Redefining Innovation in Wealth and Management with Matt Reiner

Jack Sharry: Hello, everyone. Thanks for joining us on this week’s edition of WealthTech on Deck. Thanks for tuning in. As our listeners know, I pay close attention to smart, innovative thinkers and what they’re doing to make things happen in our industry. And I do this by paying attention to conversations on LinkedIn as a way of keeping in touch with where the industry is headed, especially around the confluence of digital and human advice. For this week’s show, I found Matt Reiner. I found him on LinkedIn and saw some posts that he made and said, this guy’s thinking, he’s smart, we should have him on the conversation here at WealthTech on Deck, see if we can learn some more. So here we are. Matt is managing partner for Capital Investment Advisors. Matt is also a CFA and a CFP. He also has developed a program called The Circle, which is a community of growth oriented wealth management professionals looking for ways to grow, create scalability, and consistently deliver value to clients. So for today’s podcast, I’m looking forward to learning more, a lot more about Matt’s thinking and observations and what he’s doing about improving the experience for clients, the bottom line for the firm as well as the advisors he works with. So, Matt, welcome to WealthTech on Deck.

Matt Reiner: Well, thanks for having me. And I appreciate those kind words, hopefully can add some value, but really looking forward to this conversation. So thanks for having me.

Jack Sharry: Me as well. So, Matt, let’s start with you sharing with our audience about your role as the leader of an RIA firm and the work you’re doing with The Circle. Tell us about that.

Matt Reiner: Yeah, I think the easiest way to tell the story is kind of to start from the beginning. My professional journey, not my entire life, I won’t, I won’t bore you all with that. But my dad founded our firm, Capital Investment Advisors, 28 years ago, and my brother is four years older than me, joined the firm out of college and, and as did I, when I graduate college, I join the firm. And as you can imagine, after 10 years or 12 years of building a firm, my dad and my brother had made a great impact. And at that point in time, I was trying to find my value in the organization being the third wheel. And I dealt with a lot of imposter syndrome, trying to figure out how to deliver value and thinking it was going to be on the investment side, etc. But about nine years ago, we started a technology company inside of our organization. And I decided to go and take the lead on that. And that was really kind of the pivotal moment in my career, in my life, and my trajectory. Because I found really what it was, my center genius, my value was. And I love the entrepreneurial spirit. I love the you know, as you say, the confluence between tech and wealth management, I grew up around wealth management, watching my dad grow the firm and the ability of learning something new drove me and leading a team and doing all that and the lessons that I learned. I had this… constantly curious, I love learning. And that just impacted me. And so we did that for about eight or nine years, started as a direct to consumer business that was focused on, kind of like a mint.com and then transitioned over to a B2B solution that was called Benjamin, which was a workflow automation engine focused on helping advisors eliminate the menial mundane by connecting their technologies and automating their processes. And I always say, I think that the bittersweet moment of kind of the transition to where I am today was probably the best thing but also the most challenging thing was we had to close the business on April 1, 2023. It was March 31, 2023, we ran out of money. And we failed. And I always say, we lost $7 million. Some of it my family’s and some of it other friends of mine that entrusted me with it. And it didn’t work out. And I say that it was a pivotal moment is because the lessons that I learned over that eight years gave me perspective into what my value can be inside of this industry. And my impact I think I can have both within our organization and within the industry. And that’s led to where I am today of I’ve always been involved with our company, even during the time of building the firm, or the technology companies. But now I have a stronger foothold and an understanding of what I’m supposed to be doing. And I lead our transformation aspect which is all focused on both technology on one side and then innovation on the other, helping our firm get to where we need to be 5, 10, 15 years down the future. Along with, you know, I have a passion for advisors. I’ve talked to, over the last eight years in doing B2B tech, a lot of advisors, I love this business. And I have a passion for that. And so it heads up… I head up our inorganic strategy right now and I do a lot of work with The Circle because my passion is wealth management. It’s to learn new things and to figure out ways to communicate it in impactful ways. My mission is to help every family across this country have access to a human financial advisor. I think that technology enables and empowers advisors to be able to serve more people in a more deep way and I want to help more advisors get more capacity and more people come into this community so that we can serve every single person because I think the human advisor relationship is pivotal and game changing. I’ve seen it too often with, with the families we serve, and the families I saw served by other advisors.

Jack Sharry: That’s great. Now I know why I identified you as someone I’d want to talk to you because we’re kindred spirits here. As you mentioned, I talk about the confluence of digital and human advice, because, and I’ve been talking about that ever since the robos came on the scene, which looked to me like just some technology that all that was missing was an advisor to run it, which is kind of what how the whole robo thing played out. So I’m curious, as you’ve been building your business, I appreciate you telling the very honest, very authentic story about trying to build some technology, it’s not easy. As someone who’s doing that, has done that. It’s not easy at all, we’ve come pretty close a few times, but it’s worked out so far. And in fact, it’s working out quite well. But it’s hard to change the world and technology is all about that. And there’s probably, as much as you read the huge success stories, there’s probably more failures than successes. So I appreciate your honesty. What are you working on now? What is it that you’re… you talk about what things are going to look like 10-15 years out? What does that mean? What does that look like for you? And what are the things you’re excited about in terms of working on those things now?

Matt Reiner: Yeah, you know, I think what I’m really passionate about right now inside of our business, at least, is really focusing on this innovation vertical that we’ve created. Me and my other business partners are, are forward looking, we’re younger, we have an opportunity, I’ve been extremely lucky and fortunate in my life to have multiple opportunities, because of the foundation that was created and, and we feel that we can do more, we can make a greater impact. And with that forward thinking, we decided to start this really vertical of innovation inside of our business. And the innovation isn’t necessarily meant to just build product to create new SAS businesses. I don’t know if we’ll ever get back into the B2B or B2C SAS game, it’s focused on how do we create change in mentalities of our team? How do we bring in different concepts from outside of our industry inside of our business to help us view the world and what we do in a different light and maybe create more unique and innovative brainstorms and ideas and innovations to create efficiency, to create enhanced client experience, to create enhanced team member experience, to enable them to do more. I always say, our goal within innovation is not just to build technologies, to change mindsets, to change process, and then also technology, I think you have to have all three of those. And that’s why we we are very intentional to separate innovation to not be under technology. Because too many people think that innovation is technology. It includes technology, but it’s also a mindset shift. And our whole, our whole desire is how do we create more blank space for our team. If we can create more blank space for our team, then they’re going to have more time to think and do more for the clients and for more clients than they ever could. And the way that you create and eliminate blank space is you get creative on how you’re doing the processes, you don’t buy into the status quo, you don’t get stuck in your ways. And you utilize the backgrounds, the unique and diverse backgrounds of your team to build on ideas. It’s not a eureka moment. And I am so inspired by our team and the reception to this mentality. We look at innovation in three realms; of research, with all the trends that are happening both in our industry and out of them; inspiration, which is all about changing the mentality and we do things called innovation labs and innovation field trips, and we get people in the room and get them to do something that makes them feel like a kid again, and that they wouldn’t expect to do and a wealth manager firm; and then execution, where we take some of those ideas that are generated and turn them into proofs of concepts and test them on a very small scale. And we now have this mindset of experimenting. We have an experimental mindset inside of a wealth management firm, which is inspiring. And so I am encouraged by what is going to be created out of that and the impact to the families that we’re going to be able to, to have. And then you know, you look in the world, I think that the ability to innovate is more accessible than ever before. And the opportunity to have that type of creative freedom is better and more open than ever, you know, we can talk about generative AI and, and all of that. And I think that there’s super, there’s a great opportunity in that. And I’m a big believer in it. I’m exploring that. But I also, and I talk about it in The Circle, I say, I talk about LIT: leadership, innovation, and technology. I think that there’s a ton of ways we can learn how to be better leaders of ourselves so that we’re better to our team members, and we’re better to our clients. I think that there’s so many better ways to lead an organization that’s evolving, going from gen one and gen two to gen two and gen three. And I’m just, I’m passionate about learning. And I hopefully can share that with others in a way that maybe resonates that they can impact and make their firm just a little bit better through that.

Jack Sharry: So talk a little bit more, an example, a story or two that sort of illustrates what you’re talking about? So are you working primarily with folks that are involved with The Circle? Are you working with advisors in your own firm, probably all the above. Talk a little bit more. And then give us an example, if you would, around a process that you’ve tackled with someone that’s turned into a better way of operating and create some more of that blank space you were talking about.

Matt Reiner: Yeah, so the innovation lab and all of that, that sits within our organization at Capital Investment Advisors, that is all of our team of 80+ team members across five different offices that are participating and electing into that. And so it’s a constant communication. And we have quarterly labs, and they participate in them. And then the information on leadership, innovation, and technology, that goes to the… the lessons I learn from the labs, I share in my, my Circle emails and content as well. One of the biggest changes, I think, that we’ve had in the innovation lab is we did a three hour innovation lab all around brainstorming, which we all think is that we know how to do it, you get up on a whiteboard, and you just ideate and you throw ideas up there and you don’t… you then move on to the next thing, you choose the best one, maybe you vote on it. But we introduced this whole concept around brainstorming that I actually learned from Jake Knapp and the book Sprint that he did at Google and that IDEO has done and others, and we introduced that. And it’s all about how might we, and how might we do x and then you start with a lightning round. So you look at companies outside of your business, and who is doing something well? We always have a problem statement on the board. And so we go around the table, and we say what company provides amazing service that you want to go share with other people, and then explain why. And we go around the table. And everybody explains or they show it off on a, on a visual. And as people are listening to this, they say to that problem, they say, how might we do something like that? How might we create a service model like Chick-fil-A, or a memorable model like Disney World, or that this person had at Magic Kingdom? And you get these ideas. And we generated about 55 within a 30 minute time frame, of 55 different “how might we’s,” which are just different ideas on a sticky note, and we put them up on the board. And then we had a voting process with dots. And then we did this last step, which was called brain writing. And brain writing is this idea of how do you get everybody, instead of the loudest voice in the room, how do you get all voices to be part of building on ideas. And the idea is you have a piece of paper and the first person starts by drawing out and using kind of arrows and words to show what their idea is. And it’s all done in silence at three minute intervals. And you keep passing it around and everybody has to build off of the last one. And so we got eight different prototypes from this. And we did this all in three hours. And what it led to is that it was this idea of how do we get deeper information on our clients so that we can then serve and segment them in a way that’s differentiated from then just only age and asset value. And what we found was that there’s this lack of opportunity or ability to really surface level all this data in and then segment out based on desires and interest and also how they want to learn and be communicated with. And so what that then led to is that we created a proof of concept that we’re working on right now where, and it came from another idea of another industry, where we’re getting clients that are sharing, they’re answering questions every week about themselves. And those questions are being aggregated, and then being able to be delivered back to them in a significant way that they can then deliver to their heirs to share their story. But that information now is allowing us to better understand our clients. And we can now segment them in different ways. And that is a thing that took hours upon hours of advisors’ time that we’re now able to gather and then we can fill through… feed through if we desire our own on-prem GPT and better understand our clients and segment them so that we know how to deliver them surprise and delight moments, how to deliver them experiences when we talk to them on Zoom or in person. And before that, we didn’t have that. And it just shows nobody thought of that on their own. It was an aggregate of effort, combined effort.

Jack Sharry: That’s great. That’s great. It’s interesting, we’ve had a number of guests that are pursuing a similar path. And all I don’t know, it’s the chicken or egg around generative AI. But it all leads to that. But the mindset of understanding what people want and need and are not getting. Our industry has never been very good at that. So I’ve talked to least five different folks on our podcast that are exploring those different ways to learn more. And then because of AI, they can then slice and dice the information to then be more targeted, delivering to people what they want. Does this sound like something you’re working on as well?

Matt Reiner: Yeah, I mean, I think generative AI is you know, I think it seems like it’s low hanging fruit to provide efficiencies. I think that we’re still in the early stages of it. But I think that there’s a ton of potential and power to it, whether it’s creating transcripts from meetings and deciphering that to then feed into a GPT that can be a chat based interactive to understand what the client’s needs are, what their sentiment is, all those types of things so you know how to better deal with them. But you know, we are exploring AI. And I think, I continue to say, I don’t know if AI is going to be… it’s going to look the same 10 years from today as it does today. But I will say that it’s going to have some drastic influence in the way that we interact and work in the future. I do believe that it has some significance to what everybody’s talked about the internet. And the reason is, is that AI is, it hits three points that I talk about why I think that this is a transformative moment for AI. It’s applicable, it’s unilaterally applicable. It’s not just applicable to one industry, it has applications in all industries and in our everyday life. It’s accessible, I can now get it on my iPhone right away, I can get onto ChatGPT and interact with it. And then the cost, if you remember, remember, Watson, when he won Jeopardy, it was like, who’s ever gonna go buy a Watson? It was too expensive, like, I don’t even know what I would use it for, like, I don’t play Jeopardy ever, so like, it doesn’t have any use. But now, all of that is accessible, applicable, and the cost of it is free, I can literally use it for free. So you blend those three, and you have a transformative moment. And so I believe that advisors and wealthtech companies, etc. continue to need to explore it and learn about it and figure out how to integrate it into a day to day life cycle, to better create content, to get idea generation, to help to analyze information quicker, so that humans can do what they do best, which is build relationships. We aren’t built to be consumers of data and analyzers of data, of lots of it. We are meant to be humans, and humans are driven by relationships. And so we can meld technology to do the work that we shouldn’t be doing so that we can do more of the work that we should be doing.

Jack Sharry: And so how are you developing this as a business model? Is this something you’re doing for your own firm primarily at this point? Are you looking to do this for others? I mean, I think you’re onto something. Basically, you’re capturing data, you’re capturing sentiment, using that data to help people make better decisions. There’s not only just the efficiency thing, I think, I agree with you, that’s sort of the obvious part of where AI is going, but, but you really getting kind of more to the heart of the matter with a client, what matters to them, what their sensibilities are, what their concerns are, what, what their priorities are, that seems to be where I think AI will have its greatest value, but I’d love to hear what your thoughts are on that.

Matt Reiner: Yeah, I mean, right now it’s all focused on our firm. Our business model around this is if we can drive efficiencies, and we can both serve our clients with more value items, we can create more capacity for advisors and our operations team, then we can serve more people with the same number of people and hopefully drive, you know, better bottom line growth, right? That’s the ultimate business model. Now do some of these ideas ultimately come to fruition in terms of a product that could be utilized by other firms? Maybe. But that’s not our intention. I think that the lab that we’ve created, there is a potential opportunity to do that for other firms and help them build this mindset. Because ultimately, innovation has to happen inside of the four walls, no technology company is going to come in and just give you innovation. It has to be a mindset, it has to be a shift. And you have to have tools to help guide your people in that organization through that shift. And then a lot of these technologies, unfortunately, and I was there when I was running our technology company, you don’t get the credit deserved because the innovation that is there is great, but the teams that may be using it may be so closed off from, in terms of thinking innovatively, that they don’t see that value yet. And that’s unfortunate, because there are so many opportunities and so many tools that are extremely innovative and create so much efficiency, but it needs the right mindset from the team using it.

Jack Sharry: So one of things we hear is that as the baby boomers age, and people, haven’t heard it in a while what the average age is of an advisor, but it’s got to be in the high 50s, at least, but they’re going to be aging out and there’s not as many coming into the industry. So the industry has to figure out a way to build capacity, which sounds like you’re… what you’re doing, and also efficiency and profitability and all the rest of that stuff. So talk a little bit about where you are now and where you see this going over time, for your firm for now. And then I imagine that as you get successful with this, others will want to copy it. That’s how our industry works. So talk about where you see the industry headed, what’s in store over the next three to five years?

Matt Reiner: I love this question. I ask it a lot on our podcast as well, because I’m just super curious about it and I get so many different answers. And you know, I think in the three to five year range, I don’t know if there’s going to be a ton of… I think there’s, I don’t know if it’s going to be as drastic as people say. I think that this is a long term game, right? You have to have the older generation or gen one phase out of the business. And then gen two and gen three that grew up in technology, in different ways of thinking need to phase into the business and those will then filter in. It’s just like the generational shift in wealth. It doesn’t happen on one day, the generational shift, that’s like a 40 year thing that’s like a gradual that we’ll look back on one day. And so I think that it’s a gradual shift in mentality. But I’ve always been challenged with this question, because what’s going to be the driver to force our industry to have massive, drastic change. We can say that it’s all these other things but in reality, and I think that that’s the beauty of this industry on one side is that an advisor can have $100 million book and not do anything in terms of growth. And over 10 years, they’re going to double their salary without doing anything, all they’re doing is maintaining. There is no other industry that I know of that has that capability to grow your revenue without doing more. And I think that that’s something that’s super unique. And so I always try to push back and be realistic about people saying, well, the whole industry is going to be changed and turned on top, or turned on its head because of AI. Because, why? It was the same thing with robos, why? There is no drastic threat to the model. And until that happens, I don’t think you’re going to see this drastic shift, I think you’re going to see this gradual shift. And maybe it’s the demands of the client change as the clients get older, the millennials and Gen Xers get older. But I know that that’s not like a sexy answer. But I think it’s going to be all on the fringes. And I think that there’s going to be the separation of firms that, some stay the way they are and they just kind of gradually change and some are leaning into innovation drastically. And I I hope that I can put our firm up there as one of those. And I think that those firms are going to start to see the separation that’s going to create kind of a differentiation and an industry that is starting to say that what we were born to do, which was investment management, has been commoditized. And so we’ve got to innovate on what we do to differentiate ourselves. And I think that that may be one of those changing moments.

Jack Sharry: Well, this was fascinating. I would like to keep going but it… want to stick to our timeline. What are some key takeaways you want to share with our folks from our conversation today?

Matt Reiner: I think a couple that I would say is that I believe that the human advisor is the most valuable person in a financial relationship there is. I don’t think that the human advisor, independent of what technology innovations happen, the human advisor is never going away. And if we can continue to build technology to empower the advisor to do human things, that’s going to be really, really powerful. And the second point I would say is, as an advisor community, I would lean into testing and giving new technologies a chance. And I think that understanding technology, although it wasn’t part of the job description when we started our firms, it’s the reality of the job description today. And I think it’s a benefit to your client to lean in that way. It’s a benefit to your team. And it’s the protector to future. I think that our moat is our people. And we need to give our people more time to be with their clients. So those would be two, a couple of takeaways.

Jack Sharry: Cool. So, Matt, this has been a real pleasure, really enjoyed our conversation. There’s one last question I always ask at the end of each of our podcasts, what’s something you do outside of work that you’re excited or passionate about, that people might find interesting or surprising?

Matt Reiner: I am an avid golfer, and I have a dream of one day building a golf course. And so I don’t know if people know that about me. But I’m an avid golfer, and I love the game. I love everything about it.

Jack Sharry: That’s great. We’ve had a lot of different folks, but you’re the first golf course designer and owner perhaps that we’ve had so that is innovative at the least. So for our audience, if you’ve enjoyed our conversation, please rate, review, subscribe, and share what we’re doing here at WealthTech on Deck. We’re available wherever you get your podcasts. Matt, thanks again. This was a lot of fun. I really enjoyed our conversation and getting to know you.

Matt Reiner: Thank you, appreciate it.