Unifying Data and Integrating Systems to Maximize Growth with Adrian Johnstone

Jack Sharry: Hello and welcome to WealthTech on Deck. We have some fun each week speaking with people who are disrupting our industry as we seek to help advisors and their clients enjoy better financial outcomes, all around the confluence of digital and human advice. Today we’re speaking with Adrian Johnstone. AJ is the co-founder and president of Practifi. Practifi helps RIAs, family offices, and broker dealers grow their businesses, by unifying data from all sources, automating workflows and integrating solutions. Welcome, AJ. It’s great to have you on the show. Hey, thank you. So let’s start. Why don’t you tell our audience about practice, please share what you offer a little bit about your client base, how you get started to tell the practice my story?

Adrian Johnstone: Yeah, for sure. Look, as you can tell by the accent already, Practifi is a business that emanated out of Australia, we entered the US late 2017. Really, with a vision to bring, I guess, better technology to IRAs and wealth institutions. We’re kind of anchored in the CRM space where we’re built on the underlying Salesforce platform. But we really just use that as a tech base. And we’ve gone away and built a product that’s kind of role based. So anyone in a financial services firm has somewhere to call home, they see the data that they need to see they can run all the processes and things they need to run to be as efficient as they want, or need. And then we hook out and all the other platforms that they need. So they’re really got that one unified workspace for the whole firm.

Jack Sharry: So explain, when people hear CRM, they think of the variety of CRMs out there. And it sounds like what you do is expand turbocharge make better Salesforce, or whatever the sounds like you use the Salesforce platform, what do you make that distinction? What do you do that’s different than maybe some other serums that are out there?

Adrian Johnstone: Yeah, for sure. Look, CRM is an interesting thing. It’s sometimes gets talked about like it’s new, but it’s been around since the 70s. And it hasn’t really changed like a CRM in its core principle. Its job is to manage the relationship details between the firm advisors or, or others and the client. And it doesn’t do a lot more for one of the simplest CRMs in the market are a little bit glorified Rolodex, they do a little bit of task management, but not really anything heavy lifting. And some of them can’t even do householding in a robust way. As the opposite end of the market, you get big horizontal platforms like Dynamics and Salesforce are hugely powerful pieces of technology, that they take years and cost, often 10s of millions of dollars to try and customize to make work. From our perspective. We knew that Salesforce was really the platform that people wanted. But not everyone had the wherewithal nor the desire to go and make that upfront and ongoing investment in customization. So we took that platform and said, Okay, well, how do we fulfill the needs and provide kind of one way to optimize the way you run your firm, no matter who you are, whether you are in a directly client facing role or otherwise, we see a lot of breakaways from wire houses who are coming from this environment of having really robust enterprise grade technology. And then they’re left trying to pick a handful of small pieces of technology to make work. So we wanted to eliminate that problem.

Jack Sharry: And how do you do that? When you say eliminate the problem, I can make some assumptions, but better coming from you. So what’s the value add? In other words, you’re well beyond a simple system, and you’re not as complex and I assume you make the complex, simple in terms of what you offer, maybe digging a little bit around, what does that look like? Well, if I’m an advisor, what do I get from you that I might not get from somebody else?

Adrian Johnstone: Yeah, so you get the ability to manage the most complex of your clients to multifamily office style structures with cascaded complex family arrangements, interrelated entities, trusts and the like, all of that straight out of the box. We do center of influence management, profitability, analysis, sales and pipeline development, fully automated workflow, predictive analytics, all of those sorts of things in one platform. So sometimes we get asked, How are you a CRM, you are the advisors, desktop, or your performance reporting tool? And we would say yes to all of those things. What we’re not, though is sometimes equally as important to understand. So we’re not an advice generation tool. We’re not trying to be money guide or in money. And we’re not an Orion or an Addepar investor. But what we do is we connect to all of those platforms through API’s. So the data that’s most relevant to the day to day from now So he’s available to you in practice.

Jack Sharry: So let me ask a little bit about kind of the support that you provide. Because I’m assuming that at Salesforce I know as a as a business practice or as a business approach, likes companies like you that make what they’ve built, which is robust and can do just about anything, but you’re that intermediary that really makes it simple in terms of applying it to a specific firms business. Talk a little bit about how you do that do like concierge services, do you have coaching? How does that all online? How does that work in terms of just helping advisors, apply it and make it their own and make it useful as a tool, as you’ve described?

Adrian Johnstone: Yeah, for sure. Look, importantly, it’s important to understand that we don’t take away the flexibility of the Salesforce platform. So you can still customize and configure and do all those things with fructify. It’s just that it works out of the box, you don’t have to start from a blank slate. But we provide everything from a curated onboarding service. So when a client signs with practice fire, we have an implementation team, they take them through a structured implementation data migration service, and that includes trend this year are actually coming to market with what we call practice by you, which will be a full university style experience for our clients. Every new feature, all of the existing functions within the tool, all laid out with on demand, video, audio and text support as well. We provide a client success structure for every one of our clients has access to a dedicated client success manager is there to help drive adoption and utilization, best practice. And then beyond that, we provide all the technical support, you would expect 24/7 access to support materials, we’ve got wide hours of support for through a support portal and support agents, all those kinds of things. As a business for clients in five countries around the world these days, we actually have to manage those things in fairly broad hours and deliver last minute.

Jack Sharry: Gotcha. So you touched a little earlier, though, of where you reside. You’re not investing at Orion at a bar, you’re not any money guide, you’re not a lot of those sorts of tools, I’m assuming you can fill us in that you coordinate and connect and integrate those sorts of systems. Talk a little bit about that. But my view, quite simply is that the future financial advice centers on the data integration and coordinating of the solutions that you’ve described, the solutions that invest that are money guide, or whoever offers that help achieve clients achieve better financial outcomes. So talk about the role that you play not only the role, but then how you enabled everything I’ve just described fundamentally is about growing the practice and you say in your literature, that that’s what you all do. So talk about how you do that.

Adrian Johnstone: Yes, we know that for most firms, the goal is more clients more efficiently for higher revenues and greater profitability. It’s not unique to the financial advice markets, or businesses around the world are looking to achieve. But unfortunately, within our space, often that’s impeded by data being and lots of silos, it’s more complicated than it needs to be, there’s still too much pen and paper within our industry. And so we look to be that single unified workspace that orchestrates as much of everything. We don’t believe in the one platform to do it all mentality, because that historically has proven to be the least good as many of the options.

Jack Sharry: I’m curious they do. If I may interrupt. You say it’s the least good of the many options.

Adrian Johnstone: I always say that, because technology evolves incredible, right? Look at the FinTech space. Today, the number of new firms popping up every year, the number of firms that exit within a given year, the pace of evolution to be the best in what you’re doing. The broader you make that base, the slower you are, you just can’t. You can’t evolve platforms at the speed that you need to if you try and do everything. The flip side of that, and I think the market here in the US went this way and maybe five years ago, is it became incredibly disaggregated. Because everyone went for the pure best of breed without contemplating integration. And so you finished up with lots of silos are very good, but isolated pieces of technology. What we know is that the industry fundamentally is a people industry. It has a lot of great people working within it, and is dependent on deep relationships with clients to make its money. So what we do is aim to create an incredibly robust environment for both the client record and all of the information the firm needs, so that the business is capable of delivering on the experience the promise that they make to their clients. But we also want to make technology that’s awesome for the people who work in the industry to us, because we know that it’s a war for talent as well. And people churning and moving will often move because the technology is not good enough. So we want to make sure that our clients are competitively advantaged when they’re looking to When business and when they’re working to win staff or acquire firms and bring them in. And so one of the ways to do that, beyond the things that we can control within our own walls, is to make sure that we deliver on what I think has been an over promise and under delivery for the industry for years, which is around integration. And so we work hard to bidirectional API level integration. Not, hey, look, you can click here and just get into the other tool. We want to make sure that that is deep and orchestrated.

Jack Sharry: So I want to dig into that integration versus the term we use LifeYield called coordination. It’s probably your comment earlier, just a moment ago about bi directional API point being as the need to talk back and forth between the technologies, whether it’s debt aggregation, its planning tools, its proposals, its ongoing portfolio management, its rebalancing its income generation, it’s all the stuff Yeah, with a key focus that we often talk about LifeYield, around improving outcomes through managing cost, risk and tax. So those are the sort of the key elements beyond performance. We haven’t met too many people that beat the market consistently, in fact, can’t recall anyone that we’ve ever met the basic consistently. So those cost risk and tax become all the more important, wind up to say that at the end of the day, it’s one thing to be integrated. But even more important, and it sounds like what you do, I’d love to have you comment on this. And that is to coordinate, you may not do planning, but you take that information and you store it as you will, and then you use it as you will but describe how that works. That would but I call coordination where you’re often in the sort of the in between the baton pass between data from here and data to there, and so on, when he talked a little bit about how to rectify does that.

Adrian Johnstone: Yeah, the vision for us is that each piece of data should only need to be entered in one system once. And then it should propagate to all of the other environments. For a lot of that information. It begins its life in practice, because it’s around the client record. But we don’t want that to have to be reentered and potentially become out of out of date or out of step in an integrated platform. But equally, we know that as you’re going through the processes, whether it’s in a portfolio reporting tool, or custodial platform or advice tool, we know that that data gets augmented, it gets added, it gets amended. And we want to make sure that again, you don’t have to rekey and understand or remember to make those changes back into the source system. In practice, we aim to make it such that you enter data once it propagates to where it needs to go, it flows back if there are updates or changes. And then when there’s a work product. So if we look at our financial planning tool, when a plan is created, that that plan becomes accessible on the client record inside the practice. Now where we can attach data to that, we also want to make sure that we can take that data, we can mix it in with the other data that we already have, and the data from the portfolio system that we already have. And we can give you insights that are deeper and broader than you would get any one system alone. And we talk a lot within our firm about doing more with data. We believe that the industry deserves technology partners, who are looking at the entirety of the data set and saying, how do we help this business deliver a better client experience? Because ultimately, that delivers a better commercial outcome from the phone?

Jack Sharry: So what are these we started to touch I want to explore a little bit further. And that is the whole notion of growth. It’s one of those things that everyone talks about, easy to say hard to do. And I’m assuming that these insights is that bi directional data, the flow back and forth that keeps it where it’s entered one time and is informing as you go, in terms of decision making, and next best steps and all that sort of stuff. Talk a little bit about how that manifests how that plays out with advisors in terms of helping them grow their business, maybe some examples, rather than the abstract of the workflow or the data flow, but more how does it play out in the real world of getting the client on board, getting a client leads someone else getting the client to get a better outcome,

Adrian Johnstone: when we think that growing is growing organically. So winning a few more clients is going in organically knowing which businesses to require roll into your phone. And, you know, we help immensely in both. And we really kind of look at growth at scale. How do you take a billion-dollar business and make it a $5 billion business? So how do you power a machine for that? We look at some tangible examples. We work with some business owners in multibillion-dollar firms today, where they’ve segmented their client base. Let’s keep it really simple and say ABCD is the client segments. So much of their sales strategy has been to go on when the next day is segment client because they have the most AUM but actually when you drill into the profitability analysis that you get through practice by its their segment B clients are the most profitable because the cost of service lower and so they’re able to pivot and so actually we want to point our sales team are going and winning as many segment B clients as we can And, by the way, we’re now going to review our segmentation and servicing model. Because we know that we’re over servicing clients in that higher AUM band to the point that they’re less profitable than others. So giving them the insight to make sure that they not only have the tools, the sales and pipeline management, all that kind of rich capability, within practice by that they have the insight that helps them to grow, well, not just grow more, because I think that’s important. You know, it’s great to say, hey, we manage a billion in AUM, now we have in his 2 billion in AUM, but if your profitability went down, it’s a different equation.

Jack Sharry: Gotcha. So it sounds like you’re working with a great group of clients. They’re assuming they’re, they’re happy, they’re growing, they’re thriving, and so forth. What are some of the challenges now? And what does the future hold? Maybe just take the some of the challenges? What are some of the challenges you encounter and trying to help people grow their business? I guess we all experience some level of resistance to change, and you’re on the cutting edge. How do you deal with that? And then in a moment and talk about where you see the world going?

Adrian Johnstone: Yeah, for sure. Look, resistance change is probably the number one challenge. And correlated with that is the wishful thinking that it’s magic.

Jack Sharry: I mean, there’s no magic.

Adrian Johnstone: There is no magic technology is not filled with magic. Unfortunately, it’s filled with a lot of hard graft and a lot of work. And we are fairly regularly in communication with clients and prospects. We’re growing very, very rapidly. And as we go through those conversations, we find people say, Look, I’ve been using this platform for 15 years. And can you reshape yours or just like that? Probably, we could, but you’re trying to get off that. So why would you want us to achieve that outcome. And of course, they’re just fearful of the fact that that people will have to learn and do something different. And so the human change element, that is the hardest. And helping them to understand that, as a technology partner, we can do heaps, to help them we can teach people how to use the system, we can make it fun and enjoyable, and intuitive, and all of those great things, but they’re not our people, as a business, you still need to lean in, you need to get behind it, you need to feel very committed to that change, practice a core system, a record, you know, the two big pieces of technology in the firm, what holds your client relationships and what holds their money. And so, from our perspective, when firms look at changing portfolio systems, or custodial migrations, they treat that with great seriousness, and rightfully so. And they look at swapping out, say, a legacy CRM, to move to practice AI and workflow automation. And all of the great things that come with that is getting them to understand that it’s as big a change as moving your portfolio.

Jack Sharry: So talk a little bit about where you see the world going not only for Practifi but at large, and what’s your place in it, as you see things evolve. And certainly technology’s a key driver element leverage point. So talk a little bit about what do you see coming at large and also your role in it?

Adrian Johnstone: Yeah, look, for sure. The world moving forward, I think is a little bit the same as the world has passed. It’s all about data. Data is the lifeblood of the business. The question is, what are you doing with it. And that’s where I think the evolution is coming, whether that is more seamless integration across platforms, whether it is adding value, as I talked about before, for that more predictive lens, whether it’s going that next level into AI and fully augmented or artificial intelligence type experiences, what we’re seeing and where we’re providing a lot of focus at the moment, is into really analyzing the information. Wealth Management is a data rich environment. But so much of that data is just locked up. It’s not being leveraged. And so we’re doing quite a lot of work with what’s called TCRM, it’s, it’s a Salesforce extension through their acquisition of Tableau a number of years back, so that our clients can get business intelligence that is just deeper and broader, not only from the data within our platform, from other data sources that they may have as well. So that we can we can help them crunch massive volumes of data to get really intelligent and predictive insights for how to gear their business or growth.

Jack Sharry: Will you will be to be an enabler of other capabilities that may have some of the AI or the different ways that portfolios be managed? Is your role in enabling role? Is it a primary role, but how do you view that?

Adrian Johnstone: So it’s a little both depending on context, so we enable quite a lot of that AI future because we hold so much of the information or the data points around the client, how often are they communicating with you? What are they communicating about? How are they interacting to content that you say, send to them? So we have a lot of that information, but we’re also an aggregation point for data from lots of other platforms. We bring that together. So the rich data volume that exists in and around Practifi by being supplied out to those other tools allows us to enable, but it also allows us to be a creator in that space.

Jack Sharry: Well, this has been really interesting. And as we like to keep our podcast short, and to the point, at least under 30 minutes to last questions, I should say, this has been a great conversation, and we’d love to hear your three key takeaways from our discussion today.

Adrian Johnstone: Yeah, looks to me, a key takeaway for the industry here is, there is a huge amount more than your technology can and should be doing for you. Don’t be afraid to change, you need to look but you need to understand that it’s, it’s a big deal, you’ve got to be prepared to lean in. Another, I think, for me would be that it’s no longer good enough to accept that you have a lot of disconnected pockets of technology. If you are working with vendors who won’t integrate, it’s time to move, they’re inhibiting your growth, you wouldn’t put up with that in any other aspect of your life. You shouldn’t put up with it in your corporate technology. And then the final one there would be don’t turn yourself into a technology business. great wealth management firms are technology companies, don’t get yourself into the trap where you’re buying one of these base platforms, whether it’s Microsoft or Salesforce or something else. And then all of a sudden, you’re hiring developers and trying to make that investment to make it exactly as you want it. If we all had to go on away and design our own car, I shudder to think what the roads would look like. Leave the technology design and build to the professionals and look for practice sigh or firms like us to come and help you.

Jack Sharry: That’s great. That’s great. So our final question is always my favorite. And it’s away from the business at hand. And that is what do you do outside of work that your colleagues may find interesting or surprising or people that no you may not be aware of. So something might be particularly passionate about or something of great interest to you. Please share.

Adrian Johnstone: Jack, I’ll circle back to a quick tip we’re having before we came on air, which is as an Australian, everyone assumes sun and surf. And that’s where you want to spend your time. And my comment earlier was I give up every summer for a snowy winter. So for me, it’s all about snow and mountains. So looking forward to trying to drag a snowboard out and get out on a hill.

Jack Sharry: Terrific. So thanks, AJ, this has been a very interesting and enjoyable conversation. I look forward to our next. For those who would like to learn more about Practice fire, get in touch, what’s the best way to reach you?

Adrian Johnstone: I think just practifi.com There’s plenty of ways through there to make contact.

Jack Sharry: Great, terrific. So for our listening audience if you’ve enjoyed our podcast, please rate review, subscribe and share what we are doing here at WealthTech on Deck. We are available wherever you get your podcasts once again AJ thanks. It’s been a real pleasure. I look forward to the next time.

Adrian Johnstone: Absolutely. Thanks.