Innovating and Integrating Tech in the Financial Industry with Heather Kelly

Jack Sharry: Hello, and welcome to WealthTech on Deck. Our podcast is a series of conversations with industry leaders around the future of financial advice. And while we will spend much of our time talking about how digital and human device are coming together, I’d like to speak with people who have a rich history and our business to gain some perspective on where we’ve come from and have a better view on where it all leads. So today, speaking to someone who’s been, in my mind, a real pioneer in our industry with some of the work she’s done in the past, my friend, Heather Kelly, Heather, great to have you on board.

Heather Kelly: Delighted to be here today, Jack. Thank you.

Jack Sharry: So Heather, and I have a chance to talk from time to time we talk about what the industry is up to and where it’s going. And we’re going to do the same here today. So Heather, maybe as background because you’ve really done some interesting work leading up to the work you’re doing presently. But why don’t you go back in time a little bit and talk about your career? How do you wind up with us talking about the future of financial advice on our podcast today,

Heather Kelly: I’d love to set an exciting topic, I really think that one of the things I loved about the industry, even when I got into the industry very early on is it’s constantly evolving. And there’s always something new to learn. And when we think about wealth tax, it is definitely something that didn’t exist when I first got into this industry, or was very, very much in the back offices, and now is on all of our desktops, I remember when email was first mentioned, and we were first getting, you know, emails instead of bulletin board systems to send messages. So it’s pretty cool how far we’ve come. And when we think about the pandemic, it’s really just accelerated the velocity of adoption when it comes to technology. So it is definitely here to stay. But when we think about my background, I started my career early on with Guardian Life, it was an amazing place to really get my legs in the insurance industry and had a number of different roles there everything from you know, starting as a, you know, filing and making cold call for, to their agents to working on new business to moving into the home office in the big city, to moving out to field management and, you know, actually recruiting agents and getting them started in the business. From there, I moved into wholesaling, and really moved to a multi carrier platform, working with really institutions, broker dealers, banks, wire houses to integrate insurance into the offerings. And that’s what it was pretty new on that side. But I guess I also like big boulders, you know, fast forward many, many years, I decided that I was going to go work with United capital and teach advisors and IAR is on how to integrate insurance into their offerings when it comes to their clients and their financial planning needs. So it really has been the full gamut. I even had a very short time that I did personal production, when I had my son, I took a step back and can truly appreciate just how hard it is to sit in that advisor seat and find a client and build that trust. And I give them all kudos for the men and women who do that every day, because it’s not an easy job.

Jack Sharry: Exactly, exactly. Before we get into what you’re doing today, if you talk a little bit more about your experience at United capital, you were an important part of pulling together fin life, which is now part and parcel I gather for what Goldman Sachs is up to but you really got a sense of all the different elements that make up a comprehensive approach to helping advisors and clients improve financial outcomes on both sides. So talk a little bit about your experience at United capital, lessons learned that sort of stuff. And we’ll get into in a moment what you’re doing at Allianz and how that I know has manifested there. So talk a little bit about your past experience. And United Capital.

Heather Kelly: United capital, it was really important to involve all in the financial decision and have that non-CFO spouse involved in that process, and really create tools that facilitated it for the advisor and for the client. Just focusing on insurance for a moment. It’s really challenging for many advisors to have the conversation about insurance and risk management. And we’re squarely in a place where it’s the renaissance of risk management clients are moving into the retirement years. The Pensions don’t exist anymore. It used to be Hello pension, goodbye tension. It’s the exact opposite. It’s no pension, hello tension, and how am I going to assure that I have appropriate income during my retirement years. But what are those trade-offs and what’s most important to the client and retirement looks so different today than it did 20 years ago, 30 years ago. So it was really enabling advisors and putting the tools in their hands to be able to have those conversations and guide them through his conversations. When I think about wealth tech since that’s what we’re here to talk about. I still think that there’s far to go on that front and there couldn’t be more technology and gamification Can that can help advisors offer that conversation with clients. But then I also think about from a united capital standpoint, what we do with the fin life 360 endeavor. And that was really addressing beyond just the financial needs that a client may have. But how do we address some of the other concerns that are going to present itself during in their financial life. So whether it’s having connectivity on the tax side, the legal side, but there’s so many different items that come into that financial well-being, but then also what goes into it too, is, you know, that fun. Joe Duran often says, you know, this, you know, money is only the fuel, it’s what pays for everything. So what’s important to them? What do they really want to do? What gets them excited? Is it vacations? Is it, you know, cooking classes? Is it adult education? You know, what are those additional items that can be extended? And that just makes that client experience with the firm, even greater?

Jack Sharry: Yeah, you underscore an important point that I keep seeing wherever I go, and the many conversations I have with people like you, and that is the behavioral aspect. It’s not just about the money, obviously, fundamentally, at the end of the day, the money is the measurement, the fuel, as you called it, or Joe called it, but really, it’s about how you deal with the emotional side how you deal with the experience, or lack thereof, and how do you pull together and that’s really the challenge. So maybe that brings us to talking about what you’re doing now. Because I know you’re taking all this accumulated knowledge as home office, personnel wholesaler, recruiter, FinTech, developer, holistic, comprehensive approach, concept developer. And now with the work you’re doing in Allianz, because I think it’s all the above and probably a lot more. So talk a little bit about what you’re doing and Allianz and, and what you’re finding is, well, actually, you’ve been there now for a while. So tell us about lessons learned and benefits you’re trying to make available to advisors and their clients

Heather Kelly: It’s been an interesting transition I’ve been with Allianz, like you said, for a little while now, it’s been a year and a half, I started last January, which just makes it very interesting, because, you know, shortly after I begin, we went into the global pandemic, and the rest of the world was dealing with that also. So it was an interesting time to make a move and join a new organization. I think it just cemented me even quicker, though, into the organization, and helped identify where I can add value and have impact. You know, my day job is I’m the head of strategic accounts and advisory. So, you know, it’s pretty much what it sounds like all the brands, broker dealers, institutions that we connect with to distribute products, my team is responsible for that relationship management, and making sure that that experience for the firm is is exceptional. The next step, though, which is super important to me, is the advisory side, I know from my time with United capital, that, you know, the entire industry is moving to that advisor mindset. And when we think about the advisor mindset, it really truly is a different mindset. You know, historically, advisors were selling to their clients, and fin pros were selling their clients, when you think about the advisory mindset, they’re really buying products on behalf of the client. So it’s making sure that we’re meeting that advisor and his or her business model, but also making sure that we meet them in their mindset. So it’s been a lot of education inside the walls of Allianz. Fortunately, there was a great foundation laid here before I even arrived. And that’s why it was so interesting to me to come join Allianz. But really making sure that the education is happening out there in the industry, and it’s going to take many voices. You know, I even get the question, Jack, sometimes, you know, there’s more entrants coming into the marketplace on the insurance side, is that a concern. And in all candor, right now, it’s not a concern, because it’s going to take many voices to help educate and advance risk management integration from an insurance perspective into an advisors practice. Then the third thing that I focus on long here is really on the technology side, what we’re talking about a little bit today and making sure that we’re meeting the advisor on his or her desktop, you know, when I think about distribution, and that’s really the hat that I wear on a daily basis, the future of distribution is that advisors desktop, and if we’re not properly embedded in that desktop, it’s not going to be utilized. And not only embedded, but also have an ease of use. And this is not something that the advisor does on a daily basis. So if it’s not easy for them to integrate, it’s likely going to be left behind. So just assuring that were saying on the front of mind with what we’re doing internally, but also front of mind and working with external partners. So whether it’s LifeYield, eMoney, MoneyGuidePro, etc, etc, making sure that our products are properly represented there.

Jack Sharry: So let’s talk a little bit about that. I went fast and I spent a good bit of my early career in the annuity business as a wholesaler initially and then later heading up a an annuity business, a large insurance company, also spent a lot of time in advisory back at what is now Virtus investment partners. We kind of invented the multi manager approach. By the way, I don’t know if I’ve ever told you this but I have a patent on an income guarantee and an advisory program and something we did with Lockwood back when I was at the old Phoenix so I’ve always sought to merge the concept of annuity and the concept advisory way back when the I think the patent is good 1520 years old now, in any event, point being is that what we’re seeing is the industry come together? And maybe way to characterize I haven’t said it like this before. But it’s it struck me as you were speaking whether the industry up until, frankly, probably mid 90s, very early 2000s was a product-based industry. And what evolved over time, and it’s certainly present as we speak. And your experience at United capital, our experience at places like Morgan Stanley and many other large platforms is the industry is about the platform. So how do you pull it together on a platform, and given the complexity of putting an annuity offering with a investment offering with other types of offerings that are different is really a challenge. And you’ve been at the heart of that, but that united capital now, with the work you’re doing with Allianz with some of the platforms that you make your products available on. So talk a little bit about that platform as a nation or in the expression, but that, that move toward the platform, and the unique position as a product manufacturer and distributor, how things have shifted from talking about the latest, greatest Allianz product to how you fit into an overall plan. I know that’s central to what your efforts are, are pointing toward.

Heather Kelly: And ultimately, Jack, we are a product manufacturer. So manufacturing, good strong product that’s going to deliver real value to the client is integral. But then also, as you just alluded to, making sure that that’s properly represented in the Tools is going to be equally important. And as I think about distribution and how it’s going to continue to morph over time, that’s going to permeate everything we do including wholesaling. And if we think about how we’ve approached wholesaling, historically, it was just really, you know, going to conferences, advisors meeting eyeball to eyeball with advisors, it’s going to morph, and it is morphing currently into more of that consultative role, and how we can use our products inside of the offering and the tech stack that they have inside of their organization, and be a resource. And for my purchase, it’s really important to make sure that the products are properly represented, because if it’s overestimating what the results are going to be the client and the advisor and us are going to be disappointed 15-20 years from now, if it’s under representing then the advisor is not going to integrate it into the client’s plan, which isn’t good either, it’s now not making available a tool, a financial tool to that client that could really be meaningful and powerful to that client. So making sure that it does have that proper representation is just super important. And of course, Allianz, you know, they’re very innovative. So our products have, you know, guaranteed income that’s growing, that can be joint that can go during the distribution period. So it’s a little different than just, you know, integrating a flat rate flat income amount during the retirement year. So we’ve had to do a little bit more work. And also, it’s been work on just the education, you know, historically, especially when we talk about the advisory space insurance might not have had the best consultation. And when I talked to a lot of the tech stack creators on the financial side of the house, unlike you who have a background on the annuity in the insurance, but many of them are coming strictly from the investment side of the world, in the portfolio management side of the world. So educating them on how these products work, and what they offer to the client is really important. And then their programmers can better represent the products and their software and in their offerings. So it’s been an interesting teaching.

Jack Sharry: Yes. Well, here’s my observation on Allianz, very innovative on the product front have been for a long time continue to be really strong on the distribution, wholesaling side, you know how to do that thing. Clearly, you are have been, I think, among if not the most certainly among the most innovative around adopting embracing FinTech tools. Clearly the role you play and I know that the work you’re doing around strategic accounts, you’re you’re conveying that message or getting that message through to your key constituents, whether they’re RIAS or wirehouses, or what have you. And it’s that combination of product and fintech capability, not only what you can bring to say an IRA, with the tools you’ve adopted, you mentioned money and money guide, pro and LifeYield, and so on. But I guess I want to talk about where this all leads, because we’re in motion clearly to that platform. And so and you touched on these platforms, in different ways. Talk a little bit about the challenge of that, because there’s a real challenge to educating the advisor, frankly, educating the wholesaler, for that matter, because they’re used to selling the features and benefits of an annuity product, I’m sure. But how do you move towards solutions move toward incorporating your capabilities distribution product, FinTech, how does that work? I assume that’s part of your purview is how do you how do you make that happen and that I’ve observed across the industry, that’s one of the big challenges. I’m sure many of our listeners are trying to figure that out. So how do you move from great product fit? like understanding strategic account connection to make it all happen so that, frankly, the investor, the client gets a better outcome, the firm has more assets and does a better job, and Allianz wins as well. So talk a little bit about how you pull that off.

Heather Kelly: I think that when we look at this FinTech tech stack landscape, you know, advocacy is super important. For me, it definitely goes beyond just the tech stack. And it really goes on advocating Why risk management? Why would I look at an annuity? When I haven’t historically looked at one, why would I look at or outcome ETF, just educating those advisors on doing something differently? You know, when we think about the advisor, toolbox, and all the financial tools that our advisor has at his or her disposal, I really advocate for including that full spectrum of products, historically, they may have really been a portfolio manager, and went to traditional investment products, and use those products to mitigate risk or manage risk inside the portfolio. But there are additional tools that really can financial vehicles that really can create better outcomes. So it’s a lot of advocacy, it’s a lot of educating, but then it’s also advocating for adoption. So I’ll shift now to the tech stack. You know, the reality of it is, is there’s so many technology tools out there that an advisor can incorporate into his or her practice. Any firm, whether its largest broker dealers, or the smallest Mom and Pop firm, only have so many dollars that they can allocate to technology. So it’s picking and choosing wisely what they’re going to spend those technology dollars on. But it’s also it goes a step further adopting, you know, oftentimes they’re spending money on technology, and they have not really getting the full ROI and the full benefit out of that technology. And it goes beyond just be advisor. It’s also making sure, like when I think of my tech team, it’s not just them, talking to the advisors, them talking to the folks who are behind the scenes supporting that advisor, because oftentimes, it’s not the advisor that’s sitting on these tools. It’s their paraplanners. It’s their, you know, assistants, it’s their, their office staff and their team that supports them that are working in these tools every day. How did they foster that adoption. So this way, they’re getting the most ROI out of those tools. Ironically, I do think that the pandemic helped out a little bit because we were in this virtual world, and hastened adoption, I think about 10 years. And advisors are realizing and firms are realizing more value out of the tech stack that they have adopted. But we’re also going to have to continue to innovate, we’re not at a place where we can sit on our laurels and sit on our heels and just say okay, with the tech stacks that are out there today are fantastic, and adequate for the next 10 years. So continuing to innovate, continuing to think about what that next iteration is going to be what’s going to make that client experience that advisor experience even better. Next best action is something we talk about in the industry often. And that AI in that that machine learning is just going to become even more important as we continue to march down this path.

Jack Sharry: So it occurs to me, Heather, we talk so often I forget all the stuff we’ve done together, you and I are fierce advocates for improved outcome at the investor advisor. And firm level. That’s That’s who we are what’s what we do. And you may recall, we did a you were part of a group that did a white paper with the MMI, I think it was called Modern wealth, it’s probably about five years old, for those interested in checking it out, you can find it on the LifeYield website. But in any event, what we talked about is this UMH concept, I’m not even sure we called it that then but the whole idea of looking all the different aspects and elements coordinating all the different technology elements. So I do suggest to our audience, if you want to read up on an early document around this concept, but you and I’ve been on the next chapter Advisory Council, there’s a bunch of them that we’ve done together. And one of things we said in that original Modern wealth paper that I’ve been talking about ever since. And it’s coming to bear where it’s happening in terms of technology, the tech stack, you described that if you want to improve outcome, you’ve got to look at cost, you got to look at risk, you got to look at tax, and also how you incorporate social security into the income stream. Ultimately, that’s an important component, especially since if you wait between 62 and 70. The government gives you an 8% increase each year. So often it makes sense to wait. But then how do you work around that if you want to retire earlier, all the complexity that goes with that. But maybe if you’d comment about this notion of one, advocacy and two, how do we make it real? Because we’re all in that fiercely working along around? How do we make it better? How do we create better outcomes for investors, advisors and firms, but talk a little bit about that, and specifically what you’re doing, assuming you already have great product, which you do, and assuming that you’re creating great relationships, which you’re doing and have done. How does that play out? If I’m an advisor, how does that play out? If I’m in the RNA world? How does that play out? If I’m at a wire house or other large national firm? How do you see that progressing?

Heather Kelly: So I from an advocacy standpoint, it’s really just making sure we’re out there and we’re dealing During salient messages that advisors are dealing with on a daily basis. So when we think about the, you know, RIA, or the wire house, or the independent broker dealer, I think the approach is a little bit similar. You know, they’re parts of different organizations and different associations and making sure we’re showing up with the right content that those industry associations is super important. Same thing with trade journals, you know, there, there are many investment trade journals that are out there. But there are some that have more readership in the RIA community, others that have more readership, and the banks, broker dealers and wirehouse communities, and just making sure that we’re delivering that same message, you know, I do think the lines are getting blurred, what we’re seeing on the advisory side is definitely where the wirehouses banks and broker dealers are trending, everybody’s doing financial planning, you know, rewind 10 years ago, you were just really hearing about it from the advisory space. Now. It’s really ubiquitous. And it’s everywhere, I don’t think that there’s any financial institution that doesn’t have advisors who are working in that financial planning space. But I also think, like I’ve mentioned earlier, it’s incumbent upon us to continue to innovate, and to really continue to look to see where the puck is going and making sure that we’re advocating on that behalf as well. And that we’re getting that message out to advisor.,

Jack Sharry: You know, that innovate and integrate, which I know you’re doing in terms of working with your various partners, whether there are a are independent broker dealer or large national firm, it’s really how do you incorporate not just the product as a standalone, but how it’s part of our overall solution. So I know, part and parcel of what you do and how you do it, and you do it well. So as our time grows, nine, how they’re viewed, maybe give a quick summary, maybe three key takeaways our audience should be aware of as you take a look as to where we’ve been and where we’re going around wealthtech, fintech. And the important role the annuity plays

Heather Kelly: happy to our time chatting always goes by fast Jack, when I think about three key things, I really think first and foremost, you know, the future of distribution is the desktop. So being integrated, and having financial vehicles integrated into the prevalent tools that are out there that advisors are using is just going to be necessary. Now we must strategically integrate at the manufacturer level and make that easy for the advisor and make it easier for the client. But it’s also you know, it’s also incumbent upon the financial professionals out there to fully adopt the tools that they’re paying for and the tools that they’re using to get the maximum ROI out of them. And then we also have to continue to innovate, as I mentioned, that was spent a theme for me all along. But it’s innovate on the FinTech side, but it’s also for me as a as a manufacturer of product innovate on the product side. And that means that we have to think about product innovation a little bit differently and think about when we’re iterating. On the product side, how does that fit into the digital tool landscape that is out there on the marketplace. And then third, I would just say continue to advocate continue to be that educational resource for advisors, we have here a desk that will work with advisors on the financial tools that they’re using, or their back office on how to properly integrate and represents the our product offerings into that software. So I think it’s the educational factor. I mentioned it early on in today’s podcast, one of the beautiful things about this industry is you can always learn something new. It also could be one of the daunting things about this industry. It’s always something new to learn.

Jack Sharry: Yes, yes, for sure. So our final question before we say goodbye, or just for now, what’s one thing you do outside of work that you’re particularly passionate about? Or people may find interesting or surprising. So tell us about that.

Heather Kelly: So a couple of things. One, I definitely have a soft spot for supporting organizations that are working with, particularly children that are disadvantaged from an economic standpoint, recently relocated to Minneapolis. But before when I was in Florida, I worked with the YWCA in Harmony House, which was really near and dear to me, and I thoroughly enjoyed it. But then on the fun side, I do this little activity called metal art, which is like taking little pieces of sheet metal and putting them together to create art.

Jack Sharry: That is great. I love that I love both actually did know that we shared a passion for helping kids I do the same I’m on the board of a land Preserve. But it’s much more than that. And in a normal year, we see 4400 kids each summer and summer camp mostly from the inner city. And so I’m very active with that site. I didn’t know we share that. Another lesson learned from my friend Heather Kelly. So how this has been great as always fun to talk to you lots of insights and lots of lessons learned again, as we talk from time to time. So for those of you who are listening in if you’ve enjoyed our podcasts, please rate review and or subscribe or share what we’re doing here at WealthTech on Deck we’re up over 1000 I think we’re getting close to 1200 to subscribers, which I have to say I found shocking. But I think there’s a real hunger for understanding what’s going on in our industry and talking to people like Heather Kelly, I think is starting to serve that need or that desire. So, once again, Heather, this has been great to get caught up. Thanks for sharing your perspective and your rich history and understanding of our of our business and where it’s going. So, until next time, thanks again.

Heather Kelly: Thanks, Jack.