WealthTech in the Weeds with Charles Smith

Apr 16, 2024

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WealthTech in the Weeds is a new series covering the broad yet critical path to financial services. The goal is to get together with industry experts and get into the details of building an effective, productive, coordinated, and comprehensive advice system.

Jack is joined by Charles Smith, a partner in EY's Wealth and Asset Management Consulting, and Mark Hoffman, CEO and Co-Founder of LifeYield. Charles has extensive experience in strategy, product management, client experience, business process redesign, and senior client management. He incorporates the latest product, digital, and tech solutions to drive growth, productivity, and profitability. Mark and his team at Lifeyield have helped build comprehensive platforms for firms in the industry. They specialize in coordinating data, financial planning proposals, portfolio management, rebalancing, transitions, income generation, and more.

Charles and Mark discuss the challenges and benefits of building comprehensive advice platforms. They explore the importance of coordinating data, financial planning, portfolio management, and tax optimization to improve financial outcomes for clients. The conversation highlights the need for firms to provide holistic advice considering all aspects of a client's financial situation. Charles and Mark also discuss the operational challenges of implementing comprehensive platforms and the role of technology in streamlining processes.

Key Takeaways

[02:50] - The growing demand for advice among millennials.
[05:13] - Building the advice system of tomorrow.
[08:06] - Coordinating various elements and tools in the industry.
[13:14] - Optimizing tax returns.
[14:38] - The challenges and opportunities of operationalizing asset location.
[17:02] - Operational challenges and benefits of asset location strategies.
[19:41] - Designing an end state and overcoming legacy platform issues.
[22:01] - How to create a plan that achieves a desired outcome.
[24:55] - The dynamics of working across different departments in a firm.
[27:41] - Improving income through systematic withdrawals.
[32:40] - Charles' key takeaways.
[34:07] - Mark's key takeaways.

Quotes

[06:50] - "Unfortunately, most of those tools in the industry now, financial planning and investment proposal, don't have tax awareness. And when you're operating and trying to put all the different pieces together, that can cost the client between 30 and 100 basis points after tax return." ~ Mark Hoffman

[09:51] - "There's often a big gap between what a client thinks they're getting when they get advice from their advisor and what they're actually getting operationally. In the case of financial planning systems, ultimately, they're not connected to trading systems or the managed programs necessary to implement their advice." ~ Mark Hoffman

[12:40] - "Taxes aren't just a transactional aspect of managing investment. It's about location as well. So, having the ability to set the accounts up, bring them all together, and align the assets properly to both tax-deferred and tax-free accounts is critical." ~ Charles Smith

[31:05] - "Tax is an important part of wealth, and a lot of advisors don't know enough about it." -Charles Smith

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