Unlocking the Power of Marketing in Financial Services with John Wernz

Jack Sharry: Hello, everyone. Welcome back to this week’s edition of WealthTech on Deck. Each week we talk with senior executives about their leadership roles at wealth and asset management firms, fintechs, insurance and annuity companies, and workplace retirement businesses. Our focus is on the strategies these various firms and individuals have developed, their views on trends, and what disruptions they are finding interesting and/or causing lately. Today we talk with John Wernz. John has served in a variety of roles across the RIA and fintech landscape. I’ll let John tell his story, but a couple of highlights, he was the chief marketing officer and the chief revenue officer at various times with Wealth Enhancement Group or WEG, as it’s sometimes called, a leading RIA aggregator. He is the executive director at Dataline. He has been actively involved in venture capital and private equity investing in the fintech space, which we’ll also talk about. He’s currently an investor and advisor to many fintechs, including LifeYield. So we’re thrilled to have him on board. He’s been a great friend and advisor to our firm. And, John, welcome to WealthTech On Deck.

John Wernz: Jack, this is too fun already, talking to a friend in the industry. This doesn’t seem like work. This seems like a normal day for the both of us.

Jack Sharry: Yes, it is. In fact, we do this, don’t we? So, John, let’s start with your backstory leading up to WEG. Like so many in our industry, you started as an outsider. I, too, did that. And from my observation, that perspective has served you well and our industry well. So tell us about how you got started and what you learned along the way.

John Wernz: You know, being a marketer is still a little bit of an outsider, I think, in financial services. Luckily, we’re a growing group, as you and your team know. I was in college, and I knew I was in a business major, I didn’t really know what to do. And I have an older brother that is an ad exec, a creative at an ad agency. And he looked at me and he said, “You’re not me.” And he meant that really nicely because he could draw and he was artistic. And I was good at math. And he said, “John, I think you need to be in marketing.” And so that was what, that was what steered my college major. Out of college, I was much more of an analytic, I actually was a trend analyst as my first role. Focus on analytics led me into direct and revenue based marketing. And so, first couple jobs out of college, I was crunching numbers in direct mail and database marketing. And I got the entrepreneurial bug about five years out of school. And, you know, as a theme with many of us, you know, right time, right place, with some good people. But I was lucky to jump on to a direct response agency. So this agency was focused on providing different channels of performance to different companies, not financial services, I mean, a little financial services, insurance, LASIK, you name it, we were probably doing it, and spent almost a decade there growing that firm. And we started at 9 million, and it was well over 125 million when I left. And that was really that focus on ROI driven marketing. And one of the great things about that agency that it burned in my head was, two things actually. One was, you know, clients only spend more if it works. So I mean, this was like bottom line. It was like, it wasn’t a project, it was a campaign. And if those campaigns work, they did more of them. If it didn’t work, they didn’t do them at all. And the other one was, as someone who’s been on both the agency side and what I’ll call the client side, or the RIA side, there’s safety in numbers. So it was it was really a drive to make things work. That 10 years really taught me how to be a consultant, what to work in different industries. And then one of our largest clients happened to be Ken Fisher and Fisher Investments. And so I had the pleasure of working with Fisher Investments for a number of years, one of the leaders in the RIA space in client acquisition, ROI based marketing. And that led to an introduction where I was recruited to Wealth Enhancement Group. And, as we can touch on later, a really cool story of a firm that, it’s become known as an aggregator, but, and this might just be my background and my preference, I’d still argue it was really known for organic growth.

Jack Sharry: I have to insert an observation for those of you who follow Ken Fisher and think of him as a money manager, not to minimize that, although I’m about to. He’s far less a money manager and far more of a marketing agency that knows how to get money to come his way. I don’t know if you agree with that, or if you want to bow out of that one.

John Wernz: I strongly agree with that. And they even, you know, I started working with them, this is dating me a little bit, but in the early 2000s. And 20 years later, I’d argue they’re still in the lead seat in that position.

Jack Sharry: It’s an incredible marketing story, for those of you who think it might be an asset management story, it’s certainly that. They have a ton of assets that they keep bringing in, in spite of themselves sometimes, but bottom line, John started that or was early on in that journey, so he knows a little bit about how to raise money. So before we get into the Wealth Enhancement Group, I know that you have a passion for venture capital investing and private equity investing and you’ve recently taken on a position, and we’ll get back to Wealth Enhancement Group because you spent 12 years there and it’s important stuff, but tell us a little bit about what you’re doing at Dataline. You’re the executive director, as I understand it. Who are they? What do they do?

John Wernz: Yeah, it came through a passive investment in a venture capital fund named Vestigo Ventures in Boston. They’re related to an incubator which has a great track record of launching companies that have been highly successful, like EverQuote and SmarterTravel. And I was in a meeting one day and, and they pulled me in and said, John, what do you think of the lead generation space in financial services. And I, of course, had a very strong opinion about that good, bad, it’s a vastly growing space, it’s one of the fastest growing spaces going right now. And some people have done some great work in it. That said, we happened to align on the idea that there was room for another player, and that was Dataline. This was launched in February of last year. So it’s a firm that’s been around for well over a year. And its role is it sits between financial publishers, so people are on the internet, they’re searching for financial content, and then providing those leads to RIAs. So it’s a lead service that provides those leads. It’s a little different for some of the other services out there in that it’s fully transparent, targeting is allowed, and it’s a really high quality exchange of a one to one exchange, meaning you know, if a lead happens to come through a financial publisher, that financial publisher works with Dataline to then get that single lead to the right firm. And it’s really about being efficient in that process. So it’s a great space, that space is growing like crazy. There’s a number of really strong companies, Dataline has quickly become I would, from what I can calculate, the second largest player in the space in just over a year. It’s been a really exciting time.

Jack Sharry: That’s good. I just attended the Tiburon CEO Summit and Chip Roame talked a good bit about data and marketing and online and just in terms of lead generation, that’s a whole new world. Sounds like you’re once again, in the lead in terms of where that world is going. Talk a little bit about Wealth Enhancement Group. It’s a fascinating story from where I sit, and not unlike you, your CEO, the CEO of Wealth Enhancement Group, took a different path, I think it was Procter & Gamble, one of the big consumer products companies. Talk a little bit about WEG and what makes it so special? I do think it’s pretty special firm.

John Wernz: It is. And it’s, you know, I spent 12 years of my career there and left about three years ago and have continued to follow their story, because it’s a really impressive one. When I was connected to them, which was in 2009, right after the recession. It had been Minnesota, Iowa, North Dakota, relatively modest growing firm, you know, nice growth, nothing exponential. And it was really, it was driven on a radio show, like many of these programs that you see, like Ric Edelman, or some of the other ones that you’ve seen out there, and had done really well on that. Why I was specifically recruited in was the foresight of the CEO and of our board at the time said, you know, this has got to be multi channel marketing. And to be honest, I mean, I think, you know, radio still plays a lot of our lives. But do you really want to have your marketing plan based on AM radio? I don’t think that’s the most, that’s not probably the most progressive plan. It was a unique opportunity to come in there and say, how many channels can we build, similar to my background at Fisher, that produce? That could be direct response TV, direct response radio, direct mail, interactive social media, referral program, COI. I mean, the list is long. And our goal was to make them all work. The goal is we don’t need one. And as you referenced, the CEO’s background, it was actually General Mills. And he managed different cereals. Really sharp marketer named Jeff Dekko, he had the foresight to say, I think I see where this industry is going. And it’s going towards finally getting organic growth from kind of, you know, the old days of the lone wolf running around with a phone book. It’s like we’re actually building these bigger RIAs, these bigger firms where you can run these programs. And that has only accelerated, I would say, I mean, he called that 12, 13 years ago, and he called it, thankfully, very right. And so, what a fun time to be part of Wealth Enhancement Group to see it grow. Later became, and continues to be one of the most aggressive aggregators out there. But a lot of the people who join Wealth Enhancement Group still join because they want to grow. You know, there’s there’s a lot of great options, right? There’s a lot of great firms, a lot of money in the space, a lot of private equity. A lot of firms are doing a lot of cool things, the people that generally opt in to Wealth Enhancement Group, there’s great reasons I mean, operational efficiency, platform, and culture. But growth, I think still gives them a little edge over some of the other firms when they’re looking for who to join.

Jack Sharry: So, as I’m thinking about you, John, we have the pleasure of spending some time on the phone from time to time in terms of our interests, which largely align. The word I keep hearing from you, and rightfully so, is the word growth. So I heard that with Ken Fisher, I heard that with WEG, I’m hearing that with Dataline. I know there’s a bunch more that you’re invested in and involved in from a, both a VC and private equity standpoint. So talk about that, including LifeYield, by the way, you’ve been a great supporter of ours not only in rooting us on but with ideas and so forth, all centered around growth. So talk about that, if you would, a little bit. Growth is the theme. If I think of you, I think growth. So, talk about that if you would.

John Wernz: Sure. I mean, I have some strong opinions on this and it’s, a lot of it is rooted back in that agency, where it was produce or die, right. So I mean, I grew up in kind of, a lot of us have those kinds of those seminal moments where it’s like, boy, you know, this could be really easy or really hard, and the secret to everything was growth. Growth seems to solve a lot of problems. And so that, that was ingrained in my brain 20 years ago, you know, early in my career. When I think of growth, and I think of it in, in fintech, in RIA, I still think we’re at the beginning stages. I think there is a long way to go. I think marketing, things that has done well, in other categories outside of financial services are still super cool to financial companies. And I would argue as a marketer it’s a great place to be for that reason, because you do something that I would say is maybe even table stakes in healthcare, or in some other industry, and in financial services, it’s still just coming. And I think that is a structural change in industry. But what I’ll really, what I really believe at my heart is, if you want to be a marketer, and you want a seat at the head table, you’ve got to be ROI driven. Otherwise, it’s table stakes. And the secret, I mean, if you think about a pyramid. Brand, yes. Different value proposition, yes. Right. Awareness, yes. But when you, especially when you think of the RIA market, to me, the top of that is programmatic, repeatable, systematic growth programs, that you can go to a board, whether you’re privately held, or independently… I’m going to spend $2 million. And here’s exactly what I’m gonna get back. And that still isn’t done enough in our industry. It’s growing quickly, though. I mean, it’s, we’re, we’re like at that inflection point with these RIAs growing the way they are. So it’s a really exciting time to be a part of that. And that’s my advice to the marketers is, the further well, Jack, what do you say? Are you in marketing or sales? Yes. Right, me too. Right. That’s why you and I have always bonded so well. I think that magic mix, so if you’re like, I only do marketing, it’s like, you gotta be on that line. You got to, it’s like, I know, marketing can’t exist without sales, I understand. Right? They work together in almost every business we have. And they’re one and two. But I think really, you know, the CMOs, you know, often, I like to see CMOs over sales. I mean, it’s just how I think of an org chart.

Jack Sharry: So we actually haven’t dug in here. So I want to dig in a little bit more on this growth thing. And this marketing and sales thing, because we are birds of a feather in that regard. I said way back when I was first a wholesaler back in the forever ago, I’m not sure if I’m a marketing lead salesperson or a sales lead marketing person. And to this day, I can’t tell you, I don’t know the difference, other than I just do both. And they somehow go hand in hand. Talk about that, if you’d apply it to what you’re doing now, because I know you’ve invested in a variety of fintechs, you’re getting involved in some private equity work, what do you look for? What do you hope to apply? Talk a little bit about that growth thing?

John Wernz: Absolutely. And I can even apply it kindly to LifeYield and some of our conversations, because what I see is often you are looking I mean, if you think about that triangle again, one of the base things for any good differentiated product is, is what is your value proposition? Can I do something others can’t do? Can I really move the needle in a way that no one else is moving it? And that often, that’s a crowded space, that’s very hard to be that blue ocean or that different. But if you think of like LifeYield, and I think of the different programs, and I think of how the tech stack works, and I think about how we can look at householding all in one, you know, I don’t see that out there. And so when I first was learning about LifeYield, and someone showed me a demo, I saw something I didn’t see. I saw something and we ran a simulation, and I saw a program and a tool, and I’m like, that doesn’t exist. And I’m not… at least to my knowledge, and I really want to be a part of this. So that’s the spark to me, of what gets someone involved and what like I see in firms like LifeYield, or Dataline, or even different RIAs out in the industry. And then the second point is then structuring a marketing program around that. It’s, what channels are we using? How are we using, how cost efficient…? I’m actually really cheap, even though I love giant marketing budgets when they work. But the beginning of that is like everything needs to work, you test and drive everything, and what channels are we going to do? And I watch like what you and your team do, from a marketing standpoint, from a paid media standpoint, from an awareness standpoint, and you know how impressed I am with it. It’s like, you’ve got a differentiation and now you’ve got a bunch of working channels. And now you’re just pulling the levers. And it’s not just hey, I bought a billboard. I mean, you know, these are things where we know, how many leads did we get? How many demos did we get? What happened? What, how did this open this door? And where did this do this? And it’s like, that’s where the fun is. That’s like the magic sauce is pulling those levers. And that’s where I think it’s, I think we’re so lucky to do what we do.

Jack Sharry: Yes. So I get how you see it, I get how you observe the spark or the different… point of differentiation, I get how you see this distinctive value proposition essentially. And then once you get involved, you also want to lend some of your experience and lend a hand and how do you go about doing that? You’re an advisor with many of these firms, and they get to run it and you get to help them out. So how does that go? How does that work?

John Wernz: In my career, which was mostly spent operating, right, as, you know, owning or running the team and being part of a team, to being an advisor definitely has been a shift over the last three to four years. And I learned a lot of that. The other thing is when you’re not in the seat, you don’t know every fact, right. So as an advisor, you’re spending some time on a project. You’ll learn you have ideas to submit. At the same time, you haven’t sat in that person’s seat the whole day. So for me, it’s been about ideation and providing different areas around growth. I jokingly say, if you’re looking for someone to advise on governance, I’m probably not the right choice. It doesn’t mean I don’t follow governance or compliance… it’s just not like, I don’t wake up to run a governance program. I think they’re super important. I’m a big believer, I don’t want to do it. Like, it’s like, how do you get from x to y, and what is the very specific plan to get there, and working with teams to get there. You know, and what I’ll also say, is I have this funny thing, Jack. So I love to grow companies, right. And I’ve been fortunate to be in some places where I’ve been able to be helpful in that. I like smaller companies. So I seem to have this problem where I get into a company, and especially ones I’ve been at, like Wealth Enhancement Group, and it grows, and it may grow into something where it’s a wonderful company, but it’s like, it doesn’t fit me anymore. And I actually want to drop back to that stage where it’s like, I want to get back to that potential for growth, like I see at LifeYield, or Dataline, or seen at Wealth Enhancement Group. And it doesn’t mean those other, bigger firms aren’t growing exponentially. It’s just, I like the wild, wild west. I like that beginning phase. And so usually, like with someone like we’ll have a marketing staff of, you know, instead of 50, of 5 or 3, and in that there seems like there’s always an area to be helpful, right? Like, like, none of us know it all. So the staff might be really good at this one thing, but they don’t really see this side of it. So often, my role is to round out their preview to say, okay, we’re nailing this. I have, actually have a different board I’m on in the banking segment. I feel like they have two, they were doing two of the three marketing things they should be doing. The two they’re doing, they’re doing wonderfully, my job is to get them to go to the third. And to see that potential, and to carefully move that way.

Jack Sharry: So one of the things I know to be true, but in our conversations is that you remain a student, you’re always listening and learning. So how does that apply, especially as you’ve kind of done it all? Not it all, but you’ve done quite a bit, you achieved some great success. You learned a lot. How do you keep so enthused around all this?

John Wernz: For me, and I think, Jack, this might be we’re a little bit of similar birds of a feather. To me, it’s a lot of networking. I mean, I certainly I read and do you know the same things we all do. But it seems like most of my most interesting findings come through discussion, and come from talking to people like you and talking to other leaders or CMOs. And it’s one of the most enjoyable parts of my current role, which is working between different companies and different things is I talk to a lot of people at a lot of different firms. And a lot of, you know, hopefully I… my first goal is to share, as you and I share that in common is, you know, what can I share about my knowledge of organic growth?

Jack Sharry: Sure.

John Wernz: But I mean, the amount I get back, I mean, even if they want me to tell more of my story before hearing theirs, it’s like I’m always adding a piece to the puzzle and that puzzle changes every day. And I mean, even things like what we’re doing for using Chat GPT and others. It’s like you and I are having discussions we didn’t have six months ago.

Jack Sharry: It’s also fun to watch, did this podcast that probably will come out by the time this one comes out. I did on Total Merrill with John Thiel, who headed up Merrill at the time and you know, John, he’s on our board as well. And Rich Aneser and John Connors, who heads up the Boathouse Group, a great marketing company based in Boston. And we had so much fun just talking about what they did. I can’t think of another company that actually did marketing back in the early 2000s. They did… Total Merrill was a full on marketing program and it worked based on clear strategy was, it James Gorman, now chairman and CEO of Morgan Stanley. At the time, he was president of Merrill. He put a big bet on, and it was marketing. And he put the dollars behind it, and he made it work. This was a strategy fortified by marketing and first big success, and they raised gobs of assets and changed the way business is done. So it’s always fun. And what I’m seeing is, I’d love your comments on this. What I’m seeing happening now is marketing is sort of coming to the fore, we actually do quite a few shows on marketing. Because it’s I, to me, it’s integral to whatever the future of financial advice is going to look like.

John Wernz: Especially in the RIA space. I think it’s true both in the fintech space and RIA space, and they may be changing at a different rate. In the RIA space, when you think about the number of players over, you know, used to be big if you had 5 billion in assets. And I still think that’s big. But I mean, the number of firms over 10, 20, 30, 40, 50. And for the first time in our industry, we have what I’ll call a closed loop. Right? It used to be I’m an advisor, I aligned with Ameriprise and yeah, I process my paperwork with them. But I don’t really have a home office really, like a relationship. And so, you know, there was no way to generate leads or to in a financial structure, get that lead to an advisor, and then ensure that it was worked the right way, in a way like Fisher has done for 25 years, and now many RIAs are doing it. And so to see that landscape change. I mean, there’s a reason why I think like the company I mentioned earlier, Dataline, is exciting. It is in an exploding time when the industry where this, that demand didn’t exist 10 years ago. People wouldn’t have known what to do with those leads. It is the right time. Same with fintech. I see really savvy moves, the ability to use Account Based Marketing, digitally driven for targeting, things people are doing on LinkedIn to, you know, work with specific companies. And the way people are really able to pinpoint. You know, it was, you know, 20 years ago that was done via direct mail. And now it’s done, it’s done in a much cooler fashion.

Jack Sharry: Yeah, in fact, we don’t print anything anymore. We haven’t for, maybe ever at LifeYield. It’s all LinkedIn and email has been, remains effective, but very pinpointed in terms of who we’re targeting, and who we’re talking to. And, and, of course, social media. And doing that, in a variety of ways is all part of it. So, John, this has been great, we could keep going on forever, as we sometimes do, not forever, because we both always have schedules that don’t allow, but always enjoy getting caught up with you. So thank you for this wonderful conversation. As we look to wrap up, I’d like to ask if you would share three key takeaways for our audience on what we discussed?

John Wernz: Yeah, Jack, when you asked me to be a guest, I had been thinking about this one. And I think I’ve teased them out a little bit as we were talking, but I think they’re really strong ones. The first one is what I use the word organic or marketing, it’s in its infancy in all of financial services. It is a great time for all firms to look at their opportunities in this area. There are agencies popping up, there’s platforms popping up, there’s companies doing great independent work, it’s never been stronger. And it’s a really exciting time. And again, I would argue financial service is a little late to the party, but we’re getting there. So I’m very excited about that. The other one, which we touched on really quickly, though, is the effect of private equity on the space. And I view that as an extremely positive impact. When I was at Wealth Enhancement Group, we had with three different private equity firms, we partnered with, those firms made us so much better. So like we had the all time songs of like, they helped us mature, they nudged us. I mean, they, you know, we had some hard days. But what a win, I mean, the, you know, huge contributing factors to the growth of Wealth Enhancement Group. And I know not every private equity or VC investment yields a wonderful partnership. But I think more often than not, they do. And it’s bringing things like lifetime value and net present value and recognition to just how valued all the services we provide and all the clients we generate. And so I see it on the B2B side, it’s going to B2C side. But I think private equity still views us as very early in this kind of consolidating growing period. And I would expect a lot more of it. And that’s, I think that’s a really, really good dynamic for, for all of us in this industry. The last one’s a little silly, but when I try and give advice or… people, the thing that I’ve butted my head up against the wall most is size of company. And that goes back to that kind of goofy story where I’ve seem to grow companies out of the phase where I think I’m the best fit. And I have to deal with that. And that means I may have a life shelf at any company I’m at and the good fortune to be at a growing one, of course, which is not always easily done. But you know, I hope people out there are really looking around. Because I mean, there’s great big companies, there’s great small companies. It’s just about like, where’s your fit? Where’s your home? Who’s your people?

Jack Sharry: I think that makes a huge difference. So I’m not surprised that you figured that one out. So, John, it’s been a great pleasure to spend this time with you, as always. And now for my favorite question when we do our podcast, what do you do outside of work that you’re excited or passionate about that people might find interesting or surprising?

John Wernz: Yeah, this is a weird one. I thought this would be at least keep your audience for two more minutes as we wrap up. So I’m based out of Minnesota, Minneapolis and love to travel but have happily been, and have a wife and two kids, late teenagers. And we actually all surf, and we surf in Minnesota. So that’s a little bit different. I understand. So we have done some surfing when we have the good fortune of traveling or being in warm weather. And we do that but we actually have what’s called wake surfing in Minnesota where you surf behind the boat. And we are all semi addicted surfers. I’m the worst of the four of us in my family. Our two kids are quite incredible, where they’re doing tricks and doing crazy stuff. And it’s spring in Minnesota. So that’s top of mind for me is it’s finally, the snow is gone, it’s time to get outside. And for us, it’s time to surf.

Jack Sharry: That is great. That’s great. I’ve seen that on social media the, what… what do you call it, wakesurfing? Yeah, that’s great. I love that. That’s why this is always my favorite question. Who knew that I’d be talking to someone who’s a wakesurfer or has a whole family full. So, John, as always, this has been great to catch up. I love the opportunity to not only hear about the business side, but also hear what’s going on in your personal life. 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. John, thanks again. It’s been a lot of fun. I really enjoyed it.

John Wernz: Jack, it’s good to see a friend and I really appreciate you having me today.