Number on. The Doctor Relax. You're listening to
episode 247
of the W tech today podcast.
Never Craig,
founder of Ezra Group Consulting. And this podcast
features interviews news and analysis on the trends
and best practices,
all around wealth management, technology.
Now my guest for this episode was David
Mc, head of Wealth Solutions at Asset mark.
And that was a big coup for us.
We're trying to get, David on the podcast
for a while. And this recent announcement
about them,
buying some software from Tiff or donor advise
funds was the on perfect opportunity to get,
him on and talk about the the Asset
mark platform,
the growth of donor advice funds,
or why they decided to add donor advise
funds to their offering,
of course, why they chose tip give as
their Saas
solution, and how it's being integrated into their
Ew wealth manager platform.
Now, Dave been at Asked mark for over
9 years,
Before that, he was at Charles Schwab for
7 years where he was managing director of
their investment platform. And before that, Franklin Temple
for 9 years. So he said, quite
ill
a career in the Wealth management and asset
management base.
But before we get started with this episode,
let's talk about tech stacks. And this could
be the tech stack of an Ra,
broker a dealer, a tampa like Asset mark
an Asset manager or other firms. We've seen
the tech stacks of hundreds of firms here
at as group, Let me tell you most
of them are loaded down with tech debt.
Let's face it. Tech debt acts like an
anchor.
Holding down your firm's efficiency and ability to
scale.
So if you wanna free your farm whether
you're an R, broker dealer or a tampa
for exponential growth. You need to run. Not
walk to our website ezra dot com and
click the golden contact us button on the
homepage.
Once you do that, the experienced team at
Ezra group can then evaluate your current tech
ecosystem and deliver targeted recommendations. Such as optimizing
your existing systems,
and your operations or running an Rfp and
helping new software to bring your firm to
the next level,
You can take advantage of our free consultation
by going to ezra group dot com.
Alright. So a couple of housekeeping
notes before we continue.
Please remember to subscribe to the show wherever
you listen to podcasts, say you don't miss
an episode.
And when you get some time head over
to
our,
are 1 of our sponsors, the invest in
others
charitable
foundation. And you can find them at invest
in others dot 0RG.
Alright. Let's kick this thing off.
Alright. I'm excited to introduce my next guest.
It is. David Net, E of Wealth solutions
from asset mark. David, welcome in the program.
Thank you for having me. I appreciate I
appreciate your time today, Craig?
And I appreciate your time. David, where are
you calling from?
I am about 20 miles out of San
francisco Bay area. A little bit east there.
Thankfully. It's a lot cooler today, than it
has been over the past week. We've been
under a... Massive heat wave here on the
West Coast. They gotta tell you.
I I like visiting in California, but I
I have to say that they... You have
the the wildest weather.
It's either
storming
or it's a drought or it's a mud
slide or it's earthquake or it's smoke. It's
always something. But In a couple of the...
Like, this time of the year, you've got
some nice weather.
We do. We do. Especially in the bear,
get you get
carl the fog to roll that occasionally. But...
Didn't do that this weekend. And it was
a hot 1. So... But nice nice to
spend some time with you today. Oh, absolutely.
So we are talking about a,
a new announcement you guys just made about
donor advised funds,
your your your
collaboration with Tiff,
there Tiff give
product, which is a
philanthropic platform, serving families employers, other cause based
communities?
And can we talk about
the,
this
collaboration, how it's going to work,
how you made the decision. And first of,
let's start up with
Why donor advise funds? Why did you see
that as something you needed to add to
the Asset mark platform?
Yeah. It's a it's a great point. I
mean, I think it all starts. There. Right?
And
what we've seen truly is a growing interest
in a charitable giving across investor wealth tier.
Over the past couple of years.
And that's you know, consistent with the overall
ba
account and Au growth that you see in
the industry, if you if you go back
to, like, about 2008, what you see is
that Au and donor bias programs is tripled
during that time frame.
And today, there's now more than 2000000 staff
accounts in United States. And so we've just
seen a lot of growing demand from the
adviser base.
Around helping clients with donor advice and charitable
giving.
You know, furthermore, I'd say that many of
the advisors that we work with. And as
you know, we work with more than 10000
independent financial advisors
across the United States. They could many of
them consider themselves holistic planners or wealth planners
more And I I I'd I'd say Charitable
giving is often an integral part of
clients
financial plans.
Particularly when they're working with the affluent and
high net worth plan. And, you know, for
many of these clients,
a donor advised
program provides a lot of benefits,
instead of trying to go out and do
some private foundation. You know, there's a lot
of complexity to trying to form that. There's
a lot of administrative burden and a lot
of expense,
and,
you know, donor advise funds. On the other
hand, offer a lot of these same benefits
of a private foundation, but they're not subject
to a lot of the cost.
And a lot of the other issues that
that that you had trying to do that.
Yeah. That's something that I didn't know that
the the Au tripled, and there's over 2000000
of these accounts. It it's sort of kinda
snuck up on us.
You know, it did. And, you know, I
mean, a lot of people hypo
around maybe why
that has happened. And
Now, it it does feel as though it
happened in kind of concert with some changes
to tax laws, and and I I'd go
back to the 2017
tax. Cuts and Jobs Act. For example, You
know, that time,
standard deductions, they went up dramatically, and then
you also had caps,
being put on common itemized tax deductions like
state taxes and mortgage interest were all those
in California and New Jersey,
we're all pretty familiar with those. What I'm
the that familiar.
Yes. Painfully familiar.
But the result of those tandem actions
was that a number of the number of
taxpayers that qualify for itemized deductions,
actually fell from 30 percent pre to 10
percent post.
Now with these caps on state taxes and
mortgage interest
Suddenly, the impact of charitable giving in terms
of relative tax impact for many of item
taxpayers it significantly
increase.
Now to be clear, I just wanna be
clear, I'd say that, you know, taxpayers,
they've been giving for decades. It's not been
about tax. It's been about doing good.
However, these new tax laws provided incentive for
many taxpayers to think much more holistically
and think about how to optimize their
and philanthropic endeavors.
Let's take a break from this interview to
talk about the in invest in others charitable
foundation.
Does your firm give back to the community
in a meaningful way. If it does, you
should apply to the invest and others, charitable,
champions list.
What is this charitable champions list? It recognizes
financial advisory firms that give back to the
communities
by promoting a cultural phil
amongst their financial advisers and employees.
Now, not only is a chance to share
the impact that your firm has had on
the community. Their but it also
recognizes,
it is recognized by the invest and another's
foundation. It can bring credibility,
to these film philanthropic programs that you're running
through peer recognition,
improved employee morale, and also it can service
a talking point with clients and prospective new
hires.
So if you wanna learn more about the
invest of this charitable champions list, go to
the website, invest in others dot 0RG.
And remember, there's a... The deadline for applying
is July twelfth. So which you now in
July twelfth, go to invest in others dot
Or g and apply. For your firm to
be recognized as a charitable champion.
What do you think about some reports that?
A third of donor advice funds? Don't distribute
any money.
Are you putting in some guard rails to
ensure that they are actually sending any money
to charities.
Great. I think it's a great question.
And what I think I would point to
is...
1 of the advantages of a donor advice
fund is that it allows you to
give money away. And it's irr evo. Once
you once you put that money in the
fund, that's an they were irr evo donation
to a charitable cause, But it doesn't it
doesn't designate the timing.
And so it allows you to get that
tax benefit up upfront at the time of
donation,
but you have time to donate those assets.
As you see causes that materialize that makes
sense.
And I think it's also important to realize
too that the advantages of a dinner advice
partner are very much focused on the assets
within
that fund
being managed and growing over time so that
your actual...
Charitable and
impact is actually greater over time, than if
you just were to do cash donations, you
know, at point in time at a given
point in time.
And so III wouldn't be surprised by the
stat that that you just mentioned. But I
I would also argue that...
Charitable giving and, you know, foundations kinda operate
many of the same ways. They don't just
donate,
you know, everything grants... It's kinda kinda gets
it's granted,
in that given year. There is sort of
a process.
There is sort of the needs of a
charity over time,
and I do think that Donor advice funds
help
families,
honestly
operate like small foundations and think about how
to support charity over time and also how
to support
through more to more of a multi generational
point of view,
and we'll talk about that in a little
bit, but I I really find that to
be a really valuable
tool in our charitable
program
where we provide multi generational tools so that
the
charitable,
the money put into the da is thought
through at the family level, not just at
an individual level, and allows the family to
share values
and build legacy together and then support those
those things over time.
You made an excellent point there David that
the...
No ones were looking at the foundations and
other the private,
charitable,
structures that very, very wealthy people have access
to. No one's checking to see how much
they're distributing,
But I think da because they are new
are generating some a little bit, at least
in the philanthropic world are are getting some
flack.
Because of of they're that they're new and
that more people can now take advantage of
them. But as as you mentioned that they...
That give these same benefits of private foundations
without all a lot of the costs and
why shouldn't, you know, people who may is
are moderately wealthy have
those same advantages.
Agree.
So now you've you've decided to to bring
this in, you realize you have this need
from your advisors and their clients.
Why did you look for a software solution
and why why not build it why go
outside? For
Yeah.
There's a couple of reasons we've already established,
you know that the
demand was a big driver.
I I think it's important. We did have
a legacy
solution on the platform
for a host of years.
Com And
what what we found is 1 is it
was highly manual.
And, you know, just... In today's modern age,
that's just frankly not acceptable.
And what we found is it was incredibly
important for a couple things to happen. 1
is this needed to be easy
for the retail wealth space.
You know, they can manage their wealth. Through
a very digitally enabled experience,
advisors work in that environment
they expect the charitable side of this to
equally be as easy,
feasible in terms of the account opening, the
grant making process
processing times, etcetera. That that was a big
thing and technology enables that.
At the same time, technology and enables scale
and it scale benefits for asset mark, but
also scale benefits for the investor as a
result of, working with, our Saas partner, tip
and give in this instance,
we were able to bring down the investment
minimums and really democrat a solution to your
point, making,
know what was previous, a hundred k minimum
solution, really available for as as a little
as 10000 dollars to open a new account,
obviously
and then, you know, again, another... Another thing
that was, I think, really important for us
in enabling this solution is that right level
of education support.
You know,
investor charitable giving is a highly intentional act.
It's connected to people's values.
Their desire to do good, they have a
positive impact. When we find it's important to
help advisors have these personalized
conversations and empower them with the knowledge of
how a donor buys fun can simply be
a smarter way for many people, to affect
their charitable getting aspirations.
Those were the primary main things. And I
think the reason we primary went with Sas
is that it really enabled
client experience,
advisor experience,
drove scale, and really empowered and helped visualize
through digital tools,
many of those
education and engagement points that are very important
and what I again remind people is a
very intentional act or pete Juice do.
Now this is a Saas deal. So you're
basically hiring Tiff to provide you with this
cloud based software.
And are you integrating it into the platform?
Will it be white labeled? How it's gonna
be delivered to advisors?
Exactly. So... No. We went with a Saas
solution as I mentioned earlier,
what we have decided to do what we
work with Tip and give to do is
integrate that into the platform. Form. Through a
single sign on. So all advisers that are
signing in to
their advisor
workstation, we call that e wealth manager here
at asset mark formed
there's a single sign on. They'll immediately have
access,
we'll need to sign in to the Tiff
and give
portal.
But they'll have access to open a account.
There'll be Api transfers of, of course, data
that makes opening new accounts.
Charitable accounts much easier.
Api fees and data back to consolidate reporting
with the wealth side as well. So that
the client has a holistic view of both
their wealth assets as well as their charitable
account assets.
So it is a fully integrated solution here,
the asset mark platform.
It is white labeled.
The name is Asset mark charitable
on the
and we're very excited again work with Tiffany
and I can go into some of the
differentiator of of of some of the capabilities
that they offered in the marketplace, but we're
very excited to work with.
I mean, I wanna hear that. This this
is a technology podcast. So I'm I'm I'm
interested to hear. So now we're getting to
the point of... You've you've decided to do
this. You're getting rid of your legacy solution.
You're evaluating vendors.
So why why did you select Tiff give?
Yeah. So, you know what I'd say is
there are several large
charitable
foundations and program providers out there. And many
of them provide perfectly acceptable services.
However, when we were doing our search, what
we found is some of them
were
developed to serve the needs of the traditional
institutional giving entities. Those larger
foundations as an example,
And then we looked at a few others
that were sort of mainstream in the space
that geared more to the retail wealth space,
we really liked their focus on automation and
scale. Many of them were focused on that,
but that was kind of their sole objective.
We wanted a Saas solution that we could
1 white label and then course integrate into
our adviser ecosystem as I mentioned earlier.
We really focused very much on it providing
a modern
frictionless,
adviser and investor experience. It was very important
that having a an investor portal as well
that investors can see their activity.
And I'll say that through
Tiff technology,
we were able to fully automate the account
opening process.
You know, completely enhance the grant the grant
making process, bringing that down to being a
matter of days versus weeks,
and then just significantly reduce the processing time.
Another important point that
that Tip,
provided was they were able to use our
investment menu do. What we also found with
advisors is they're talking with the clients
and and building goals based portfolios
on their wealth side
and using specific investment solutions that are available
through the asset mark platform.
They didn't wanna go over to the charitable
side and have to learn a whole new
set of investment solutions, and and then have
a different conversation with the investor there.
So, Tip in solution was very,
agnostic to that and allowed us to to
use and import over our investment menu.
Also include values oriented strategies.
They allowed us to really set the investment
minimums. There's just a lot of flexibility on
the feature setting. They also allowed us to
play a much larger role in the client
servicing
education support process.
As you know, we're a leader in the
industry when it comes to... Premium service, premium
support, and, premium education.
So it really was sort of a compliment,
I would say, of of of strengths of
the 2 firms and I think best made
this work. The final thing, I I will
say I think it was
maybe the icing on the cake, but
it kinda ties back to something we're talking
about earlier. 1 of the things that I
thought was differentiated I didn't see anywhere else
was
the tip technology
it has tools that empower multi generational, charitable
objectives.
So what we find when we talk to
advisers is that It's often not just an
individual. It's families that are thinking about phil.
They often have a collective exercise, a collective
way of thinking.
And many of the, you know,
you know,
leaders in the family, they wanna instill, and
they wanna pass along those values and and
and build a legacy with that net generation.
And they had a lot of education and
tools that allow that. You can grant access
to family members to also
allow for grant, next you can do grant
raising activities
that where you invite people to also contribute
to to causes that are,
to, you know,
charitable causes.
And that sort of social dynamic,
and multi generational dynamic was a pretty unique
feature that and give offered that we didn't
see
anywhere else.
1 of the things I like about this
whole project here is
you're really
walking the walk when it comes to or
walking the talk when it comes to holistic
wealth management.
And that charitable giving is usually been part
of the tax conversation and advisers full. Usually
they're involved with that, well, we'll transfer some
money for you, then you can open up
your. You can do charitable giving. Now you're
really taking the lead on that, say, we're
gonna do the whole thing With open account
for you. We're gonna manage the money for
you. We're gonna, you know, help you figure
all this out. So
it's it's really expanding the role of an
adviser
in their client's financial lots.
Yeah. It it's, you know,
there's so many reasons that I think advisers
should be paying attention that if you you
mentioned it's holistic wealth. Right?
And
you know, it's specific to donor or revised
funds,
it's just another way for them to differentiate
themselves in the marketplace.
It's a way for them to service and
win more high net worth clients.
And importantly, it's a tool that helps connect
them to that next generation of clients.
You know, it totally get it. We work
with advisors all day about growing and scaling
their practices. As you know, Asset marks a
a business solution for advisors.
And we understand that there's a revenue weighted
bias to advice today and we're constantly encouraging
advisors to kind of prepare their businesses for
that.
Massive wealth transfer, which we know... Which was
frankly already underway.
I I think I read a survey from
fidelity just recently where
people under 40 are already inheriting
500
plus billion dollars every year in the United
States.
And then this next generation
is much more apt to stay with that
family advisor
if they've embraced things like technology,
personalization, and they're able to support them
and their values
and charitable giving endeavors and preferences.
That same study noted that 13 that 13...
Only 13 percent of advisors are actually engaging
with that next generation,
but that 13 percent that's doing it.
They're already seeing 1.6
times revenue growth and 2.7 times profit growth.
So we see this again, as you said,
part of holistic wealth,
as well as part of connecting with that
next gen client.
Those are pretty powerful statistics, David.
I wanna roll back to something you mentioned,
where on the platform on the E wealth
manager,
being single sign on,
to not only Tip and give, but
being able to build out goals based portfolios.
Now Asset mark acquired a company called, Buoyant,
number of years ago with a full featured
venture planning application.
Is that something that can link into Tiff
and give that... If I if I a
goal that I set up in v of,
phil or donations, can I then link that
over to open up a the the Da
account,
you know, inside the same platform?
That is where we wanna go, Hi craig,
so it's great. You're... You definitely understand the
vision. That that we have here. What I'd
say is today,
I would say v is, you know, certainly
industry leading,
financial planning
tool,
it's very much goals and objective based,
and it's certainly handle modeling and it does
handle modeling
for
tax implications and as well as charitable giving
and very much supports buyers use in terms
of thinking about a state as well.
So
that's that is definitely something that many of
our advisors a tool that they use today.
It'd be a phase 2 development for us.
To sort of take that and say, okay.
We've this plan suggest x percentage of donations
in your this given year to charitable getting
Now let's click that button and immediately link
over. It doesn't do that today, but you
certainly understand our vision.
Yeah. I can see the writing on the
wall. It's definitely where you're going with that.
And I think buying
acquiring volume was
something that I think a lot surprised a
lot of people in the industry, but not
me. It's... It made perfect sense based on
what I know about your platform and how
you work with clients that
it's something you need to do. If you're
really going to be understanding
how clients think and and looking at their
overall, and we keep using holistic the buzz
word, but that's an aspect of saying, hey,
We've see the need to be more holistic
well we need to have a financial planning
tool in house that we can control, we
can deliver a bespoke experience that is only
available on the asset mark platform.
Yeah. I, you know, I I intentionally use
the word that asset marks a wealth management
platform.
And we have evolved that over over the
past 10:15 years, you know, by we have
a very strong heritage in investment management, diligence,
portfolio construction,
but know, we have added lots of point
solutions to help advisors with everything from, you
know, tax management services,
to cash management services to securities back lending
programs and and now charitable getting programs. And
as you mentioned to at the same time,
advisor all you using more and more of
our tools to develop plans, the the holy
grail that we're driving to, of course, as
you said is making this... Super easy for
advisors because at the end of the day,
from we're wanting to empower them for growth,
make them be able to scale their business,
And so we need to connect all of
those point solutions to the plan. Right? You
got the plan, now let's put that plan
into action.
And we gotta make that a little bit
easier for advisors, and that is definitely a
key objectives.
Yeah. And you mentioned...
I don't know wanna I wanna to re
highlight that you talking about, the V tax
capabilities. We had a demo, I think back
in March.
And we impressed with the with the the
goals based planning.
The cash flow analysis,
you know, the net worth, you know, the
the the the balance sheet capability capabilities. So
I I see the being able to then
in in the future, say, hey, now, I've
I've got my charitable giving. Now, boom, open
up a death account.
Is gonna be hugely valuable to advisors.
And on along those lines, you mentioned, as
you say you reduced the grant process, the
opening the the account, and getting the grants
going from weeks to days.
That's right. Instantaneously,
anyone that was in that legacy solution They
often experienced, you know, for a grant to
happen, it might taken 3 weeks. We've taken
that down to 2 to 3 days on
average now. So you know, it just shows
the power of technology,
a technology brings.
It's probably not gonna,
shock your your audience here.
But for advisors, I mean, the delight that
brings to them to their clients. Right? That
just makes them what, like, a hero in
front of their clients.
It's it's really powerful tool.
Indeed, and it's also gonna increase the number
of,
da that are open. Once it becomes easier?
Why it open. Know if... If it's... It's
not... No brand doesn't take a long time.
It's all electronic, no paperwork required.
I would expect to see AAA
spike in number of deaths that get opened
from Ass mark clients by Mark advisors?
Yes. We're already seeing increased activity and it's
only been a matter of weeks. It's you
know, people think of, charitable getting is sort
of
into the year exercise.
Again, as I think about it, is the
thing about donor advice fund is we're always,
we're getting throughout the year. Right?
And so it it actually is is is
there is an element of into the year
planning. I do agree with that there is
some seasonality.
But what we actually see is that this
is a much more...
We are teaching people to better opt... Use
a da to better optimize their charitable giving.
In terms of their planning. Their overall financial
planning and their their life. And what that's
doing is is actually, creating
activity throughout the year not just in that
q 4 of time period.
Is there any
connection or any...
Planned,
future,
deployment with the
family office giving program that Tiff
acquired called giving place back in February which
was a solution for family offices and and
private foundations. Is that something that that uc
see asset mark getting involved with?
You know, they they
Tiff,
the the give program and they work with
Clearing is the actual foundation that that they're
they're sort of the Saas and then
they have the actual charitable foundation itself.
They they support more than donor advice funds,
and we have talked to them about the
other types of
of,
clients that they... And and solutions that they
can bring. Certainly, they can bring true private
foundational services
and democrat that to clients,
think they also provide charitable lead trust,
charitable gift annuities, So there are a host
of other things under that realm of
in charitable
that they support.
We just focused on the donor advice. Piece
for for,
the the first year, but we will probably
continue to have conversations with them as an
as our client needs continue to evolve.
It's all technology. Just making everything easier and
easier and giving people more and more
capabilities to deploy their assets.
In the way they see fit and without
requiring a lot of headache.
It's... Yeah. It's trying to build this, you
know, for a
subset it in your population. It's just really
hard to do that. And I think it's
important for firms
to really just be honest with themselves sometimes
about what they're good at.
And, you know, and then partner more in
the industry. I mean, as, Mark, we are
open architecture in terms of our custody services,
we have a custodian in the open architecture
and custody.
We're open architecture on the investments.
We have many wealth solutions that we offer
to to to clients to today into platform.
That are white labeled solutions with third party
tech providers today. So, you know, just knowing
what we're trying to do, We we know
who we are. We're trying to empower advisors
to grow. And better serve their clients. It
sometimes that means that we should just partner
with people rather than build solutions then this
is definitely 1 of those cases.
It's a great goal, David, and wish all
the best luck. I think we are out
of time.
Please, tell everyone where they can find more
information about asset mark.
Yep. So easiest place to start out is
at asset mark dot com. And I would
just encourage you to go there, find out
a lot about
how to work with the platform meeting an
adviser with the platform.
And then also just figure out all the
different services that we provide there. Thanks for
having me today. I really appreciate it. David,
Thanks for being here.
Hey, it's Greg again. Here are my top
3 takeaways from this episode with David Mc.
As you heard.
S mark has acquired software from Tiff Give
to run their toner advice fund program as
a white label solution inside their e wealth
manager platform.
Donor advise funds are growing tremendously having their
asset tripled since 2008,
Now over 2000000
donor advised funds
accounts in the Us.
They chose the Tiff give platform because of
its feature functionality, such as automation, scale, and
lower investment minimums.
1 interesting point,
I've heard about the complexities of opening donor
advised fund accounts and according to David, they
have reduced them amount of time required from
weeks to just days. That should be a
big boo for advisors and their clients.
And the the platform out the software is
being integrated into the Ew wealth manager platform
white labeled, there's gonna be Apis that enabled
data sharing, consolidated reporting. And on their road
map, not available now, but available in the
future, they're gonna be integrating this da solution
with their v
financial planning software.
So it'll be 1 great seamless experience end
to end, you can do a financial plan
with your clients and part of that plan
might be a goal of Charitable giving, and
then I'm imagine can just click a button,
and open up a donor advise fund through
the Tiff give platform that the assets will
then be managed by Ass mark.
A great
vision and a solution which we're looking forward
to seeing.
And that's it you made it to the
end of the episode of the Wealth Tech
today podcast.
Thanks listing. But before you go, head over
to our website. S dot com. Scroll to
the bottom of the homepage and sign up
for our newsletter. Once a month, you receive
an email. Chuck for the Wealth management goodness,
news information, maybe some summer planning tips for
vacations. You never know might be snuck in
there. You will not be disappointed. Thanks again
listening and talk to you all again next
time.