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What are the Expectations of the NextGen Advisor? · Views from 6,230

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Welcome to the Adjusted for Risk podcast.
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Join myself, Ryan Mallman, as I bring together financial markets, investments, economics- Let's get started wealth management, and life to help investment professionals make sense of what's happening and prepare for what's next in order to make more informed investment
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decisions on behalf of their clients.
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This podcast is for informational purposes only and should not be relied on for investment decisions.
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Welcome, everyone, to Zephyr's Adjusted for Risk podcast.
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We are recording on location at the Wealth Management Edge Conference in Boca Raton.
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It's been a great conference so far.
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Uh, great conversations, great content, great insight, and we are just getting started as my next conversation is gonna be great also.
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I'm really looking forward to it.
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There's been a big shift taking place in wealth management space over the years, and it involves the next gen financial advisor, and how they are changing the way firms do business, service their clients, and service their financial advisors
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and support them.
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Well, I have on the perfect guest to talk about this, the trends in the space, and so much more.
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But first, this episode is sponsored by the award-winning Zephyr, which helps investment professionals make more informed investment decisions on behalf of their clients.
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All right, enough from me.
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Let's go ahead and bring on the star of this show.
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I'd like to give a very warm welcome to Nate Lenz.
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Nate is the co-founder and CEO of Concurrent.
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Nate, thank you so much for coming on the podcast.
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Yeah.
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It's an honor to have you on.
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Second time.
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Second time.
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We were here- Two-part guest same location last year.
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Exactly.
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Um, it's an honor to have you on.
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Can you just tell us real quickly again about yourself and Concurrent?
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Absolutely.
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Yeah, no, it's, it's great to be back, Ryan.
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I appreciate you, uh, having me on again.
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So, um, at Concurrent, the way to think of us, just in a nutshell, is we are a, a platform for and strategic investor in independent wealth managers.
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And so we support financial advisors.
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Our role is to own the middle and back office, keep them focused on their clients, uh, and be able to bring them the scale and resources that a firm of our size can bring to the table, uh, while
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allowing them to maintain, you know, autonomy and ownership of their business.
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And so think of us as a platform model.
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But with that, you know, we're supporting now over, over 90 firms around the country, um, that are operating.
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Our core business, uh, is where the advisors are under our ADV, so they're ac- acting as IARs of Concurrent.
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Um, but we've also, over the last 18 months, have, um, started to build a RI- what we call our RIA Capital Partners business, as well as our Platform-as-a-Service.
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This is where we're working, making minority investments in third-party RIAs, and then extending elements of our platform to them on an a la carte basis as a service to support their business, uh, and allow them to keep pace.
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And, and so, um, it's been, it's been great, man.
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The growth has been great over the last year since we talked last.
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But I think you've, you've touched on a phenomenal point, which is, um, this, I'll call it declining supply of, of financial advisors due to the aging demographics in the space paired with the increasing demand, uh, for advice.
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And so I think we're at a really interesting crossroads where being able to attract, uh, develop and retain talent is going to be a key determining factor for success.
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So excited to dive into that a little bit with you.
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Yeah, Nate, I agree completely.
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I think- There's some talks out there that there's a lack of talent coming in from college, from universities.
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I tend to disagree.
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Or even if there is, I tell people, if they listen to me, that it's a great opportunity right now.
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Like, if you, if you have an interest in financial services, wealth management- It's huge especially if you're younger, um, you're probably in technology, you like technology We're soon might be a technology-driven industry 100%.
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I mean, just looking out at the, uh, exhibit hall here, you know, I think 90% of the booths around us are, are different technology companies, and it's awesome to see just the, the progress that's being made and what's
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being created and, and how it's able to empower advisors to do more for their clients.
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And it's, um, yeah, it's moving fast.
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So I do think, you know, the fact that a lot of these recent college graduates, uh, have grown up in a world where AI is a thing, and they're using it on a day-to-day basis, I think the, the
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uptake of a lot of these new resources is gonna be much faster, and so yeah, no doubt there's a huge opportunity for those folks.
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And they will be much better positioned since they know AI.
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They're better at technology than I am right now.
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Yeah.
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Yeah.
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Because I- on some of the term, it takes me forever to learn.
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It's like- Yeah I'm still just using a, uh, basic chat.
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Yep, yep But, um- It's, uh- it's fine It's good.
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We, we recently onboarded, um, kind of an enterprise AI solution that's been, uh, it's been a game changer.
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So- Yeah I was joking 'cause you asked a little bit of my background, but before we launched Concurrent in 2016, um, I had previously ran the succession and acquisitions group at ReJ.
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So again, working with financial advisors as they were looking to facilitate succession plans for their business, whether internal or external.
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Um, so that's really where I grew up in this space.
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So this, this topic hits close to home.
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Um, but when I left ReJ, I actually left to start a consulting business, um, again, working in a very similar capacity, um, just on my own.
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And, um, you know, I was joking, uh, with one of our colleagues the other day, if these tools were available, I don't know if Concurrent would exist because the ability to have a conversation, produce an output, leveraging AI,
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leveraging the AI note takers, just so much more efficient.
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Yeah.
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So I might still be doing consulting- um, which is my first love, but I don't know if, uh, yeah, that's, that's the jo- the running joke.
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So you bring up a really good point.
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Do you think people and firms- Yeah are a little bit too concerned about rather than thinking of it as an opportunity- Mm-hmm and leveraging AI, they focus too much on the negative, like, "Oh my gosh, it's gonna flood
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for financial advisors, it's gonna take over, and, and we're done"?
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Yeah.
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I mean, look, I, I don't think You start to think about this idea of a rising demand for advice, and you think about, like, the generational wealth transfer, and, you know, I don't think I do think there are
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generational differences that are impacting the uptake of AI-like solutions, and I do think it's not like all of the assets in this generational wealth transfer are gonna go from baby boomers to millennials tomorrow.
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You know, you've got this dynamic where you've got really a horizontal wealth transfer first, where it goes to the surviving spouse.
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Then again, really the next generation in play is Gen X I, I, so this idea that everyone is gonna prefer just interfacing with, you know, with a ChatGPT-type solution to asking questions about financial advice, I think is a
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little bit overblown.
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Like, I don't think we're gonna see this massive shift.
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Um, it's similar to, like, the, you know, again, like the TD Ameritrade, E-Trade stuff back in the day, and then robo-advisors.
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There's I know those are the common, you know, um, connections, but I do think, like, at the end of the day, this is a human-to-human business.
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We talk a lot about the fact that it's really, it's people and technology paired together, and so I think it's gonna be a huge win.
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And in fact, when you think about, like, the independent financial advisor space, um, I think what this does is it really allows more advisors to, to go independent, to be able to do more with less.
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So I think you're gonna see people talk about this, "Oh, there's gonna be this huge wave of unemployment.
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AI is coming for every job."
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I actually think this will create kind of a, a boom of entrepreneurship, 'cause it's gonna be it's gonna lower the barriers to entry to be able to launch a business, and, and why would our space be any different
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in that regard?
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So I'm, I'm bullish on it.
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I, I completely Uh, if you're not bullish on it, then you're gonna be left behind- Exactly I think.
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And- Exactly and just use it.
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I don't If it's, you know, a simple chat, you know, agent- Sure or something like that, or if you go all in and it's more of a workflow- Yeah piece, um Because you know what I feel is gonna
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happen is these younger clients, when the great wealth transfer- Yep trickles down- Yep they're gonna go, "Hey, advisor A, how are you using AI?"
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Yeah, yeah.
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And if you say no- Exactly.
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That's- Very- Exactly.
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'Cause they're gonna be using it, you know- Yeah in their day-to-day.
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Like, and so it's the And they see I mean, it's been amazing to see the productivity gains, just even of little things like, um, going through and creating, you know, illustrations and proposals and, you know Again, going back
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to I'd still be doing consulting if this existed 10, 12 years ago, um, you know?
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And, and a lot of the work that we do, because all of our firms are independent, they own their own businesses, they're grappling with all of these issues.
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So it's, okay, how do I start to create career paths for my junior people?
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How do I create paths to equity ownership?
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I'm thinking about, you know, selling a portion of the business to them.
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How do I do that?
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Um, how do I create alignment?
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And so a lot of the work that our team does with our firms is, is really heavy-duty consulting.
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It's, it's understanding what they're trying to accomplish, uh, understanding what arrows we have in the quiver, and then coming up with solutions that allow them to create that alignment with their team members and, uh, and make sure that,
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you know, that they're setting up their business to be durable and sustainable over the long term.
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Some of the things, like you go have one of those conversations, we use our AI notetaker, you know, which we use Ox as our primary tool there.
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Yeah.
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That, you take the transcript from that, you dump it into Claude Enterprise.
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That'll create You, you prompt it for 10 minutes of like, "Here's all the thoughts I have on how to construct this, and I want to pull in elements from this deal that we did before and this deal," and
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it produces That's exactly what we need.
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So what would've taken You know, we'd have to call, you know, our outside legal counsel.
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This, like you could do that now in 15 minutes following a phone call.
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So I do think, uh, now if you think about the parallel to that of an advisor working with their end client, you know, that's having that has complex planning needs and things of that nature, I just think it's
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going to, you know, rapidly increase their ability to, um, expand the scope of what they can provide.
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Yeah.
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I completely agree.
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And I also think, too, it's gonna make relationship building even more important.
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100%.
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'Cause a lot of that stuff, like maybe the investment management, some financial planning- Mm it's gonna be commoditized- Yeah a little bit.
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Yeah.
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So being able to have relationships- 100%.
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That is, that is by far the biggest thing.
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Th- that human element is what's irreplaceable.
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And, and again, you know, with clients, this is, it's, it's their entire financial lives, right?
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That's what they're conversing about, and that's what they're going and seeking guidance for, and I, I have a hard time believing that that will be replaced by a computer.
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But, you know, one of the analogies that I use a lot internally with our advisors is let's kind of break down what you do on a scale of, like, one to five.
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Oversimplify it.
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One being, like, the most reactive service-oriented stuff.
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You know, two is where you start to get more proactive service-oriented, scheduling reviews, things of that nature.
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Three, you get into, um, like the planning process, starting to put together the financial plan and gather the data and investment research and trading.
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You know, and four is meet with clients, and five is prospect for new ones.
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The problem is, I think historically, most advisors have had to do steps one and a half to five.
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You know?
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Um, we say, "Look, you should really be focused on four and five."
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I think this will just, uh, further enable that to be the case, um, where maybe we haven't had that, that capability in the past.
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Completely agree.
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It'll be interesting to see it play out.
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I'm excited for it- Yeah even if a robot replaces me.
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I'm still, like, kind of excited for it to see what happens.
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We've seen some of our colleagues create, like, AI versions of themself.
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I haven't gone You know, it's- Yeah our team hasn't created that yet.
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That'd be scary.
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I, I don't- I don- I don't know if I'm ready for that one Yeah, I'm not That's a r- I don't think the world is ready for that one.
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Um, so, uh, what type of expectations do next gen advisors have of their firms?
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How are those expectations of their firm different than the older generations?
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Sure.
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Um, it's interesting, and I had the opportunity to participate in a think tank yesterday here at the conference that was really focused on next gen a- advisors.
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And what they had is they actually had three, um, current students that are doing internships in financial planning, um, that were on a panel and, and there was also some data, uh, that they were, that they were utilizing
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from a survey of the FinServ Foundation.
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And, and it was interesting 'cause what we were What I was surprised by was kind of our perception versus their reality in terms of, like, what they're looking for in a firm and what, what's important to them.
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And, you know, you start to look at things like mentorship is, like, top of the list, and, you know, remote work.
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You would've thought that there's this huge push for remote work.
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They're like, "No, we wanna be in office."
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Yeah, that was, like, very low priority, was remote work opportunities, and on the panel they even made the comment of, like, "No, we want to be in office.
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We want the opportunity to network and to learn and so forth."
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So it's interesting 'cause I think there is a, like, stereotype of, like, oh, the next generation is afraid of sales and, you know, they're not motivated and, and they're entitled.
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And it's like, I, I think what you're seeing and, and what we're hearing in these conversations is that's really not the case.
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They're not afraid to, to roll up their sleeves.
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Now, I do think, um, you know, our industry has done a poor job of, I think, bringing folks, finding that talent and bringing it into the space.
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You know, one of the things that we've been really focused on that's been a great source of hiring for us has been our internship program.
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So we just had, uh, 10 interns start, uh, mid-May, uh, in our office in Tampa, and then, um, we've also opened up We do, with that internship, it's a 10-week program.
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Um, we do a week of kind of training, which is more get to know Concurrent, understand the firm, all the different parts, how do we make money, what's the, you know, what's the business model and so forth, and
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then they're broken into their individual departments that they've been hired into.
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What we've done has been very intentional about the departments that participate in that they have to have a full-time opportunity available And so for us, this is really like a 10-week extended interview to get to know these people.
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Um, and, and so what we found is that it's been a great way for us to get to know them, them to get to know us and the business, and decide if this could be a good long-term fit,
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and we've made some really good hires over the last couple of years.
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But in order to...
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So those 10 applicants, we had, we had over 300 applicants for those 10 spots.
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But that was a result of us going on campus.
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And so, you know, we've been, like, within our...
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We're based in Tampa, so we've got the University of Tampa right across the, the river.
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We've got University of South Florida close by.
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Um, University of Florida, we've built a good relationship with their planning program.
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But, you know, we had members of our team going on campus, doing career fairs, doing things like that.
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So I think it's one of those things where it's not that the talent's not out there.
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There's...
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It's out there.
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Um, one of my football coaches in college used to always, I think it was a John Wooden quote that he stole it from, but it's, it's not difficult, but it's hard.
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You know?
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It's not complex.
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There's not...
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It's not rocket science to figure out where to find it, but you have to go do it.
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And so I think that's what we've found, um, a high degree of success, and it's led to some phenomenal hires over the last few years, uh, across a variety of our departments.
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But, a- and Nate, to that point too, if it was easy- Mm-hmm everybody would do it.
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Exactly.
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Right?
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So I love what you guys are doing.
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I'm a firm believer in, in education.
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I remember when I got into the industry, Nate, years and years ago, out of college, uh, it was...
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I, my first job was at Piper Jaffray.
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Okay.
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A prominent regional brokerage firm in, in Minnesota, and they used to do a university.
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Yeah.
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A Piper University.
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Okay.
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So they bring on 20 local, uh, recent grads- Mm-hmm and they would do a three-month university.
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Everything that you need to know.
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Yep.
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And I don't see that happening very often.
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You guys are doing that at Concurrent.
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Mm.
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Yep.
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Um, may- you know, maybe more firms need to do that.
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Yeah.
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And it's not, to, to your point, like, we do weekly lunch and learns.
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What we've also done is we've opened up tho- that week of training, as well as the weekly sessions that we do with all of our department heads over the course of the summer, to all of our advisor offices
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in the field.
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So any of our advisor offices that are bringing on interns, we're supporting them with job descriptions and, and being able to, to help them connect with local universities.
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But let's say they do decide to hire an intern, they're also able to put them into our program.
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So they'll send them down to Tampa for the week of training, they'll participate virtually on all of those weekly calls, and we've kind of created a curriculum for them over the course of the summer.
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Um, so I think that there's, you know, there's the training element of that program.
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One of the things that we've also found to be pretty successful is, you know, as a, as a full-time opportunity with Concurrent, we've created a 18-month operational rotation, where the new hire would spend six months on our transition
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team, six months on our base camp team, which is like custodial ops, and six months on our central operations and planning team, and get kind of a diverse experience across those operational departments, uh, which lays a, a really
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good foundation no matter where they ultimately land.
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'Cause I think at the end of the day, and we saw this in the panel as well, I do think there is a reluctance, especially for some of the recent grads coming out, to be kind of handed the
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phone book, you know?
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Like, that, that was always how a lot of our advisors grew up in the business.
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In the bullpen.
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In the bullpen, smiling and dialing, right?
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Yeah.
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Um, I think there's an aversion to that which contributes to this feeling of, oh, they might be entitled or so forth.
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But I think really what it, it is, is it's a, you've got to instill confidence in them, and they're gonna gain confidence through gaining competency, and that's only gonna come through apprenticeship-style programs and getting kind of, you know,
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live action opportunities.
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So I think finding ways to facilitate allows them to establish that level of confidence in those, you know, client interactions, which then gives them the confidence to make them effective ultimately at prospecting and, and business development.
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Nate, that's awesome.
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So how do you...
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Mentorship is a big one.
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Mm-hmm.
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Are there other things that you guys are using that- Maybe other firms that are attracting the next gen.
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Is it technology?
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You know, "Hey, we've got a cool tech stack, we're leveraging AI."
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Is that, like, uh, some types attractive?
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You said office and office- Yeah are there any, is there anything you guys are doing to attract them?
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Yeah.
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I don't know if technology per se is necessarily an attractant.
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Like, I think in a lot of ways that's kind of table stakes.
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You know, a lot of- Yeah a lot of the If you're in that kind of upper echelon, um, you know, of, of firms, like, that's almost a given, 'cause you're gonna have a good tech stack and you're investing
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in that.
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Um, you have to, to keep pace.
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I do think, you know, that culture of mentorship's important.
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I think another piece is understanding a clear career path.
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So them being able to come in and say, "Okay, hey, I understand where I'm starting, but then ultimately, what are my options, and how do I grow in the role, and what milestones am I expecting to hit?"
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Um, I, I do think being able to lay that out clearly is, is an important element, 'cause then they have very clear expectations, um, of, of where they're going.
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And then, um, the You know, I would say that the mentorship piece, you wanna have some structure around it, but also you don't want it to be overly structured.
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And, and what we've found is that we've also created mentorships opportunities, not just at like, with, like, senior management level people, but also maybe someone that's a year ahead of them, that's kind of walked in their shoes, that's
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more of a peer than necessarily a manager, but they're ask- able to ask really candid questions of how have you dealt with these things, and how have you gone through it?
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And so creating kind of a loose structure, but then really creating an environment where they can have really candid conversations with someone that's, you know, relatively a peer, um, I think has been, uh, an impactful way where they
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can feel really comfortable and, and get some of the guidance they need to, to really excel.
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I love that bec- And it ties it all back.
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Nate, we were talking about technology, AI, you said it wasn't really the biggest factor in it, but what is gonna be a driving factor moving forward just for success of firms is relationships.
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100%.
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And that's exactly what you're talking about with that- Yeah mentorship and aligning them with the peers, that relationship.
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And because a lot of things you can learn, relationship building is- Yeah Six years Exactly.
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100%.
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Nate, awesome conversation.
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Yeah.
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Really fun.
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I always enjoy talking to you.
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Absolutely.
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Seeing you at the Edge.
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I thank you again.
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Where can our audience get more information about Concurrent?
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Yeah, yeah, poweredbyconcurrent.com, uh, or my individual LinkedIn page, Nate Lenz, uh, our corporate LinkedIn page.
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Uh, any of those resources are a great place to learn a little bit more about the Concurrent platform.
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Um, and, uh, and yeah, I'm excited, uh, to participate on the panel later today on this exact topic, so it was a good, uh, practice run- Yes you know, to be able to get some of my talking points
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out.
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I don't think you need practice, Nate.
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You're, you're, you're a pro.
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You got it.
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You got it.
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Awesome.
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Awesome.
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Well, thank you, Nate.
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Yeah.
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Thanks, Ryan.
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And thank you everyone for listening to this episode of Zephyr's Adjust Your Periscope podcast.
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You can watch all of our other episodes on the Zephyr YouTube channel, Spotify, wherever else you get your podcasts.
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Thank you very much, and have a great rest of your week