Enhancing Business Growth Through Strategic Partnerships with Mark Spina

Jack Sharry: Everyone, welcome to WealthTech on Deck. Thanks for joining us. Each week, I have the privilege of speaking with industry leaders about issues that move our industry forward around financial advice, wealth and asset management, retirement insurance and annuities and technology. Our guests are working on strategies to help advisors, investors, participants and firms enjoy better financial outcomes, all around the confluence of digital and human advice. Today we’re speaking with Mark Spina longtime friend Mark is president and chief operating officer of FLX networks. Mark, welcome to WealthTech on Deck.

Mark Spina: Thank you, Jack. Great to be here.

Jack Sharry: Terrific. So Mark, let’s start with you telling our audience about flex networks and your role there. I love the story. So fill us in.

Mark Spina: Sure, as you said President and CEO here at FLX Networks. And the quick backstory is I was one of the original partners and employees. And actually before that, I was on the advisory board here at FLX Networks back in seems like a long time ago, not too distant past though back to first quarter of 2020. Brian Moran is the founder and CEO of the business, he had a bold idea, I think that continues to resonate in a meaningful way. And that was to revolutionize the way that asset managers, wealth managers and advisors engaged. I know that’s an interaction, you’re familiar with Jack. And it’s one that we’ve been trying to shape and evolve over the years. So at a high level, I partner with Brian, our leadership team to help set strategy, create implementation plans and processes, and run the business on a day to day basis. And it’s all pointed at bringing that idea and vision to life may be a level down from there tactically, more tangibly responsible for enterprise sales, marketing and strategic partnerships.

Jack Sharry: So let’s go back aways you and I have known each other for decades and decades. So talk a little bit of background, you grew up in the wholesaling business key account management business, then maybe tie that into what you’re doing now, if you would.

Mark Spina: So I had a bit of an unconventional it’s more conventional today and less conventional when I went through it typically, as you know, Jack, you have people take a fairly linear path from internal sales to external sales, to divisional to national to potentially running the business. And I did all of those things. I also had some other experiences along the way that were kind of important and formative for me both in those roles. And reflecting today, I’m able to draw on those more diverse set of experiences that I had. So starting in the financial services space 30 years ago, briefly on the wealth management or advisory side of the business, I saw a wholesaler come through an audience through our office one day and I kind of questioned what is that? Who is it what just happened? I kind of thought it was cool and neat role. I moved at that time into Asset Management specifically at the time it was with Alliance Capital, the predecessor to what is now a B, and started in a shareholder services role. And you might say big deal. I think that was important, though, in that it stays with me today. It grounded me to the fact that at the end of this long process, there are actual shareholders, they’re real people with real money that their dividend, check their dividend reinvestment, whatever the nature of that shareholder service request was it was a person with real needs and real aspirations. So that’s that stayed with me from a service perspective. I also had product responsibilities, marketing responsibilities, and strategy responsibilities. And bringing those things together. Today, I’ve been able to draw on those and kind of apply them in real time in a fast growing and kind of digitally oriented environment here at FLX networks.

Jack Sharry: So the thing I find fascinating, I’d love to have you talk about the whole network concept of what you’re doing. And least as I understand and correct me if I don’t get this quite right. Basically, you’re wholesaling crude for hire I, I’m quite sure you would prefer me not to say it that way. But at least for our audience, they might get that they see your third party marketer in the old way, you’re doing it very differently. I’d love to have you make that distinction between the old way and now you guys are doing it, which I find fascinating. You also serve as a key cup managers for hire again, bad term, but least for our audience to get a sense of that you’re, you have a number of firms that you work with or represent number of offices that you are speaking to and so on. So describe that and how that comes together. Really you’re helping wealth management firms and you’re helping the asset managers work more efficiently and effectively together probably a better way to say it the for hire thing, but when he described I want to straighten out what I just said

Mark Spina: Brian Moran is bristling somewhere hearing that it’s actually quite and conversational, and it is the initial kind of understanding and kind of reflexive response.

Jack Sharry: And in fairness, you go well beyond it. So I’ll let you explain that, of course.

Mark Spina: So there are absolutely components of the business that are people oriented. And that tie to the concept of wholesaling. And key difference between what we’re doing. And what’s been done historically, though, is there’s multiple distinctions I would say. One is that it’s modular in the approach, Jack, we’ve talked about this. Historically, if you thought of a third party marketer, they’re fairly focused or one dimensional, you could hire that whole selling team, they would represent the product. And that was the extent of the engagement. Brian and I both have spent significant time in business development and national accounts roles personally, we recognize that as a mission critical part of an overall distribution organization, we’ve built a team here, a significant team of national accounts, professionals, we call them platform relationship directors. And that, in fact, is the most widely utilized personnel service or capability. So as firms think about utilizing and partnering with FLX, many times, they’re coming to us seeking to hire a wholesaler or hire a whole selling team more. And we’re guiding them we’re educating, and we’re getting an understanding of their product readiness, the amount of shelf space they have, and much much, much more often than not, that conversation moves towards ensuring that the product is appropriately positioned, is it marketable? Is it placed on a platform, so we’re having these wider conversations with asset managers, along with those personnel capabilities, and part of the connection that we’ve made to Jack is that we see a digital and human kind of future. And this space has been largely unchanged, right, the way you started in the business, wholesaling, and built up, a couple of companies focus on that responsibility. If you think about that basic act of advice, rather, wholesaler calling on advisor, maybe back in an office, knocking on a glass window with a fact sheet and saying, Excuse me, can I have a minute that still happens today? It’s kind of amazing. When you think about how modern, all other sales engagements have become how like, traditionally grounded most of the whole selling experiences, it’s better targeted, there’s more data flowing into it, you can be more precise, but at the point of sale, it still looks and feels very similar to the way it did 30 years ago.

Jack Sharry: Let’s get at this network’s concept because I, one of the things that really struck me, we’ve known each other for a long time, and I read an article that appeared in FM magazine you did with a colleague. And it’s just like, wow, this is a different way of thinking. And so let me do my version of translating it, but it’s gonna fall far short, I know. But I’d like to have you expand on that. So you take a firm that has a product or capability or they’re really looking at the cost of wholesaling, they’re trying to figure out how to be more efficient and effective. They’re thinking of maybe getting out or they’re thinking about getting in or they’re thinking about doing a better job which every wholesaling organization today is going through, what you guys will do, as I understand it is that you might pick a product or two, or you might pick a solution or orientation. And you identify firms, and you’re working with the major firms, you have a team that really knows what each firm is looking for. And then you can position what they have to offer where that might fit, so that you’re on the front end the gatekeeper, if you will, you’re calling on those folks. And you’re positioning this product, in line with what they’re trying to either fill a gap or what have you. And then you have a wholesaling team that goes out and then represents that product. But it’s very targeted, very specific. So that’s my attempt at explaining what y’all do. But when you correct whatever I just said, wrong. And then also I know it’s far deeper and more refined than what I just described.

Mark Spina: You’re far more right than wrong, Jack and the network or the community that we’re building, you’re drawing the right conclusion in that, again, the compare contrast versus what was done historically in this space versus what we’re doing. We’ve very intentionally have engaged the wealth management side of the business. So a number of the leaders that you’ve talked to on this podcast were in regular dialogue with about how can we improve the wholesaling experience within their respective firms? How can we make it more efficient for the home office personnel who have either relationship management, product management due diligence responsibilities? How can we allow those firms to retain access to a broad diverse set of managers to achieve kind of avoid compression that’s happening in the market where more and more assets are going to fewer and fewer managers. How do they retain choice? How do they retain democratization, but how do they do it in a more efficient way, a way to do that is to utilize a firm like ours that has a network of asset managers behind us, where we’re coordinating the personal interaction, we’re coordinating the digital interaction, and making life for the home office of the wealth manager. Much, much simpler, much easier. That’s a concept that has resonated widely with a wealth management firms. And you could quickly see that as those relationships take hold, and they have with key wealth managers and intermediaries, our value to the asset manager increases, right. So we get more interesting, more capable asset managers, or additional managers joining the platform, which further enhances our value to the wealth manager. So there’s this stair step process that we’re going through quarter over quarter. And it’s in an exciting and important and exciting part of our overall build.

Jack Sharry: So when I talk a lot about your growth, I mean, the numbers in terms of number of firms, you represent the number of wealth managers that you work with, I was frankly, shocked, it’s it’s pretty big impact. Again, it’s very targeted for our audience, just so you get it. It’s very targeted. So when they go to a firm, they’re bringing their best and brightest in terms of product and people and so on. And I would imagine, please comment on this, I would imagine on the gatekeeper side, if you will pardon the expression, but the due diligence, folks, they have to be appreciative that when they you come with an idea, they want to listen, because it’s probably going to be better than some of the other stuff they hear when he explained all that your growth and also that pinpoint kind of targeting approach you take?

Mark Spina: Sure, so the growth, right, we’re speaking together here in spring of 2020. To spring of 2020, the business was still an idea, largely a concept. It was a PowerPoint and a basic website, that the initial idea that Brian founded, the firm on the back of was one of better matching investment distribution professionals with asset managers better identifying the capabilities of those distribution professionals, and essentially creating a matching exchange in the middle that quickly evolved DAC to one of creating a shared services model that we’ve just described, where asset managers can utilize the shared services of a national accounts team of a whole selling team of a marketing team, for example, of immediate team, which is another thread we may have drawn or not, but the use of media and video has expanded, and were big advocates of that. So from spring of 2020, to summer of 2020, we have this sequencing challenge that we have to unlock, we have to identify our first managers to be able to hire our first team members, we secure our first asset management clients in the summer of 2020. We go live with two asset managers. By September, we have four by the end of 2020. We have 17 managers on the platform. So if you rewind and think about what’s happening in the market, in the environment at that time, businesses of all types, asset managers of all types are going through this existential evaluation. Who are we what do we do? Well, what do we want to focus on as a firm and almost universally, they come to the realization, we want to focus on asset management. And we’re more open to partnering with experts in areas of like distribution. And that’s very, it seems very intuitive now.

Jack Sharry: Familiar with that intuitive thing. It’s a little harder to make intuitive real, right?

Mark Spina: Exactly. So we end 2020 with 17 managers on the platform. Fast forward, the business matures a bit, the technology platform supporting the business develops markedly. And by the end of 2021. We have over 40 managers on the platform, the size and scale of those managers increases over time as well. And then to your point, I’d be remiss not to address it. Within those asset managers, we’re working with a set of what we think of as qualified product that is qualified and effective for the advisor market. We’ve done exhaustive research and data capture on the various wealth management platforms. We understand exactly which products are available at which places and we’re focusing our efforts based on that data and utilizing data, network market recognition to target growth opportunities.

Jack Sharry: So it sounds to me to use another colloquialism. You’re really taking out the noise you take enough to be us in terms of very targeted, select managers at select firms filling gaps that you know exist. I gotta believe the other side, I’d love to hear your comment on this, if, if I’m at a firm and I’m responsible for due diligence, I welcome your call as opposed to maybe some of the other folks that might be caught on with an idea that they may not want to hear about.

Mark Spina: Well, it’s interesting, Jack, you are right. It’s counterintuitive to many though, think about yourself in an asset manager’s shoes, and their viewpoint has been formed largely by one of intense focus on their respective capabilities. So growing up were living and breathing on their sales team, having a singular focus on a single managers capabilities. The reality of that in the marketplace is to the professional buyer to the product manager to the advisor, there’s only so many times that they want to hear about, fill in the blank, emerging market equity, small cap growth, our proposition is that we’re able to represent a diverse range of products, and therefore, through scale of ideas for diversity of ideas, we are able to gain and maintain access to both professional buyers and advisors. So it’s counterintuitive, and there are limits to it, we could be spread too thin. And that’s something we take great pains to guard against. But the trade-off is unequivocally there that scale and diversity means to greater access and greater opportunity.

Jack Sharry: So I’m I know, the whole digital thing, the whole technology thing is part of what you’re doing. I’m sure that will expand. I would imagine there’s probably there’s some interesting things that could happen in terms of how you continue to stay focused at the same time to serve this need. I think that’s you’re fulfilling a need that people didn’t know they had often the best ideas are just that right. So where do you see things gone? Where are you guys going with all this?

Mark Spina: Think about as you do think about an environment where that has historically been dominated by interruption. It’s been an interruption-based market, right? Whether you’re the internal wholesaler calling on an advisor, or you’re the wholesaler calling on an advisor in an office, it’s been one of how do I interrupt my intended buyer in the middle of what they’re doing, maybe capture their attention, maybe through interruption get them to change their behavior. It’s worked, it’s been a vibrant market, and almost all of the constituents kind of grudgingly have accepted it, right? Yes, yes. To your point, though, we think we’re presenting and building a different and better way, we were in the process of building what you could think of as a digital exchange for wholesaling, one that brings together the community of asset managers, wealth managers, and advisors, and moves towards an invitation based approach where we know that Jack has expressed interest he’s done, he’s downloaded a tutorial on how to grow his advisory business through marketing to multiple generations. So Jack is growing and building his business. We know that somebody on Jack’s team and analyst on Jack’s team has done multiple searches for the afore-mentioned, I think I said emerging market equity products. So we have a growing business, we have an interest in emerging market equity, that’s kind of creating an invitation or an opportunity to serve up digitally information to Jack and his team on emerging market equity. We think that that is entirely more efficient, and more sensible than 12 Different salespeople rolling through Jack’s office on any given day. And you know, pitching large growth or value, you know, the newest alts idea that may be perfect investment products, but not suitable or timely for Jack and his team.

Jack Sharry: A little too smart, though, just want to caution you but no, I joke. So you’re not only obviously, we’ve talked a good deal about the product side, the sales side with the advisor and so on. But you’re also we haven’t explored though, if you would please talk a bit more about this. That sort of value added, as we used to call it back in the day, still is important sounds like but it’s also targeted. We’ve talked a little bit about that. But what do you do around programs or on technology? In other words, how do you enable the adviser to be more effective and on point with how they do business and the kind of products they use?

Mark Spina: Sure. So you mentioned it earlier Jack being a network of networks, we are able to source a combination of component tree, we’re able to source practice management capabilities from from external providers, we think of them as solutions providers, were able to see We’re coaching from multiple external solutions, providers. And the long side of that, I think of equal importance is we’ve built in house capabilities in some of the areas that we think resonate across that community. And I’d go back to the ability for advisors to tell their story to prospective clients or existing clients digitally, is something that we’ve built a capacity and a process for doing. We’re helping asset managers build a routine eyes process for digitally engaging with wealth managers. And from the wealth management side, an ability for them to come in and search a library of asset managers and products as a way of developing advanced and advanced understanding of the products that they’re set to review, it’s a massive way to you get the dual benefit of greater efficiency, and greater depth like of understanding. So we think that video in multiple forms is something that from a solutions perspective, going to continue to grow in popularity.

Jack Sharry: And no, you do some of this now, but I would imagine that digital tools will be part of your network of networks. We’ll talk about that, if you would.

Mark Spina: Sure, so from a one that I would say is one of the things that routinely comes back almost, it’s a fixture in terms of importance to advisors is the ability to generate leads, right? For lead generation, they’re the biggest the best, the brightest are, even while they grow through organic growth and acquisition, there’s a sustained interest in lead generation. So for advisors, we’ve been thoughtful about sourcing capabilities in that space. And that’s a key part of the offering. We’ve partnered with a firm called Aidentified interesting shops worth checking out, they’re doing novel things in that space. And then for the asset manager side, right? By creating this digital exchange, our ability to generate leads for asset managers in targeted products and targeted firms down to the advisor level is something we’re building out rapidly and expect to have in full form by the end of this year.

Jack Sharry: So if I have this right, essentially what you’re doing, you don’t own all these capabilities, you are networking, with your constituents, whether it’s the folks on the village inside folks on the adviser side, you’re networking, these kinds of capabilities to help deliver what that particular advisor or that particular due diligence officer is looking to achieve to have their right.

Mark Spina: Yeah, great. So yes, is the short answer a clarification and maybe bridging back to one of the earlier questions and maybe misunderstandings about the business model, we have a 30 plus person team, full time employees at flex at flex networks, many of those advisor facing many of those national accounts facing so real people doing real work on a full time on a full time basis for reflects different from other players in this space, though, we don’t have an economic interest in the asset manager. Right. So that’s a purely network relationship. We don’t have an economic interest in the wealth manager. That’s obviously a purely a network relationship, and also different from other players in this space. And this isn’t to say right or wrong just to say different that we take an asset managers product and represent it as is we’re not putting them into a sub advise capacity. So we think we give asset managers like significant optionality, right, they retain the economic structure, the firm, they retain control of their product, we’re delivering a much more efficient distribution partnership for them and for, for the wealth managers to your earlier point, we declutter or take out a lot of the noise in the environment by funneling dozens of asset managers into and through our communication channel.

Jack Sharry: So speaking of the business model, who pays you where’s the money come from?

Mark Spina: Good question. The economics of the model today are driven by the asset manager, right? Our interests are aligned with the asset manager, we want to ensure that we’ve got kind of a long term partnership, these are multi year agreements. We want to ensure that we have good people with significant experience driven to perform. So there’s the combination of a retainer and incentive in those economic agreements. I’m going to use this As a useful bridge throughout that network deck that you referenced were for the managers on our platform, we’ve intentionally assertively worked to create synthetic scale for them. So as we go out to solutions providers, as we go out to wealth managers, were able to kind of bring consortium buying power. Think about the 40 managers, we bring that kind of consortium buying power to different constituents in the marketplace. And that’s something else that I would say is distinctive and different from what we’re doing from them from what others have done, historically,

Jack Sharry: I think is really cool. I like new stuff. That’s cool. And this is all that. So as we tried to do to keep our discussion under half an hour, when we wrap up, what are three key takeaways you’d like to leave with our audiences, we head off into the sunset.

Mark Spina: I’ll start with the point we just talked about this notion of so number one is synthetic scale in a business, an industry that requires scale to succeed, managers have to think about how they can creatively and collaboratively create that scale. And it’s unlikely for the vast majority of asset managers to be able to create the requisite scale by themselves. So we’re helping to create synthetic scale. For wealth managers, we’re helping to simultaneously declutter their environment and democratize their product platforms. So those two things sound seem like at odds with one another, our ability to deliver both things, I think, is a big benefit. So decluttering and democratization, I’m going to take some liberty and call that number two on the list. And then importantly, Jack like we could do great work for asset managers, we could do great work for wealth managers. The third point that I think I’d make is an improved engagement experience for advisors. The notion the concept of wholesaling product has to evolve in the next three to five years, it has to look more like everything else that an advisor or person does in their day to day life of buying and selling product. And so think of that as more digitized, more invitation based, and one, one that retains a human element. But that human element is brought in when and as needed.

Jack Sharry: Well said actually, you’ve heard this countless times and No, you’re a fan of the show. It’s the confluence of digital and human advice. It’s both it’s not one or the other. It’s you really got to put them together. And I really applaud what you and Brian have put together in the flex networks team. It’s really impressive. I will continue to watch and applaud and reach you guys on So one last thing before we go as we do each week on our podcast. My favorite question, after all is What is something you do outside of work that you are excited or passionate about? People might find interesting or surprising.

Mark Spina: I try and stay active generally outside of works, but there will be some recency bias in the response. I’m a board member on the Navy SEAL Family Foundation, we had a we had an event in Philadelphia, just last week post pandemic, we had record attendance record giving, it was extraordinary, I’d say for the reason kind of why might be interesting to you in the audience is the seal operators obviously get some well-deserved attention and accolades. Our foundation is purposefully pointed at the families, the women, the children, the extended families that stand behind these operators, and taking care of them in the routine needs of daily life that sometimes go under appreciated and underserved in that community. So by taking care of the family, it allows the operators to take care of their respective jobs. It’s been humbling grounding and inspiring all at once to get a close up look in interaction with that community.

Jack Sharry: Great, great. I was unaware and thrilled to know when thanks for doing that good work. So Mark, this has been a great conversation. I thought I knew a bunch about your business. I learned a whole bunch more. Thank you for that. For our audience. If you’ve enjoyed our podcasts, please rate review, subscribe and share what we’re doing here at WealthTech on Deck. We’re available wherever you get your podcasts. Thanks again, Mark. It’s been a lot of fun. I look forward to our next conversation, which I think is next week, actually. But I look forward to that next discussion.

Mark Spina: Likewise, Jack, thank you for the time.