Creating Solutions That Help Advisors Compete and Succeed with Natalie Wolfsen

Jack Sharry: Welcome friends. Thanks for joining us on WealthTech on Deck. As a regular listeners know, I have the pleasure of speaking with industry leaders each week about issues and strategies that move our industry forward. Each week on our show, we have discussions on the confluence of a variety of trends and wealth management and asset management, retirement insurance and annuities, and financial technology. We talked about the innovations and disruptions occurring around the inexorable advances, where most firms are building comprehensive advice platforms. Our guests work to help advisors investors, participants in firms enjoy better financial outcomes enabled by combining digital and human advice. Today, we are speaking with Natalie Wolfsen, Natalie is the CEO of AssetMark leading provider of wealth management and technology solutions for independent financial advisors and their clients. Natalie, welcome to WealthTech on Deck, good to have you here.

Natalie Wolfsen: Really nice to be here. Thanks for having me, looking forward to our conversation.

Jack Sharry: So now let’s start with you telling our audience about AssetMark and your role there. I know AssetMark has made a lot of changes and very positive, constructive changes. So tell us all about it. Yeah, absolutely.

Natalie Wolfsen: So AssetMark is a large tamp, we offer outsourced investment management, service and support and technology to independent fee based financial advisors. We’ve been around for over 25 years. And through the course of that time, we have a unwavering focus on making a difference in the lives of advisors and their clients. Every single one of our 1000 teammates here at AssetMark comes to work every day to make sure advisors can compete and succeed and grow. And so in order to do that, we make sure that we have a curated set of investment solutions. With deep and thorough due diligence, we make sure that we have technology that saves advisors time and money. And also that creates great conversations between investors and advisors. And we do that in a way that advisors feel very well served and know that they can count on us and trust us to help them make a difference in their investors lives. So that’s a little bit about acid mark. I’ve been CEO of AssetMark for a little over a year now. And prior to that I was chief solutions officer at AssetMark for seven years, which means that I was responsible for all growth initiatives, whether it be technology or investments, or new channels or new offerings as well as business strategy. And before that I was at First Eagle Investment Management in New York, I headed up product development and marketing there. Prior to that I was at Pershing and I worked on platform investment platform product management and development there. And before that I was at Schwab for about 10 years, did a lot of things while I was there, and then started my career at American Express and payments. So really, really great to be here. Yeah, terrific.

Jack Sharry: I knew some of that, but not all of it. So you have a pretty extensive and broad based background. Now that you’re an SMR can run on the show, tell me what you’re excited about. What are you working on these days that has you getting up early each morning to get that thing done?

Natalie Wolfsen: You know, I have to say, I have never been more excited about the future of financial services, and wealth management specifically than I am right now. You know, not only do we have an incredible set of advisors who are doing fantastic work for their clients every day, you know, given that the markets have been choppy, you know, deep decline in equities and fixed income in the first four months of this year. These are really the times where platforms and advisors can help investors make decisions that have really profound implications on their overall wealth for the rest of their lives. And so incredibly excited about the work we do all the time, but specifically right now. And there are really three things that are exciting the most, I mean, lots of things that are exciting me, but three things that are exciting me most right now, the first I would just say is the rise of personalization and customization. You know, in the pandemic, we all became much more reliant on technology. And also the benefits of technology became so clear to so many for the first time. And as a result, demands for advice and technology has changed. And one really important way it’s changed is personalization. Investors and consumers really, but investors expect their portfolios to be personal to them. Also, you know, in the last several years in the United States, it’s never been more clear that there are divergent views, whichever side you’re on that there are divergent views about a variety of really important things in this country. And investors want to vote with their money, as well as voting with their vote. And so I’m really, really excited about ESG and the growth that there’s been an ESG best two years for ESG in history where the last two years, and the growth is accelerating, in addition to that, just the needs for custom portfolios with fractional shares and other capabilities, for the first time investors can really have portfolios that reflect who the investor is not just the instrument that they purchase. And so really excited about that, as to mark launched an ESG platform for the second generation of its ESG platform in April. And we’re already getting a lot of interest from advisors and investors and, and we’ll continue to do more work there, make sure that it grows and expands to meet the needs of emerging types of investors.

Jack Sharry: Natalie, as we both know, our industry has a tendency to fall in love with buzzwords, the latest is personalization and customization. How do you guys do it differently? What is it that AssetMark is doing that distinguishes itself? I know that’s a big part, I’m sure what you what you do is try to differentiate and really build a better product. So talk a little bit about if you would about how you guys are going about that?

Natalie Wolfsen: Yeah, absolutely. So personalization is more than just having the ability to select Standard portfolios that meet your needs. So in the realm of investment management, what we’re doing at AssetMark is where allowing our advisors and their investors to set a personal plan for how their portfolio is managed from a tax perspective, to set a personal plan for the types of investments they want to hold in their portfolios, based on their religious, social, environmental governance, diversity, and many, many other beliefs. In addition to that, we’re also personalizing the reporting. So the time series, the benchmarks, how each investor wants to view their reporting. They have personal goals and personal financial plans, some of which are more cashflow, and orientation, another which of which are probability of success and orientation. Some are a combination of both. And so whether it’s investments or technology, or the service model that you require, we want all of that to be personalized for the adviser and for the investor. And again, the most important thing to us is that investors have portfolios that they believe in, and that suit their goals and their needs. And then advisers can access information about the investor their business, their financial plans in ways that don’t take them too much time or resources.

Jack Sharry: Gotcha. So now you’re doing some other things I’m thinking of recent purchase avoidant, and probably a bunch of other things that you might want to cover. So tell us a little bit about some of the things that you’re working on that you’re excited about presently, and some of the acquisitions as well as some of the capabilities that you’re expanding upon.

Natalie Wolfsen: Yeah, so I’m very, very excited about financial wellness. And our purchase, avoid financial planning system that has many, many advisor relationships outside of the US, is an incredibly important component of that financial wellness strategy. So a lot of people you mentioned earlier buzzwords, and a lot of people talk about financial wellness, too. So I’m just gonna take a moment to define it and then explain how Voyant and AssetMark come together. From my perspective, what financial wellness ultimately does, is it brings together the goals, dreams, aspirations that live in a financial plan, with the investments that advisors and their clients make to bring that financial plan to life. So right now, in financial services, those things often not always, but often sit very far apart, you do your financial plan, and then there’s a theoretical 6040 or 7030 portfolio allocation through the Monte Carlo simulation, and then you see the probability of success. But that 6040 portfolio can be very different in nature from the actual investments that are chosen, because other dimensions beside asset allocation are important. And so we want to bring AssetMark’s portfolios inside Voyant’s financial plan, so advisors and their clients can see it all together in one place. The other aspect of financial wellness is incredibly important is the fact that most people experience their financial life every step of the way. So the Monte Carlo simulation that gives you the probability of success for a goal that can be 30 years out or 20 years out, doesn’t help you make decisions every single day about vacations to take cars to purchase houses to purchase your cash flow decisions. But those cashflow decisions can have huge implication on your ability to reach your goals. And so, for me, financial wellness brings those daily monthly yearly decisions together with your goal with your long term probability of success, so that you know exactly the implication of buying that boat or upsizing your house or having another child or getting married, paying for your children’s weddings, on your ability to achieve your goals. And more importantly, you can plan for it ahead of time. So you know, it’s not just about retirement or just about a legacy. It’s about planning for those interim goals too. And giving consumers some permission to spend, you know, it’s interesting, we always think about folks is not saving enough. But there’s also many, many consumers that just save because they’re so worried about running out of money. They’re so worried about that worst Monte Carlo simulation. And unfortunately, in some of those cases, you know, there’s tremendous amount of regret, because the investor hasn’t done the things that make them happy along the way. And financial wellness through this discussion about cash flow management can help investors make the right decisions along the way. And then the last thing I’ll just say, that’s part of financial wellness, for me is risk management, making sure that investors have the absolute best ability to understand their own risk tolerance over time. And you check in on that over time, because your risk tolerance when you’re in your 20s, or is very different from your risk tolerance after you have kids, or when you have a sick parent, checking in that over time, so that the portfolios can reflect your ability to withstand risk, so you don’t make bad decisions. And markets like this one. So I’m really excited about financial wellness. And I’m really excited about Voyant. Because Voyant has cashflow planning, and probability of success planning. And we’re bringing that into the overall AssetMark ecosystem. In addition, avoidant is going to continue to be sold to independent financial advisors in the US and around the world. And they’re having great success as standalone too.

Jack Sharry: So I know Voyant is quite popular overseas, when he talks about why it’s so popular there. And, and as you well know, there’s the incumbents, the EMoney’s, the MoneyGuidePro’s. And you know, there’s some pretty strong lots of various planning tools that are quite strong. So how do you differentiate? How do you compete? How did Voyant get so successful overseas? Maybe fill us in a little bit on what you’re doing there?

Natalie Wolfsen: Yeah, so Voyant’s success overseas is really mostly a function of the fact that buoyant started as an enterprise software technology being sold to large institutions, and through relationships, and through experience of the leadership team, the large institutions that they sold to first were in Canada and the UK. And as a result, the system gained traction in those two countries earlier than in the United States. The system itself is highly flexible, it works in multiple tax regimes, it works with multiple currencies, you know, it isn’t dependent on any single geography. As far as the United States go, we think that Voyant has a lot of flexibility in terms of the technology and the customization and personalization of that technology integrates into the plan, many, many instruments, whether they be insurance based or equity based, or cash based or a liquids. And in addition to that, it has a very robust way to have the cash flow and overall probability of success conversation with an investor at the same time. The last thing I’ll just say, is the investor facing tools that are included in Voyant. The way that Voyant brings to life, the trade offs investors need to make between spending and saving different parts of their lives are incredibly robust. So we’re really excited about what it brings to the US market and what it brings to our clients.

Jack Sharry: That’s great. And tell me a little bit about how you intend to integrate that in with AssetMark is kind of two separate functions, least historically two separate functions, asset management, investment management and planning, and curious to know how you’re then integrating that with your distribution model, because that all seems to tie together. So maybe talk a little bit about how you bring that all together to bring value to the advisors that you work with?

Natalie Wolfsen: Yeah, one of the pillars of AssetMark strategy has always been compelling technology. Our technology solution, i.e. wealth manager is quite robust and helps advisors evaluate investment solutions, manage their client activities, build marketing, programs, marketing campaigns, all within this one system. We also have a view on risk management that’s embedded in a wealth manager. And so as I said earlier, financial wellness is the combination of ongoing communications between the advisor, their clients, goal setting, goal management, risk management, and investments. And at AssetMark, we have three of three of those pillars. The fourth is what that’s what, what Voyant brings to the table. And Voyant brings the goal of management, the communication about those goals between the advisors and their clients. And so our plan is to bring Voyant into the wealth manager experience so that an advisor in their client can have a conversation about goals and not just the retirement goal, but all the goals they have for their life. And then a convent conversation about the risks they’re willing to take to achieve those goals. And right alongside of that is potential investments solutions that are appropriate for advisors and investors at a certain level of risk with a certain need for return as it relates to their goals, then the advisor can say, Okay, you want to retire when you’re 55, and you need $2 million. To do that, right? Now you have a million dollars, and you cannot withstand a maximum drawdown above a certain amount. Here’s a set of solutions we have, let’s put that together in a portfolio. And let’s see how that portfolio responds to different market conditions, align it with the maximum drawdown thresholds, align it with the return needs, and overlay together, that portfolio analysis and the goal needs of the client so they can see it all in one place. Then if the advisor and investor are satisfied, they can, you know, push a set of buttons, fill out a set of online forms and execute the account. So that’s how we want to bring it together AssetMark. But again, you know, Voyant will be sold as a financial planning system, AssetMark will continue to be sold as a TAMP or we can sell the two together.

Jack Sharry: So one of the things I’m sure you see, no, you say is that this combination of planning and proposal, which is sounds like we’re where you’re headed, as people fill out the necessary information around a plan. So the next question is, so what do we do about it? And how do we then translate that into a portfolio or make good portfolio adjustments? So talk a little bit about that solutions orientation? That’s clearly a trend in our industry. And it sounds like you’re very much working in that direction.

Natalie Wolfsen: Yeah, absolutely. You know, one thing I’ll just also say, as it relates to your question, it’s not just about the proposal generation and the initial setup of the plan. It’s also about checking in on the plan and adjusting the plan over time, which means you need to check in on the portfolio and adjust the portfolio over time. And so true financial wellness means that there’s an ongoing conversation between the advisor and the investor. And the technology in this case Voyant and e-wealth manager needs to automate that and empower that you set up the portfolio, you set up the financial plan. Market conditions happen, like what’s happened in the first quarter of 2022. The system should alert the investor that you’re getting close to your max drawdown, but everything’s okay. We planned for situations like this, your portfolio still in line with what you need. If you’re feeling anxiety, please reach out to us, the system should allow the advisor and the investor to do some homework where the investor can say, well, what if I changed my equity allocation a little bit? Or what if I deferred my retirement a little bit? What consequences are that for my long-term goals and my financial decisions, so that everyone gets comfortable with the program that the advisor and the investor has put in place. And so that’s a true solution. Because not only are you setting up the client account, you’re also monitoring it checking in on it in a somewhat automated fashion, obviously, up to the adviser and the investor, how they want to implement that. And you’re reassuring the investor along the way. Now in situations where maybe you exceed your max drawdown threshold, or you know, you have a fourth child, and you’d only plan for three, it prompts the advisor and the client to regroup and to talk and to determine what they need to do next. So that’s the solution orientation. We’re driving to it as more.

Jack Sharry: So we’ve talked about product. And we’ve talked about your platform investment platform, we’ve talked about planning, talked about how it comes together as a solution. Of course, there’s the delivery of the above and more around your wholesaling model your distribution model. So can you talk a little bit about what you’re doing on that front and how you might be innovating in that regard.

Natalie Wolfsen: So our distribution model at AssetMark, we have about 120 client relationship and distribution specialists. And the way that we organize the way that we’ve aligned those distribution professionals to serve their clients best is we arrange them into an ensemble team. We have 20 ensemble teams and 20 locations around the United States. And on that ensemble team, you have a very senior Relationship Consultant who is supported by national consultants. So the senior Relationship Consultant serves the biggest and most complex relationship in their region. The National consultants serve emerging advisors or advisors who are trying to grow on our platform and grow generally. And those professionals are supported by a business development consultant, someone who focuses just on new business, a business consulting expert, somebody who can help that advisor grow a thriving vibrant business or retirement consultant who can help advisors with the retirement plans and that they serve investment specialists who can come in and talk about investments on our platform and how waste To think about portfolio construction. And so these teams of relationship consultants are surrounded by the experts that they and their clients need so that they can achieve, you know, industry leading growth rates and benefit from best practices. And that ensemble team approach is one of the reasons that AssetMark advisors grow so quickly. And at the heart of that is a concept of outsourcing. If you outsource your investment management, if you outsource your technology, if you outsource key parts of your operational processes to ask that mark, you will grow faster. In fact, 80% of clients who have outsourced we do a survey every other year, we just did our second one. In the fall of 2021, what you find is your number of clients go grows, your revenue grows, your profitability grows, as does your client satisfaction and your own quality of life. And so this team of specialists, they work together to ensure that advisors are benefiting or getting the benefits and all of those areas. And that’s one of the reasons that AssetMark has been so successful as we empower advisors success, and their success is our success.

Jack Sharry: That’s good. I’ve not heard that expression ensemble in this context and the distribution context, I love it. I think it’s really, really smart. And are those folks? Are they in the field on the phones on teams, or zoom? Or how does that all work?

Natalie Wolfsen: It’s a combination of all of those things. And what we found during the pandemic is, it’s oftentimes a balance between interpersonal one on one in person and office conversations, and then zoom based interactions. You know, one thing jack that I should have said, just the statistics, you know, 91% of advisors who outsource 70% or more for a growth and total assets and 84% report, a positive change in business valuation, and 83% reported higher income. And further to that 83% also reported that they had better relationships with their clients, and 82% reported higher client retention. And 74% said they were able to deliver higher quality services to their investors. Well, so pretty big number somebody really, really compelling and big numbers.

Jack Sharry: Yeah, if I could, or underscore that I’d say huge numbers. Yeah, I don’t think I’ve seen numbers like that. That’s how long have you been using that model? Is that have been gone for a while? Or how long has it been?

Natalie Wolfsen: So that model has been in place since about 2016. That AssetMark. And we continue to expand it. You know, as we expand the outsourcing capabilities and service that we provide to advisors, we need to expand the type of specialists that we have on the teams too.

Jack Sharry: Yeah, yeah. So would you call it a concierge service? Is it something isn’t on that along those lines?

Natalie Wolfsen: We think so we would definitely call it we hold ourselves to a standard of the highest quality service possible. It’s great. We use words like white glove or concierge, we want advisors to know that they can count on us.

Jack Sharry: That’s great. Well done. I like it. So we’ve been talking about all things AssetMark, and buoyant and so much more and curious where this all leads, we’re sure you spent a good bit of your time talking about what’s next. So what do you have in mind, not only for your firm, but what are some of the trends you see? And how are you going to either leverage or take advantage of those trends?

Natalie Wolfsen: Yes, so the first and most important trend, I think all these trends are really important. But the most important trend for me is the amount of time advisors are able to spend serving their clients. If you look at surly on average, advisors can only spend about 54% of their time actually serving their clients. The rest of their time is spent on administrative tasks compliance, attracting and retaining talent, finance, other activities. And at AssetMark, we really believe that we want to attack that 46% We have a long standing and successful history of being an outsourced provider to financial advisors. And we want to expand the outsourcing services we provide so that advisors can count on us to maybe attract and retain create career paths for junior folks at their firms. So they don’t have to hire a whole person. They can just hire hours in the day and the individual or professional has a career path. We can give them consulting services, as it relates to complex financial plans or complex trusts and estates. We can help them you know, be an outsourced CFO or an outsourced CIO so that they can spend that time you know, helping their clients build and remain comfortable with financial plans. And so I’m really excited about that opportunity. And the team here at AssetMark spends a lot of time thinking about what’s next in terms of outsourcing. We just recently launched marketing outsourcing, and it’s been really successful and advisors are really happy with it. And we’d like to do so much more there. You know, another trend I’m I’m extremely excited about I think we’ve got an income incredible set of investors coming out of the pandemic. And coming out of the last three years of investing. There’s been so much creativity in what investors can do and how they’re getting information, you know, whether it’s digital assets or Reddit or but investors are excited about investing and have been empowered with information in a way that hasn’t happened really, since the early 90s. About if you look at as of year-end, 2021, about 15% of all investors according to Schwab, were new. And these investors, even though there’s been a lot, a lot of decline in digital assets, in terms of evaluation, first four months of this year, they still created a lot of wealth for themselves. And about 85% of those investors want advice. And so that’s a huge tailwind for advisors. And I just think we have a big opportunity in the industry to to help those investors be a little bit more diversified. And have, you know, a long-term view and then, you know, a short term view sort of sit side by side. So I’m really excited about that trend. And we’re building up solutions that AssetMark for that. And then there’s so many others, you know, like the number of financial advisors hasn’t grown, really, in the last 10 years, through outsourcing, I think I have an opportunity and the rest of the team here at AssetMark has an opportunity to help those smaller advisors flourish. And gosh, the more new entrants, the more you know, small businesses that we help succeed, the better off it is for the whole industry. So I’m really excited about that trend, too, and the opportunity it affords so I can go on and on. But I will stop there.

Jack Sharry: I’m loving what you’re saying that one of things that strikes me as you’re describing the really this whole conversation, when we talk about solutions, you’re connecting all the dots around a solution. So it’s product and its planning and its proposal, and it’s being tied into the investor in terms of customization and personalization, and just how they want to invest their money and their quest for financial wellness. I agree with you. It’s a it’s one of those buzzwords that we I’m not always sure what it means. I always ask whoever saying it, what they mean by it, because it’s always different. But I have to subscribe to your point point of view on that, which is basically what you’re doing now, where you’ve articulated the ensemble approach, providing concierge white glove type service, that’s what I call a solution, a comprehensive solution where you’re looking at all aspects and angles. It’s a very compelling story I, and I was not familiar, I’ve been following AssetMark for years. But it’s like any complex story is probably a little bit hard to get it all out in a three-minute intro discussion. So appreciate your sharing that but Bravo. Well done.

Natalie Wolfsen: Thank you. And there’s still so much more fun ahead. Right? You know, we’re, we’re on a journey, I tell my team, you know, you’re never done. We need to be relentless. And so we’re going to be relentlessly improving as long as we’re together.

Jack Sharry: So that’s great. That’s great. So this has been, this has been terrific. And as we start to wind down from our conversation, what are three key takeaways you’d like to share with our audience?

Natalie Wolfsen: Now, the first thing is just that we’re really excited about the power of advice, and helping advisors compete and succeed, because we think that’s the right model for investors, and investors have never needed it more. So that’s the first thing. The second thing is, AssetMark is an incredibly powerful outsourcing partner in a variety of ways. We’re more than just what people thought of as a TAMP 25 years ago, continuing to change and evolve to meet your needs. And then the last thing I just want to say is we couldn’t be more excited about the future. There’s just a tremendous amount of opportunity to serve investors today. And we want to be a big part of it.

Jack Sharry: That’s great. So valley, a real pleasure to chat with you get to know as a market. I know you’ve been quite impressed with what you put together. And if I were a betting man, I would bet that that continue that success will only grow from here. So my favorite question is our next one, which is what is something you do outside of work that you were especially excited about or passionate about that our audience and your colleagues might find interesting or surprising?

Natalie Wolfsen: You know, something that I’m really excited about is diversity in our industry, and just generally, so I spend a lot of my time outside of work, mentoring people, whether it’s folks that are young and trying to figure out what they want to do with their life or their careers or, or women who are trying to decide what career path they’d like to take or how they could grow in their career, or folks from other underrepresented populations who just really want to understand what financial services is all about and whether it’s a fit for them. And as a result, I find myself with many mentoring relationships, also really excited to connect with people who just have questions and are interested in, you know, what it takes to become a CEO or how you know, I thought about various parts of my career. The thing I’ll just say is, I’m on the board of the CFP Board, and they have an incredible diversity center and a Center for Financial Planning, and a set of diversity initiatives which I love to be part of anything we can do to help our industry Eat more diverse and inclusive, I think is so great not only for the future of the industry, but also ensures that everyone has access to fantastic and ethical financial advice. And I want to be part of that. The more teachers, fire professionals, lawyers, doctors, community advocates that we have, that have the benefit of a great financial advisor, the better off we all are. And so I spend a lot of time and have a lot of passion around that. And also have a lot of passionate about early financial education. You know, whether it’s volunteering and my kids classes or asking, you know, high schools and local communities, what they’re doing, the sooner that kids understand financial choices, and long term financial planning and all the resources they have, the better off everyone is. So that’s something I spend my time on outside of work.

Jack Sharry: Well, that is wonderful. I applaud you for all of that. And thank you for this wonderful conversation. I’ve learned a ton and leave as we are about to part ways I leave inspired. So thank you for this conversation. It’s really been wonderful, and to our audience. If you’ve enjoyed our podcast, please rate review, subscribe, and share what we’re doing here at WealthTech on Deck. We’re available wherever you get your podcasts. Thank you, Natalie, this has been a real pleasure. So I really appreciate it.

Natalie Wolfsen: Thank you. It’s been great to be here with you today. Thanks.