Solving Tech Fatigue in Wealth Management: Building Smarter Systems and Better Experiences

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

[00:00:00] RJ Malyk:

Hello, and welcome to the Beacon Strategies Podcast with your host, Chip Kispert. I’m RJ Malyk, producer of this podcast, uh, chip, how about you introduce your guest and tell us about what you’re gonna be talking about on this podcast? 

[00:00:14] Chip Kispert:

I’m excited to have Mike Overdorf, the CEO of Sycamore with us today. Mike, welcome.

[00:00:21] Mike Overdorf:

Thanks, Chip. How are you?

[00:00:23] Chip Kispert:

Doing fabulous. It’s a gorgeous Friday afternoon here in Denver where it’s gonna be a lovely 102 and, uh, I got a tee time at 1140, so, uh, you know, it’s, uh, it’s gonna be fun.

[00:00:37] Mike Overdorf:

Have fun with that. As you know, I’m from Buffalo and it’s a beautiful 75 degrees right now, so.

[00:00:42] Chip Kispert:

You have perfect weather.

[00:00:43] Chip Kispert:

So, uh. But, uh, you know, seriously, we, uh, I’m super excited to have you join us, uh, for the 1% Better podcast. I think we have a lot to talk about today and, uh, I look forward to getting right to it. So, um, you know, one of the things I want to kind of dive into, Mike, is, um, you know, you and I were chatting earlier this week and we talked about, uh, you know, how.

[00:01:10] Chip Kispert:

Wealth firms are looking at their tech and talking. We talked a little bit about that tech fatigue. So I’m super curious to get your perspective on what you’re seeing out there and how wealth firms, uh, are, are viewing, you know, the abundance of technology as we watch kind of the bloom of FinTech. 

[00:01:32] Mike Overdorf:

Yeah.

[00:01:32] Mike Overdorf:

We’re seeing that across all our clients. Um, their tech stacks are getting larger and larger and larger. Um, they also are saddled with a lot of legacy, uh, you know, core pieces like their compensation or their compliance, and they’re really struggling with how you get all these pieces talking to each other.

[00:01:50] Mike Overdorf:

’cause that’s the other big thing we see is, is data. Um, because you have all these different pieces spread out across the organization, they all have their own little data silos. And, um, what we get from our clients a lot is, is, you know, you can’t get the comp talking to the, to the surveillance and, and, um.

[00:02:07] Mike Overdorf:

That really stresses them, and that that’s always seems to be a topic of conversation. Um, the, the other piece is, and it goes, it goes back to data is reporting. It seems like that they’re always trying to gather data from all over the place to, to get these, these reports in place. And that is tiring, especially when there’s like a FINRA auditor in in house or something like that.

[00:02:29] Mike Overdorf:

Um, those seem to be the two big stresses, fatigues, if you will, that we hear from our clients. 

[00:02:35] Chip Kispert:

You know, it’s interesting. Uh, we recently had our RIA round table and, you know, around the group, you know, there was a common theme simplification. Mm-hmm. Um, and I think, you know, that’s one of the things about your platform is you do try to simplify things for, uh, advisors and wealth firms by, by bringing it all to one platform.

[00:02:58] Mike Overdorf:

Yeah, we start with, um, you know, as you know, 15 years ago we started as a compensation platform, but, you know, you gotta bring in a lot of data process commissions correctly. And just over the years we just started bringing in more and more and more, and next thing, you know, more of a data platform than anything else that all these, you know, these, these fun functions hang off of, whether it’s compensation or surveillance or supervision.

[00:03:19] Mike Overdorf:

Um, but, you know, over the years became more and more, uh, uh, like a, a data platform than, than anything else.

[00:03:26] Chip Kispert:

Um, you know, so as you look at that kind of proliferation of data right? You, you really talk about, um, you know, becoming that data platform, right? Um, how do you see, you know, and, and listen, I, I know you’re, you guys are on the Salesforce chassis.

[00:03:45] Chip Kispert:

Mm-hmm. Um, you know, and we see the Matthew McConaughey, uh, advertisements talking about. Data being the new oil. Um, you know, how do you see, you know, firms more effectively getting their arms around their data? Because this has been a traditional problem over the years. Every time we walk into on a consulting engagement, you know, data comes up within the first 20 minutes of quality versus junk data.

[00:04:19] Chip Kispert:

Um, where do you see kind of this proliferation? Because you got Salesforce, you got Snowflake, you got all these different applications, tool sets, trying to get their arms around data. How does it, how does it get better for the advisors? I. 

[00:04:35] Mike Overdorf:

It’s a good question. I mean, I think everyone, I mean, whenever I go to your round tables and you ask everyone, say, what’s keeps you up at night?

[00:04:41] Mike Overdorf:

And every, every single CTO says, well, it’s data, you know, it’s data, it’s data, data silos. Um, that’s been for years now. So there’s a lot of, there’s a lot of people out there trying to solve that problem. Um, but I think the problem started is because, um, going back to the legacy issue, um, these firms started buying, you know, point solutions.

[00:05:00] Mike Overdorf:

They bought a comp system, they bought a surveillance system. They all their own databases. Um, what, what we do, what we recommend is really you gotta start with data first and like I said, and then add, add these, these point solutions to that data. So we, we always start with, well, let’s get all your data from the clearing firm, from DST Dazzle, DTCC, Schwab, you name it, all these different data sources.

[00:05:21] Mike Overdorf:

Let’s get that in, let’s get it normalized and let’s get into a single, um, platform. It’s architected to hold that data wisely. And then from there, once, that’s step one for us. Um, and from there then we, then we turn on the compensation engine, then we turn on the supervision, then we turn on the surveillance.

[00:05:37] Mike Overdorf:

But you really do need to start with data. Now that goes to all, you know, all these broker dealers out there, or RIAs, they’ve already got a problem. So. When we go in, we, we basically start from scratch and say, we gotta be build this foundation. We gotta, let’s, we need to centralize your data. Uh, and that’s usually how we attack it.

[00:05:52] Mike Overdorf:

Now, how, how the, our competitors are doing it. I, I wouldn’t know, but it’s probably something similar. 

[00:05:56] Chip Kispert:

You know, I wanted to get your perspective on that because, uh, you just touched on it. They have data here. They have data there, you know, all these different silos that don’t talk to one another. Right. And it’s super important to get them talking to one another.

[00:06:10] Chip Kispert:

Um, and as you see kind of. Firms that are out there that you all plug into with your integrations, right. How, how are those firms working with you to streamline the process and, and to ensure data integrity, hygiene, et cetera? 

[00:06:34] Mike Overdorf:

Well, we, we bring in data from all the different data sources, you know, the clearing firms of the world, and we, we have a close relationship with all of them in, in DST and Dazzle and.

[00:06:43] Mike Overdorf:

Um, you know, staying up to date with their file formats and things like that. But, but really what I think you’re asking is the other third party, uh, programs out there. Uh, the big one, the, the big ones that we integrate with that, um. Um, on a day-to-day basis are the forms, engines, you know, the quicks and the laser apps of the world.

[00:07:02] Mike Overdorf:

Um, and they, they’re doing wonders as well. I mean, they’re, they’re integrating electronic signature now and they’re working on straight through processing and things like that. But really those are the two big integration partners that we have. Um, now there’s others, uh, you know, that we will build, um, you know, custom, I mean, every one of our clients is, you know, we’re, we’re constantly doing single sign on.

[00:07:22] Mike Overdorf:

Say, Hey, I have these five, these five programs. I need SSO for that. So we have one guy that works for us. All he does is SSO and day after day after day. Um, so, so it’s, um, so you, they’re all wanting to talk to somebody or another. Um, so we’re constantly doing that. Um, but the real heavy duty moving a data back and forth, that’s mostly with the, the forms engines out there.

[00:07:44] Chip Kispert:

Got it. Um, as an organization. Right. And, and as you’re looking kind of three to five years out, um, where do you see tech going for advisors? Where do you see the evolution of the platform to be able to support the advisor? To be able to support the investor customer, and then, you know, the ability to support the, what I’ll call the, the, the hub.

[00:08:11] Chip Kispert:

And that may be, you know, a broker dealer or that may be an RIA that has, you know, kind of that hub and spoke model where, but where do you see kind of tech evolving to for advisors? 

[00:08:24] Mike Overdorf:

I. I am, I’m gonna start my answer with a little bit of a story. So, when I first got outta school and the first jobs I first got outta school, um, I was hired as an internet product manager.

[00:08:33] Mike Overdorf:

It was 1995. Uh, and back then, as you know, there was, there was no internet really. It was like Netscape and a couple, you know, stupid little websites out there. But it was my job to go around. It was an insurance software company at the time to go around and educate all these, you know, these CEOs of these huge insurance companies, what the internet was, and, um.

[00:08:52] Mike Overdorf:

Back then, I was like out there saying, what, what, what it’s gonna be, not what it is today, but what it’s gonna be today. It’s, it’s just kind of, you know, barbed wire and bandaids, uh, but it’s gonna be able to do this and this and this. And they’re like, oh, that’s great. And then at the same time, in the late nineties, you know, you had the, the dotcom, uh, was going crazy and we eventually had the bust.

[00:09:13] Mike Overdorf:

But I, you know, I lived through all that and I remember it, and I think we’re going through the same thing right now with ai. And that’s my long windup to, to the, my answer is, I think AI is, is definitely the future. But you know, just like back in the nineties, it’s got plenty of potential, but there’s not a lot there yet.

[00:09:30] Mike Overdorf:

Um, it, it will, it will be taking over, uh, software and that’s why everybody’s investing all this much money into it. ’cause there were smart guys back in the nineties ton dumping a ton of money in the internet as well. Um. But you know, when you, the old analogy, you gotta crawl, then walk, then run. I think AI’s still in the crib, right?

[00:09:47] Mike Overdorf:

It’s not even crawling yet, but boy, boy, oh boy, does have a ton of potential. Uh, we’re looking at it as you mentioned, we’re, you know, we’re a hundred percent native with Salesforce. Salesforce has its own AI tools. Uh, we were at a conference there a couple weeks ago, some really cool stuff coming. Coming soon.

[00:10:03] Mike Overdorf:

Um, and just give you an example. You know, Salesforce has got this great report writer. They went out and spent the billions of dollars in Tableau. Um, but you know, I could see sometime in the very near future, you could speak into the system, say, Hey, can I need to compare ticket charges or management fees from last year to this year?

[00:10:20] Mike Overdorf:

Can you just, you know, throw together reports for me to do that? Boom, boom, it’s done. Now. You can do that today. But you need to go in there and you need to write the report. And, and so it’s, it’s, it’s all there. Uh, just like back in 1996, you could pick up and call your travel agent to book airline tickets, right?

[00:10:37] Mike Overdorf:

Uh, you could do it, but now you can just do it from your phone and, and on the internet. So, uh, I think AI is coming. It’s the future. Um, it’s one of the reasons why you have to have good data. ’cause you need good data to power ai. It just doesn’t make this stuff up. It needs to go back and look at, well, you know.

[00:10:52] Mike Overdorf:

Good, normalized, well architected, uh, related data, uh, in order to do some of the queries that you’re gonna wanna do. Uh, but yeah, our, our, our focus for the next two, three years is gonna be AI and, and, and see how, how it’s gonna be deployed, what we’re gonna do with it. I don’t know yet, but I do know that’s, it’s the future.

[00:11:11] Chip Kispert:

So if we look at that. Right. And, and you, you mentioned going to the conferences and doing, you know, where if you were to make a. A working man’s bet, right On the three pieces of the puzzle, um, where wealth firms would, would gain traction and add value, what would those be? 

[00:11:38] Mike Overdorf:

Um, a add value to. Well, you know, my clients, the, the RIAs and, and the broker dealers, their client is the advisor.

[00:11:46] Mike Overdorf:

Right? Right. So, so where, where my clients would add value to their clients, to the advisors, absolutely. Uh, faster response time, more accurate responses. Um, a lot of, a lot of nonsense that you have to go through now will be automatically filtered out. Uh, it’s so, uh, cleaner, more accurate, faster, um, data, um, everything more, much more, uh, forms in, in good order.

[00:12:08] Mike Overdorf:

Even if there are forms, by then, who knows? That’s where it’s gonna be. Like I said, everything you can do, everything today. AI just makes it faster, uh, more intuitive, uh, easier. Um, then you can do it today. 

[00:12:21] Chip Kispert:

Yeah, I mean we’re, you know, we’re seeing a lot of these note taking apps and, and the like, um, you know, whether that’s Zox, whether it’s jump, um, you know, being able to, to smooth that process, be able to record creating a little bit of compliance, heartburn, but they’re working through that.

[00:12:40] Chip Kispert:

Um, but it’s interesting ’cause what you just told me is that a, it’s gonna be a smoother. Uh, investor ex experience from a reporting standpoint as well as a meeting prep perspective. Um, I’m hearing that. Yep. I’m hearing that it’s going to be smoother and faster and easier to do business reporting, which I think a lot of these folks, uh, or a lot of these RIAs, they do the best they can possibly do, but they don’t have the ability to, to pool those numbers and, and get that structure.

[00:13:18] Chip Kispert:

And then finally in talking about operational efficiencies, I think you just talked about automating the account opening process and making that smoother. 

[00:13:28] Mike Overdorf:

Yeah. Yeah. That’s one of the areas we’re gonna look at first actually. Uh, is the account opening process. 

[00:13:34] Chip Kispert:

Yeah. That account opening process is one that, and you know, again, I go back to the round tables.

[00:13:39] Chip Kispert:

We hosted this this spring. It, it’s one that everybody’s been working on for. Years and years. And it’s still tough. It’s still tough. 

[00:13:49] Mike Overdorf:

Well, what we find is like, you know, ’cause we have a lot of clients, they all do it differently. There’s no out of the box account opening process. I mean, they, they all want their own flavor on it.

[00:13:57] Mike Overdorf:

They all have their own, you know, suitability information. They need to track they, and so they’re all, these are all custom workflows, 

[00:14:03] Chip Kispert:

right? 

[00:14:04] Mike Overdorf:

Um, that, that need to be built. There’s, there’s, there’s no cookie cutter. 

[00:14:09] Chip Kispert:

One other question I have is, and we chatted a little bit about this. Is, you know, we have this proliferation of FinTech, wealth tech, compliance tech, whatever you wanna call it.

[00:14:20] Chip Kispert:

Um, there are also a lot of legacy systems that are hanging out there For sure are. And so I’d love to get your perspective on, you know, ’cause these getting off a legacy system, if that’s the desire of a, of a firm can be a challenge. How, how do you see firms kind of evolving to the next generation? Tech stack to support their businesses, uh, and being and, and being able to deal with these legacy systems that they’ve been on for 20 thir 25 years.

[00:14:54] Mike Overdorf:

Yeah. And the reason there’s so many leg there are in, in our industry for whatever reason, um, I, I’ll tell you what I think it is in the second year, but there’s a, there’s a ton of legacy out there, um, more so than any other industry. I, I think the real reason is it’s painful to move off, especially a, like a comp engine.

[00:15:09] Mike Overdorf:

Um, you know, you know, it’s like, I, we get this all the time. It’s like, yeah, we’re on this comp engine, the reporting’s horrible, but we just don’t have the energy to to, to move. Um, so they’re very sticky. So a lot of these legacy apps are very sticky. You’re, the clients know that they could be on something better, that they just don’t want to go through the effort and, um.

[00:15:29] Mike Overdorf:

It, it is a challenge. I mean, that, that is, you know, you know, in our sales, I talk to my sales guys and they say, yeah, they just, you know, status quo is, is the hardest thing we fight against. It really is. It’s not, you know, a competitor or anything like that. It’s just they’re, they just don’t wanna make the move.

[00:15:43] Mike Overdorf:

Um, and, um, and they’re right. It, it is, um, it’s hard to do it. It’s, it’s, it’s an effort. It’s job. You need top down. You need support from senior management and you need, you know. People dedicated to the project. Um, but once they go through that process, they’re extremely happy. Next thing you know, you got real time reporting and, you know, flexibility that just wasn’t there before.

[00:16:06] Mike Overdorf:

Um, so it’s, it’s a commitment. Um, but that’s the reason there is so much legacy out there. 

[00:16:10] Chip Kispert:

Got it. Yeah. And, and you know, as we see it, it, it’s interesting because we can go in and do consulting and give this beautiful plan. About 50% of the time we’ll see firms act on it. Mm-hmm. And then. 50% of the time, even if it’s better, faster, cheaper experience cost the whole nine yards, as you said, they just don’t have the heart to make that change.

[00:16:36] Chip Kispert:

Okay. They don’t have the, the grit. Maybe it is, I don’t know. But, um, you know, they kind of get, they get stuck and it’s, but it, I think if we, as we look at competitive callouts and differentiation. Um, certainly being able to have a tech stack that can balance the need to knee with self-service is what’s expected in the marketplace today.

[00:17:01] Chip Kispert:

And to some extent, I think our industry is behind when it comes to FinTech.

[00:17:07] Mike Overdorf:

U usually the advisors drive it. I mean, they, they listen to their clients and the advisor says, you know, I mean, come on guys, you know, we need to upgrade our tech stack here a little bit. That’s, that’s usually when I get the phone call.

[00:17:18] Mike Overdorf:

Yep. Um, so it’s no matter what we say, our sales guys say, um, until they get a demand from the advisor in some way or the other, that’s usually when we, we get the sale. 

[00:17:30] Chip Kispert:

Mike, before we kind of look at wrapping this up, uh, I wanted to chat with you a little bit, talk a little bit about, uh, our friend Mary Blackburn, uh, who we lost in December.

[00:17:41] Chip Kispert:

Um, and, um, you know, one of the things that in concert with you, we’ve worked to create, uh, a, uh, partner challenge within our round tables that are, uh, provide some. Charity work, but I’d, I’d love for you to share a few of your thoughts on Mary. And, you know, she was such a dear friend of mine and I know she was, uh, super, super, uh, tight with you and, and, and your team.

[00:18:06] Chip Kispert:

And, and, uh, I’d love to hear a little bit about your thoughts. 

[00:18:10] Mike Overdorf:

Yeah, she was the best. I mean, uh, Mary and I were friends for a long time. Uh, we knew each other going back, um, you know, several lives, you know, for, you know, different companies we worked together with. When I decided to start a Sycamore company, um, 2008, she was my first phone call.

[00:18:27] Mike Overdorf:

So she, so I, we started on company on Thursday. I hired her on Friday, and she’s been with me ever since. So, so she was, she was awesome. She was, she, she ran sales and marketing for us. And you never, she was the most laid back salesperson in the world. I mean, she, she. There was no pressure coming from Mary at all, which we liked.

[00:18:45] Mike Overdorf:

That’s kind of my philosophy. Philosophy as well. Um, you know, and, but what she, she developed, uh, friendships, um, and, and, and trust. The one thing I always I heard back about Mary was, man, they just trusted her. I mean, she just developed that relationship, which is key. A lot of sales guys. Can’t do that. They really can’t.

[00:19:04] Mike Overdorf:

Um, but she went out there and, and just developed friendships and trust and uh, she was just a joy to work with. She was a hell of a salesperson and she was just a great person all around. 

[00:19:13] Chip Kispert:

Yeah, it’s, uh, in terms of, um, you know, my loss and, and my, and our ecosystem, that was a big loss. And, you know, when you called me, I was, I was pretty shook up.

[00:19:25] Chip Kispert:

Yeah, 

[00:19:26] Mike Overdorf:

it was, it was, it was shocking. Like, I, like I told you, I mean, it, it was, I mean, it was completely until unexpected. She had just closed the deal that day. That day. It was a Wednesday, and she was happy as can be. And we were laughing about it and joking. And then I get a call the next day that she, she had passed away in the middle of the night.

[00:19:41] Mike Overdorf:

It was just complete shock. 

[00:19:42] Chip Kispert:

Yeah. So, uh, so I know you and I, you know, we’re doing a little bit of, uh, you know, we’re trying to, we’re, we’re keeping our memory alive. And, um, you know, it’s been amazing too, how many people have reached out to me, um, you know, asking and there a lot of people still. Don’t know.

[00:20:00] Chip Kispert:

Um, and, but, um, I know some of the work that you and I are looking at potentially doing in 26 may be able to, to, you know, even make more of an impact. So I, I look forward to that, those conversations, um, and figuring out how we potentially could do, uh, you know, some more charitable donation work in her name.

[00:20:22] Chip Kispert:

Excellent. I agree. So Mike, I wanna thank you for coming on board the, uh, beacon 1% better podcast. It’s been a great conversation and, uh, I’m super grateful for your time. Thanks, chip. Anytime.

[00:20:36] RJ Malyk:

Okay, chip, before you guys go, uh, let’s have some contact information. Let’s start with Mike first. 

[00:20:42] Mike Overdorf:

Oh, sure. Uh, Mike Overdorf, uh, Sycamore Company.

[00:20:45] Mike Overdorf:

Um, Mike.overdorf@sycamorecompany.com. 

[00:20:48] RJ Malyk:

Alright, chip, how about your contact info? I.

[00:20:52] Chip Kispert:

And you can, uh, reach me@beaconstrategiesllc.com or through my LinkedIn chip

[00:21:00]

Kiper.

[00:21:00] RJ Malyk:

Okay. Thank you. And most importantly, thank you for listening to the Beacon Strategies Podcast. We ask you to share this podcast rated and leave a review because this actually helps others find the show.

[00:21:12] RJ Malyk:

Again, thank you for listening and for Chip Kiper and everyone at Beacon Strategies, I’m RJ Malyk, and we look forward to you joining us for the next podcast.