF form, well, I’m just going to give you a digital application that’s basically the same exact information that you’re collecting on this form, but in digital form. And it might be combined with a few other forms so you can fill it out in one go. The downside here is one, you know, we just talked about client experience and how much we did at Robinhood to make that personalized and conversational. A form is not personalized or conversational at all. They’re collecting a lot of duplicate data. You know, it’s dense, it’s hard to understand, and ultimately, you know, tech stacks and advisors, tech stacks are just getting more and more complex.

It’s not just about the form and the custodian anymore, .it’s about the CRM. It’s about their portfolio management system, their financial planning tool.It’s about you know, the actual client experience, there’s all these different surfaces of data that the system needs to interface with, which is why you can’t just design your entire system around, you know, this PDF form, this account opening form. Our system has its own opinionated data model that interfaces across all these different custodians, CRMs, it doesn’t matter what system it is, it will have a transformation layer into our system.

And that’s what I mean by data-driven versus forms-driven. A form is just an interface for filling out data and getting it into a different provider. But Feathery really were designed around our own sort of experience, which allows us to simplify it, make it more personalized, allows us to actually validate the information coming in and just, you know, integrate across the board with everything the advisor is using.

08:04 Chip Kispert
So, you know, it’s interesting because I think about industry NIGO rates, right? Typically, they’re in that 16 to 22% area. I think that’s conservative, honestly. So, you know, what does, in your mind, a NIGO actually cost a wealth firm?

08:28 Peter Dun
Yeah, that’s a great question. I mean, ultimately, there’s a few different factors, right? So you’re an advisor, you’re working with your client, you’re trying to get them on board so you can start doing work together. Meanwhile, you’re dealing with NIGOs and you’re struggling to open up that account. First of all, poor client experience. You’re going back and forth with them. You know, they’re struggling to fill out all these forms. They’re missing some information. A few days later, they think they’re done. You’re coming back to them like, hey, here’s this piece of information, like, you know, five different things that we have to correct on the form.

And then we have to go through the process again, cross our fingers and hope everything works out. Extends the amount of time needed for onboarding to open up that account and run actual business, takes up a lot of advisor time, takes up a lot of client time when they could be doing something much more productive. And on the NIGO rate, and again tying this back to form-centric versus data-centric, the form-centric experience historically has a much higher NIGO rate. Today, many custodians are moving towards an API-centric account opening experience.

So instead of having to fill out this PDF form with no validation and waiting for someone on the custodian side to read it and process it, today, for some providers. For example, Schwab, we were the first company ever to fully integrate with their digital account opening API. We send all of the collected information directly instantaneously to Schwab. We’re able to get validation back immediately beyond what we ourselves offer on top of the data. And so instead of waiting a few days and crossing your fingers, you get immediate feedback as the data is being collected from the client on what’s going wrong, what’s missing, what’s optional, what’s required, what’s formatted incorrectly. And that takes your NIGO rate from and I agree with you, Chip, the 16 percent number might be a little conservative, you know, down to the low, low single digits, which makes for a much better experience.

10:32 Chip Kispert
Gotcha. Yeah. You know, it’s fascinating to me because, you know, you do a little math here, right? And I’ll be conservative in my numbers. You know, a wealth team brings 200 accounts, has 200 accounts, 35 to 45 accounts get screwed up, for lack of a better term. They’re a NIGO, right? And, wow, that’s a lot of work to have to go back and figure out and troubleshoot.

10:59 Peter Dun
Yeah. Yeah, i mean we haven’t even started talking about advisor transitions right it’s such a critical event where timing matters so much you have an advisor who’s shifting their entire book of business every last um account you know matters so much for a successful transition but ultimately you know like even one mess up will stall the entire transition until you figure that out

11:25 Chip Kispert
Correct .Now, you sent me some great information in terms of one of your use cases, which is RFG advisory, right? And how you achieved two times faster form generation and faster one-day execution. You also mentioned Sequoia. What is their feedback to you? How are they…Looking at what you’re doing.

And then the next question I have is, are you using the data you’re collecting to help them in other ways?

12:03 Peter Dun
Yeah, absolutely. So on the RFG side, we are powering advisor transitions for them. There’s a number of different value propositions that we have for a firm like RFG that we’re working with. First of all on sort of like the repapering side we’re able to actually integrate into the different advisor systems and uh automatically pull information normalize and validate it map it to the different account types that we’re opening up with the new provider um and again like data centric versus form centric this is something that that allows us to unlock um

Historically, for a transition, you have someone manually going through these different systems or you ask the advisor to manually fill out this data. They hand you a spreadsheet and someone on the receiving firm’s end is manually looking through these spreadsheets. And so again, we’re able to automatically pull data. The spreadsheets that we receive, we actually leverage AI to automatically ma pthe different data types, the columns on the spreadsheets to the corresponding fields on the different account types that they’re looking to open.

Not only are we able to repaper accounts, we’re also able to shift data over into other systems, the receiving firm CRM, for example. And maybe I’ll just to get a little bit deeper here from a regulation perspective, Regulation SP is a big sort of concern on the transition side. Right. The receiving firm has to make sure that they don’t get access to the transition advisors data until they’re legally allowed to do so.

However, as an independent third party firm, Feathery, we are able to contract with the advisor directly and simply help them clean up and prepare their data in advance of a potential transition. What that means is actually a complete game changer from a transition’s perspective .Instead of day one being when everything starts and you’re scrambling to get everything over the lines, we’re working with the advisor way before that. We’re getting all the kinks and the paperwork and everything filled out ahead of time.

That way, on day one, everything’s already ready to go. You just have to write out these forms for e-signature and for completion. And that’s how we kind of get these day one conversion rates from a transitions perspective, because we’re able to do something that the receiving firm simply isn’t able to.

14:38 Chip Kispert
Absolutely. Absolutely. So I’ve had related fun little story back to you. So at one of our operations roundtables, it might have been two or three years ago, one of the Chief operations officers made a comment and he goes, you know, we look at when we do an advisor transition, that’s a team building exercise. And I got I got an absolute charge out of that.

And I’m like, oh, rough team building exercise.

15:21 Peter Dun
Hey, you know bonds are forged in adversity, right? That is correct. So you put them in for a traumatizing event, they’ll feel closer afterwards.

15:29 Chip Kispert
So, yeah, that always stuck in my head. But, hey, you just brought out something super interesting. Robin, you know, we talked about the day layer, right, and all the infrastructure. So tell us a little bit about Robin and what it’s doing and what it is.

15:49 Peter Dun
Yeah, for sure. Glad you asked, Chip. So, Robin is Feathery’s AI assistant. We’re really excited about it. It’s the most important product we’ve released at Feathery since we started. It’s been in closed beta for a while, and now we’re opening it up to everyone. Basically, Robin has two main parts. First, there’s Robin Builder, which works with the ops and solutions teams to use AI to automatically build a lot of workflows, like onboarding, transitions, and account openings. It lets you create these processes easily. modify them, automatically map systems, integrate systems. And what Robin Builder does is it basically gives you the flexibility and speed of vibe coding with something like a cloud, but it gives you the governance, the robustness, the security and the that, you know, more of a traditional enterprise tool is going to give you. That’s because Robin Builder under the hood is not generating black box code that you can’t understand.

And you’re sort of crossing your fingers that it’s going to work the way you want it to. It actually configures the feathery infrastructure, the core building blocks. Instead of, you know, it’s not trying to hand spin a Schwab integration under the hood. It’s using our existing primitive, our existing integration with Schwab that already maps into all the different core components on the Schwab side. And it simply figures out how to connect it into the overall workflow that it’s building and designing. And so we’ve seen this be a game changer from a development perspective.

We’re able to get these turnaround times for, you know, making changes, making updates, getting customers live from months down to, you know ,like a week or two weeks. And ultimately, it gives the power back to the firm themselves. Right? The traditional way of working with an enterprise software firm is you throw up, throw a ticket over the wall. They handle the ticket. They get back to you in a few weeks, months. But with Robin, it actually simplifies the experience so much that the firm themselves can actually go in and make changes to if they want.

18:12 Chip Kispert
So, so that the ops team can go in and make adjustments based on, you know ,a new field being added or all different types of operational needs.

18:23 Peter Dun
Exactly. Exactly. Yeah I mean from a field perspective right like if if you’re opening up an account with Schwab right we already will automatically handle those sorts of adjustments if Schwab changes something then we’ll adjust the systems automatically but you know let’s say you know your firm for your own you know risk questionnaire right like there’s a question that you’re trying to remove or add or rearrange that’s the type of thing that will take robin uh you know a few seconds to make that update and it saves you the hassle of having to wait for you know someone on the other side to get around to it um so that’s Robin Builder right um so using ai to completely change how workflows are being built and and developed um on the other side Robin Assist uh works with the end user directly who’s actually filling out these workflows, right? So let’s say you’re the advisor, you’re running through the transition, right? You’re using Feathery’s transitions product to bring in your book of business and get your accounts repapered.

There’s a lot of moving pieces, right? And historically, you’re the one who’s, you know, trying to figure out like what buttons to click to upload the spreadsheet or to connect up your Salesforce account. And you’re trying to figure out how to all the different columns map. Robin Assist is, you know, speaking of personalization conversation, it’s an assistant that lives on the workflow itself. You can talk to it using voice or text and basically ask. It’ll help guide you through the workflow. Right. You jump on.

You’re like, hey, Robin, what? Should I do right now? And it’s going to tell you, hey, all right, you’re at step number one. Let’s get your data prepared. And the first step is where does your data live right now? And you might be like, oh, my data lives in Redtail. OK, perfect here. I need your whatever credentials in order to plug into your Redtail account so that I can read it and tell me what data you want to pull from Redtail, right.

And it’ll kind of go through with you step by step to figure out exactly what’s needed to actually complete this workflow, which, again, improves the conversion rates, gets people from point A to point B way faster than they otherwise would.

20:38 Chip Kispert
Completely understand. So I got to ask this question. How did you name it, Robin?

20:45 Peter Dun
Yeah, I mean, Robin is very thematic, right? It ties into our name Feathery.

20:52 Chip Kispert
Oh, now I get it.

20:56 Peter Dun
And so Feathery came from, again, really looking to kind of counter position ourselves from traditional enterprise software, which is on the slower side, a little more brittle, a little more rigid. Feathery was very much intended to evoke feelings of, hey, lightweight, easy to use, dare I say, maybe even enjoyable to use from a workflow perspective. And then Robin is sort of our AI assistant that is actually a little more intelligent and Feathery, lightweight. And again, just there to kind of help you out.

21:35 Chip Kispert
That’s great. That was fabulous, learning about what you’re doing there. Absolutely love that .RJ, what a…Terrific first part of our interview.

21:48 RJ Malyk
Yeah, that was that was interesting .I wish it was a lot for me to take in. But to me, my takeaway was just he’s trying to make just the workflow more personalized. And also, I came up with the word flexible in my notes here. You know, I take notes during as I’m listening. But actually, I think his program is trying to make business or the workflow more nimble.

22:19 Chip Kispert
It’s making it more nimble, putting it back to really the advisor and the customer and streamlining that flow. I’ve been in this business 30 plus years and up until just after COVID, onboarding, advisor transition, new account, Was kind of a nightmare for these firms high NIGO rates, et cetera. And what they’re trying to do is really groundbreaking and a huge upgrade to the advisor and client experience.

There are a couple things I took away from our time on part one. One is that and this is a broad simplicity but Feathery is really built to solve that the onboarding complexity right that is out there and they’re trying and Peter used the term or I use the term elegantly simple but he hopped onto that and I think that’s a big big deal because so many firms today are still using more archaic methods, I’ll put it that way.

And I think that the future is bright. The second observation I took away is that I love the conversation on data-centric versus form-centric. It’s a conversation that, again, I’ve been having for years. I had a pretty good idea what he was talking about, but I really find it interesting, by being data-centric, offers a lot more flexibility to their customers. There’s so many more things that can be done.

And then, you know, here’s, here’s the bottom line. I mean, he learned onboarding at Robinhood, right? And so I’m looking at, he’s doing great stuff to take down those NIGRO rates. And the friction that goes with those NIGRO rates, both at an operational level, home office for firms that are hub and spoke, and then at the advisor level, and at the client level, those are pretty deep.

24:44 RJ Malyk
Interesting. A lot there, that’s for sure.

24:48 Chip Kispert
Well, that’s going to wrap up part one of our interview with Peter Dun. I look forward to the second interview part. And as I go out the door for this one, before I leave, to quote Ted Lasso, “Be curious, not judgmental.” This is Chip Kispert wishing you well until our next edition of the BPN Insights Podcast, where we deliver part two of our interview with Peter Dun.

25:19 RJ Malyk
Sounds good. And thank you for checking out the BPN Insights Podcast, which is brought to you by Beacon Strategies, LLC. For more information, visit beaconstrategiesllc.com. Until our next BPN Insights Podcast, for Chip Kispert and everyone at Beacon Strategies, I’m RJ Malyk.