FactSet Research Systems Inc. (FDS) Earnings Call Transcript & Summary

Good afternoon, everybody, and welcome to today's WealthManagement.com webinar, Delivering Actionable Insights: How Wealth Managers Can Leverage Technology and Data to Meet Client Demands. This webinar is sponsored by FactSet. My name is David Armstrong, and I'm the Editor-in-Chief and Director of Content for WealthManagement.com, and I'll be your moderator today. In a moment, I'm going to be turning things over to our speakers. But first, I want to give you a sense of how you can get the most out of this event. To improve your viewing and listening experience on the portal, you can move your webcast windows around, drag on the title bar, resize them by clicking on the lower right corner. And to improve your viewing and listening experience, we -- adjust the windows as you will. And understand that today, we welcome any and all questions about the topic. We will answer as many as we can following the presentation, but feel free to submit yours to the queue at any time. The way you do that, just open up the Q&A widget there on the bottom on the screen, type in the question, hit submit and we will get to as many as we can following the presentation. But you can submit them there at any time. If you have any technical questions about the webinar tools, you can ask them there as well and they will be answered in the Q&A widget. This webcast has been accepted for 1 CE credit hour towards the AEP designation program, and the live broadcast of this event has also been approved for 1 CFP board CE credit hour. Investments & Wealth Institute has accepted this program for 1 hour of CE credit towards the CIMA, CPWA, CIMC and RMA certifications. And instructions on how to get those credits are available in the resource list widget. Again, instructions for how to get those credits are available in the resource list widget at the bottom of the screen. And please also be aware that today's session is being recorded. It will be available for on-demand viewing, and you will be notified when the archive is available. Now let me introduce you to today's speakers. First up, Doug Fritz. Doug is the Founder of F2 Strategy, a wealth management technology consultancy and a tenured Wealth Management Chief Technology Officer. And joining Doug today is Alex Perovic. He is a 22-year veteran of Wealth Management. He is the Head of Strategic Initiatives and Digital Enablement for RBC Wealth Management. With that, I'm going to kick it over to Doug. He's going to start it off. Doug, the floor is yours.

Awesome. Thanks so much, David. Great to be here again today. And a real honor. I think these are always fun to do. These are always -- hopefully, this are insightful for participants. I think we've got a good number of people on the call. So hopefully, this is catching on as a good use of folks' time. Today, I think is uniquely fun for me because I get to share this conversation with a good friend of mine, Alex Perovic, from RBC in Toronto. And Alex and I have, I think, built a friendship maybe is the best way to talk about this, over quite a long period of time of both being at industry events, speaking roles, think tanks, thought leadership things. And so I think Alex is a heck of a guy. And I think when I was thinking about this session and specifically talking about the role of data in our digital innovation and rapid-changing client expectations world, the first person -- or the only person that popped in my mind, was just Alex because this is so critical to our conservations over the last few years. And what you're going to get today from Alex and I is really about the -- there's some strategy, like, for sure, this is strategic in nature. This is about things in the future and how you go about them, but the difference is that, that with Alex and I, our joint experience is really from the tactical side of viewing it, actually having to get these things done through large organizations. And so a lot of this conversation will be about what are the challenges and pitfalls and issues, and how do we get around them and what's important and what's not important, and what would you maybe not otherwise hear on other conversations that just focus on the strategy, not on the actual day-to-day reality of delivering on some of those changes. And so I'm stoked to have this conversation today. And I think that I'll launch off with a question, probably for Alex first and this is going to -- this will probably set the tone for the rest of the conversation. But the question for Alex is when I see firms, medium- to large-sized firms predominantly, think about and talk about and structure their organizations for a digital experience. A lot of times, they'll build a digital team. It will be this digital team that focuses just on digital and they'll be staffed with great digital people that come from design agencies or fintech firms or some other well-known digital company and they'll place them within the organization. And those organizations will think about digitalize this separate holistic distinct thing. And when I think about that, I think well, what about the rest of the organization? What about the digital and paper experience? What about the adviser experience, et cetera? So a question for you, Alex, like why would it be important to have digital experiences as part of not just a digital team, but as a part of a holistic experience for the entire organization. What's your take on that?

Great question. But first, I just want to say, man, what an intro for me. I appreciate that. I appreciate being here as well. But again, Doug's the real rock star on this one. So I'm a little nervous I can meet the expectations of that great intro. But thanks very much on that. Great question around the client experience, the digital experience and so on. And I think you and I have seen a lot about it. We've talked a lot about it in terms of we get these teams that talk about, we are the digital team. And then you still have your marketing team and you still have your production team and you have your communications team. And then you have your advisers who, at the end of the day, at head office, we can make all the decisions we want around experience, but experience is delivered by our advisers and our advisers' teams. To that end, we need to -- historically, what people have done is they've given experience this importance but not focused on what the actual vision is. So you have a number of people now going out and delivering what they believe is the right experience, and you have a digital team delivering basically a separate experience to what happens on a day-to-day basis. And people say, "We don't want to talk about the paper statements." Well, the reality is a lot of the organizations, the majority of the people are still getting paper statements. So how can you not talk about experience on paper statements and then talk about experience as a digital experience that's going to be different and then be surprised that it's disjointed? So I think we've all done that progression where we stood up a digital team because now we're digital. And now what people are starting to see and where people are starting to move towards is, it's not a separate digital experience. It's not a separate digital team. It's a single vision that we need to have that's supported by the leadership team of what we want to do, whether it's printed statement, whether it's simply passing data, whether it's an online statement. And a PDF is not much different than a paper statement. And then whether it's an interactive statement, where it's customizable online. That experience needs to be consistent across whether the client comes through a phone call, whether the client comes into a branch, whether you're sitting and having a chat with them on the golf course or whether they're on their phone, tablet or their laptop, looking at the different channels that we have. And because we haven't historically looked at it that way, we've created disjointed experiences. Now I think we're trying to regroup and realize there is no digital team. There is no digital experience. We have our business strategy that we've got to execute, and I doubt there's very few teams that are saying, "Here's our paper strategy moving forward. Everything we do is now digital."

Yes. Totally right. And you can -- like we can -- if you look back and say you started this process 5, 10 years ago, that made sense. Digital was this new thing and you needed new different people. And some firms -- I think certainly, some firms have adopted that concept that like it's -- everything is digital. It's digital first, digital everywhere. You hear these kind of slogans within the firm. They're trying to drive a more digital culture across different segments of their group. For sure. But I think those that haven't -- or maybe those that are looking at this new accelerated client expectation and saying, "Oh, crap, we've got to become digital quickly. Let's go back to that digital plan that someone told us we should have done 10 years ago and dust it off and just go do it." Probably the wrong way to start that process is to build a digital team. And one of the things that if folks on the phone are listening and they're part of those firms that are really trying to accelerate the digital programs or thinking about establishing a digital group, one of the biggest pain points we see, especially right now with COVID, is that where your digital experience and you're logging your portal or you've got a mobile app with a planning utility, an aggregation utility or something and you're looking at your phone, your tablet and you're trying to figure out what the heck's happened to my portfolio, how do I talk to my adviser, what's important, what should I do, should I keep my plans where they are, I think you go pull up your paper statement and like the data is all different. Like the classification of the data is different from the statement to the digital experience. The market values are different. There's just -- you can't make sense of this. And then you call your adviser and you ask her like, "What's going on in my portfolio," and she's got a different version of that truth. The -- especially in an area where people's anxiety is heightened, that data discrepancy could be really, really disjointed and be like a horrible experience for folks along the way. So I think that's some people definitely need to be paying attention to right now. What else about…

And I think you're bringing up a good point.

Yes.

Sorry. Go ahead. I was just going to say, you bring up a good point about the discrepancies. And I think the biggest challenge there is what ends up happening is you lose trust. And you don't just lose trust from the client, you start to lose trust from the adviser and adviser teams. And when the adviser teams don't trust what you're putting online and the clients don't trust what you're putting online, that experience is not going to end up being in any way seamless. And just to your point around you've got to think about the paper versus the in-branch, the conversation, the view the client has, the view the adviser has, those -- if there's any data discrepancies there, you lose the trust and you lose that experience. And it can't be looked at as a separate experience.

Yes. Spot on. And what about the -- so in this world where everything is digital, and we're moving further towards digital, do you see the role of the adviser really changing? Is this an area where the adviser themselves has to do anything? Or is this something that's going to be curated for advisers by their home shop? If you're an adviser listening to this call or you're working with an adviser group, is there any of the advisers, in your opinion, for medium and large-sized firms, what would advisers need to do to kind of get ready for this shift or this change?

Yes. It's another great question, a challenge we all face. Historically, we've had some early adopters, but a lot of resistors to the idea of digitizing because people feel it's the replacement of the adviser and the value I bring is that personalization. That's something that we've moved on from and making sure, from a change management perspective, our adviser teams know our goal is to make a digital experience an extension of the adviser team. It's not a replacement of the adviser team. Now what we've done is really focused in -- on user engagement around that and working with both our end clients and our adviser teams to say, where's the value that you bring when it is person to person? And where's the value -- where there's no value-add to do those activities. And that's where successful organizations are digitizing the simple things, nonvalue-add activities, but then continuing to drive the adviser team value aspects. So when it comes to deep discovery, we use digital tools to help gather information, but it's not what does the discovery. It's not what does the insights alone. There's a combination of machine helping advisers but then advisers' teams developing relationships. That's something that -- developing relationships is still something that an online tool doesn't necessarily do well, but it drives good insights that enables the adviser to deepen the relationship. And that's where we've got to get that combination, the right combination of where do we eliminate nonvalue-add activities and allow digital tools to do that, where do we use machines and data to empower the adviser teams to drive deeper insights and better planning for their clients. And that's where we've seen the real success of adoption. And the real success of our clients seeing the value of our digital tools versus our human interactions and relationship building.

Got it.

So -- yes. Now one of the things that we struggle with is particularly with the medium and just the larger firms is we all want to be more digital and I'm using air quotes on a webinar that I'm not on video, but we all want to be more digital. We all want to -- none of us are exactly where we want to be with that and we're all trying to find ways to accelerate that transformation and how we look at whether it's in branch, phone, online, mobile or so on, how -- what models have you seen that help medium to larger firms accelerate their omni experiences and delivering those?

Yes. It's a good question. I think the -- that desire to have an omnichannel experience where we're comfortable with the in-office experience, we're comfortable with the adviser talking to the client directly. Now we're going to overlay digital and we don't want to screw it up, right? Like there's the opportunity to take digital and really significantly mess up the stuff that made you great to begin with or model your value proposition, those are real, I think, especially in our area where the digital medium and that form factor, that the way that we communicate with our clients is changing so dramatically over such a short period of time. The best firms that I see in this space start with a vision of who they want to be and they know what they want to be great at. And they -- forget digital as a concept, just think about who are you as a firm? Why do people pick you? Why do people choose to work with an RBC? What is about RBC that wins -- consistently wins clients over? What type of clients does an RBC win over? And then what type of advisers and team members and infrastructure and product and pricing and positioning do you have that creates this moat around your organization? With that in mind, that vision of who you are as a firm, taking that into the digital space with a really clear vision of who that -- who you are and what you are is critical. We see a lot of firms just jumping into digital with this model like, we're going to be aggregation. We're going to have aggregation. We're going to have planning, and we're going to have performance reporting. And then we're going to have DocuSign, and we're going to have a chat with your adviser, and we're going to have an AI bot. We're just going to throw these things at our clients. It actually ends up muddying some of the value proposition that your existing clients have with you. Because there's a -- if 70% of your clients are with you because you've got great planning capability or you've got great performance over a long period of time or you're really great at compliance and making sure that all the Ts are crossed and the Is are dotted and you're taking care of your clients' wealth and you're planning for the future and you're the fiduciary owner of that vision, then deliver that digitally. If you're an alpha-generating company and you're all about the products and the SMAs and the funds in your portfolios, and you launch a planning tool digitally, that's completely like out of whack what your clients are expecting. Maybe they like the planning. Maybe it's a good thing. But all your people, all your clients aren't really expecting you to be great at that. So the great firms that we see really start with this digital move or enhancing or growing their digital capabilities around this very clear concept of who they are. And what it does is it allows every single one of those clicks and log-ins and look at your watch and maybe your Google glasses at some point, to reinforce why that client is with you in the first place. And we all in our -- all of our commercial lives, we need to be -- we need to reinforce why we're with the firms that we are. If -- I have had this problem with Apple, where like I've used Apple products forever, my most recent MacBook purchase is a total dog. I want to return it to Apple because it was -- it's not at all living up to the standard of Apple for me historically. And for those that don't know that, don't know what their cultural niche is or the type of client niche, that's the very first step I think. I think -- the other thing I think that people need to do is just be really simple and start with a simple approach with very few variables, if possible. The solution to becoming more digitally advanced is not go hire 5 different software firms and plug all of them in. That's like a recipe for disaster. It starts with the ones you've already got, frankly, just start slow because you're learning to crawl, walk, then run. And so starting with some of the vendors you already have in place. And as few vendors and as few in outside influences as possible, if only for the fact that there's just fewer variables there for you to manage. The fewer moving parts, projects, costs, budgets, integrations that you have that you're going to have a higher level of success even if the success might seem a bit anemic at first. No one is going to expect you become Amazon overnight. And certainly, from a cultural perspective, your own teams have got to understand how to operate and think about their client experience with this additional level of omnichannel or digital kind of laid on top of that. Yes. I think that, hopefully, answers your question.

Okay. Actually, I was going to say, I'm glad you answered it that way because when we first met years ago, I asked you this question. And that is pretty involved.

Did I give the same answer?

Yes, you pretty much said that and you said that. And what I would say it was very helpful for us because based on that, we do a lot of things, and we do a lot of projects, and we get very passionate about it. And you helped me realize that we have a lot of good ideas, we have a few really great ones. So over the last couple of years, we focused on what are the 3 most transformational most strategic things we can do. And doing that actually enabled us to get our leadership team to agree, you know what, these are the 3 most important things we need to work on in the next little bit. One was around digitizing planning. One was around digitizing our onboarding. And the third was around revamping our online channels so that we can create better experiences. And I'm happy to say, 3 years later, we are now -- just released our new onboarding process, which is fully digitized and reusing data, where we've got a new vendor that we're partnering with in terms of our online channel, and we are deemed to be one of the leaders from a planning perspective in our industry in Canada. So I'm glad we're still on that same track with that same answer because asking ourselves what are the most strategic things we can do right now, focusing on the great ideas and doubling down on those has made a significant difference in terms of delivering from a digital perspective. So that's been really, really great advice. And I'm glad the answer is still the same.

Yes. I think it's -- I think this comes probably from -- jeez, I think it comes reading at an early age some historical literature, which totally makes sense to change management. And if you worked in a large company, it's always shocked me as the difference between the strategy of what you need to do and then if you look behind it, like how actually firms achieve that strategy. They take this crazy circuitous route to that same end. And it's all those -- all those pathways to get to that end really is about culture and your team and how ready your team is to make some of those changes and how to prepare your own firm to move faster, especially in, like, 2020, we all have to move faster to be able to transform faster. And I think it's amazing to watch really smart firms sometimes take slow, cautious, seemingly, like, what are they doing kind of steps really at the -- really intelligently because they're slow. Their culture builds slowly and slow cultural shifts are the ones that actually end up paying off in the long run. I would argue that in 2020, the firms we've seen do really great things. RBC is a really good example of this, of leaning into labs and innovation and making innovation a cultural touchstone a decade ago are now really reaping the rewards from that. And those that looked at and said, that's innovation theater, there's no ROI on that. We'll just -- we'll be -- we'll come second to the market. We'll be a fast follower, right? Those are the firms that didn't build a culture. They just kept assuming that digital was going to be like everything else they had for the last 4 decades, which was just buy something or implement something and it would solve a problem. I think digital is so much different than just a new type of technology, not like an Internet, not like building a -- putting a website out. This is completely different. It's a different way to think about what we do as an industry, how our clients engage with us and what our value proposition is. It's -- people thought about this as like a thing to buy. You basically are Sears at this point. But those firms that have invested in the people and the culture are really able to move fast out. It's fascinating to see the fast-moving firms do really well. And the firms that really didn't get out of the starting block until recently struggled significantly in this last few months. Let's shift gears a little bit because I want to talk about that kind of the D word. And this is going to sound -- I don't know if it sounds funny or not, but as a consultant, as a -- person who sells consulting services, we never sell data architecture and governance, and doing the right thing with your data. And it isn't because it isn't totally critical to whatever we do. It's that it's the most, like, ugly kid, like it's just not a very sexy thing to sell. And I've been in a number of conversations early when we started the firm, where I would say, hey, we can come and help you with your data architecture and our prospects would say, well, tell us about digital, because we just really need a better digital experience. Not knowing that the pathway to digital really was paved with really understanding and getting hold of your data. I know this is a conversation you and I have had dozens upon dozens of times. So I'm poking the bear a bit here. But from a consulting standpoint, I know and I get that when someone comes into -- as a former CTO, someone comes in and says, we want you to spend $4 million on re-architecting your data into the cloud and bringing data in. And I see the dollars spend, but the connection between the dollars spend and the revenue or the improvement or growth or whatever the ROI is on the data spend is really opaque. It's not very transparent. And I think because of that, I don't know if it's just maybe I'm doing a bad job of making that transparency obvious or whether it's just as an industry, it's very difficult to talk about, it's almost like the difference between like hygiene and brushing your teeth and not liking the dentist. I mean you got to brush your teeth every day. I don't like the dentist, but brushing my teeth sometimes is a pain in the butt. So maybe it's that same concept that the cause and the symptom are so far apart that it's hard to correlate them. But these seem like big boondoggle projects. I know it. It was like at -- gosh, at Wells, long time ago, we had a really smart person on my team, a technical person on my team that said, "Doug, we needed to build this data hub." And I told this person, who I've apologized to profusely for 10 years because I did this, said, that's a boondoggle. We don't need better data, just go put the functionality in. And luckily, they actually found their way around me and actually put it in place because it was one of the best products I ever seen done with the most return on it. But for you, Alex, like, not just at RBC, but like all the other organizations you should participate with, what do you see as the -- as the sort of other firms that really make the best use cases, like how do you make a use case for data and data governance and quality within a bigger organization? How would you do that?

You don't. I'm being a little facetious. I think I talked to a few of my partners in the industry on this because a couple of years back, I was -- I don't know if I was rewarded or punished, but I was tasked on the business side to improve our data environment. And I didn't really know what that was. And so the first thing I did was I tried to make a data ROI, and it just didn't work. So I went to partners in the industry to talk about how people are doing this and the ones who succeeded in doing it. And the reality is they don't talk about data. They talk about what they're going to do with the data. They talk about the client experience they're going to generate. They talk about by having better data management and a high level of integrity on their data, they talk about how their onboarding projects have better time to revenue. You say time to revenue to a leader, they're like, that sounds interesting. Well, if we can get the data flowing faster and our average onboarding takes anywhere between 14 to 20 some days, if we manage data better, reuse data of existing clients, our banking partners, so on and so on, we can open accounts in the next day or same day. Now we have that money faster sooner, you have time to revenue. As soon as you turn the conversation into time to revenue and you don't talk about the actual data challenge, you talk about what the adviser productivity and experience is, what the client experience you can deliver is, then people will say, let's deliver that. I struggled for 2 years trying to deliver the need for people to understand that data is a strategic asset. It sounds really cool. And if you're a data dork like me, you like that, but our leaders who have to sign the checks are not feeling as -- like you said, it's not a sexy as saying, we're improving our client experience. We're increasing time to revenue. We're onboarding in a day versus 2 weeks. We are doing planning that includes data from third-party aggregation tools and not just the information we know about the client. It's deeper discovery. You say these things from a client and adviser experience perspective, and you make your business case around client and adviser experience and productivity and operations productivity. You don't need to talk about the data and how you do it. You talk about what the improvement will be and let the leaders get excited about that stuff. So in a way, you don't make the data argument, you make the value argument.

Yes. And there's a concept that -- well, I hear people talk about it, and I think it probably falls down slightly after the first few minutes, but it's the concept that data is, as an asset, almost like capital reserves in the vault, right? It's this concept that your data is an asset to the firm. And the more you organize it, structure it, make it business-ready, there's another concept business-ready data, you can leverage that data to do all kinds of crazy things. To some extent, I wish it was simpler, but we talk about, especially for like you and I come from this bank wealth background. And there's so much data on the bank side and so much data on the wealth side and the client thinks about you as RBC or Wells Fargo, right? And so they're thinking about you in this holistic sense. But yet, we know that internally, the data can be super-fragmented, siloed everywhere, and we're not really treating our clients like one relationship. They think about us as one firm. But we think about them as like 8 different firms. And when you start to think about that -- their data and that relationship as an asset to your firm and all the things that you can do to support and to continue to curate that relationship, it's good. But again, like it's like hygiene, it starts to fall down when you start putting a number associating with that work. And it's incredibly difficult to pin down the exact value. I think that one of the things that I think in terms of the value to -- also to the client is where data can possibly go. And we're going to talk a little later about -- later in this conversation more about like the future. But in terms of those crossover moments where a client comes in and we're thinking that our data about you, as a client, has to do with your holdings, the transactions, the prices, your goals, how we did, like what's our alpha, is the fund or strategy up, down versus the benchmark, et cetera. But the client's needs for data can actually cross beyond that a little bit, and they can start thinking what about what's going on in Hong Kong right now? And how is what's going in Hong Kong going to drive a possible change in my portfolio or just large macroeconomic health and wellness and especially around ESG and impact. And that's such a massive growth area in terms of data and criticality of what clients are going to be looking to their wealth adviser to provide them information on. But these crossover moments where we're collecting information on the client and being able to pull that in, where do you see that like going in terms of wealth management? How important is bringing external data into the client conversation, where that really breaks a lot of molds about what we historically have always been to our clients?

Yes. It's growing more and more important. And I think this is the area where I don't know that anybody is doing it great yet. But we like to say in this particular aspect, if you're doing the money management aspect of your job, you're doing half the job. The other half of it is around that, what is the holistic wealth plan? What are all the other information? How can we actually do a plan on a client or a family or -- without having the full picture of all of the information? And then data is so available for the -- for a client or just a standard individual just going online, checking on Yahoo!, checking on whatever source they want, and there's so much information about the markets and so on. Is there a play here for us to be some sort of aggregator of all of this? So we are looking at whether we call it an AI tool. I don't know that it's true AI yet. But we are looking -- and a lot of people in the industry are looking at how do we take all this information that we learn about the news in the markets? And how do we display that to a client or even to an adviser to say, how does this impact your book? So it's your book as a client and your book as an IA. How does that impact that? So how do we take all this information from all the various sources, utilize the great processing powers that we have now, utilize AI tools or advanced predictive analytics and make commentary? But the big challenge where I think we're all having -- we're all experimenting with it, the big challenge we're having with this is delivering a so what. What's the action? And again, if we're simply telling you, it's one thing. But if we can actually get -- whoever gets first to the market on this, on what I would say so-what reporting, whether it's third-party aggregation, whether it's industry information, and even if it's in your own reporting, and that's where I sort of curious to hear your thoughts on how does data, client experience and reporting, how do we do all of this and the impact of this with still empowering the adviser to be the relationship manager, if you will, using huge amounts of data to deliver and not just to frighten or alarm the adviser or the client, but to actually add a so what, what do I do about it? What does it mean to me? How is this good or bad?

Totally. I think -- so you've heard me say this before, and it hopefully like resonates with other people. But the moment you think about so what, it's such a great, like, way to think about the digital -- probably any client experience, but digital is our topic. You start to realize that the things that you're putting in front of your clients don't have a whole lot of so-what factor, right? A client's statement with tables and tables of data with securities or funds sort of listed in this time period. So the flip, what? Like what does this tell me? Like -- or pie charts, right? It's my biggest pain point is that you look at a report or a digital experience, what do you see first page? It's almost ubiquitous. It's like -- it's canonical at those -- almost in our industry. You have to have a pie chart or a donut. And all that shows you've got a lot of green or a lot of blue or a lot of gray or whatever. It doesn't actually tell you anything. It just shows you like this PAC-MAN-looking thing. That doesn't tell me anything. If I'm pushing nowadays, where like markets aren't necessarily as correlated as they used to be that you've got a lot of fixed income, what does that mean to me that I have a lot of fixed income? Am I going to be better because I got a lot of fixed income; worse, do I have more risk, less risk? Am I going to achieve my goal? Am I not? My kid is going to get to go to that university they need to go to? Am I going to be okay to live in my home until I'm 95? So what? It's a pie chart. And it's -- I say this and a lot of people -- if I say this at a conference, people will come up, like, years later, they'd be like, holy cow, Doug, I can't look at anything now and not see the damn pie chart, which doesn't say anything. And so I think we're -- we have to challenge ourselves as an industry to get to that level of creating a so-what value. I think new technology can help, not to go off into the distant future and The Jetsons here, but what I've seen in terms of natural language processing, where computers can figure out what you're trying to ask, pull the data and be able to give it to you, I think that's important. But the point -- you always make this point on reporting as a forgotten child of digital, which is that reporting is a huge concept that I have a need or my accountant has a need or I'm trying to understand things and now give me this report adviser on what I'm looking for. This is a very end investor-focused concept. And a lot of times, we've focused on standardizing our performance layouts, on creating a unified digital experience so every client gets the same view. We almost narrowed out all of these abilities for our client to ask for specifics and quickly get the specifics back because we've made everything fairly homogenous. And I think it's a challenge for digital spheres to say, let's build digital experiences so that you don't just push a big boatload of tables and charts and things to clients, but we're able to take the data we have on them, both market data, their own data, benchmark data, maybe it's even like peer-correlated data, like you're doing better than people of your age and the same demographic, et cetera, and be able to deliver that to our clients in a meaningful way, possibly not having them ask the question, right? What about predicting that clients are going to want to know something before they actually ask for it. I think that's where we need to head as an industry. Going back to data, if you don't have your data ready and available, forget about it. That type of an enhancement you couldn't build. You could spend your whole entire career building freaking pipes from data to data to try to create that structure and you build it once where you have hundreds of thousands of clients that are going to have evolving needs over the years. Forget about it. You're never going to pipe your way into something like that. And so yes, I think that's -- it's a great point.

Yes. I think you sort of -- the one thing I would just say that you really drove the point with me over the years, and I really like this, just do something. We so often -- around client experience, digital and data, are 3 giant topics. The reality, it's all one topic. And the reality is if you try to solve all of it, you're going to paralyze yourself, you're not going to get it done and done is better than perfect. And that's something that you really helped drive my mindset with, and I think has really changed the way we've been able to succeed. And when I look at my partners in the industry, and I ask them, what did you do, it was really about we just got something done. The ones that are successful, just go and do something. Maybe it's not all the data, maybe it's not the final experience that they want to create. Maybe it's not even the best experience to start with, but just go get something done. Start with some info, get it out and then iterate.

Yes. You always -- I try to make this a point, like, by moving fast and doing something, anything in the right direction, it doesn't necessarily mean you're going to end up in the wrong place. There's a bit of a legacy mindset in technology that if I start in the wrong path, I'm going to waste 4 to 10 years on the wrong outcome. If you structure the outcome in that way, yes, that's correct. But if you get moving, especially around data, digital or client experience, adviser experience, you start in this direction, it's not necessarily like the most perfect visual of an outcome, you basically are buying yourself expertise that you're going to build along the way. And so if you hold off for 12 to 24 months on the long-term strategic vision and you give yourself 12 to 24 months of just getting the basics, the foundation and the culture, most importantly, the culture, moving forward, then by the time you get to the question about what you need to do in the future, your own team is going to be like dramatically farther ahead. You're going to get a better direction because you're going to have bought better input and better experience. Yes, it's a -- I see far too many firms, just -- I think the word is perseverate, right? They just spend all their time thinking and hand wrangling and switching and changing their strategy at the expense of building experience. And that's probably a critical miss for a lot of firms. Let's skip over to sort of where I always love to go, and I put this at the end because otherwise, I would have spent the entire time talking about this with you, Alex. But the concept that post-COVID, our client experiences have dramatically accelerated. I've heard it said by many smarter people than me that we got a decade of digital adoption in about 3 months. So we expected clients to be where they are now in 2030, and they're there now. And so the older stereotypical, wealthy, steady client or wealth firm that no one really thought was going to be on an iPad or maybe be interested in buying an oculus glasses or something. Like, they're kind of there or getting there. And so that changes a ton for organizations. We talk about that -- the prioritization of digital and where this all goes. Like, cast out in the future 5 years, man, like where do you think that client experience could be in 5 years? And how do we, as an industry, really get ready for that and sort of hit what's going to become important and some things that maybe we haven't seen other people talk about that could be on the rise?

Yes. That's a great question. A lot of my partners in the industry are -- we're talking about this. And the initial reaction was what's the impact to our employees? And do they want to come back to the offices and so on? And then we realized as a team quickly, it's not so much about the employees, what if the clients don't want to come back? What if the clients don't come back to the offices for the next 2 years, what does that do to us? And like you said, from a COVID perspective, I mean, sadly, it's one of the best things that's happened from a digitization, for roles like you and I, where we're trying to encourage people to digitize and look at data more important, look at digital experience and experience as a whole and how it's all integrated. It's one of the most fun times I've had in the last few months. We rolled out eSignature in 2 weeks. We never would have been able to do that prior. Our clients are demanding it. They're not asking for it, they're demanding it. They are -- and we're opening accounts with clients that are well into their 70s, and they, like, literally laugh at us that we don't have the digital tools to do this. So to your point around those are the folks that are in their 70s, what about our base which is anywhere between 50 to -- sort of 52 to 62? What are their expectations in digitization? So we're now just starting the conversations around what if people don't come back to the banks or to the branches? And if they don't, does -- do we have the scalability to actually deliver remotely? And that's going to be our first big challenge. But then it's also the opportunity is if this is now not something that we need to worry about our branch infrastructures and our legacy systems and tools, and we can start to use other tools, I think that's really where it's going to drive how can we start using existing tools that are out there in the market and get away from some of the legacy systems that anchor medium and large firms to their ability to digitize? And that's going to be the big challenge in the next little while is the comfort level to -- I don't want to say scrap, I was going to, but the comfort level to move away from legacy tools that maybe are built in-house or we bought ages ago and we've invested in year after year to utilizing brand-new tools that are out there that are being developed right now. That's going to be the big mind shift. That's going to be a challenge for us because we like to build our own tools. We like to continue to support it. What does that mean? Are legal teams going to get comfortable with it? Are compliance teams going to get comfortable with it? Cybersecurity, all of these things. We -- I'm sure all of you have had the same experiences. Cyber-attacks are definitely higher than they've ever been because people know there's so much remote work going on, and it's outside of our normal environments, and there are weaknesses now. So these are some of the big challenges. Once we get over that in, let's say, 6 months, it's all about give me access to the new tools and let's start -- let's continue growing.

Yes. Super. I think the one thing that I think will be most unexpected, even in the short term, is actually this medium that we're talking about right now and the video context that -- we all kind of had video conferencing before this, like you could jump on a Zoom call or GoToMeeting call with your clients or Webex, like we've had that for 5 years or longer. But no one saw the criticality of this form factor being so instantly critical to the -- how we talk to clients and will continue to be critical because we're all used to it now. We're all used to getting on Zoom calls. Like, my mom has a background, which is stunning. And that -- because I think we didn't really think about it, it wasn't a critical piece of the experience. Now that I'm using this on an almost minute-by-minute basis of my day, in a van, I think the -- what we could make out of a video experience is so much more than we have right now. What I mean is, right now, we're on -- this cool ON24, we use Zoom at F2. And with Zoom, like I can see 4 people talking and I can present a document. Cool. But that's not really any different than it was 10 years ago. If you think about what we can do with voice recording and an instantaneous transcript of voice linked to natural language search. And so as an adviser talking to a client, this back and forth and listening to the client's voice and the way they use words and their information to driving like a red or green, almost like in the politics, like people can kind of click, I like them, I don't like them, get rid of them. That kind of a concept in real-time or doing like eye-tracking and looking for where is this client looking? And are they engaged, they're not engaged? Or if a client is talking about a concept, having that search instantly pull up that data out of the client's portfolio and present it on the side of the adviser screen so that the adviser can answer the question in near real-time or predict what that client is going to ask about because 20 other clients over the last month have asked a similar question and this has been the answer. So that level of this video ability to really significantly improve the quality of our service delivery, the details we can share with our clients and just like the near real-time usefulness of talking to an adviser or anybody in the organization, just seems like we're -- I think video is at this very nascent stage. And I think we can go significantly beyond that. There's a couple of cool technologies that are kind of starting to scratch the service on that. And I'll throw out a name. I do like totally unbidden, but I do like Liveoak, which is I think what Merrill Lynch uses right now. It's just fantastic. If you haven't seen Liveoak, it's great. Let's -- Alex, do you want to take some questions here?

Yes, that sounds good.

I've got for both of you real quick. If I can just throw one out real quick for both of you. So you guys have approached this very much from the chief technology officer point of view, from the financial planner point of view, from the adviser point of view. How much do you build these technology tools around their workflow or what they need, what they need to do? Because I think the sense is that financial planners are getting the sense that, well, we were investment managers, then the robos came for investment management. Then we were financial planners and now the robos are coming out for financial planning. Where does the -- are we kind of sketching out a future here where the human financial adviser is kind of pushed into the call center, in the back of the room to answer 25 questions a day from clients who get prompted by a digital interaction? Or where is the human adviser in the tech future you're sketching out?

Alex, man, that's for you, sir.

Yes. I love that question. I'm really excited about this. From -- if you're thinking about high net worth and ultra-high net worth individuals, we've had a lot of people talk about what's the impact of global adviser. I've been on some panels with some of my partners from a global perspective. And when you start asking them, how are you going to do detailed planning, how are you going to talk about charitable donations, wills of states and so on, the answer is we're going to add people. And what's happening is you're seeing the traditional robos adding people to add that level of detailed relationship discovery that's required that you simply can't do in a questionnaire for high net worth and ultra-high net worth clients. We, historically, in the wealth industry, have been a people-led business, and we now are trying to say, how can we use tools? Is this a replacement? We realized really quickly, it's not about a replacement. Robos are adding humans to do things to establish relationships, and wealth managers are adding machines to help augment the humans learn more about their clients and establish those relationships. The reality what's happening is there's a race to the middle. And the race to the middle is who's going to get that right mix of machine plus human, and I actually think us as human-led wealth businesses, I think we have the advantage. The human capital is the harder parts to go out and buy and purchase. The machine part, we can copy, emulate or hire and buy ourselves to create that. So it's a race to the middle, and I think the human-led businesses are going to win there for the high net worth and ultra-high net worth and for the mass affluent. I think that's the right spot possibly for robos, but there's still a spot for human-led there as well. Doug, what are your thoughts?

Yes. Totally agree. Tech can't do empathy, not yet. And a human can do empathy, if you have the right persona. And so maybe the question back to you, David, is if you're an adviser that really just loves the data and has always gotten into this industry because you love the data, I mean, you literally want to crawl into that black box optimizer and like get geeky on correlation matrix, maybe the future isn't great for you. But if you got into this business to help people and help them navigate their lives and help their kids go to the right school and help them take care of their parents when their parents get dementia and have to figure out how to do home care and how to work out the state plan so that they can live comfortably the rest of their years, like this is your time. Because all the technology is allowing you to do is to free up all that detail of trading and rebalancing and product selection and everything, let the computers do that. Spend time with your clients, spend time and use the data you've got and the insights you get from your clients and some of the new technology to connect on a more empathetic level with your clients. And that's what I see happening. I see absolutely the empathetic adviser really winning with technology. And there's so many great tools coming out that help them do that.

Yes. I mean, there's a few questions in here about the financial planning as a value-add. A few questions on the audience queue. And I will say we are taking any questions. I mean, these guys will answer anything you want. Just type your questions into the Q&A widget, and they will get to as many as they can. But yes, people are asking about financial planning and whether that's still a value-add. Where the advisers sit in front of the technology -- and between the technology and the client in terms of the client experience or behind the technology? Where is the adviser's place?

Yes. No. I think planning as an outcome is what it always is. I don't think technology changes planning as an outcome. I have the money, I need to retire at a certain date. Nothing is really changing with that. What changes with financial planning are the things that go beyond an outcome and talk about cash flow, the type of life you want to have in the future. I mean, I go to this -- maybe I'm accused of going into this too much, but the impact that your portfolio has on the world around you, which I know is a separate conversation than -- necessarily than financial planning, but I don't think it necessarily has to be. If you talk to your adviser and you say, look, I want to retire at this age and I'm going to sell my company at this age, and this is kind of roughly what I want to do and leave and how I like to work, help me out. But you know on the way there, I want to put shoes on -- I want to put shoes on the feet of kids in Central America. We went there on our honeymoon, and we really resonated with these families and one of the biggest things was shoes. And so I also want to make sure that the companies that I own and the companies that I'm equity owner, like you're a part owner in a company, have a better-than-average rate of minority and female executive leadership because that's really important to me. And so plan for my future, but make sure on the way there, that you do the right thing for my world around me. I think these concepts sort of begin to come together. I wish in 2020, they would have come together already. All the machinery is there, the data is kind of there. I think the data needs to be emancipated a little bit and made less expensive than some of the data providers today are offering it. But yes, I think financial planning absolutely is a growth area and one that has the opportunity to be much more impactful and connected to clients than just trying to be the benchmark or have lower cost returns. I saw a question here from one of my other very good friends. This guy named [ Craig Ezwitz ] I don't recall you should know [ Craig Ezwitz ] if you don't, do. But what are the tips for changing company culture so they can move faster? And I'm going to select that one for Alex to answer. I'm going to bump set spike you, my friend, and how do you answer that one? Tips for company culture moving faster towards innovation?

Yes. I mean, that's a great question. One of the things that we realized in COVID was -- and I think we need to think of this as we move forward with trying to move faster is, number one, when things change and you continue to manage the same way with the same organization and the same structure and you get same results, like if you want to move faster, you've got to change the way you do it. That's -- I mean, it sounds simple, but it's actually culturally one of the most difficult things to do is to say we are changing the way we do things and we need to change the way we're structured. The message has to come from the top down, and that's the single thing is I've struggled so much of my time with trying to convince people of what I thought were good ideas and maybe they weren't good ideas, maybe there wasn't organizational readiness and so on. And that's when we -- talking to guys like Doug and then talking to my industry partners and saying, how did you succeed, it always starts with, we had support from the top down. You don't have that support from top down. That's just the single most important thing. The other big thing that I'm noticing in the industry becoming more and more popular, and I'm really lucky that this was one of those things they threw on my plate is user engagement. And we use user engagement extensively to learn from both the end client and our adviser teams. What is it that you want? What's most important? How do you want to change this? And we create prototypes and then rather than build, we do prototypes, and we will do numerous iterations of the prototype before we actually start coding. You'll save so much money and deliver such a better product. If there's a one single thing that I would tell people to change, start doing user engagement.

Yes. Super relevant. And it's something that people don't expect big firms to do. It's something that small firms, especially tech firms do just as part of their like foundation story, but large firms like RBC that can do this and start to find ways to be innovative. That goes to actually the previous question too, around changing the culture, right? Like, it isn't just about doing things faster in either way, is that when you're doing that, you get rewarded for coming up with ideas that might be crazy or sound crazy and you can circumvent this like it used to be a 12-month waiting period just to get on the list of projects that might get funded and might get defunded or whatever. That rapid prototyping and user engagement and testing gives you better decisions, maybe micro decisions faster. And RBC has been really good at deploying that -- really weaponizing that ability to move fast. We'll ask one more question, and this one is going to be the -- let's see, it's going from hidden levers. What is the -- what is your tech stack? What has been most useful in your tech stack?

Yeah, there's a few in there from hidden levers. Let me see if I can articulate them all kind of in a thing for you and Alex.

Please do. Combine them. Thank you.

Give us your idea, Alex, at RBC, for the way you approach the RFP process? How you kind of map out the future? What tech stack elements you've found least useful, most useful in the past few months? And maybe where you're looking going forward? What are you kind of mapping out for the forward?

Well that's a big dangerous question. I'll answer quickly. We've only got a minute left, I believe. But the way we're focusing on this is not at a system level and not talking at all about what the tool is or can do. We talk at the experience level, at the capability level. So rather than talking about account opening, we look at onboarding as a whole from prospecting to needs assessment, to planning, to account opening, to transfers, to finally reporting with welcome kits. And then we define what is the experience we want to create there. And then back to what Doug said early on, identify what matters most in terms of what we want to be great at and then identify the things that we can be okay at and the things that we want to be great at. But rather than talk about the actual technology, we talk about what we want to achieve, the business value in what we want to achieve. And then we assess, does our existing tech stack work or do we need to go to an external vendor to help us? In some cases, our internal tools are exactly what we wanted with some adjustment. In some cases, we've definitely made the decision to go with partners externally and try to create a bit of a hybrid model. But the era of everything being built in-house, I think is not something that we are going to be doing. We are definitely accelerating when we pick partners to do the right things.

Is there any area in the future that you're looking at in particular for vendors or going outside for? Where you -- what are some pain points that you see coming up in the future that you're trying to address?

Yes. I think we've done a lot of work around client onboarding and online where we partnered with vendors. From a planning perspective, we did a lot of work internally, which was a great success. Now the next couple of spots where I think we need to really be thinking about is opportunity management as a whole. When you talk about data and you talk about planning and you talk about client value, adviser value and firm value, opportunity management is the big area. There's a lot of room for improvement in opportunity management on how we use data, how we reuse data, third-party aggregation tools of how we can pull in additional information, how do we link that to our planning tools, to our desktops and then ultimately deliver this in a way that's meaningful and useful for a client. So I would say in a very specific area, I think that's a big opportunity for all of us to do things better. I don't know that anybody is doing it great, and there's lots of tools out there, and you guys can sort of pick and choose your tools. But I think really getting back to what is the vision that you want to do, what are you trying to achieve, there's a lot of ways to solve that one. We can get a ton of wins and start improving immediately if we focus on a few and then continue that as we progress along.

Yes. Makes sense. Doug, any last words? Someone has -- we've a few questions in here about your setup in the background there, where you're broadcasting from. I don't know if you want to quickly address that in your final words, but we're at the top of the hour…

Well, that's what happens when your regular office becomes a first grade. But I've been referred as the man in the van now. But this is basically our Ford Transit F-250 or Ford Transit 250 camper setup with a kitchen and everything. So it's kind of like a little mobile home maybe. It's not down by the river. I know this is what everybody likes to ask. Is it down by the river? No, it's parked in my driveway. And it's normally parked at the beach, but they closed the beaches in California, so you can't go to beach even though it's a couple of blocks away. But no, I think the last thing is just I think FactSet's been great at hosting this one. They -- any time anybody is going to let me just publicly talk to one of my good friends and banter all this stuff is great. So just thank you to our sponsor for setting this up today and appreciate the sponsorship.

Yes. Absolutely. Thank you very much.

Yes. Thank you. Yes, I want to thank both of you guys, too. Thank you, Doug Fritz and Alex Perovic. That's been a great, great conversation. We do want to thank FactSet for making today's webinar possible. And as a reminder to everyone here, you will receive a follow-up e-mail. It will include a link to view a recording of this presentation. So if you want to listen to it all over again, share it with your colleagues, whatever. And once you leave the event, a short survey is going to pop up in your browser window. We appreciate any feedback you have. It helps us provide you with content most interesting for you in the future. So on behalf of WealthManagement.com, have a productive remainder of the day.

Thank, guys. Thanks, Alex.

Thank you very much. Thanks, Doug. Thanks, David. Have a great day.