On this week's episode of the Financial Planning Podcast, Lincoln Ross talks about the importance of giving advisors true freedom of choice when it comes to selecting their tech.
Ross, the CEO and president of New Jersey-based fintech firm CircleBlack, said advisors are often trapped into prepackaged tech solutions that give them a few things they want, and a whole lot of stuff they don't need. That's why CircleBlack's platform wants to let advisors use only their favorite tools and deliver a consistent, streamlined experience to their clients.
With more than a decade of experience as a leader at Envestnet before becoming CircleBlack's leader earlier this year, Ross is also focused on helping advisors keep pace in a quickly evolving environment. He knows that the top tools of today can become old hat in an instant, so what's next is just as important as what's now.
During his conversation with FP Podcast host and lead editorial producer Justin L. Mack, Ross talks about how watching a lot of CNBC in college got him into financial services; the untapped tech of tomorrow that excites him the most; and why the term "ecosystem orchestration" should be a big deal for modern advisors.
Listen to the new episode — as well as to all future and past episodes — by subscribing to the FP Podcast on
Transcript:
Justin L. Mack (
Good morning, good afternoon and good evening. Welcome to the Financial Planning Podcast. I'm your host, Justin L. Mack, wealthtech editor with Financial Planning. And it is my pleasure to introduce this week's guest, Lincoln Ross, CEO and president of CircleBlack. Lincoln, thanks so much for joining us this week.
Lincoln Ross (
Thanks for having me. Great to be here with you, Justin.
Justin L. Mack (
Absolutely. And on this week's edition of the FP Pod, we're gonna be talking about ecosystem orchestration when it comes to advisor tech and how Lincoln is aiming to solve that top-of-mind problem for planners with the work he's leading over at CircleBlack. And he's a good person to ask. A fintech OG, if you will, he's seen the space transform and says he wants to help advisors transform along with it. Before taking the reins over at CircleBlack in early 2022, Lincoln served as chief of business operations for Envestnet, leading strategic planning and transformation initiatives. During his more than a decade at Envestnet, he led several operating functions, including product management, operations, client experience and communications. And right now, he's gonna chat with me about how advisors try to balance a number of tools and personas they work with to craft a singular experience that works. But not just one that works, one that actually includes all the tech that they actually want to work with. Not compromising because it's here and it's accessible, but because this is truly what offers the best experience as an advisor to my end client.
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So we're going to get into all that really important stuff that we've been covering here at Financial Planning all year. And we know it is only going to get more important in 2023 as we talk about how tech spending is the number-one priority for firms of all sizes right now. But Lincoln, I wanted to talk to you a little bit about how you got into this space because, one, you've got the experience. And two, we're at a space in time where wealthtech is advancing very, very rapidly. There's a lot of new ideas, a lot of new players, and a really different mindset. It's the understanding that wealth management has become very much a tech-first operation. Now, it's just the way we do business. Heck, it's the way we're doing this podcast. So with that, how'd you get into it? Is it one of those things where when you were a kid you said, "hey, I wanna be in financial services when I grow up?" I mean, I doubt that was the case, but how did you get into wealthtech directly? Give us a little bit more history.
Lincoln Ross (
Sure. Happy to go back pretty far. I don't know (that it goes) back to when I was a kid, but back to when I graduated college. And just before I do that, thank you for the fintech OG title. <laugh> Can I add that to my title on social media?
Justin L. Mack (
Feel free. Feel free. There's no test or anything. And no designation where I can get you like an acronym or another three or four letters. How about just FTOG. You can just put that after your name. You're welcome.
Lincoln Ross (
I love it. Appreciate that. So I had graduated college and was looking for my first adventure. I was actually working at a library at the University of New Hampshire, and it was the late shift. So it was 1 p.m. to 10 p.m. And in the mornings, I was watching CNBC all morning and was really getting fascinated with capital markets and investing, and was just fascinated with the whole concept of wealth creation and investing in companies that were growing. And I started to explore a career there. And what I found as I entered the financial services space is that there's a real misunderstanding or lack of knowledge with investors and consumers about the wealth creation potential that we have here. And so I started to get really excited about the concept of democratizing investments for people to achieve their hopes and dreams. And so that's kind of the passion I have around it. As I entered the space, I always did … well, I will go back to a childhood story. I had a VIC-20, which was made by Commodore back in the day. Another OG PC…
Justin L. Mack (
<laugh>
Lincoln Ross (
And I would copy basic programs. Basic was a programming language into my VIC-20. And so I've always had a bit of a passion around software development and technology. And so in some of my early roles, I started to see the power of software. The power of technology and how it can scale a business. But also how it can enable advisors to deliver better advice. And so that's really my path and my passion around focusing on the fintech part of wealth management.
Justin L. Mack (
Definitely. And that's a great transition into the work you're trying to solve for now at CircleBlack. So talk to me about, like I said, that term we brought up at the beginning of the show, "ecosystem orchestration." Great term. Potentially fantastic name for a financial services-related cover band. But what does it actually mean to you when we talk about it in this context of when you're talking about that problem? What's that mean to you and how are you trying to solve it?
Lincoln Ross (
Sure. So if you think about the tech solutions that are available for advisors, they all live within our wealth management ecosystem. And that ecosystem includes all the different point providers. So financial planning, CRM, risk management, portfolio management, account opening —all the different functions that you can imagine that a technology solution provides for financial advisors. But there's other participants in that ecosystem. There's custody players, there's record keepers, there's product investment management and asset management product providers. And so what advisors are really struggling with is how to assemble an ecosystem that works for them and works for their practice and works for the way that they want to deliver financial advice. So often, they really struggle or have a quandary around how to get those tools to work together. There's a number of all-in-one solutions and prepackaged solutions in the space that may serve the need of a subset of advisors.
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But I think that there's a broad part of the advisor market that really doesn't fit into one of those prepackaged solutions. They want to choose the financial planning tool that fits their needs. They want to choose the CRM that's gonna give them the best opportunity to manage their client relationships. They want to choose the risk tool that helps them discuss risk in the best way that they're comfortable with their clients and they need those tools to work together. And so coming back to the fintech … covering the ecosystem orchestrator, what we think that we're able to do is allow an advisor or enable an advisor to configure their own ecosystem. And we can orchestrate that ecosystem on their behalf. And so the orchestration is the real magic here. And what we mean by that is integration isn't enough.
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It gets some data moved back and forth between applications, and that can simply be a single sign on or a contextual single sign on that gets an advisor from one tool to another within the context of a client. But that's not enough in our opinion. What we're trying to do is this orchestration concept where when an advisor updates data in one of their tools, that data is then orchestrated throughout their ecosystem. So a good example I like to use is that household management is a real pain point for advisors. Oftentimes, they need to update a household in multiple systems. And when the households are not reconciled, the billing system may have different accounts in a household than the reporting system or than the financial planning system. And so that doesn't create a great client experience. And it really hinders their ability to deliver on that financial plan and deliver financial advice.
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So what we're working to do is to be able to tell an advisor, you pick the source of truth for the household. So whether that's the financial planning system, the CRM, the risk tool, wherever you go. The first place that you think about configuring households and you want that to be the source of truth, you tell us what that is in our system, then we'll make sure that we reconcile and synchronize that household throughout your chosen ecosystem. So that's just one example of how we're thinking about how orchestration actually happens in the world. In reality.
Justin L. Mack (
And that need for the advisor to, like you said, craft that suite of tools, specifically the ones they want to work with. And a lot of that is driven by the demand from their actual clients. I think the modern financial planning client has changed to the point where they're expecting the ability to pick and choose. And I think something you said earlier when you were describing that problem of an advisor not fitting into one of the prepackaged offerings that might be available to them. I was talking to an advisor for a story not too long ago and we were talking about the tech issue. And he's independent. We're talking about getting his stack together and likened it to picking cable TV packages. The whole, "I don't need this. I don't watch this. But I do need these channels. So I guess I'll get this one. It's the closest to what I need." Right? And now it sounds like getting close is good enough. But how does being better than just close enough change an advisor's actual day-to-day life (and) practice? Why is this so important?
Lincoln Ross (
Sure. So great question. And there's a couple dimensions of that. One is productivity. So if we're able to, like I said, synchronize the household, synchronize data, move data between their various systems so that they don't have to do that, that saves them a lot of time and energy and really increases their productivity and lets them spend more time with their clients. And that's the second really impactful outcome of this ecosystem orchestration strategy. We really think that with this, we can enable higher quality conversations between advisors and clients. And by having their chosen ecosystem orchestrated, we can then deliver a unified experience through our client portal. We also have a mobile app, which has some of the similar features in the client portal where that client portal experience becomes so much more complete.
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So for example, if they're using whatever financial planning tool they're using, a lot of them have a probability of success for their financial goals. We can connect their progress towards their financial goals and deliver that through the client portal. If they're using a risk tool and the client's selected or profiled into a certain risk tolerance, we can deliver that integration through the client portal so the client has access to understand what their risk tolerance is and how their current investments compare to that risk tolerance. So bringing all of this together is something that we don't think a lot of players in this space are solving for … where an advisor can deliver a complete view of a client's net worth that is connected to their financial plan and shows how they're making progress towards their financial goals and have all of their investments and all of their insurance in one place to really enable a higher quality conversation between advisors and clients.
Justin L. Mack (
Absolutely. And with that, we're actually gonna take a quick break and enjoy a word from our sponsors, but when we return, we'll have more with Lincoln Ross, CEO and president over at CircleBlack, talking about fintech, the state of fintech innovation and some Financial Planning Podcast good vibes. We're gonna talk about what he loves most about this business and what keeps him coming back after all these years. Stay locked. We'll have more with the Financial Planning Podcast.
And welcome back to the Financial Planning podcast. I'm your host, Justin Mack, and diving back into our conversation this week with Lincoln Ross, CEO and president of CircleBlack. Now Lincoln, a topic I really want to talk to you about is just the rate of fintech innovation right now. Because a lot of what we covered in the first half of the show is just that need for an advisor to be able to grab all the tools that they are now required to have to do their jobs because of, I guess, the wider scope of not only what planners are able to provide to clients, but what clients expect.
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We talk about a lot in our coverage, that holistic approach to financial planning or wealth management. It's about being more than just one aspect of a client's life, and tech really makes that possible. You talked about household management and how that ties into everything else. It's an extremely important, important thing. With that, there are so many options and there are so many choices and there's so much competition in the fintech space right now. I feel like every time, if you're an advisor, you've gotta pay attention to here's a new tool. Here's a new option. Here's a new thing that will supposedly make your life easier for you. On that side of being a problem solver, and you have been for a long time, talk to me about how much competition has changed I guess over the past 10 years. What's that innovation rate been like? And is it just me or does it feel like it's hotter than ever right now?
Lincoln Ross (
So there's definitely been an increasing rate of innovation in wealth tech and in fintech. I do think that it does feel like it's accelerating and is as competitive as ever right now. And do I think there's been a significant amount of investment in this space from venture capital and financial sponsors, seeing that wealth management technology and financial services technology is somewhat behind consumer technology and other areas of consumer expectations. So what I mean by that is, we use amazing tools on our phone every day. We can book a flight. We can book a hotel. We can book a car. We can do incredible things now that make our lives better on our phone. But it's still kind of hard to do wealth management on our phones and interact with our advisors on our phones and have that mobile-first delightful experience. And so I think that's driving a lot of investment in the space and I still think there's a huge opportunity to really give advisors the tools, like I said, to have higher quality conversations with their clients, engage their clients in a digital way that really delights their clients. Some of the things that we're working on are the ability for advisors to message their clients through our mobile app, the ability for advisors to deliver notifications to preconfigure notifications, the ability for advisors to select and curate content that is contextualized by the investment recommendations that they've made in the client portal on in the mobile app.
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And so those things are what you'd expect from some of your other apps that you use in your day to day life. And we really think that should become a reality for wealth management technology.
Justin L. Mack (
Definitely. And is there any kind of wealth management technology that you're most excited to see continue to improve? Because it feels like when the client benefits, the advisors do too. If the client gets a simpler experience, the advisors usually have a simpler conduit through which to deliver those services. Everyone helps everyone, which is really cool. And you are kind of like a connector of all these things, right? You want to make sure that, "oh, you like this? Got it. You can put it over here with this other thing you like." So as someone who's looking at everything, what excites you the most about what's coming?
Lincoln Ross (
So what I'm really excited about is the potential for technology and data science to really help advisors to identify next best actions. So if you think about the technology community, and CircleBlack also fits into this use case where we have years of data, we have millions of accounts. With data science, we can identify all kinds of patterns that a human would not be able to. And so we think that we can with this pattern identification, help advisors better service their clients, help them grow their business, as well as help them retain clients. And so I've got a couple of examples I usually share within this context. So in the growth area, when we have access to all the clients, all the accounts that a client has, we can find areas for an advisor to deliver better advice. So one example is if we have the 401(k) of a client connected to our system, we can, with data science, interrogate that transaction stream and identify when contributions stop to that 401(k).
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When contributions stop, that usually means that that person's left that employer and that 401(k) is now somewhat orphaned in the employer plan. With data science, we can identify that pattern, we can bring that to the attention of the advisor in an alert and say, it looks like contributions stop to this 401(k). This could be an opportunity for you to reach out to this client and roll that 401(k) over into a rollover IRA and incorporate that better into your financial planning process with that client. So that's an example of a way that we think that data science can help grow an advisor's business. And then another career long obsession I've had is with churn and losing clients and client retention. And given how much energy goes into acquiring a client and managing a client relationship, really it hurts a business when you lose these valuable client relationships.
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And so I think there's a real reason to invest in a way to improve client retention. So again, with this data science and the trove of data that we have, we can identify patterns. And within our data we have clients that have left advisors and accounts that have closed. So within that data set, I think we can find patterns within those clients that have left an advisor and we can then identify those patterns in current clients. And we can create an alert based on our algorithm and the data science work we've done to alert that advisor that this particular client has. We've identified patterns in this client that match a high probability that the client may be at risk, and give them the opportunity to reach out to that client to potentially save it.
Justin L. Mack (
Definitely exciting stuff to think about now, especially when that is one of the big fears. The transfer of wealth and maintaining client relationships with a client who just might be open to a change because of how easy it is to make a change. Now you can pick up your phone and find a new advisor, maybe easier than you can work with your advisor, which is a shame. But also understanding that this next generation might want to find a way to connect with you, too. And tech that might enable that would be extremely valuable I imagine for any firm.
So the last thing I definitely want to get into you with is something that we like to make a routine here on the Financial Planning Podcast, which is some good vibes to send everybody home with. And Lincoln, we've talked to you about your experiences both at the beginning, what you're doing now and looking forward to next for you, what is your favorite thing about the work you do? Favorite part of your job. What keeps you coming back to this and what gets you so excited about data science in the first place? Why do you love financial services and what you're doing in wealthtech so much?
Lincoln Ross (
Wow, that's like asking me to pick my favorite kid. That's a tough one. I would say …
Justin L. Mack (
Earmuffs.
Lincoln Ross (
Yeah, <laugh>. I would say that when our promise to our advisor clients is delivered is what really gets me excited and is super rewarding. So when we hear from an advisor that they use our technology, they were able to grow a client relationship or retain one to deliver better advice because everything was integrated. Or they had a high quality conversation with that client and their client is super happy with their service, and they've been able to deliver on why I started in this space, which is they're democratizing in investing, they're helping clients achieve their hopes and dreams. That gets me really excited and is super rewarding. So I think that's the top one. I've got a second one, if you indulge me, which is leading a team is super rewarding. And like I said, it's hard to decide what's my most favorite part of the job. But when I see people work hard and focus on a common goal and we deliver success together. That is super rewarding and gets me really excited to get up and do it all again the next day.
Justin L. Mack (
Absolutely. And you know what, having more than one thing you dig about your job and having that be a problem is a pretty good problem to have. So I wanna thank you for sharing that, and thank you for spending some time with us this week on the Financial Planning Podcast.
Lincoln Ross (
Happy to be here. Fintech OG, dropping the mic.
Justin L. Mack (
Absolutely. Mic drop on the way out. And I want to thank all of the listeners for turning in this week to the Financial Planning Podcast. This episode was produced by Arizent with audio production by Kellie Malone. Special thanks again to our guest, Lincoln Ross, CEO and president of CircleBlack. Rate us, review us and subscribe to all of our content at www.financial-planning.com/subscribe. For Financial Planning, I'm Justin Mack, thanks for listening.