Why I'm going to Las Vegas to tell a story

We made our first ever acquisition last summer. I've never said a word about it...until now

For thirty years Joel Bruckenstein has been the voice and the face of advisor technology and twenty years ago he launched the first ever T3 Conference. To hear him tell it, it was a smallish affair in a not so great location and almost no one showed up. But Joel is a visionary and he saw - correctly - that the business of selling software to financial advisors was going to boom and he had the opportunity to sit right in the center of it all.

And he was right. T3 - which stands for Technology Tools for Today - became the preeminent information brand in the space. If you had something to show off or to launch into the advisor community, Joel was your first (and sometimes only) call. The entrepreneurs and founders in our space who have created billions in wealth over the years have Joel to thank for playing some role in their success. And thank him they do - with an annual pilgrimage out to his T3 event to see the latest and greatest technology while networking with their peers.

Over the years, Joel became reviewer, critic, influencer, facilitator, introducer, cheerleader and confidant. He is revered by most and respected by all. He also shows up at all the best events being thrown by others, which is why I appreciated it so much when he arrived at my festival, Future Proof. If Joel’s there, that means the event is legit.

When I was still a young punk doing my little blog, with no actual industry success to show for it yet, Joel saw something more. He invited me out to the big show and put me on stage. I got to meet a whole host of fellow wealth management players as a result of this invite, many of whom became contacts and colleagues forever.

Our First Acquisition

So when Joel Bruckenstein asked me to come back to T3 this year for the 20th anniversary, I said “How can I resist?” I don’t go to anything anymore, but for T3 20 I was willing to make a big exception.

And not only am I going - I’m speaking on stage with my partner Michael Batnick. The conference gave us a space to do what we wanted and we’re going to use this opportunity to tell a story that no one’s ever heard before. We’re going to tell the story of our first ever acquisition - which we have never said a word about since the news broke last summer.

In the fall of 2022, the largest asset manager in the world, BlackRock, approached us to discuss the possibility of buying their consumer-facing robo-advice business, FutureAdvisor. They had acquired it in 2015 back when it seemed like automated asset allocation was going to be a big deal and a great standalone business. A lot had changed over the ensuing years and BlackRock had made the decision that this was no longer a core asset for them. When Michael got the call, he couldn’t believe it. “I never thought in a million years a firm like ours would be in a position to do an M&A deal with a $10 trillion company,” he said, or something like that.

We have a lot to say about the process, challenges, the highs and lows and everything that went into pulling this off, including building a brand new technology platform in a short period of time to onboard the clients. Until now, other than replying to the press via tersely-worded emails, we haven’t said a single word. There were some good reasons for that, which we’ll get into on stage.

On Tuesday, January 23rd, Michael and I will be taking the stage at the Cosmopolitan Hotel in Las Vegas, Nevada to talk about the acquisition for the first time ever. We’ll be following Kunal Kapoor, the CEO of Morningstar. We’re bringing Rich Cancro of AdvisorEngine up on stage to help us tell the tale. Rich was with us from the very beginning as we started our due diligence. When we hired AdvisorEngine, he assembled the team we needed, knew the timetables and understood the complexities. Most importantly, he knew all the counterparties at BlackRock, Schwab and Fidelity - and it really required the cooperation of everyone to pull the whole thing together.

The $250,000 to $1,000,000 household segment of the wealth management business is often referred to as the “mass affluent.” Historically, the mass affluent have not had many great options - being serviced by our industry always meant compromising on one thing or another in order to make it a profitable endeavor. At first, it was mostly insurance companies willing to work with these customers - and you know damn well why. There were also broker-dealers more than willing to sell products to them but not under any sort of fiduciary standard of care. And then there were young, independent advisors who were happy to help these folks, but often from newer firms or solo practices with less resources and capabilities.

Not anymore. We’re talking to this segment now, with a staff of human Certified Financial Planners and a whole trading, operations and compliance mechanism at the ready. We’re using tech where tech is wanted but it’s a human-driven advisory service that I think represents the future of what this industry will become.

I’ll talk more about it sometime in the future.

We’re excited to give the industry an inside look at how we pulled it off and talk about our strategy for the thousands of families who came aboard as clients as a result of the deal. There’s a lot going on and we’re ready to share.

This Week

On tomorrow’s live What Are Your Thoughts for YouTube, Michael and I will be covering valuations, the earnings season kickoff for banks, an upcoming inflation print and a whole lot more. Subscribe to the channel for the alert. It’s live and interactive with the audience this Tuesday (and every Tuesday) at 5pm EST, available afterward as a video or an audio podcast episode.

Animal Spirits comes out Wednesday and then Ben is doing an all new Ask The Compound on Thursday - also live for YouTube. This Friday is The Compound and Friends as always. To find out who the guest is, subscribe to The Compound Insider - we’ll tell you every week.

Micheal Kitces and I Reflect

One more thing on T3 - almost forgot. Michael Kitces is America’s foremost expert on the financial advisory industry. He and I did a new video interview reflecting back on the T3 conference’s legacy. You can watch it below:

OK, talk soon! - Josh