In our latest episode, I’m featuring an interview I was super excited to have with YAFPNW guest, Jason Wenk. Jason is the founder and CEO of Altruist, a digital brokerage platform that empowers financial planners to be better and more efficient in their work. In turn, Altruist makes financial advice more accessible for more people. Jason and I talked about the inspiration for Altruist, why robo-advisors won’t take over our jobs, and how new generations of clients in 20 years will change the profession. 

How Altruist came to be and what it does for the profession

Jason has worked in the RIA space since 2004. Through the years, he found himself asking simple questions about the way things were. Why is it so hard to open an account? Why is this accounting and management software so expensive and cumbersome? When he was running a TAMP, Jason realized they were spending over $2m a year on software. Cost-effective, scalable tech didn’t exist for advisors. That created inefficiencies and limitations on clients to work with. Altruist works to fix that by allowing advisors to scale and broaden their clientele. Beginning investors, clients with no assets, clients of any net worth: Altruist makes it possible to work with them all. 

When you begin as a financial planner, what you’re most worried about is finding clients before the clock runs out. If we can’t, ultimately we have to raise our minimum and charge clients more. Unfortunately, that means we also exclude other clients from our financial planning services. That’s another problem, Jason said. We should be trying to close wealth gaps and make financial advice and decision-making more accessible for everyone. 

“In theory, we can take care of five or 10 times as many clients and actually do better work for them,” said Jason. “And that makes good financial advice and good financial planners more accessible, because we’re not all capped at maybe 50 to 150 client relationships.”

It’s not all up to fintech to improve financial planning

Although Jason is a big proponent of fintech, that doesn’t mean he thinks we humans will eventually be replaced by technology. In fact, the advancements in technology will make human advice in financial planning more in demand. To meet that demand and be better at the profession, we need to understand how fintech is advancing and embrace it, rather than be scared of it. 

We can’t remain stuck in our ways and expect to create a lasting business. Remember that the next generation of clients are kids that are in elementary and middle school now, Jason said. Kids today are more comfortable using mobile apps like Venmo and Cash App, and digital banking services. We have to understand where fintech is now and where it’s headed to best serve our clients. 

Seeing this kind of change is a great long-term goal for the profession, but what about the short-term? What can we start changing now? For one thing, we can simply get more people into financial planning: more young professionals, more women, more minorities. If the goal is to make financial advice more accessible to more people, said Jason, we need to have financial planners who reflect the communities we want to serve. 

Looking towards the future

Financial advisors have to step up their game, yes, but Jason is excited to see how fintech will advance to help us in the years to come. Automation, for one thing, is a current weakness in financial planning applications. We need better automation to allow us to serve more clients and deliver better outcomes, with less work input. Better tech and better automation will allow us to spend more time helping our clients. If financial planning is our passion, that’s what we should spend most of our time doing, after all.



[tweet_box design=”box_10″ url=”” float=”none” excerpt=”In 20 years, today’s 10 year olds will be your clients. And their expectation of what a financial advisor or financial help for today is going to be very different. – Jason Wenk on #YAFPNW”]In 20 years, today’s 10 year olds will be your clients. And their expectation of what a financial advisor or financial help for today is going to be very different. – Jason Wenk on #YAFPNW 189[/tweet_box]


What You’ll Learn:

  • What inspired Jason to start Altruist
  • What Altruist does for financial advisors
  • Why the B2B side of fintech needs to step up their game
  • The strengths and weaknesses of robo-advisors
  • How tech has affected the profession for both clients and advisors
  • The next big innovation in financial planning
  • The key to using fintech in a smart way
  • Working with high net worth clients vs. newer generations of clients
  • How we can make financial planning more accessible
  • Jason’s short-term and long-term vision for the profession


Show Notes:

In this episode of YAFPNW, I talk to Jason Wenk about:

Want to follow Jason on social media? Check out his LinkedIn and Twitter page at @jasonwenk.


[show_more more=”Show Transcript” less=”Hide Transcript”]

Episode Transcript

Matt: Alright joining me today I have Jason Wink who is the founder of a $2 billion RIA, founder of a $4 billion TAMP. And now the founder of Altruist. He was also named the 2018 Ernst and Young Entrepreneur of the Year and labeled an industry disrupter within financial services. So, Jason, thank you so much for taking time out of your busy schedule to sit down with us today.

Jason: It’s my pleasure, Matt. Thanks so much for having me on.

Matt: Well, I’m just going to jump right into things, even after your great success in both the RIA space and the TAMP space at formula folios. You made a big change. What inspired you to start Altruist?

Jason: Sure, so I think, I’ve been doing this for a long time. And yeah, I think there’s an evolution of sorts in all of our careers where the more we know things, the more we sometimes question, we can ask the question why? But I’ve been in the RIA space since about 2004. And traditionally, worked with custodians, like TD Ameritrade was the first custodian I ever worked with kind of on RIA side. Eventually, worked with Schwab and Fidelity and others. And I remember a decade ago, just asking simple questions like, why is it so hard to open an account? That seems so strange to me. And the more I dug into that business model, there was a lot of questions I have.

Jason: I started understanding their revenue model. And it really sort of was frustrating that there were commissions, I started realizing that a commission was really just there to make you think that’s what you paid. But it was just an inconsequential part really, of most of the revenue model. And then when you grow big RIAs, you need to do something there, I should step back and say like, “Even when I started my first sort of wealth management RIA, I was using a portfolio accounting and portfolio management software.” And it was really expensive and it was really cumbersome. And the data was always bad. And I would ask the software company why? And they’d say, “Oh, well, it’s the files we get from the custodian.” And I kept thinking to myself, why are those two things separate?

Jason: Like, why should I have to pay a software company that is struggling with the data provided by the custodian? Why doesn’t the custodian just do this for me and save me a lot of money and then eventually, those firms became big. And sort of in the latter years that I was running a TAMP, we were spending 200 and maybe 30 or $240,000 on software. It just seemed crazy to me. So I’d say a lot of frustrations kind of all boiled up into my ultimate kind of decision maker really was actually spurred by like the direct to consumer platforms. I kept seeing these platforms like Robin Hood is a great example.

Jason: And you can hop on your phone, download the app open an account funded and be trading and not less than two minutes. And I kept thinking we have been in this space for almost 15 years. And there’s been nothing like this built for financial advisors. And my background is primarily in engineering. So I thought maybe I should tackle this. So, that was the impetus to kind of get going. But without rambling too much, it was 15 years of asking a lot of small questions, kind of cultivating into one really big one.

Matt: Yeah. And I think that’s something that especially we as newer planners don’t realize how much work does go into opening account or all these softwares that don’t work well with each other and create a ton of inefficiencies in our work. So in the landscape of financial planning, in general, in those we serve, why is something like Altruist, even matter?

Jason: Yeah. And I think a huge part of kind of the why and one of the things that’s really important, is at least is important to me, might not be important to everybody, but as my firms have getting bigger and bigger, one of the things that you’ll hear from advisors who’ve been doing this a long time, is they eventually sort of max out. So when you’re new to the profession, your biggest problem is just getting clients. And because of that, you don’t ask many questions about scaling, or operationally, what’s the most efficient way to do things. You just focused on getting more clients, you get older and bigger, and you’ve been doing it for a while, eventually you run out of time and space.

Jason: Only at that point, do people start asking questions about efficiency, and usually what that leads them to, by the way, is raising their minimums, because they don’t have any way to get more efficient. So they just start saying, “Well, I’m going to charge clients more. And so to justify these higher fees, I’m going to go up market work with wealthier people.” This is really, I think, quite counterintuitive. When we think about financial planning, we should be trying to close wealth gaps and make financial advice and good financial decision making more accessible. And we’re never going to do that if we all end up kind of in the same place, which is we start with the best intentions.

Jason: But when we get to the prime of our careers, we’re only working with rich people. So the why is something like an Altruist important? Well, it really kind of allows advisors to have massive scale. So it’s a beautiful experience, but there’s a lot of things we’ve done to make it really fun to use. So if you’re working with younger clients, it feels more relevant than old technology that doesn’t really look quickly good, doesn’t function perfectly good, like all of our stuff passes the eye test really well. But it’s actually about the stuff that happens behind the scenes. That allows advisors if they want to work with clients of really any net worth, if they’re beginning investors, if they have no money to invest, if they’re planning only client and you’re not even worried about like managing assets because there’s no assets to manage.

Jason: All of those things are very possible. I mean, they’re possible not just because of the price. I mean, it’s free for people for a lot of advisors anyway, but it’s also just easy to use. So you never run into these roadblocks, the time it takes to open accounts, manage account, service accounts, all those things that again, will eventually be problems in a new planners career later down the road, they go away. So in theory, we can take care of five or 10 times as many clients and actually do better work for them. And that really makes good financial advice and good financial planners more accessible, because we’re not all capped at maybe 50 to 150 client relationships.

Matt: Yeah, I think that is really interesting what you keyed in there at the start, all we’re worried about is finding clients, we eventually run out of time. And that causes us to raise the minimum ultimately blocking more people from financial planning. So how do you think that’s been shifting with the rise of FinTech? And also what obstacles has FinTech really created that have exacerbated that problem?

Jason: Well, I don’t know, as it relates to advisors, I would say FinTech is a very broad term. Because it covers everything from like cash transfer apps, and digital wallets, credit. So things like student loan refinancing, they fix all of those elements. And then it does still encompass, what we do as financial advisors. But if we look very specifically, I’d call it the b2b side of FinTech, which is the business to business like a software provider working with a small business like a financial advisor. My opinion, which might not be real popular with the other software companies, is we haven’t done a whole lot.

Jason: And the case in point would be advisors have gotten a little bit more efficient, but then again, much more efficient, so 20 years ago, what a financial advisor could do in terms of how many clients they could successfully take care of, isn’t that much different than it is today, prices have come down a little bit, but not a whole lot, most of the largest firms still have really large minimums. Million dollar plus minimums. And the cost of the software has gone up, it’s not gone down. It’s very, very expensive. So if you’re a new planner, there’s obviously a lot of paths that new planners can take.

Jason: But if you’re a new planner, and you make a decision, at some point, I want to start my own RIA, I’m going to run it myself rather than be part of like a group. It’s pricing out really the sort of innovative thinkers, I guess. The next generation of what I think should be the great financial advisors. So there’s certainly then again, an evolution, but I think it’s primarily been on the consumer side, which means there’s been a lot of tools developed and they’ve been substantially funded. So if you think about what is venture capital or private equity fund. They don’t fund many tools for financial advisors. They fund companies like Betterment and Wealthfront.

Jason: And Sophi and Robin Hood and I could go on and on. Even public companies that have subsidiaries like Kashyap and Venmo, from PayPal. It’s fascinating where all of the money’s flowing and it’s all been really towards technology designed to disintermediate the financial advisor. And advisors are kind of lot of them… I would say everyone. Well, that’s not really video. Those are not the kind of clients I work with today. Anyway, I kind of challenge to advisors would be I put this on Twitter the other day, I said, “In 20 years, today’s 10 year olds will be your clients. And their expectation of what a financial advisor or financial help for today is going to be very different.” So even millennials today, which someone say well, very different kind of expectations than my baby boomer clients.

Jason: Look, the baby boomers in 20 years will be dying at a very, very fast pace, not to be morbid. And so the wealth transfer will finally happen. And it will be largely millennials inheriting that money. Some younger Gen Xers, I guess. And then the next generation clients are kids that are in elementary and middle school right now, and the tools that we have as advisors would be embarrassing to put in front of whatever, 10 or 12 year old today, they would laugh at it. It’s kind of akin to see many young people using Facebook anymore. And that’s what’s going to happen these tools for advisors. So yeah, there’s been innovation, but it’s largely been to get people to not want to hire an advisor or planner. And we have to be aware that we shouldn’t be afraid of it, but we should be aware of it.

Matt: Over the past decade, there’s been an ever increasing focus on some of those technology apps that you mentioned, which a lot of people label as Robo advisors. And that is you what some older planners think the next generation want? What do you view is the current strengths and weaknesses of Robo advisors?

Jason: Well, I think some of the obvious things they do well, is they’re very low cost, they’re very efficient. And they’re helping people save that otherwise maybe would have had our time saving. So, micro investing apps like acorns is getting people to save their spare change, so to speak, or get rewards or incentives based on their debit spending and sweep that into a savings account. It kind of remains to be seen, how effective that will be, are people going to micro save till they get $500 and then use it to buy a Coachella ticket, or is it going to like actually turn into long term savings. But there’s been absolutely some really cool things that have happened, I think, on the Robo side.

Jason: I think, where they struggled is just the economics, as a venture investor called the unit economics, sort of the client acquisition cost is quite high in the average investor and doesn’t have a whole lot of money. And as a result, you have a very, very long sort of payback on your cost of acquisition. And so they’re somewhat struggling to maintain their growth rates. On the surface for an advisor, and we look at a company like Betterment that I think it’s recently hit our surpassed 20 billion in assets, I think Wealthfront has as well. I know that sounds really, really amazing, but then you start thinking about how many hundreds of millions of dollars of investment they’ve taken in and sort of the cost to acquire that is pretty bad, actually compared to human advisors.

Jason: So I think we have a huge advantage. So I mean, again, you take every Robo platform out there and you combine them, and that’s just a few weeks of human RIAs in terms of the volume of business they do. So actually been their weakness, and I think the biggest opportunity really is just merging the two things. So the efficiencies of automated advice, automated account opening or high efficiency account opening and servicing, gamifying to some degree, the enjoyment of saving and investing and the victories that can come along with it.

Jason: And then also making it really, really easy, the Robos have done a great job because they’ve struggled with client acquisition, least how much it costs to pay for it, they’ve done a great job of actually getting referrals, which is something that human advisors have sort of struggled with, its kind of creating a scalable, efficient, replicable way to get more clients paying a lot for them. So, I think that’s kind of like the areas where they’ve been great and some of the things that we can learn as advisors from them.

Matt: Yeah. And then just taking a step back to what we were talking about before. Obviously, you founded a company that focuses on technology and financial planning what importance does Technology play in the financial planning process, kind of both from the eyes of the advisor within the firm and ultimately to the end consumer, our clients.

Jason: Yeah, I mean, I think there’s a ton. I mean, I’d say some of the obvious things are technology makes it a lot easier to do difficult calculations than it was 20 years ago even. But beyond the obvious, like the computing power, that there’s really interesting takeaways and actually like taking a look at a Robo platform that we haven’t mentioned yet, but it’s called personal capital is a great like way to learn some lessons in terms of like the value of planning. If those who aren’t familiar with personal capital, they’re kind of like this weird in between or they’re a Robo-advisor kind of that in some respects, but they have all human financial planners on staff.

Jason: And so what’s really interesting about them compared to other Robos is they charge about three times as much. They charge a fee pretty similar to a human financial advisor. And their average account size is very large, I can’t remember off top my head, but I want to say it’s a couple $100,000, it’s actually higher than a lot of our RIAs, like regular standalone RIAs. But what’s really, really interesting about them is I think they’re one of the few that’s profitable, and they’re quite profitable actually. And in part of that is because all of their client acquisition is based on financial planning tools and calculators, so if someone looked into their platform, they allow you to sort of very easily it’s sort of a type of experience where you can connect all of your accounts plug into different planning engines, and you kind of have this planning first experience.

Jason: And because they’re able to use a planning first experience, are able to acquire a much higher net worth client or a little bit more sophisticated client than some of their competitors like Wealthfront and Betterment. So, when you think about like planning specifically and kind of how technology can play a part, I think there’s a few things that have been very much validated in the last decade. And one is that, people are absolutely looking for planning, they’re looking for all over including the internet. And they’re absolutely willing to hire advisors that are planning centric. In some cases, planning only, and that’s the number one acquisition method for personal capital. So a lot of really cool things there.

Jason: And I think beyond some of the acquisition methods, I think that investing as a whole has become… We’ll see what happens in 2020, but certainly the last decade, it’s really been all about watching costs so investing is become pre-commoditize, there’s not nearly as much value in sort of the traditional, AUM, managing money business model. And so all of your value primarily is coming from being a financial planner, not from being an asset manager. And so, I think that if we’re going to try to differentiate, be successful, be desirable in the eyes of clients, you better have some good planning tools. So both on the front end, like when you acquire a client, your initial plan, but then also how you’re going to monitor and sort of deliver on the promises of that plan. And technology makes that a lot easier.

Matt: That’s really interesting. And I liked what you talked about there with the acquisition and this whole business, financial planning has been predicated on acquire and retain. Do you think at some point, we might see a shift in that where we’re more willing to let certain clients go to focus in on a niche or a specialization of client we serve?

Jason: Well, I think the niches are already I think that’s always been something that has been effective. There’s not really that many planning centric tools to serve niches. So, others are some like college specific planning, but if somebody just works with dentists or something. There’s not like planning for occupational niches, I guess yet. But what I think is really fascinating anyway, in terms of like the direction that certainly planning can go is the automation side of it, I think it’s actually going to become super important.

Jason: Financial planning software can do a lot of computations or calculations for us. But in the end, it’s still a very human experience of gathering data, sort of using that data and manipulating it within a software application that present sort of here’s where you are now versus maybe here’s where you could be if you make some changes, that’s still very manual. It takes a lot of time.

Jason: And it’s not particularly scalable. And so I think that’s maybe the next big innovation in financial planning is in perhaps some additional, niche coverage, but I think the biggest thing that has to change is the automation. How can we serve more clients with less work but actually deliver better outcomes. And right now, most of the financial planning applications are a little bit lacking in that department. There’s not a ton that have that sort of interactivity with the client, there’s limited, but not in a way that’s probably where we needed to be to reach really mass adoption.

Matt: Yeah. And God forbid, you want to change from one technology provider to the other. Right?

Jason: Yeah, totally. On the planning side, it’s pretty brutal. But I think that creates a lot of interesting opportunities. I’m really surprised that nobody’s sort of created like a catch all. Meaning like, what if I had an application that it wasn’t actually a planning application, it’s just an application I use to capture all of the data that I use for financial planning. And then that application, I could simply one click, import it into whatever financial planning application. Now, I’m sort of owning all my client data I’m not letting the software vendors own it. And I have portability. So yeah, maybe a million dollar idea for somebody if they want to build an API collaboration tool like that, but you’re totally right. We’re very much held hostage to our vendors, which is a shame.

Matt: So commonly, a lot of those software providers, they’re claiming how their FinTech can help advisors be better advisors. I want to flip the script a little bit and ask you, how do you envision human advisors evolving to bring out the best of what FinTech provides to our clients?

Jason: Great question. I think so I’m very cynical, about advisor facing FinTech. I think that most of it’s quite old. So it’s not actually then built on modern architecture. It’s part of why so many of them struggle with integrations. You’ve got legacy providers, what’s crazy about technology is how fast it changes. And if your architecture of your software is 10 years old, it’s going to really struggle to be relevant in today’s age world. Today, we work in a very micro services architectural world, which is kind of how API’s work. And so it’s really, I feel bad. Because some people had great ideas they launched and built companies, a decade or even longer ago. And now they have to almost completely rebuild their software, if they want it to be relevant kind of today, and I’m sure that’ll happen 10 years from now too.

Jason: So it’s very, very hard to be on the cutting edge in anything, but it’s really hard when you’re in these micro segments of the market, meaning like software, just for financial advisors is a very small segment. The software market, and you’re not typically going to get a lot of really, really bright people dedicating their lives to serving a micro kind of component of the software space. So soon I’m a bit cynical, I kind of can pick up but in a sense that I think that there needs to be a lot of change and evolution as advisors were stuck in a lot of respects. I wish I could say, “Oh, there’s tons of great solutions. It’s just a sea change of opportunity.”

Jason: And what I would actually if I’m being truthful, I’d say is, “It’s a just mess of bit providers that if you allow it to, it’ll consume you and make it to where you’re really not spending any time doing your job. You’re spending all of your time vetting and managing software companies, in trying to integrate their data.” In a perfect world if our job and what we love and our passion is being a financial planner, we should be trying to spend every moment we can, helping clients. And so that’s part of the problem and I wish I could say there’s a magic pill that would make advisors efficiently adopt and maximize the evolution FinTech but there hasn’t been evolutionarily in FinTech.

Jason: There’s a few newer kind of providers have done a really good job or build smart and build well, but the majority are not and then there’s these things floating around like FinTech solution maps that have 150 vendors on it, that doesn’t help anybody. It just makes everyone’s lives more complicated and makes it really, really difficult to manage. So I think, in a lot of respects, made a ton of consolidation, a lot of less and instead of a lot of more. And as advisors, one of the most important things we can do to be efficient to sort of say, “No.” Don’t be sort of duped into building a big giant technology stack, the fewer vendors you can have probably the more time you’re going to be spending with clients, which is ultimately going to allow you to be more successful, and allow your clients to be more successful.

Matt: Then I think it’s something a lot of us get stuck on, like learning all these fancy tools getting distracted by the shiny objects. What would your best piece of advice be for young planners on learning enough about FinTech but maybe not going too far into it and getting stuck in analysis paralysis.

Jason: Well, I think in so many ways, it’s the decision making process is not that different than the financial planning decision making process. So I think one of the really important things is kind of thinking about, well, what happens if I successfully implement this new solution? Like how does that really affect me or my business? Because a lot of things we don’t get much ROI from, we spend a lot of time managing them, it seems like we’re cool and cutting edge. But if we were really being honest about assessing the value creation, we’d find, wow, this isn’t a whole lot.

Jason: It reminds me, we have some really incredibly talented product managers here at Altruist that they came from companies like Salesforce and Zero, which is a big, SAS tax software. And essentially, sometimes they’ll challenge I’ll have an idea and they’ll just ask the simplest question, they’ll be like, “Well, so if we successfully build that feature, what’s the benefit? What happens?” And if I sit there and I can’t come up with anything? I’m like, “Great question we’re killing that.” We’re not going to build that feature. Because we can’t quantify it. It’s like, “Oh, well, we shouldn’t do it, because everyone else does it.” No, let’s build this feature of a dashboard, because seven other companies have it on their dashboard. And then you really start thinking about it, no one uses it, it’s irrelevant.

Jason: It just takes up space is going to be more buttons that no one uses. So, I think as an advisor, we can be very, very thoughtful about measuring if we execute this the outcome going to look like and if it’s not, like a major improvement, it’s probably not even worth the implementation for some micro improvement. And I think we work that same way as planners, talking with clients. If someone’s like, “Oh, I’m going to get into the rental real estate business.” And they’ve got to go out and spend whatever hundreds of hours a year and do some crazy financing and when all the dust settles, they increase her cash flow like $60 a month, we might say, “Yeah, like on paper, you make 60 more dollars a month, but it’s just absolutely not worth it. Like you’re much better off just focusing on other things.” So similar without.

Matt: Yeah, I think that’s really interesting point also, and I want to go back to what you said at the beginning of we’re kind of stuck in this way of just raising our minimums and sticking with those ultra high net worth or high net worth clients, do you think it’s kind of a double edged sword in the sense where, “Hey, I should just keep doing what I’m doing and not explore this to serve the newer generation of clients?” Or what are your opinions on that?

Jason: Yeah, Matt, I think if people do that, then they’re not really building a business. If they make that choice, they’re just choosing to be self employed. And so there’s nothing wrong with that, by the way. So if somebody says, “Look, I just want to have a career and make a great living, take good care of some clients, and then when I’m ready to hang it up by hanging up. And really nothing that I built, it has any value, I’m not building a business. Yes, I could sell it, there’s always some goodwill value of my assets client relationships and whatever.” But again, it’s not really a business. And so I would say like a businesses is something where you could envision that. It can succeed for 100 years or more.

Jason: If you want to have a 100 year business, then you can’t just work with baby boomers and seniors that have half a million dollars or more, you really do need to have a multi generational practice. And you can do it efficiently. An interesting phenomenon is the only real reason that planners have those really high minimums because they’re sort of forced with this impossible to change formula, which is that there’s only 24 hours in a day and there’s only one of you. So something has to give in if you want to get more output and you don’t have the ability for more input. You just have to raise the amount you charge or the amount of money your clients have. This isn’t like rocket science.

Jason: But again, if we were able to hypothetically, let’s just keep math simple. And let’s say we can serve 10 times as many clients as we do today, we didn’t have to work anymore, like it’s exact same amount of work. And we could actually do a better job for those clients we do today, because of automation, we were able to watch things and pay attention to details that would be impossible for you to do even if you only had one client, you still couldn’t do it as well as a computer could. So if that was the world we lived in, I could in theory drop my minimum by 75%. And I can actually lower my fees by 50%.

Jason: And I’m not actually changing my income a whole lot. I think that the way the math would work is it would be roughly the same as getting net out like a 20% increase in sort of like income if you will, but a lot of us because we’re just taking a huge leap forward, these orders of magnitude leaps forward in the quantity of people we can serve, they don’t actually have to have a ton more money. That’s what I’m hopeful people will aspire to do and we don’t always know. But if somebody wants to be again, if they think more entrepreneurial, they say, “Look, I want to build a real business that can scale and if I ever one day want to add employees, or if I ever one day want to sell this or ever one day want to leave this to the next generation of my own family, I could do that.”

Jason: Whereas again, this self employed advisor, nothing wrong with that, they probably should just do what they keep doing right now. Because someday they’re going to be obsolete anyway. Like, if that’s all someone’s business there differentiations I just work with wealthier people. Like I hate to be the bearer of bad news, and it’s unpopular when I bring this up with people and I don’t mean to make it sound horrible, but there will come a day where people are not going to be willing to pay the prices that they paid for advisors today. It won’t be that far down the road. It’s an interesting phenomenon. But the teenagers of today, the tweens of today, their version of what’s going to be reasonable and realistic be very, very different and in 20 years, so much can change a huge portion of what a human financial advisor even the planning aspects will be able to be automated over the next 20 years.

Jason: So we’re going to have to be able to work with clients of all wealth levels, very different fee schedules and we work with today would have to serve a lot more clients or would have to be like get more micro focused and just have a really, really defined niches. But either way things will change a lot. There’s nothing we should be afraid of. But I think that it’s absolutely possible to serve clients that have different net worths. And young clients, eventually are going to not be young anymore. Client said, “As long as they’re committed to saving and following advice, eventually they should become very great clients for somebody. It just takes some time.”

Matt: Yeah. And I’m going to challenge you a little bit, again, we hear about all of these people who don’t have access to it. And we have pro bono and volunteering. But other than that, what actually needs to be done, in your opinion to reach the majority of Americans that don’t have access to financial planning?

Jason: One of the things that’s going necessary is more financial planners. Some things will change just generationally, I’ll say like, there’s people today and I’ve had this conversation with some friends of mine, that we have family members that they just will not go anywhere other than a bank for financial advice. Like that’s just kind of how they are. In fact, they don’t even trust the bank, but they trust the bank more than they trust the internet. So whatever reason it’s like the lesser of evil’s for them. And that’s just where they go get their financial help from. In a number of generations, that’ll just change. So, you look at kids today. And I don’t mean to use the term kids, in a bad way, I have kids that are teenagers. And I look at how they manage money.

Jason: And it’s fascinating, Venmo and cash app, they’re primarily methods of taking care of their money. So they’ve never stepped foot in a physical bank branch. Like they don’t even really use ATM machines, you don’t really need cash anymore in their lives, like cash is this weird thing that their grandma sends them in their birthday cards or whatever. So it’s a very, very different kind of world, 20 years from now and 30 years from now. And so I think that some people want we as advisors just we cannot help them today. Because they’ve got a bias in their mind and we’re not going to change that. They’ve had some experiences in their life, have shaped the way they think about money, and they will never hire us. And I don’t know the solution for that.

Jason: But then the future generations very different ballgame and we have some really large generations kind of coming into the workforce in the next decade or two, there’s going to be a lot of people that need and want access to financial help. And there’s going to be a massive decline if the trend stays there right now. And number of advisors out there and planners out there, so we think like the average age of a financial planner today, and while there’s not a lot of impetus for those people to ever retire, which is kind of like a bummer in some respects, but part of that’s because they didn’t build good businesses, they just are self employed for many years.

Jason: So they’ll just kind of keep coasting until they can no longer work but there will come a point again, time will prove itself out whether it’s 10 years, 15 years, 20 years, and we will see a very, very large number of people who need help and wanted to actually and then a small number of people to give it to him. So we didn’t really have more financial planners for one. So I guess one huge, huge need. And I’m not probably the person to solve that. But I am certainly aware that we need to get more people into the financial planning profession. And then we have to be able to give advisors tools to make this actually economical.

Jason: So if I started RIA today, and it costs me, I don’t know $10,000 for software to kind of get up and running. It’s hard for me to then go out and pay clients that can pay those bills. I mean, we as advisors, we have a cost of doing business. But what’s interesting in that part of why I started Altruist is outside of a financial planning software, and maybe a CRM if they need that at that early stage. Like the barrier for entry now to run an RIA might be two grand a year. So we’ve just cut the base costs by 80%. And as someone scales, today someone that might be spending 50 by next month, they could do the same work better actually at far more scale and their cost might be $3,000.

Jason: So by cutting the cost of software and increasing amount of efficiency, like that is a huge step in the right direction instead of allowing us to have a little bit more freedom and kind of who we work with and how we work with them. Because it won’t be as hard to do great work for clients. And it won’t be as expensive to kind of be in this business. And hopefully, things like that, again, this is just a small step, I think over the next year into the next decade, I mean, like these efficiency gains.

Jason: I mean, they will start picking up in a way that’s almost incomprehensible to people as far as like what will be possible and what we can do. And I’m really excited about that. So I envision it, it shouldn’t take us that long, like two to three years, it’s going to be such a different world being a financial planner, than the world we’re in today. And in a lot of that will be driven from again, sort of like massive innovations in reducing the costs to be an advisor and a planner. And also the amount of time it takes to be advisor player. So as the efficiency gains, the automation gains, it’s going to be pretty amazing.

Matt: Yeah, that’s really an interesting thought there. And I want to key in on what you said about the barrier to entry. If we do lower the barrier of entry to starting a firm, if that’s what you want to do, what do we as a profession have to do to still maintain that quality of what financial planning is and how does the financial planning profession have to evolve to keep a positive or create a positive image of having a financial planner?

Jason: Great question. I think there’s been a lot of progress there in the last couple decades and I know around the year 2000, which is when I got into the business, there weren’t a whole lot of people that identified themselves as a financial planner. The number of CFPS was way lower than it is today. I mean, a fraction of what it is today. But even the financial planners, many of them that had the designation back then, were people who got it in the 80s, when it was pretty easy to get, and didn’t really mean you knew that much about financial planning and just was a credential.

Jason: But I think that direction, I think it would be really great if we had a universal standard and I think there’s a chance the CFP market can become that and it already really is, I think, for those of us in the profession, but I think in the public eye, it’ll become sort of akin to the CPA and become sort of this expected sort of standard of knowledge and expertise and care. So that’s education, I think is a big part and I think that again, it has been moving in the right direction. It can get better and better. The way that new advisors and planners are brought into the space into the industry that’s a pretty big challenge really.

Jason: If someone’s fresh out of college there’s not a lot of places that you can go and really learn how to be a great financial planner because almost every large organization they want to bring you in and teach you how to be a great salesperson which is very different obviously. And then there’s a handful, there are boutique firms that are successful, stand small RIAs, 100,000,000. 200,000. 500,000,000. Whatever, when you’re small. Again, you might get access to being around great planners and advisors, but it’s difficult to have like a career track where you really learn a lot. And then have clear path to sort of advance.

Jason: Is that some of the challenges. Those are the things we have to get better at. And I wish I could say I have the answer, but I know some of the problems are. And we need to get more people excited about being a planner, we have to have a standard of care and sort of excellence. I think moving to a fiduciary standard, a true fiduciary standard and sort of eliminating conditions would be a great start to then that at least that would sort of eliminate some of the conflicts of interest, perhaps, but there’s a lot of things right that we could do.

Jason: Some require government help, some require large organizations to continue fighting for what they’ve been really responsible for building like the CFP board and FDA and so forth. And so a lot of work there. And then I think in the end, so much falls on us, those of us who are active in the business to make sure that we’re good stewards, so if we have influenced. If we have the ability to hire people, grow a practice, nurture planners, is it kind of just be thoughtful about it? What would we wish someone would have helped us with when we were starting, the work that you’re doing, I think is really important in that front, and there’s others too.

Jason: And so it’s a massive collective effort, and I certainly have confidence that will get there. But we’ve got to kind of cut out from the bad actors, create some consistency. And otherwise, I can build all the greatest software in the world. And if we have people that don’t know how to use it or people aren’t well trained. I don’t really try to use it for the wrong purposes. I mean, shoot, that’s not the type of efficiency gains we want, is getting more unqualified people the ability to do more crappy work.

Matt: Well, and I think you’re really onto something there. The inefficiencies in the firm, it just eats away the time. And that’s why you can’t go through the career path in a small firm as easily as some of the larger firms because there’s just not the operations in place. So if you were to look out like even one year from now, what would you consider a success for the financial planning profession?

Jason: Well, a year, I’m such a macro thinker, I guess that a year seems like thinking about tomorrow to me, I guess. But I would say, in that shorter time periods can be hard to see, like in a big meaningful change. But what I would be hopeful about any way is, we start thinking about some of the trends, it’d be great to see again, more young people in the business, more women in the business, more minorities in the business, I think all of those things will help us get access to… Help us serve a more diverse group of clients. So again, if the goal is to make financial advice more accessible to more people, well, the clients and the advisors tend to be a reflection of each other if we don’t have people who can connect with the client because there’s so different and this is not meant to sound bad, but maybe it will.

Jason: But I don’t want to work with like my parents financial advisor, like some old gray haired white guy, like that’s not who I want to work with. There’s probably a lot of people out there, that’s the impression they have of financial advisors, like whoever their parents were working with. So we need to have financial planners that reflect sort of the communities that we want to serve. That’d be a great short term goals, we just need to start getting more people into the business that are interested in working with their peers. And if that’s a more diverse group of people that comes in, we’re going to start serving a more diverse group of clients. Long term, there’s a lot more that we have to do but that’d be great start.

Matt: Just out of curiosity, what would that 10 year vision be for you? For the success of the profession?

Jason: Yeah, and I think that if I’m looking 10 years out, a few things that I think it’s relates to Financial Planning. I think that 10 years from now there’ll be a pretty large change in how we do planning. So I think Financial Planning will be some things done at scale meaning like highly automated. So the way it’ll work is a very kind of augmented experience. Again, primarily technology first humans coming in so they can do a lot more. Now in different than if we saw what happened to the tax profession. You had all these websites where people go in, they can answer a lot of questions themselves get to a certain point, if they would sign it, they wanted to do it on their own, they could, if they decided they want to kind of refer but take that information over to a human, they could as well right.

Jason: I think we’re going to find like that becomes sort of the norm and planning. The execution plans, I think everything will be digital, it will be paper for anything in the future. It really shouldn’t exist today, but I think it’s like super clear. I think almost all of these things will need to be mobile first. Today, there’s almost nothing and advisor planner can use that’s truly interactive with their clients. That’s mobile. There’s mobile web so like stuff that kind of sort of works out web browser on your phone, but truly, like native to mobile device like the droid or Android or iOS. I mean, there’s isn’t much but I think 10 years from now, everything will be that way. So those of us who are making forms and printing those things off. I mean, we’re moving the wrong direction.

Jason: It’s going to be very much entirely digital, and not just digital, but moving towards a phone. And if I say that largely is like young people today, that’s how they live, they do their homework on their phones, they’re not using even laptops half the time anymore. And so we’re going to have to just get to use the fact that we consume more and more and more content. Almost all social media is mobile, emails over 50% now mobile, everything is moving that direction. So that’s going to be the direction of even planning, will be like these very easy ways on a mobile device for people to get very interactive with planning, and execution of plans will be, all right, let’s get started.

Jason: You click a few buttons. I mean, we can already do it at Altruist and under two minutes, some cases like way fast than that as far as sort of the execution of like opening accounts and getting money moved around. It’s going to get so much faster and easier and better. Everything will be fractional shares, there’ll be no commissions or transaction fees for anything. So doesn’t matter. It’s mutual funds, options, stocks, all of those things will go away. Everything will get more transparent because in this world of commission, free trading, people are asking questions about like how is everything free? And so transparency will be pretty key. I think that people are just going to know a lot more about like how their money works, and there’s going to be a ton more competition.

Jason: It’s going to be from people that advisors haven’t ever had to compete with. But we’ve all seen where companies like Amazon, Google are kind of kicking around banking services. It doesn’t take that long for people that do mobile banking services or digital banking services start offering digital asset management and eventually financial planning and all these other things. And so there’s going to be some interesting competitors, and they probably won’t be the usual suspects, like insurance companies, and banks and broker dealers and warehouses. It’s going to need people that understand the future, technology companies and they look at opportunities in vertical integration, integrating experiences across their platform with their users, is going to be very different. But that’s all going to happen inside of 10 years. I’m quite confident.

Matt: Very interesting. Well, it’s refreshing to hear that our jobs aren’t going to go away. We’re not going to be made obsolete by computers, but we should just be excited and embrace it so that we can serve more people.

Jason: Yeah, totally. And again, I think that the great irony here is that there’s going to be so many more people who need and want help than there are planners to serve. We’re going to be swapped. It’s going to be tons of opportunity. We have to have the tools to deliver it at scale because the prices are going to have to come down.

Matt: Yeah, I definitely agree. Well, thank you so much for your time Jason. I’ll let you get back to your busy day. But I really do appreciate you spending the time here with us today on the podcast and sharing some insight with our listeners.

Jason: Was an absolute blast. Hope it was helpful and can’t wait to hear some more of your guests here down the road.

Matt: Yeah, and I can’t wait to see how Altruist looks a year from now.

Jason: It’ll be fun.