Joe Duran and Terri Kallsen of Rise Growth Partners - 2025 Forecast

Speaker A: I'm Brian McLauslin, President of Orion Advisor for Technology and along with Natalie Wolfson, Orion CEO. Uh, we've been taking over Orion's popular fintech podcast, the few show in 2024. We have one goal in mind. Share stories that actually show you how you can innovate, disrupt and win for your business. Each episode we'll be sharing compelling stories of innovation across the industry, including a few of our own friends. We're going to explore groundbreaking ideas from Fintech's need for a data revolution to. Investors are demanding more from you than ever before to do so much more. And together we're going to light the fuse to your growth. Well, welcome everyone to the Fuse Show. I'm Brian McLaughlin and with Natalie Wolfson, co host with me, she's uh, the Ryan CEO. And Natalie, then how's it been? Uh, it's been a little while, but here we are getting into Thanksgiving season as we record this.

Speaker B: Things have been great. Brian, as we were talking about before we started, um, we are breaking in our new Tesla in the Wolfson household and it has been awesome. M looking forward to taking our longest road trip yet on Thanksgiving and heading up to Tahoe.

Speaker A: Whoa. You think you can make it one drive or. Tesla's got, it's got the range. I mean, I got one. I think it has a range for that, right?

Speaker B: Yeah, it has just the range for it.

Speaker A: That's awesome. Well listeners, we're recording this literally a week before Thanksgiving and also the week of Schwab Impact, uh, where you can catch Natalie and I as well, uh, at different events. So anyways, let's kick this off. We have an amazing guest today. Really excited to introduce Terry, uh, Carlson and Joe Duran. Natalie, would you like to talk a little bit about what's going on with Joe and Terry and why they're hanging out with us today?

Speaker B: Absolutely. So, uh, Terry is an award winning wealth management executive and former CEO of Wealth Enhancement Group and is currently managing partner at Rise. And Joe, as many of you know, is a serial entrepreneur and a founder of Rise and a former partner at Goldman Sachs as co head of workplace and personal wealth. Um, both Joe and Terry are seasoned leaders and innovators. And Terry and Joe are bringing a wealth of experience in wealth management, digital solutions and client service to today's webinar. Uh, in addition, they're bringing a fresh take on advisor success at Rise Wealth. And so I'm very excited to hear what they have to say about the future of wealth management and the future of our industry. Today we're going to explore emerging trends, challenges advisors face, and how advisors can prepare for and seize the opportunities in 2025 and beyond. And so welcome Terry and Joe. We're so happy to have you join us today.

Speaker C: Thank you so much, Natalie.

Speaker D: It's good to meet you. Good to be on, um, this, uh, podcast with both of you.

Speaker A: Thank you so much for being here and joining us. And, uh, so when we start this podcast, we'd love to do a couple icebreaker questions so people can kind of get to know you. Something a little bit different than the industry stuff. So, Terry, I understand you've run, like, a ton of marathons. Now, I'll be honest, I have not completed a marathon, so I don't even know what's involved. But I understand it's probably a lot going on to train for those. And you're ready for those, uh, I think 21 marathons. Is that right?

Speaker C: That's right.

Speaker A: Holy cow. Uh, so it's an amazing accomplishment. Like, what has running taught you for about resilience and pushing through and leadership? Anything our listeners can kind of glean from, uh, your marathon experience and training?

Speaker C: Sure. Well, you know, it's interesting because I did my first marathon in 1999, and the reason why I did it was because everyone thought, well, the year 2000, remember the, the years of Y2K, if any of that recalls anyone from our listeners. And so if anything was going to happen, I was going to go down knowing I at least accomplished one thing. And that was running a marathon. Well, obviously that was, uh, many years ago. And when you run marathons, you either love them or you hate them. There's not very many people in between that think they're okay. Right. Because they're quite a commitment. And when I think about the career I have in financial planning and wealth management, there's a lot of parallels between running and doing financial plans. And I'd say the first one is really having a plan to run. You can't just wake up one morning and run 26.2 miles. You have to have a plan. And in general, it takes anywhere between nine and 12 months to. To actually plan to run a marathon. And you have to start out, you know, running 1 to 2 miles and 5 miles and 10 miles. And then you have to get your body used to the nutrition and the hydration that's taking place. And the discipline is really important. And so when you think about financial planning, it's a retirement plan that may be, you know, several years off. It may be an estate plan that you're preparing for or a tax plan. But all of those require discipline, knowledge, and a systematic approach in order to achieve it. And probably the biggest thing I think about is financial planning as well as running a marathon are all about the short term pain for the long term gain. Right. Not every run is a beautiful run. Some of them are very painful, some of them take a lot of time that you have to plan for. But you know when you're doing it, you're going to have that moment when you finished the 26.2 and you've got the gain there. So it's about really sacrificing, you know, drinking at night or partying or not sleeping, but getting it done so that when you finish, you're pretty happy about it.

Speaker A: Yeah, that sounds amazing. Jeez. Okay, you're going to be outside the marathon. Maybe. We'll see about that. Joe, for you. Um, I actually didn't know this. You're a lifelong, like beach volleyball player?

Speaker D: No, no, I'm a lifelong yogi.

Speaker A: Oh, yogi.

Speaker D: Yeah, I've been doing that for many, many years. But I do play beach volleyball mostly because my daughters are really, really good volleyball players and I live at the beach and I thought, I want them to come and play. And uh, and so it's really fun. They come back from college and like to kick our old man volleyball crew.

Speaker A: These family volleyball tournaments, who wins these things? Are they crushing you or you?

Speaker D: They always crush us. And as I mentioned, they like to come and play. I have an old man crew that plays on the weekends and they like to come and spank us. So it's a lot of fun. But Yoga's been, uh, 27 year, uh, twice a week. I was just thinking this weekend as I was doing yoga, the importance of what Terry was just saying that what's good for you seldom feels good when you're doing it. And I've had almost 4,000 yoga classes when I added up. And I realized I've never once looked forward to it and I've never once enjoyed it, but when it's done, I'm like, okay, I'm doing what's important to me. And I've been a study student of behavioral economics my whole life. And I find it interesting that we all talk about happiness, but yet we are all willing to sacrifice happiness for fulfillment. And having a satisfying life and planning and wealth management is really about not doing what feels good, but doing what is good. And that usually means some short term pain or long term success. And that's true of all Endeavors in life. I think whether you're trying to be a good husband or a good dad or a good business person or a good financial creature, it's fighting our own natural instincts. I love cheeseburgers and french fries, but if I have what feels good, it's probably not good for me. Right? So that trade off is, uh, a delicate and important balance we all need to learn. And I think that's the role of a great advisor, right? Like, it's to help give you perspective, that enforces and helps you to apply a discipline of doing what's actually satisfactory to your life and not what feels great right now.

Speaker A: Well said, well said. Very insightful. So one last one for both of you. You guys have made huge impacts in the wealth management space over your careers. Everybody knows you done amazing things, but if you have switched careers entirely, leave the industry, go do something totally. What would be a dream career? Like if you could go do something, Just rant on. I'll throw it out there for me. I love airplanes. Grew up as a little kid, boy, with my mom, watching airplanes all the time. I'd go work at an airport doing something, pushing the plane out. I'd be the guy waving the wands or something like that. What would be your other career?

Speaker C: Well, I've thought about this, and Natalie will probably know this answer because Natalie and I have done Orange Theory together and I've always had a dream of opening up my own Orange Theory fitness center and being a coach and cleaning the bathrooms at the same time and helping people register. But I just really believe in high interval training, um, different than marathon running, and just really helping people feel good and achieve a certain level of mental fitness as well as physical fitness.

Speaker D: And mine, uh, when I was growing up, I used to watch Praise the Lord in Zimbabwe, and I couldn't believe the money that they'd raised. So my family would always say, well, you should be an evangelist. Except that wasn't on the cards for me. But I think if anything, like a, um, motivational, inspirational life coach kind of person, like a Paul version of Tony Robbins. That's when I'm most excited, honestly, when we're working with advisors and I'm working with entrepreneurs. I coach a lot of individuals personally just, um, because I love doing it. There's nothing more rewarding than watching the evolution of somebody who you've helped to guide and mentor and see something that grows and becomes more beautiful because you're attached to it. Um, they got to do the work. But there is something for me, incredibly psychologically Rewarding. And you know, I think getting psychic income is really important from whatever you do every day.

Speaker A: Well, I mean if you guys ever do Orange theory or become an evangelist, who called me and call that, we'd love to come hang out with you all and see that attorney. I mean you've been an inspiration for so much of the industry. Um, you led large teams, driven huge growth for organizations and so forth. So if you would tell us both about, uh, tell us about the rise of growth, what you're doing there, what's keeping you so passionate? I mean you have long careers of great successes. So I mean, what's keeping you motivated, invested passionately into this new project.

Speaker D: Terry, if you don't mind, I'll just start with a couple of minutes. Terry, as you know, is one of the most visionary leaders in wealth. Uh, when we started this idea, she reached out to me and said joe, uh, and she'll give you her color of why she called me because I think it's interesting. But she really liked the idea that we'd come up with, which is we've done this ourselves. But when we were doing and building our own businesses, it's very, very difficult to find people who have not just capital, but the knowledge and know how. I had never run anything as big as I was running its insuring capital that ultimately became Assetmark or United Capital, which as you know, became Goldman Sachs. In that process, you're just doing a lot of trial by error and frankly if you get the wrong investors. And I had really smart and capable investors, but they only cared about their rate of return. And so when you had to make these tough short term sacrifices and you don't know that you're making the right decision because you're just never been on as big a rocket ship or as big a ship as you're on, I just prayed to have somebody around me who could say hey, that's a mistake or this might work. But think about this. And I never did. And now the industry's evolved a lot. And we'll talk about where the industry is now. And I feel like there's a major gap in the industry right now, which is you have these mega firms now at hundreds of billions of dollars who are being run by, almost all of them are run by private equity or have vast slugs of private equity and there's nothing wrong with that, but you have these rising firms at 5, 8, 10 billion that they're not sure how to do what's next. And I thought it'd be lovely if we could use a know how and knowledge with complete alignment in a capital sense and bring tier one money and do so. Because the problem is these big tier one firms now need to write hundreds of millions of dollars in investments. And so a $5 billion firm would have to sell itself in entirety. They don't get to do a minority stake. So we thought, I'm going to go to some tier one firms. And we got Charles bank, which is the private equity group that spun out of the Harvard endowment. And we said, look, we'd like to invest in three to four great firms, you know, and make 50 to 80 million dollars check sizes, but put 250 plus million to work. And they said, that's a great idea. With your help and guidance, we can have higher confidence and conviction that there'll be success. And obviously, Terry and I know what good looks like. Right. And our partner, Darius. So, so it's, it's been an amazing voyage so far. And our first investment, Terry will talk about, but that was the idea is just to say, can we create? And I don't like doing the same voyage twice. I think it's always fun to do things for the first time. Um, and so we thought there's a gap in the market right now for knowledgeable, what we're calling a synchronistic investor. Like somebody who brings you something valuable as well as money m to help you grow. And so it's been. We've had an amazing response from the marketplace. Obviously, Terry's a rock star, so it's easy to do to be successful and she's your partner, but we're a good combination because, uh, she has an attention to detail and follow through. That's five seeds. Anything I do. Um, and it's been an amazing partnership.

Speaker C: Well, I agree, Joe. And you know, you may want to be an evangelist, but I think you already are. Uh, you know, Joe just has such incredible vision. And the reason why I think Rise Growth has been so successful is that we're really about expanding the, the next lighthouse brands across the industry. Right. And Joe knows what a lighthouse brand looks like and he can help facilitate that. And so the firm we're working with right now, Bleakley Financial Group out of New Jersey, a $10 billion firm who has been successful for over 20 years. And they will always be successful, but we're really helping them be able to expand their services and their solutions to reach more clients ultimately. And why, uh, that's so important to me is I was an advisor at one time. I have my CFP And I really believe that we want to continue to provide competent, ethical financial plans to those that want one and need one from an access standpoint. So if we can take a firm as successful as bleakly has been over the last 20 years and expand their solutions and their client experience so that everyone has access to a competent ethical financial plan. That's why I'm in this industry and will continue to work with Many top shelf RIAs to be able to help and serve more clients and meet more people's needs.

Speaker B: All right, so then I want to build on the comments you just made about how you can help advisors take their success to the next level. Because you both have walked that path before. And um, I agree with you completely that um, independent financial advisors in particular because of their independence, it can be quite isolating. And that's especially true of uh, this generation of independent financial advisors because consolidation has happened. So you have firms that have been very successful. And then when you look at firms, um, there's also a pretty high failure rate of firms that are small in their effort to get a little bigger. And so as you look at to 2025 and to those firms that have made it past the entrepreneurship stage, uh, of the evolution and now are looking to get bigger, those new firms, the ones that uh, you'd like to help succeed and grow, what do you think the biggest opportunities are in 2025?

Speaker D: I think a, ah, couple of things. Number one, I always think about business, any business, as having three areas. Number one is the leadership and management team, the people who are driving it and ah, how do they measure, track results, what is their client offering, et cetera. Number two is what's the platform, what is the technology stack for consumers, advisors and back office? We're in the information business, which means we're in the technology business. If you're in wealth, you traffic in knowledge and data that is your currency, that is your gold. And interestingly enough, uh, most of our industry doesn't think of it that way, but I've always thought of it that way. We are in the data business and most advisors are woefully behind in the importance of managing their data flows. So one of the things that I'm strongly believer in is you've got to create a very unique proprietary final mile to the consumer. Like you as an advisor, in order to stand out, have to make a great brand promise that is different than everyone else. And unfortunately that is not true. Most people are very unoriginal in our industry sadly. And so being clear about why do we exist, then you need to have the people that can execute on that promise. And then you need to have the product offering and the services that deliver on that. And then if you're really good and you want to be a lighthouse brand, you want to have passion too. I call it the four piece. And if you have that, if you think about Apple, you were just talking about Tesla. Well, Tesla is a great example, right? Like they have a great product, they have a very clear promise. It's going to be a modern, clean design, very efficient, great car. And it is at a reasonable price point. And it is. And when you go to the store, guess what, it's utilitarian and clean. It feels like an Apple of cars. You know it is. You know exactly what you're going to get and the people in there exactly what you expect. And then of course, because you have that consistency and that brand promise delivered throughout, guess what? You have passionate Tesla Bros everywhere. And then sometimes they're ladies too. So that kind of brand evolution, it's one of the things we know has to exist if you're going to be successful. Because the number one gap right now, Natalie, in the industry by far is the lack of organic growth. We're in a saturated industry. It is no longer a growth industry. And so that's why you're seeing all this consolidation. And we believe that just a bit of imagination, using behavioral economics to create a unique upfront, think creatively about creating a brand story that's different than everyone else. Uh, but sadly, there's an incredible lack of imagination. Everyone just looks around, says, what do they do? We'll do the same thing in different colors. And the reality is that's not how you win. If you're competing against elephants, like if you're not an elephant, you can't. An elephant could go walk, do whatever it wants. And so these large mega firms, they can do whatever they want. But if you're a 5 to 10 billion, you have to use your wits for currency. You have to be original and you have to make sure if you're going to win as a brand, that your promise and your people and your product create passion in the underlying marketplace, including recruiting, talent and everything else. So I think for 2025, middleware is a big deal. How do you get your data to speak to each other? Obviously, you at Orion are doing all kinds of work. If you don't have good data, you can't put AI to work for you. So having clear data collection and a great brand promise that allows you to use that data in a good way. That would be the two things that say you should be thinking about in 2025. Sorry for the wrong answer.

Speaker C: No, that's a great answer. Joe and I agree. Natalie, one part of your question is what would you tell advisors for 2025? Right. They've, they've moved beyond that ensemble practice and they want to get to be a much larger firm. And you know, the advice I always received as an advisor and a leader in this industry is what got me here won't get me there. Right. And Marshall Goldsmith wrote a whole book about it. You know, they've had tremendous success. They can count all the things they've accomplished. But what got them there won't get them to the 5 billion firm or the $10 billion firm. They've got to figure out a new way to do this. And certainly there's people out there that can help you do that. But the three things that I think about, most importantly are really making sure that their financial plan is customized and personalized for clients. It's not just a product, it's not just a document we send out, but it needs to mean something to that client in terms of the next five years, the next 10 years and 20 years. And by doing that, by making it customized, you know, Joe mentioned predictive analytics for behavioral insights. That combination of, uh, both the analytics of the financial plan and the personalization based on their behaviors, I think is going to be the future for advisors in 2025 and beyond. And then when I think about, you know, beyond 2025, there's $84 trillion to be passed through this wealth generational transfer between now and 2045. And so if I was an advisor and I haven't started preparing for the beneficiaries of that financial plan, I would start getting them engaged through digital channels as well as personal channels to make sure that that family is taken care of.

Speaker A: Here you set me up for a perfect next question then. Data analytics, predictive analytics, B5, all these amazing topics. You know, the industry is going through the world going through a whole industrial revolution again, I feel like around data and information access, uh, but especially around AI, right. Uh, I can't believe turn a corner without talking about AI. I feel like these days. But I'm curious for your both your take on this, what technology is going to really matter next year? Uh, a lot of it's revolutionary, a lot of it's maybe a little bit too edgy right now. We haven't settled on anything. I'm curious your take what's going to really matter next.

Speaker D: The first and most important is to me what touches the client. Uh, I think too few advisors are thinking about. I love financial plans but the reality is most clients don't know how to react to a 40 page plan. And so a simplified one page summary is where most people want to live. And there are some great technology solutions out there competing directly for end consumers, for Gen Y and Gen Z that actually get it right, that actually do a far better job because they don't have a bunch of really seasoned CFPs. They keep it simple and they keep it simple enough that people know exactly what they're meant to do. There's a bullet point list of three or four things that I got to do this year. We, because our industry is run by engineers who know the business really well is we don't tend to speak to the consumer. So I would just ask myself the question, does my non financial spouse understand the financial plan I'm delivering? Because I think the winners will be people who deliver planning in an understandable and digestible way. And I don't think we as an industry have done ourselves any favors here. Number two, you're going to have to have middleware, you have to have systems that connect all your disparate technologies. Now Orion has its own ecosystem of course, but most advisors are also working directly with the custodians or maybe they're using you for portfolio accounting and they have something else for planning and they're using something else for their CRM. So having a way to move that data elegantly back and forth is really important and I think what I would be concentrating on. And then lastly, how do I communicate at scale with consumers in a personalized way? One to many videoing, for example, if you have an app uploading video that give market updates because it's interesting, there was research we did in the old days at United Capital that in fact people who had seen a video of you and spoken to you really didn't remember three weeks later where they had spoken to you or seen a video of you, it had the same resonant impact three weeks later. So yes, two days later they'd say yeah, I spoke to them. But if they seen a video of you and you asked three weeks later did you talk to Joe that say uh yeah, yeah, yeah, yes, yeah, we did a zoom. And they, they couldn't quite differentiate whether they'd seen a video or spoken to you. Interestingly enough, because mentally you don't store everything to exact detail. And by three weeks it Just was a touch point. So again, I think realizing what AI is doing to make information so much more accessible and easier to digest in the form that you want it, the competition is not going to come from AI, but your competition will be using AI. So you just have to think about how do we make the way we communicate easier and more understandable and more useful to the way people make choices?

Speaker C: Yeah, that's a great point, Jo. I just underscore that there's just been a recent survey done from clients and 80% of clients would prefer the information delivered by video because it's so personal and so impactful. And I think you see it around in this industry as well as other industries. So, you know, if I were an advisor for 2025, I'd make sure that I'm making personalized communications and videos based on what my client's preferences are. When, um, Joe talked a lot about the personalization of the client experience in communication. I'm pretty excited about AI for some of the automation of routine tasks that it can provide. So from a client and advisor standpoint, I can automate those tasks, such as rebalancing. AI can help me rebalance automatically. I don't need a whole trading area rebalancing and making that happen. And I know Orion has that capability. The other thing it can do is really work on some of the regulatory and compliance documentation that's needed. Right. By being able to scan documents and create documentation. Because I've worked with advisors for almost 25 years and one of the things they don't enjoy is having a really productive, impactful conversation, but then having to document all of that and document it thoroughly for compliance purposes. Well, now the technology exists where they don't have to do that. Right. I don't know if any of you use Zoom, um, AI, but when I have a meeting, I don't need summary notes anymore. It's done for me and it's done probably 90% is pretty accurate. So AI can help automate many of those tasks from a regulatory standpoint. It can also help on the efficiency between, um, you know, AML and know your customer, the kyc, from a regulatory standpoint. So when you're onboarding clients or all that can be automated and you don't have to have all that work done manually anymore. And the other thing it can do is flag any type of supervisory issues or fraud issues, so you can start to reduce the amount of work that needs to be done manually on suspicious activities. So, uh, we talk about client experience, but we also Talk about advisor experience. But back office operations should improve dramatically as well.

Speaker A: It's interesting about AI. I love how you're talking about the supportive feature, uh, set, whether it's generating narratives, task messages, whatever it is, make your life easier. Which is so different than the last time we had an emerging trend which was Robo Advisor was the last major robo technology trend. I feel like where we says doomsday, this is more optimism. I love that.

Speaker C: I've worked with a lot of advisors. I was one. Anything that can help me, um, spend more time with my client versus having to do a lot of paperwork or administrative work, I'm pretty excited about because clients want to spend time with me as an advisor and this will help me do that.

Speaker D: And then, you know, you have to think about AI as. It's kind of uh, it's as big as the Internet really. It's a, it's a, it's a really a productivity tool that allows you to be better at what you do. Without the Internet, I don't know where we would all be. And I think in a few years we'll say the same thing about AI and the same thing is true. Like if you're not on the, on the front edge of using it, understanding it, knowing that it is going to be part of your life, you're not, you're not going to be competitive in a cost management basis or on a competitive rate basis. So uh, I think again, this is, this is not one that you can just ignore like maybe blockchain or Bitcoin. This is not that now blockchain will change the world, but in different ways. This is a right in your business. Business. This is one that again, this is like the Internet. It's as big as that.

Speaker B: So uh, Terry, um, you talked about the generational wealth transfer and Joe, you talked about um, consumer needs for simplicity and personalization. Um, can you give us some specific examples of how consumer um, and advisor expectations are going to shift over the next few years and then share with us some advice that you have for advisors who are trying to get ahead of these needs. I'm going to start Joe, with you and then go to Terry.

Speaker D: Yeah, I've got a very specific one. One of the biggest crisis unspoken about in Gen X is today, and by the way, Gen X is still the wildly most overlooked generation for no good reason. They have the long, they have, they are not the point where their kids are in college, they have money and they have a long Runway of earning and needing your help where you can make A massive impact. And yet most advisory firms are still either focusing on baby boomers who retired or on their grandkids. The gen X, gen 1, uh, gen Y, Gen Z. No one seems to be focusing on Gen X, which baffles the mind. But the biggest crisis facing America today is its aging population. And what happens when you're in the sandwich generation, when you're in the middle with kids who are leaving college but have no income, uh, and need to be supported and parents who did not save enough because they were called post pensions and their 401ks and their IRAs are not enough to survive and the health care costs are out of sight. And I'm dealing with this at home, you know, again with my mother in law. They start to have mental issues, they don't have enough resources to make it. And you're in the middle having to take care of everything. That crisis is one that squarely impacts the wealth management industry. And it's probably in your client's world, it's almost certainly for your clients between 55 and 65, one of the single biggest aggravators in their lives, besides their own children, who they're most comfortable and prepared for, is their own parents. And it is something we see repeatedly, it's something we see so few people actually addressing is what is your position as the child when your parent, you start having to be the parent of your parents. And it's confounding and it is absolutely inescapable. And uh, anyone listening to this, with clients 55 to 65, it's unlikely that at least half of them are not confronting this. Either the husband or the wife or the husband or the husband, whatever the combination is, uh, in the marriage or the family or even with your single clients, it's almost unimaginable that they're not confronting this in some way. At least half of your households that are 55 to 65. And so to me that's, that is number one, number one by a long shot is what do we do? And how do you provide our clients with the off balance sheet liabilities they never considered because they're very good with their direct responsibilities. They don't think about the uncle or the GR parents who really didn't have enough because they never asked what's your situation, mom and dad? Um, and that reverse planning or the off balance sheet liabilities that your clients have, that's how you add value because they'll never forget that conversation. Wow, I never thought about that. And you say it's about time we find out what your parents condition is because everyone's always thought about inheriting wealth. Well, what about if it's the reverse? And it will be that way for many, many, many of your clients. And by the way, the great irony, if you've saved money and been responsible, you're almost certainly going to be the beast of burden for everyone around you.

Speaker B: Thanks, Joe. That sounds like a very Gen X thing to say, speaking from the perspective of a Gen Xer. Uh, Terry, uh, how about you?

Speaker C: Well, I couldn't agree with Joe more. And actually last week, Natalie, I was at the CFP board and we had a client panel of basically, uh, Generation X as well as millennials speak to us about what their expectations were. And so I was intrigued by it because these were clients anywhere between the ages of 30 to about 60 in that range. And what was really interesting to me is that these clients were telling us, you know, I want to reduce the amount of anxiety I have in my life around my financial plan. Right. And these are not people that were extremely wealthy or they, you know, they didn't have a lot of debt, but they wanted, they had anxiety behind the complexity. And so what they were saying very strongly was I want simplicity when it comes to my financial life and I want my advisor to keep it simple for me. I don't want to do all the industry jargon. I don't need to know every bit of performance. I just want to know that when I have my goals, that I'm on the right track to hit my goals. And if I'm not, help me understand what I need to do. That's different. So that's number one, Number two is they really want stellar personalized service. They want to know that their advisor's proactively thinking about them, that they're making the necessary changes, you know, prior to the election, after the election. Now we all know presidential elections don't impact the economy that much, but that's not what consumers think. And so they want to know their advisors thinking about them so that, remember I talked about predictive analytics. They want to know, not just predictive analytics of their investment performance, but of their holistic goals. Are they going to be able to hit those or not? And then the last thing they really wanted is they wanted to be able to leverage technology more effectively and to be able to keep track of all their accounts and see it all in one place. That was a very strong need. So you could call that simplicity, but I really think about is helping our clients scale their total plan and investment performance in one place. And they really don't care much for the use of our portals per se. Portals, um, are difficult for them.

Speaker A: That's an interesting statement right there. They don't care for the portals and the portals haven't been very successful. Can we double click into that a little bit? Like, uh, what would be a crazy. In your mind, what would be a great portal experience? What would be a great personal.

Speaker C: Well, they understand the need for security, right? Like these are very smart clients, they understand the need for cybersecurity, but they want it to be more intuitive in how they access the information and to use more of the technology that's available. So one example that they shared with me was that when they go through tsa, all they have to do is put their eyes on the screen and they're automatically identified, Right? We have that same capability. Can you still keep my information secure but make it easier for me to access all my information? And so I think we're maybe not there in 2025, but we can get there rather quickly and still keep everything safe.

Speaker A: How do we dive into hyper, uh, personalization at scale, Right? Uh, Joe mentioned it. You mentioned it as well, Tarek. Uh, but personalization, when you're talking about this one off, sure, making videos, it's not that big of a scene, but uh, well, you have to make a hundred of them, right? Or something like that. How is there any specific tools or tips or tricks you can tell people how they can do? Hyper personalization techniques that you're talking about, but at scale, I'll just say, you

Speaker C: know, one of the easiest ways to do this that is very meaningful to clients is life events, right? And you think about life events that happen just about in everyone's life that we start out, right? Going to college, getting married, having children, moving. The average American today, Brian, moves 11 times in their lifetime. That's by zip code, like out of a zip code. Not just the house across the street because I'm making more money, it's they're moving for jobs or so on. And this was, this is even post Covid, not just pre Covid. And then, um, on top of that, planning for retirement, living in retirement. And then your estate plan, the one that's in there that's actually fairly easy to predict is divorce. Believe it or not, there are certain things that happen with people's money when they're planning uh, for a divorce. And a divorce can be very impactful for an advisor because 70% of the non financial spouse will leave that advisor. Right? So the money split and one of them goes away and one stays. So you can start to use the data to predict some of these things, to then reach out and make sure everyone's engaged. And I'm not just talking about, um, divorce. I'm talking about move, retirement, children, and wealth transfer whenever.

Speaker A: Right. I mean, go ahead, Joe.

Speaker C: I'm sorry.

Speaker D: No, I think, look, personalization first. How about you collect information that not everyone has about your clients, like how they think about wealth management. Are they savers or are they protectors or are they enjoyers of life? Like creating language that speaks to who your clients are. Not every client has the same view of their financial plan. Some are doing it without a lot of happiness. They don't want to do it, but they know it's important. Some of them love it and track the numbers. And so, again, I just think using behavioral economics to help understand how your clients are wired. So when you're speaking to them, you know, there's like, even behavioral DNA is a great example, right? Like they categorize your clients so that they know with a 10% drop which of your clients are probably most nervous. I know you do a lot of behavioral economics work, obviously, I've been a huge fan of it for years, but trying to not just make it the way everyone else does it. Oh, uh, she's a female in her 50s with the grandchildren. Yes, that matters. And yes, AI can help you identify what other people in that same situation might want. That's one way of hyper, like taking big data and applying that to your clients so that you know what the next best action would likely be. They're probably going to buy a second home, or they're probably going to think about retiring or leaving their husband or whatever typically happens with somebody with that combination that they happen to have. So that's one way. But secondly, that's much more interesting is to bring in some behavioral economics that helps you to categorize the way your clients think and feel around wealth management so that when you have an event that occurs, you can interpret it in their way. That's going to be most effective. Because ultimately we're paid for one thing. That's to help people make better choices, right? Like, if we paid for anything, it's for that. If we paid for a second thing, it's to help them remove financial anxiety. But the way you do that is to make sure that they make great choices. And yet we spend so little time understanding why does this person make the choices they do. Like, uh, to me, it's fascinating when we are in the choice and decision making business, ultimately, how little time we spend thinking about why does this person in particular, how are they wired and how do they make choices? And so how can I help them? Because again, no one listens to advice if they're not understood. And yet we do such a weak job going beyond the money and beyond mathematics, risk profile, et cetera, et cetera, target allocation, none of which really speaks to the fact that money is an emotional category. So why don't you help yourself more understanding. Why is this person make the decisions they do? What drove them to buy their house? How do they make trade offs? I'll give you a good example of that. We all make financial choices, but many people take meaningless choices like the wine that they order at dinner and go aggro over to spend $50 or $100 on the wine and then afterwards beat themselves up over it. But they take five minutes thinking about, oh, I'm going to go buy a Bentley or I'm going to go buy the new Tesla. And you're like, okay, well one decision that you've just spent hours aggravating over, uh, is meaningless and the other one is much more important or they just leave their job, which is a life changing decision. So thinking about from irrelevant to really important financial choices and how do you help people differentiate and help them to be better financial decision makers, which is ultimately what we're paid for to me is very interesting. And that requires bringing behavioral economics to the forefront in those conversations. And that is how you can be very personal. I am driven by avoiding pain. My wife's driven by enjoying happiness. So we're going to have a different lens in almost every financial conversation we have.

Speaker B: You know, Joe, we, um, have spent, uh, a lot of time and effort, um, implementing behavioral finance tools here at Orion. And most recently we implemented a tool that gets at the attributes of happiness and evaluates what, what makes the client, uh, joyful and happy about their life and how advisors can help clients understand that and then build their wealth around it. Um, and the way that I think about it is similar to a physician. You have physicians that are brilliant, they're great clinicians, or they're, they really understand the science, but they don't make folks feel great about the experience. And in the wealth management industry or in financial services generally, we have great clinicians. We don't necessarily have good bedside banner. You know, where you're going through some of the biggest challenges of your life or the most important financial decisions of your life. You want to you want somebody who gives you great advice and also gives you comfort. Um, and so we at Orion are trying to help through technology. I know you and Terry are trying to help, um, through rise. But if we can do more of that. You know, I've always said we're in the comfort business. In financial services, you want people to be comfortable to spend their money that they work their whole lives to earn.

Speaker D: Yeah. And I can tell you one thing's for sure, they children will have no problem spending it. I always tell people, hey, don't burn your kids without wealth, because they will have none of the holdbacks that you have. I will say, just on this topic, Daniel Kahneman, who was a professor of mine at Berkeley, uh, and then obviously was at Princeton, he was the father, really the godfather of, uh, behavioral economics. He had a brilliant insight, which is, we live our lives for satisfaction and fulfillment, not for happiness. Happiness is a feeling that you can have when you get a nice martini and a nice steak with a person you care about. That's fleeting. It's meaning that matters. It is purpose that matters. It is living aligned and narrowing the gap between who you want to be and who you are that matters. And our job is advice. We're the most privileged job in the world, which is we get to ask our clients, what do you want? Truly not what everyone else wants, but what makes you feel good? What is the best version of you, and how do we help you get there? And I always, you know, we did a lot of research on this United Capital. The most important thing you can do is narrow the gap between where they want to be and where they are as humans. Like, beyond the financial stuff, beyond having the perfect house and enough savings. It's also the way I get there and the choices I, uh, make once I am there. Because money's just fuel. It's just gas to get you somewhere. And a great advisor is going to help you realize more money is not going to make you any happier. Like, beyond a certain threshold, it's not going to have any more meaning to you. It's what you do with it and how you think about it that's going to make your life better.

Speaker B: Absolutely. Absolutely. So, uh, two more questions for both of you. Uh, one, um, related to the industry, and then one, a little bit more fun. All of us, you both, Brian and I, we've all had the experience of navigating through major industry shifts and industry challenges. So what do you believe are the biggest challenges or industry shifts that advisors should prepare for in the next few years. Um, and then how would you recommend that they prepare for them?

Speaker C: Well, we already talked a lot about AI and machine learning, natural language processing. You know, those I think are viewed as positives for us. And how do we grasp onto those and help us create better client experiences, more automation in our back offices. And so, you know, number one would be the incorporation. Even if it's just one way to incorporate AI into your practice next year, I think you should go forward and do that. Can help with client communications and engagement. And then the second thing is really the personalized client experiences we've talked about. Not just the analytics on, um, paper, but the personalization behind that. And then the last thing is just really transparency of communication, making sure we know our clients and we're transparent in what, what is happening and what their future can be. Those are three of the things that I can think of that will really impact advisors most in 2025.

Speaker D: Mine is a little bit more direct and commercial. I think that if you stare at what's going to matter most over your long term success, it will be sales and growth. And it's a dirty word in our industry, especially with G2 who had never had to go out there and find new clients. They just are comfortable getting inbound referrals. And yet the businesses that succeed that Terry and I have spoken to hundreds of these firms now with 5 billion and more in assets, and we see a common thread. The vast majority have gone away from selling. And selling is not a dirty word. If you're going to be successful, you have to commit to how you're going to grow organically. You cannot just grow inorganically. And what does that take? I would just start with one simple promise to yourself. You're going to double the time you spend focusing on new client acquisition. Not through acquisition, but finding new clients. The average firm spends 5 to 8% of their time talking about organic growth. And yet it is 100% the driver of your future success. 5 to 8%. It should be 25 to 35% of your time. How many new clients are we meeting? How are we meeting them? What happens when they come in? What's our close rate? What's our find rate? What's our cost per client? How do we do it better? How, uh, do we train our people to do it better? It's remarkable how we all become very good at the technicals of planning, but really not very concentrated on the business of running a great advisory firm. So it's remarkable to me. So I would just say take the time to Ask yourself how you're going to grow. If you're proud of what you do, how do you get more people? Because it's a much more competitive environment with people bigger and more capital than you. If you don't commit time to it, they're going to get all the growth that you're not getting.

Speaker B: No, it's interesting. Um, before we get to our last question, I actually love the intersection of two things you both said. So the first, um, Terry started with, which is intergenerational wealth transfer. What I like to say to advisors is we're in a once in a lifetime time right now, the next 10 years where we have the opportunity to more than double the size of our industry if we can just successfully attract these clients, these clients that are the recipients of wealth, the clients that are transferring wealth. Right now is the time. And Joe, what you said about focus on business development and focus on organic growth, there's never been a time where the opportunity for more return on investment has been present than right now, uh, in our industry. So I think that's some great advice to leave our, uh, listeners with. Um, so a fun final question before, uh, we leave our discussion today. Um, if you could either of you, Joe or Terry, snap your fingers today and make it happen right now, what sci fi futuristic technology would you wish for most? And it can be in Fintech or in your personal life. Um, so Joe, I'll start with you and then go to Terry.

Speaker D: Uh, you know, I always had fantasies when I read a book, I can't remember who the author was, about stopping time. I actually like the idea of being able to go back and forth on time. But I always thought it was really interesting, the idea of being able to just pause everyone around you and still be able to move in that time space. But I mean, I'm sure everyone says this, but the ability to go back and forth in time controlled because I wouldn't want to be able to. Some people just, there's books about just moving from time to time. But I think there are moments where I would love to go back and just see what I was thinking when I made some really stupid choices and some good ones and just see, like, have I evolved? I think you could learn so much from just seeing the life that you've led and what you were thinking and feeling and remembering it at that time. And as you get older, you reflect back and go, uh, what would I do differently then? Without changing it, but just to see what you, your thought process was. And I think it'll Help me to appreciate maybe how much I've grown and evolved as a person and make sure that that continues to be true.

Speaker B: And Terry.

Speaker C: So I think about the intersection between financial health and physical health. And if I could create a new technology, it would be, as we create financial plans, that we could understand people's health projections moving forward and build their plan based on their mortality and morbidity. And I don't mean that as a negative. Right. I want everyone to enjoy every day of this blessing we have in life today. And it's the uncertainty that creates so much anxiety for people. And so as we build plans, I'd love to build in, you know, any type of challenges they're going to have with their health. Because, uh, if people need to retire at 40 because something else is coming, I'd want them to do that. Because I know, you know, in my world, working in this industry, in 30 years, I want everyone to, to retire and have that prediction perfect, right? You're going to live 20 more years. Here's exactly how much you'll need and how you'll get there. Now, I'm sure there'd be errors all over the place on that because we can't control car accidents or things like that, but I'd like to give people more certainty around their health.

Speaker A: Brilliant.

Speaker B: That sounds. Both of those things sound amazing. Brian, hand off to you?

Speaker A: No, I was just gonna say I don't think we've heard either of those answers, have we, Natalie? I mean, we've heard replicators, we've heard transportation, all these type of things. Uh, Joe, by the way, there was a movie called Click. It's Remote Control that does that. That's your next time you answer. I want the remote control for time travel and health. I mean, I mean, who can argue that? I mean, yes, that'd be awesome. And, uh, maybe AI could help with some of that in the future because we'll see. Uh, anyways, thank you, Joe. Thank you, Terry, so much for taking valuable time out of your day.

Speaker D: And both of you, thank you for the great work you're doing to improve the industry. I think Terry and I are passionate about the independent advisors and helping them win. And you're all doing your piece to make that a reality. So congratulations to Natalie, by the way.

Speaker C: Thank you. And enjoy your time in San Francisco.

Speaker B: Thanks. Enjoy your time in Southern California.

Speaker C: You will.

Speaker D: Bye, uh, everyone.

Speaker C: Bye.