The Future of Human & Digital Advice, Why Tech Matters, and the Power of Personalization with Cheryl Nas‪h‬‬

Jack Sharry: Hello, everyone. Welcome to our podcast, WealthTech on Deck. This is where we speak to the industry leaders about the future of digital and human advice. Today we are talking to my good friend, Cheryl Nash. She is the CEO of InvestCloud Financial Supermarket. She’ll explain that in more detail in a moment. She’s been a leader at her organization, which has had a few different names. I’ll cite some of them. And we’ll also ask Cheryl to talk about that transition. But APL to Fiserv to Tegra118 and now InvestCloud. So we’ll hear some more about that in just a moment. Cheryl’s been a leader at all these firms, a true leader at every step of the way, and a true leader in our industry. So we’ll get to all this in a moment. Cheryl, welcome. Good to have you on WealthTech on Deck.

Cheryl Nash: Thanks, Jack. It’s great to be here.

Jack Sharry: So let’s start with providing our audience with some perspective. You are as well known as anyone I know in this industry. So but maybe there’s still a little bit of background on how you got started, just a highlights tour of your career. And we’ll save the InvestCloud conversation for a moment, but maybe a little bit about from APL on.

Cheryl Nash: Sure. So it’s funny, because a lot of the people in our industry, Jack, still call us APL. And that was many, many years ago.

Jack Sharry: Actually, Cheryl, if I may interrupt the CEO of InvestCloud referred to the deal as buying APL.

Cheryl Nash: I know. And he loves APL so, so it’s great. But yeah, I think it’s funny when we’re talking to clients, they still refer to us as APL, so. And that was so many names ago, like you said, but I did start my career at a company called Security APL, I was actually the fifth hire at that company. And, you know, when I started my career there, I did many different things, mostly input data into the system on, from confirms that I picked up from our clients. So we didn’t have much automation back then. And fast forward to where we are today. Lots of automation in our industry. Security APL was bought by CheckFree. So you didn’t mention CheckFree, but that was back in 1996. And it’s funny because when CheckFree bought us, a lot of people were scratching their head why. And Pete Kight, who was the CEO of CheckFree, at the time, had, I think he was, you know, a visionary and way before his time, because he saw, back then, where brokerage and banking would come together. So CheckFree did, you know electronic bill payments. He loved the fact that we were doing back office and brokerage and really thinking that the two would come together. And fast forward. It’s finally happening, especially more from a digital perspective. Then CheckFree was bought by Fiserv. And that’s where I held you know, many different roles. We were the investment services division within Fiserv. Fiserv was also very focused on payments and merchant processing. When you know, working at Fiserv, we had a lot of opportunity because Fiserv had many clients. So we were able to, you know, bring on new clients because of being part of Fiserv. But I’d say as the years went on, Fiserv was very focused on payments versus wealth management. And when the first data acquisition happened in 2019, Jeff Yabuki came to me and said, “I think it’s time to find a home that’s going to invest in your business and really, you know, make you stand apart from the rest.” And it was perfect timing. We went through a whole sales process, a lot of PE firms were interested, some strategics. And fortunately, we got Motive Partners. Fortunately, I say because they’ve been a great partner of ours. And, you know, they took us to this next level, which I’ll talk to. So I was appointed for the first time in my career CEO, so CEO of our new company, which was named Tegra118. And that was a short lived but much loved name. It was a bold name in the industry. We had bold colors, dark purple. Funny story, we, that, right after we became Tegra, we went, my husband and I went to the paint store and picked out purple paint for our office. We painted the offices back in March and nobody has seen them. So we’re now painting them blue because we’re not Tegra anymore. We’re now InvestCloud. So literally right now they’re being painted back to blue. So Tegra118 lasted almost a full year, a couple of weeks before our one year anniversary, we merged with InvestCloud and Finantix. Which now I’m the CEO of the Financial Supermarket division, which is really exciting. I’ll talk to you about that a little bit more about, you know, my career has gone through from, you know, inputting data into the system, to running product management, to being even a salesperson, to leading a business analyst team, all the way through, anything that you could think of, to become president and then CEO. So I feel fortunate that I’ve been in the same company, although it hasn’t been the same company, when you think about the different acquisitions we’ve gone through.

Jack Sharry: Of course, you and I have known each other for a very long time. And it’s been fun to watch those, that evolution and your continued elevation in terms of leadership. So tell us a little bit about what’s going on with InvestCloud? I’m sure, I know from my standpoint, I follow all this stuff pretty closely. And I’m trying to understand how it all comes together. What’s the role of the Supermarket that you are the CEO of. What does InvestCloud do? Finantix? How do you guys come together?

Cheryl Nash: Yeah, so great question. So InvestCloud, when they started back about 10 years ago, or so. John Wise, who was the founder, and is now the CEO and my boss. His vision, then, and it still is, is any investment manager can have access to a first class digital platform, through the cloud with InvestCloud. And you know, back 10 years ago, the cloud wasn’t necessarily as popular as you know, important as it is now. But he again, was a visionary way ahead of his time. And, you know, we think about that today. Now that we’re part of InvestCloud as really our North Star. It’s really the driving vision of everything that we’re doing for our clients. And when you think about APL, and you think about the platform that we’ve built over the last 30 years, and this incredible network that we’ve built, that enables asset managers and sponsors to actually do business together. Overnight, you know, we send data across our platform, from custodians from trading venues. And it’s a pretty, I’d say, probably one of the most robust networks in our industry. And so when you think about InvestCloud’s, where they came from, and their very impressive front office capabilities in digital experience. And where we came from, which is pure back office, trading, you know, portfolio accounting. And then Finantix, which is outside of the US, it was a Motive Partners company that we started partnering with, actually, to help bring them into North America, they have a beautiful front end as well. When you think about bringing these three companies together, you actually get the best of all three, you get to take our core APL platform that really powers this industry. And you get to put a pretty front end on top of it. And we do it through the InvestCloud elements. So, and it’s funny because we were Tegra118, and 118 was 118 elements and InvestCloud talks about their modules or their apps as elements. So I think it was meant to be way back when. But when you think about their elements, and their apps, taking data from our core platform, giving our clients a much better experience, it’s really where this industry is going. And I’d say this big platform that we’ve built now has the opportunity to be more nimble and agile. Because we can take data out, put it in a data warehouse, and put apps on top of it, which is exactly where we need to go and how our clients are asking us to be you know, fast and delivery and use their UI/UX. So it’s really been a, it’s really great timing. And it’s really been exciting over the last, this is six weeks, over the last six weeks of learning about InvestCloud and how our core platform fits nicely into what they do.

Jack Sharry: So, if you would, talk a little bit about what it looks like if I’m an asset manager or a wealth manager. In other words, what’s in it for me if I’m running one of those organizations?

Cheryl Nash: Yeah, great question. So InvestCloud, their product sets are in colors. So they’ve got a blue product, an orange product, a black product, and a green product. And how those products are broken out is aligned to some of the key capabilities that we have. So you’re an asset manager on our platform, and you’re using our SMA capabilities. So you get access to all the different sponsors, and you get to trade on our platform. Let’s say tomorrow, you come to us because this is actually a true, you know, true scenario, and says I need more tax managed portfolios. We now because InvestCloud has a tax managed app. We can take our data that sits in APL, that comes from the custodians every night, put that into the InvestCloud orange platform, which is their digital warehouse, and then have that tax managed app be accessed by our client. And, and because it’s an app, it can be accessed headless. So it can be accessed via their website, or it can just fit right into the platform that they use from us. What’s really important is that we don’t have to go now in this big platform that we have, and build and build and build on top of it. What we’re learning, because InvestCloud has over 300 apps, is that how the fast paced way that they can take and build apps versus big platform and going in and making changes and having programmers constantly in there–completely different. We still have our platform, we’re still going to sell our platform. But now what, if you’re a client of ours, you actually get an opportunity to say, “I want a tax managed function in an app,” and here you go. Or, “I want a fractional share, direct indexing app,” and here you go. So it’s a much better way to give our clients what they need, and in a much faster way.

Jack Sharry: So let me dig in a little bit deeper here. A lot of particularly wealth managers, they want to own the user experience. And it sounds like, you’re gonna have to correct me here, the InvestCloud has a series of apps, and you’re the back office to execute. Am I getting that right?

Cheryl Nash: Yep. And the apps actually are mostly headless, so they can…

Jack Sharry: And when you say headless, what do you mean by headless?

Cheryl Nash: That means that the apps, all the data, the underlying calculations, or configurations, in that app, the stays in the app, but it could be surfaced up through a client’s dot com, or client workstation, or advisor workstation or wherever that might… may be. And that’s becoming more and more than norm, like you said, they want to own the experience. So the app does all the work in the background. But it surfaces it up to however the client wants it to look. I think I have this right, but I think John said that they have 7000 different user experiences, because they’re, that’s I think where they really perform and where they really, I think, stand out is first off this data warehouse and these apps, but then making and enabling the end client to have it look exactly like you need it to look. And I’ve seen demos where you don’t know where their app begins or ends, because it’s completely integrated in the client experience.

Jack Sharry: So again, I’m going to attempt to translate, I think I’ve got this, but let me ask you a question first. So if I’m, if I’m a wealth manager, or an asset manager, I might choose from those 7000 apps.

Cheryl Nash: No, so there’s 300 apps, but there’s 7000 different user experiences. Yeah.

Jack Sharry: So I might choose from those and then adapt or adopt those to fit my particular circumstance.

Cheryl Nash: Yeah, private label, your logo, wherever you want it to show up. So yes, you have that right.

Jack Sharry: Yeah. And then the data warehouse is where the, also part of InvestCloud, do I have that right?

Cheryl Nash: Yeah.

Jack Sharry: In the back office, so to speak, the financial supermarket, your organization, will then do the calculation, portfolio, accounting, all that kind of stuff.

Cheryl Nash: Yeah. All the things we do well, today.

Jack Sharry: Cool.

Cheryl Nash: That’s right. And what InvestCloud loves about our platform is this network. So the distribution, the asset managers, the sponsors that we have, and all of these data points that we’ve built, because as you know, Jack, data is king right now. So we have we sit on an enormous amount of data that is very meaningful. So, InvestCloud, when John Wise was looking at an acquisition, and he told me that he’s looked at us a couple of times. It was really because of that, because of this core platform, this data that we sit on, and the ability to enable, you know, a network and a community.

Jack Sharry: And how is it being received by your customers and prospective customers?

Cheryl Nash: Very well, I think they get the concept, they get the strategy and the vision, they’re anxious to see us put it to work. So there’s been you know, already some, some as you can imagine, in our, like I said, we’re six weeks in, a lot of meetings on integration. And, you know, we’re starting small, so we don’t boil the ocean so we can get things done. It’s resonating really well with our clients. I think COVID helped too, our clients understand the real need for digital, and the need to put things to market quickly, and not wait for long standing, and long running programs to have to get done before we can get something out to them. So I’ve introduced John to many of our clients already, and we’ve got more to go. But it’s really resonating in the… in our… with our clients in the industry.

Jack Sharry: So as you know, in our organization, we have a lot of conversations of build, buy, or API, and I know you do the same. Our take, we probably agree on this is that building it at a firm has turned out to be costly and disappointing, I guess is the best way to say it for a lot of firms. But it sounds like what you’re putting together is actually a way to, for them to control the user experience and the journey of the… the client journey. Why don’t you expand on that a little bit in terms of, of how that will play out in your marketplace?

Cheryl Nash: That’s a great point, I think it is costly to build capabilities, the way that InvestCloud has designed their systems, and its modulars, the way they talk about is like Legos. And they build these over time. So as things are needed, they’ll build another module or another app. But what I love about what they did is that, or I should say now, what we did, is that these apps are created to really enable advisors and clients to engage through any device. So when John talks about it, he shows his phone, and how all these things are running in the background, but how your phone is actually your, your experience. And through, now the work that InvestCloud’s done, you know, they’re, they offer thousands of user type options, which is, you know, so different than when you think about where we came from. But it’s so important right now where this industry is going. But you’re right, people think about build, buy, or partner, we still do too, because you’re not going to build everything. But we are now more conscious, making sure that the next acquisition or the next partner fits into this modular platform that now InvestCloud has.

Jack Sharry: So tell our audience, a lot of people just like you trying to figure out the future of human and digital advice. Where do you see all this going, specific to your organization, but at large, where are we headed?

Cheryl Nash: I think personalization. I think we’ve talked about personalization for, for a long, long time. I think we’re heading towards enabling people to get what they want, where they want it, and how they want it. And we’ve talked about this even, you know, as part of Fiserv and then Tegra and now InvestCloud. But the consumer experience is so different today and through this pandemic has really enabled a lot. So our clients are telling us that they want to mimic that. They love Netflix, that you can personalize what you watch. They love Amazon, you know, the financial supermarket is the Amazon thinking where you actually can, when we’re ready, get things off the shelf, buy things that you want, it’s not going to be you know, we’d love it to be a one stop shop, if you want to go find a tax optimization platform, if you want to go find risk, and not, you know, risk platform. So we ultimately make it a one stop shop. But that’s all due to the big need in our industry to personalize things. So the advisor’s job is easier, to give the end investor exactly what they need, exactly when they need it, and exactly how they want it. So I think that’s a big bit. You know, that’s a big vision of ours. And in all the reports that I read, and I as you know, I’m on… I sit on a lot of panels, I’m very active in our industry. That’s the one big thing that we’ve got to figure out how we break, how we get our industry to be much more like some of these other industries that are, have really figured it out for the consumer.

Jack Sharry: So does that mean that, we’ve talked about risk and tax and so forth, does that mean, you partner, or does that mean, you build?

Cheryl Nash: Yeah, it means… So it means both, but it probably means we partner.

Jack Sharry: Gotcha. That’s good to know.

Cheryl Nash: Yeah. I think we might know of a tax partner.

Jack Sharry: We’ll talk.

Cheryl Nash: And households, we got to talk about householding.

Jack Sharry: Yeah. Well, actually let’s do that. Although one thing’s, you and I haven’t spoken in a bit on this particular topic, I came across some info recently that the rate of people retiring during COVID was four times as great as the prior period. And McKinsey came up, that was a Pew Research study. And then McKinsey came up with a study 350% increase in money in motion 20 over 2019. So people are retiring. You know, that baby boom wave we talked about forever? It’s now.

Cheryl Nash: Yeah.

Jack Sharry: Well, the thing we’re finding is that the first question they asked is Social Security, the second question is what do I do with my rollover? So it’s become pretty specific. And it sounds like you’re geared up to answer those questions. And I’ll take it a step further. Two steps further, actually, then the question is, how do I optimize maximize retirement income? And what that suggests is you got to look at the whole thing, and that gets to householding.

Cheryl Nash: Yeah.

Jack Sharry: So talk about that. Where do you see the world going? If we’re underway on this baby boomer wave that’s hitting the shores..

Cheryl Nash: We have been talking about that wave.

Jack Sharry: Decades. But where do you see all that going? How do you see that playing out particularly with regard to InvestCloud?

Cheryl Nash: So InvestCloud has, like I said, they’ve got these four colors in their platform. The blue is all about the advisor-client experience as well as planning. Back last year, we bought a company called RetireUp, which is really around retirement income, really about deccumulation versus accumulation, and really helps an advisor tell the story to their, an investor of what they need to do to save for retirement. And I think that, you know, through this, and we’ve all seen this, it’s, it’s, we’ve got to have a simple way to explain to the investors what they need to do. It needs to be personal. So it looks at their household, it looks at their situation, it looks at their goals that they want. But it also lays out how you look across your retirement savings, and what you’re going to need year over year. And I think that’s one big way to look at it. We’ve all, we’ve always been talking and planning about accumulation. I think the big next thing is, what about income deccumulation? And how do you make sure you have enough? And how do you make sure you do that? So there’s a lot of good apps in that InvestCloud platform. And now we’re adding our RetireUp app. And that just gives our clients a much more, I’d say, holistic view at goals based planning, which is also been something we’ve been talking about for ages. But now once you hit retirement, how do you support your clients in that way? So specific, we have a very specific solution to that which is RetireUp.

Jack Sharry: I think we’ve been talking about UMH, unified managed household, for a while, at least decades, if not longer. As we wrap up here, Cheryl, what are three things you’d like to share with the audience, three takeaways that they should bear in mind about your view of the world or your view of InvestCloud?

Cheryl Nash: Yeah, no, you know, it’s funny, because I’ve been, when I think about my career, and I think about the different companies and the different bosses and the different ways in which we do things, I’ve learned that you need to be nimble, you need to have an open mind, you need to always look ahead, you need to know where you are today. But you need to always look ahead, you have to be ready to change. And you have to know that you can change tomorrow, and you just have to be ready for whatever comes your way. So that’s one thing, one key takeaway or lessons that I’ve learned. Another because we’ve gone through a few acquisitions, and just being on our own last year, was really exciting. And something that was, for the first time part of our, you know, we were standalone for the first time. One of the things that I learned through that is to know what your firm does really well, celebrate that and own it, you can’t be all things to all people. And at the same time, know when to partner, know when to integrate well, and know when to, you know, make an acquisition or a merger. You know, I think being part of PE now you have a much better opportunity to do that. And there’s so much change in our industry where people are, you know, being owned by PE or others. So, you know, know what you do really well and be open to, you know, partnering or acquiring, where you’re where you, you know, your gaps. And then lastly, I’d say, and we’ve learned this through this whole, you know, this whole pandemic. And I think, Jack, you and I knew this, but technology is an essential enabler. Use technology for the tasks where speed, efficiency, automation, precision are needed, while always remembering that we’re in a people business. Relationships matter and trust matters. But technology really becomes an essential enabler and just use that. And really, I’d say, grasp that.

Jack Sharry: Great. That’s terrific. One last question before we part for now, what’s something about you that most don’t know? Or would find interesting or surprising that isn’t part of your day to day work effort?

Cheryl Nash: Yeah, I don’t think I’ve shared this with many people. So over the last two years, I’d say, my husband and I have taken up fixing up places.

Jack Sharry: Really?

Cheryl Nash: Not flipping them, but helping my daughter. We have a place in Sea Isle City, New Jersey, that over the last six years, we completely redid the whole place. We did a lot of it ourselves. And we bought a condo recently where we’re going through the whole process again, and I love, that’s how I get, I work so hard during the week and even on weekends. But I get so much pleasure out of looking at a room, looking where I think there’s opportunity to change that room up and then see it come to life. It’s so fun.

Jack Sharry: That is great. That is great. We share that, by the way. We’ll have to talk about this at another time. So you and your husband are a fixer uppers.

Cheryl Nash: We are, we are.

Jack Sharry: Like Joanna and Chip. That’s great.

Cheryl Nash: Now, I wouldn’t put it into that category by… It’s, we’re having fun with it.

Jack Sharry: That’s terrific. Well, Cheryl, as always great to spend some time with you. Thanks for sharing your perspective. And congratulations on all the good work that seems to be well underway. So thanks very much. Appreciate the time.

Cheryl Nash: Thanks, Jack. It’s been great to talk to you.