BY Chip Kispert

Good day! A few weeks back, we had our first roundtable since 2020. My heart warmed. While in Truckee, CA our community interacted, debated, and enjoyed each other’s company – in person and not on Zoom.  

Personally, hosting our first roundtable in 20 months made me feel like life slowly is returning to a new normal. And, this morning, as I write this while sitting in a hotel in Florida, after meeting with clients in Minnesota and Wisconsin, my observation is that wealth firms are shifting from survival to aggressive advancement mode.  

I often reflect on how the people of our industry accomplished so much during rough times of lock-down with no personal interaction. The pandemic forced the wealth space to up its game and truly embrace automation. As we begin to move beyond the pandemic, the wealth industry is poised for transformational shifts in business models and executions. The plans we hear about and the projects that firms are looking to kick off are beyond ambitious. They are transformational.  

Running an independent consulting firm gives us a unique line of sight into the wealth marketplace. We have front row seats while being called on to periodically come on the field times to coach. We observed firms that embraced automation and technology before the pandemic and did not skip a processing beat during the stay-at-home time.  

We have seen firms craft service models for different client personas – think big investor clients and growing investor clients. We have seen firms embrace the concept of investor communication and next-generation education. This is an exciting evolution. And now, we are seeing firms thirst for information and starting to plan for what is next. Artificial intelligence and blockchain are two that immediately come to mind. 

Wealth management firms are modernizing at a frantic clip. That progress is driven by firm leaders who have upped their vision and innovation at wealth and fintech firms. The pandemic forced automation out of necessity and now demands more critical thinking about streamlining servicing and technology to stay relevant. 

So, while we recognize the leaders, our folks here at Beacon give a huge call out to the unsung heroes. The drivers of change. The wealth firm employees and the fintech project teams partnering to implement and take on the scary concept of imperative change and automation.  

So this newsletter is dedicated to those that go to their desks every morning and dedicate themselves to making their wealth work world a little better when they leave that desk than when they started.  

This newsletter has some great info. Marshall, Ron, and Jerry have a. few of their thoughts for you.  

  • Marshall will delve into the blockchain. 
  • Ron is sharing his thoughts on workplace environment.
  • And Jerry has written a super piece on vendor management. 

Hopefully, my thoughts have not been too verbose. But after 20 months, a lot needs to be said.  

Talk soon!  

Chip's Signature

Chip Kispert

Distributed Ledger Technology


When I say blockchain, you say crypto.

The challenges and opportunities of cryptocurrency investment are near the top of the strategic agenda for every wealth management firm and will continue to be a hot topic for the foreseeable future. Regardless of regulatory direction, Crypto will have significant, and permanent, impact on the economy, capital markets, investing and, wealth management.

But I’m not here to talk about crypto. When I say blockchain, I’m talking about Distributed Ledger Technology (DLT),  the underlying technology utilized by every crypto platform, and the impact it will have on how future wealth management ecosystem will operate.

The DTCC has just unveiled it Digital Securities Marketplace1 (DSM) which is based upon weaving together various DLT capabilities including, universal tokens and delegated proof of state (the ability to let a third-party act as agent for the token holder), with cloud computing, AI applications shared data (like CUSIP and to create an infrastructure that will support the  delegate the validation role.

The fully digitized platform supports the life cycle of a private security including creation, regulatory and, transfer restriction approvals, all the way through T+1 settlement and sale.  It is blockchain agnostic solution that will provide a tokenization facility enabling broker-dealers or custodians to hold customer assets as a “Good Control Location” which may solve one of the major problems of scale and cost that a many-to-many platform (like Bitcoin) creates.

The DSM is a result of the DTCC’s 2019 Project Whitney which, quite frankly, can be best described as a search for a market where DTCC could prove the value of a next generation infrastructure utilizing all the elements involved in the DSM.  The private securities 

market fit the bill.  DSM will initially support pre-IPO equity securities expanding to other private instruments.

Why should you care?

At the most practical level,  investor interest in private securities is already significant and growing rapidly amongst UHNW and HNW investors. The ability to support private securities investment opportunities for clients is becoming a requirement for enterprise wealth management firms.  A solution that simplifies the sales and servicing process while expanding the available product shelf needs to be understood and exploited. It is an obvious means to increase your value proposition in an environment where millennials are questioning the value of advice.

At a more holistic level,  it is highly unlikely that the DSM in its entirety will be adopted as a standard for other securities markets (like equities or mutual funds) as their infrastructure is far more mature with many aspects of the DSM modernization already fully implemented.  But the DSM is a test bed and many of its features will be adopted or adapted for public securities.   These will include the use of blockchain for processes like on-boarding, maintaining books and records, and compliance.  

It  will also be very interesting to see if DSM’s tokenization/blockchain agnostic structure can addresses the problem of B-Ds and custodians serving as agents so that asset and account servicing can remain in place while adopting blockchain. 

Integrating blockchain into wealth management’s technological infrastructure is already happening and will accelerate.   Understanding this evolution and understanding how your vendors are thinking about and planning for these changes is vital.

Both wealth management firms and vendors need to become conversant, engage in dialogue with each other,  and contemplate what mutualization of non-differentiated services,  like embedding a regulatory ruleset, would mean for your organization. At Beacon, we hope to help foster this dialogue and look forward to working with you.

Musing from the Beacon Team


Why Where You Work May Drive Everything Else About Work 

Recently, I had the pleasure of speaking with a senior Insurance Broker/Dealer manager who lamented how hard it has been to find people. In fact, several positions had proven so difficult to find qualified candidates that she changed the status of the position to “remote” from an in-office position. This is not the first time that I have heard this. Eventually, COVID will be in our rear-view mirror but I believe that working from home will not be. Facing this reality has proven to be somewhat daunting to many firms in our industry.  Some examples of issues that these firms are facing include what type of culture will your firm have?  How will new associates be on boarded?  How will training happen?  Will people who work from home be paid differently?  Have a different career path?  All these issues are compounded by the regulatory reality of our industry, and the fact that the regulators have not really caught up yet with the work from home phenomenon.  Grab the popcorn, this should prove to be exciting! 


Fines and How to Avoid Them

In June of this year the online broker dealer Robinhood was fined a whopping $70 million for misleading clients. It also agreed to $12.6 million in restitutions to clients.  FINRA said the company also failed to reasonably maintain its technology and neglected to do proper due diligence before approving customers for options trades. 

Avoiding missteps in protecting client data is mission critical today. How do you ensure you are performing due diligence on vendors and clients? Do you ensure your technology from vendors protects the best interest of your clients? How do they support your firm in preparing for audits and exams?  Cyberattacks for financial services firms are on the rise. 

Most firms have at least seven to 10 mission critical solution providers that they rely on to protect client personal and private information and to keep your business running. Being proactive with vendors and holding them accountable is crucial to staying ahead of the regulators examination results. Having your critical vendors alert you when they have a breach or significant incident needs to be in every initial contract and subsequent renewals.  

Most of your vendors serve multiple wealth management firms and are getting the same requests from their other customers in our industry. Ask your vendors to assist in preparing for exams not just for you but for all of us in the industry. Their support is needed by all wealth management firms and will give them a differentiator from their competition. 

Solution Provider Spotlight: Advisor360

Recently, we spent some time with the folks at Advisor360°. The conversation was fun, informative, and thought-provoking. Typically, when we look at technology solutions, the solutions are siloed in nature. Advisor360° takes a comprehensive approach. 

Advisor360°.  solves the ever-present data issue – in both wealth and insurance, and overlays critical functionality, including CRM, Client onboarding, portfolio management, trading, and many more capabilities. In essence, an out-of-the-box solution for broker-dealers and large RIAs. 

Exciting to us is the Advisor360°data-first approach.  The Advisor360°. platform is built on top of their proprietary Unified Data FabricTM. Their data management strategy synthesizes complex and disparate data streams into a highly organized database that supports the cross-functional needs of an enterprise wealth firm. In short, they bring into Advisor360° clearing and custody, insurance, banking and other third-party feeds from over 450 fund companies and 150 distinct data feeds delivered through 37,000+ files/month. 

Recent Advisor360°. customer rollouts include MassMutual. Advisor360°is a firm worth keeping an eye on. For all you wealth platform students out there, take a look at Advisor360°.  

And, stay tuned, as we will be doing a Flash Interview with Advisor360° .

Solution Provider Spotlight: Clout – a Tifin Company

Building client relationships in a digital-first environment has been on our minds lately. Fresh in our minds is our recent demonstration with Clout – A Tifin company. Clout’s core value proposition is enabling and overseeing digital campaigns between advisors that focus on the investor customer and prospects interests.  

Clout’s platform really is a Command Center for wealth firm customer communications. The Clout marketing platform is designed to drive more leads, referrals, and conversations. The platform also can support compliance oversight demands and documentation. However, the strength of Clout in our thinking comes from its machine learning/artificial intelligence that can align investor interests with subject matter delivery.  That is fantastic stuff. And, the more advisors use it, the more brilliant the Clout intellect becomes, meaning that the content is more closely aligned to the customer’s needs. As well, Clout also creates custom content for delivery to end customers when needed.

We are at the beginning of a digital transformation with a focus on personalization in the wealth industry. No longer is an annual face-to-face meeting and a quarterly performance statement adequate for the investor customer. Now customers are asking, “what has my advisor done for me lately?” And, by lately, we mean this week. Check out Clout – they are changing the narrative of client communications.

Check it out here.

Check out our 2022 Roundtable Schedule

Are the Regulators asking for more and more information about your vendors and how you are managing that risk?  As the industry outsources systems to the cloud, regulators are demanding a robust annual review of your mission critical vendors that host your client’s personal and private information. 

At Beacon, we have developed a Vendor Management Toolkit to help address these and other issues. Automated questionnaires and scoring of submissions couple with a repository to house the responses can assist in your next audit or exam. Click here to learn more.