Jack Sharry
Hello everyone and welcome. Thank you for joining us for this week’s edition of WealthTech on Deck. As our listeners know, we’re always in search of a good story about the future of financial advice. We like to mix things up and look at our industry from different angles as we try to understand how the future of wealth and asset management might unfold over time. As I settle into my new home at SEI, I keep finding very interesting stories beyond what I know and what is my comfort zone. And I find that quite intriguing. Over the decades I’ve worked with and for wealth management firms like wirehouses, regional and independent firms, RIAs, insurance BDs, and manufacturers, asset managers, alternative players, and fintechs, an area where I have little personal experiences in bank trusts and private banks, call it what you will. We’ll learn more in a moment about all that. I know I find myself working with and for a firm that is a leader in this area. We’ll also learn more about that as well. So today I’m going to go to school to learn about bank trusts and private banks.
I’ve invited Allie Carey. Allie is the Chief Strategy Officer at SEI’s Private Banking and Wealth Management Division. She’s going to share her perspective on this part of the wealth management space and I’m ready to learn and hear more. Allie developed strategic growth plans for SEI’s private banking and wealth management. And she does so in collaboration with executive leaders across the company. I’ve invited Allie on our podcast to educate us on this marketplace and talk about one of her favorite topics, how to generate organic growth. Allie, welcome to WealthTech on Deck.
Allie Carey
Thank you, Jack. I’m so excited to be here. As an avid listener, this is a cool moment for me.
Jack Sharry
I get it. get it. We like that. So Allie, let’s start with you describing your role at SEI as the Chief Strategy Officer for the Private Bank and Wealth Management Division. Please fill us in on what you do, who you do it with, and who you do it for.
Allie Carey
Sure, great. So as the Chief Strategy Officer, my remit is really to outline and show a path to grow the business, right? I like to think of myself and my team as the ones that are out in the wilderness, bushwhacking through, trying to find clear space where we can kind of bring the business along with us. We have the opportunity and really the responsibility to be thinking quite far ahead on multiple different facets. So that could be anything from regulatory thoughts and changes and pressures to technology innovations and disruptions to workforce impacts. And what we need to be thinking about as far as upscaling and re-scaling our workforce, what does that next generation of workforce need to be and how can we start getting the organization there.
Jack Sharry
When you say get the workforce there, are you talking about SEI? Are you talking about your clients? Talk about who you’re serving in that regard.
Allie Carey
Great question. It’s both. And honestly, it’s really, you know, from an industry perspective. So we all know, you know, at least across the wealth management spectrum, the aging advisor base, we talk a lot about who are those next generation of advisors. I still think the industry is thinking too much that it’s, we just need advisors that are younger, but they’re doing the same thing that advisors do today. When in fact, yes, they could and should be younger, but they’re going to be doing very different things than what advisors do today because of the technology innovations that are coming through. And they’re going to need a wider array of knowledge across the client’s life, not just investing or even financial planning, right? And I know we we’re going to get into the banking side of it in a little bit, but I do believe this is a place where banks are quite well positioned to win. So it’s industry focused and then we back into what does that mean for SEI and the services we’re delivering, the evolution of those services or the new ones that we need to bring to market. And then how does that impact our clients? And can we play a role in collaborating with our clients and even supporting our clients in that front?
Jack Sharry
Why don’t you give a perspective, because I was very pleasantly surprised to find out what a big player SEI is in the bank world. Talk a little bit about who you serve in that regard.
Allie Carey
Sure. So as you know, Jack, and probably a lot of the audience, SEI is, you know, 50 some years old and the business really started in the bank trust space or the independent trust company space. We provide technology, platform technology, SEI wealth platform, as well as outsourced operations to banks and then asset management. So similar to the other businesses at SEI, those core capabilities we deliver to banks. The banks that we serve, their wealth management businesses are usually focused on either high net worth or ultra high net worth individuals where estate planning and trust services are highly valued and required. And our technology really changed the game decades ago around automating a lot of the calculations required to serve and deliver trust services. In the industry, we talk about P&I accounting, principal and income accounting. You need to separate out the principal of the trust versus the income that’s generated from that principal because there’s different stipulations in the trust documents of how those things can be used, distributed, et cetera. The bank trust business has been an excellent business for SEI. We serve eight of the top 20 banks in the US. And that business has really been the one that was able to grow and then spin off the rest of our businesses. If you think about all the work we do with independent advisors and institutions and asset managers and beyond. So we are proud of what we’ve done here. We like to think of ourselves as the original FinTech, the original wealthtech that has innovated consistently over the decades and we use the stability we have to continue that innovation.
Jack Sharry
Interesting, interesting. The way I characterize it, because I’ve been telling the story and this is all part of my education because I just learned a few things from you just this second, just this moment as we’re chatting here, is that SEI started as a back office operator for the bank channel and over time added independent advisors, added RIAs, added a variety of other services and products and TAMPs and asset management capabilities, all that sort of evolved over time and currently not only is it big with the banks, but it’s also big with asset managers. I think there’s 43 of the top 100 asset managers are served by SEI. A lot of this, by the way, I’m sharing with our audience because I didn’t know it when I joined SEI. I’ve since learned it. And I think many others I find do not know all this. And that as things evolve, currently SEI provides back office services for mutual funds, ETFs, SMAs, UMAs, alts, it’s actually the largest provider I think of, private credit, I think one of the aspects of alts. I’m not sure of that exactly, but pretty close. But the idea is it’s a big alternatives back office operator, just at the right time as the rest of the world is discovering alts. And we’ll probably speak a little bit about that. So what’s happening, and all this, by the way, for those of you who are faithful listeners, you know that we talk about UMH as if everyone does it, no one does it. But SEI is intending to do that collectively across all of the different channels. So a lot of what we’re talking about here is how this UMH concept might apply to banks, but I’m getting ahead of myself. So let me go back to what you discovered as you work with clients. And that is that they have challenges like all industries do. It’s a mature industry of a sort, but it’s also, with the advent of technology, learning how to operate in a different way. So talk a little about that. What are some of the challenges that you see with private banks and wealth management clients? Fill us in on that.
Allie Carey
Sure. So I’m going to give you a little bit of history on myself and then I can kind of come into what I think opportunities and challenges for wealth management in the bank channel. I started my career selling asset management for SEI into our independent advisor market. It was a phenomenal first job, especially coming out right around the tail end of the financial crisis like talk about jumping in, whether you like it or not and swimming or else you’re sinking, right? But I always had this like interest in why is the technology working this way? How are these decisions made? So I moved into the technology organization here at SEI and really got a firsthand view of building scaled wealth management technology and the importance of prioritization and focus on value. So fast forward to here, I really spent so much of my time working with independent advisors and RIAs, I didn’t have a full appreciation of banks’ position and the enormity that banks have when it comes to wealth assets. And what I have quickly come to realize that’s a challenge, but more importantly, a strategic advantage that banks have is their client base. Banks have a massive client base across their different business lines and independent advisors in many cases have to participate in referral programs or pay for leads to stimulate organic growth. Where a wealth management business inside of a bank, they can work with their commercial colleagues, they can work with their retail colleagues, their lending colleagues. I mean, some of these organizations, we’re talking about hundreds of thousands of near-end prospects for the wealth management business. That is unmatched in any other channel. Maybe insurance has that edge. So that is like amazing when, as you said, Jack, I love, I study organic growth. I think there’s just so much here, but what was always so fascinating is that banks traditionally, at least over the last decade, two decades or so, their growth has been inorganic. There’s been consolidation. And, you know, I always just thought to myself, what, what’s happening here? Why isn’t this an avenue where we’re seeing success and growth? And what’s come to fruition over the last couple years is two things, cooperation inside of the organization. These are separate businesses that have separate goals that are working really hard towards those goals and creating that collaboration is difficult, right? It really comes from the top. And then there’s data challenges, but with the advent of AI and the microscope and spotlight even on data being an enabler, we’re starting to see those things open up. And at SEI, we’re so focused, especially in the bank channel and bringing data capabilities to help our clients, not only get a better handle on their wealth management data, but bring in data from those other business lines so that you’re looking at the client holistically. I have the opportunity and the privilege to speak with banks weekly. Some of the largest banks in the country to regional and community banks that are so mission driven around their community. And I hear the same two things client 360 strategy, we need to put the client at the center or the full client strategy. How do we serve the whole client? And I like to joke, we have to give the client a hug, right? Because not only do they have access to this near end pool of clients, but they have a breadth of services that they can bring to these clients that hit both sides of the balance sheet. So bringing that data together that normally has been very siloed and also somewhat incompatible. Mortgage interest is a bit different than dividend interest, right? And coming, that’s a very like in the weeds example, but it matters if you’re trying to deliver a full suite and services and client service to that client. And that’s one major thing that we’re focused on is liberating data, bringing it together, and then putting analytics, predictive AI on top to really help move those 360 strategies, those full client strategies along to take advantage of that strategic differentiation they have.
Jack Sharry
Love it. And of course, everything I’ve observed so far and hear about you, you’re one step ahead of me at least. Could you give us some examples of what that looks like? Obviously, you wouldn’t give specifics in terms of various banking institutions, what have you, but how’s that playing out? In other words, as they’re a look at make that big hug, it’s a much more holistic kind of approach. And as a strategy person, as someone who’s a leader in that regard across the company, how does that work? How does that play out? What are you working on? What are you doing? Where are you trying to take this effort of enabling the banks to provide that big hug?
Allie Carey
Sure. So there’s a couple of ways, but really importantly and more near in is banks have complex ecosystems even inside of their wealth management channels, right? So they’re… in many of the banks, they’re not only running a ultra or high net worth business that’s regulated by the OCC, right? And brings estate and trust services to bear. They’re operating a registered investment advisor, many are buying registered investment advisors, right? And then they might have a broker dealer in house too. So the first step that we’re really seeing play out is bringing those wealth management entities together and operating and providing services across the spectrum of advice, self-directed investing, estate planning, et cetera.
Jack Sharry
And all this requires data that works together, that talks to one another. Add that element. I know that’s a critical part of what you’re doing, especially for SEI.
Allie Carey
It really does. And the thing that’s unfortunate, right, and just what we all have to live with is those are three separate regulatory environments with three separate regulators. And because of that, we’ve had different platforms, different service providers grow up in those spaces, and we’re all kind of converging. So we need to be conscious of separating the day-to-day operations of those platforms and the reasons why they’re different with the data that can help unify an experience for a client. So getting that data up out of those individual platforms into a unified data layer in a cloud-enabled data lake where you have real-time integration opportunities and abilities. Whether that’s, you know, lot of banks we’re seeing are doing that using Salesforce, the SEI data cloud, which is that infrastructure to make all that happen. We’re in a lot of conversations and execution with clients to truly bring those things together. But then there’s also multiple custodians across that. And how do you bring together, in some of our clients, we’re talking 50, 60 different custodians that we’re aggregating together into one platform so that that business can operate in the middle office, can serve clients, as well as sell new clients using one view of that client. So first, we got to tackle the wealth management world. And then once we’ve gotten that house ready to go, we can build the next floor of commercial lending, retail, so on and so forth. I like to call it the T strategy. You have the vertical integration, and then you can put the horizontal integration across the business lines. So we haven’t seen the business lines come to fruition yet. I haven’t seen that really come to fruition at scale, but that’s where the industry’s going.
Jack Sharry
Yeah. So, fascinating to be coming from a place, namely, LifeYield, where we help connect dots. That’s fundamentally what we do. And we’re working closely with you and your colleagues on the banking side. There’s lots of opportunity I think we all see. Talk about that. A lot of our listeners are interested in, fascinated by, curious about this whole notion of UMH, multi-account management. So everything I just heard suggests to me that, can UMH be far behind?
Allie Carey
So it’s it’s funny, I think that the bringing UMH and really delivering it right, because to your point, Jack, no one’s really doing it. And if they are doing it, it’s not at scale. And it’s very bespoke for probably a very small segment of clients because it’s hard. So I think that UMH can be even more powerful, not only the technology that SEI LifeYield has, but if you think about the foundational pieces that SEI’s wealth platform brings to the table and being able to aggregate across multiple custodians inside of one ecosystem, that eliminates a lot of the setup and the friction and gets you to the implementation and usage of the SEI LifeYield quicker. And that gets back to my point of the wealth manager having a different job or the advisor having a different job tomorrow than they have today.
Jack Sharry
Yes. So let’s talk about that. Let’s talk about where we’re headed. Clearly, lots of elements are in place, are being put in place, are being connected and coordinated. All that sort of stuff is underway. A lot more work to be done, but certainly, progress, great progress, is being made across the board, across SEI LifeYield and SEI at large. So talk about where the world is headed. Now we’re going to take a look at how does the future unfold over the next, I don’t know, year, two, five years? Much beyond that, who the heck knows, but what’s your crystal ball telling you in terms of where this goes in terms of this convergence, this consolidation, this aligned interests that are coming together? Talk about that. Where do see it all leading?
Allie Carey
Yeah. So right now it’s so, you know, we talked about the convergence, right? There’s banks buying RIAs because they want that growth, but they have the full scope of services all the way up to, you know, that estate trust planning. We have RIAs buying trust companies. So everybody’s kind of wanting to pull all the pieces together, right? what I don’t think either are giving enough thought to or credit to are the ability for fintechs to come in and disrupt this completely digitally.
Jack Sharry
Explain what you mean there. I hear you, but… I’d… Explain, that’s pretty important thing you just said.
Allie Carey
So the fintech ecosystem, we’re starting to see some interesting, agentic AI solutions where services are being delivered at scale and potentially at a much more affordable rate. They don’t have what I’ll call the tech debt, for lack of a better word, or business debt of a complex ecosystem older platforms that they have to manage and stitch together to be able to deliver these things. They can come at it with much more agility and flexibility, deliver it quicker and at a price in which is affordable up and down the market. So we talk about democratization of services. We’re seeing that with estate planning. We’re seeing that with bill pay services. We’re starting to see some personal finance automation platforms. So like, think of a day where you never have to think about if you’ve paid your credit card, or if you have enough money in your checking account, or if you need to move money between things, because it’s completely automated. So those things are starting to appear. And as RIAs are buying trust companies and banks are buying RIAs, and they’re trying to stitch these businesses together, I think we’re going to see new entrants. I like to talk about it as like Robo 2.0. A robo wasn’t really a robo advisor. It was a asset allocation advice and some rebalancing. We’re getting to the point where we could have some real advice across the life cycle of someone delivered via technology. Where humans are curating that, they’re not creating it, if that makes sense.
Jack Sharry
So let me pose a challenge here. And I have a hunch we probably agree more than not. So I agree with everything you just said. There’s nothing I disagree with. But at the end of the day, and I’m personally going through this now, I’m going through a personal planning exercise, extensive, which I swore I was gonna do this, I don’t know, 20, 30, 40 years ago. And I’m just doing it now late in the game, which seems to be when people do that sort of stuff. And it’s been fascinating and wonderful. And the only way I was able to pull it off is to work with someone to help me do it. I’m somewhat computer savvy. My wife is far more so. But there’s so many things, just it’s not her thing. So she didn’t even know the questions to ask, let alone manage it. So my hunch is that while I agree with everything you’re saying, my hunch you may agree with me on this, you’re going to need a human being to help you pull it all together and answer the questions you didn’t even know to ask to really understand what you’re doing so there’s lots of efficiency capability coming, already here, but more on the way and then we will tie it together far better but you’re really going to need a human being to pull this off. Do you agree with that?
Allie Carey
I do agree with that. I think there’s the human being, one, I agree with that, because this is emotional. Whether or not we want it to be, it’s emotional. There are many things still inside of the advice creation and advice delivery process that isn’t emotional, that people are in and don’t need to be in, right? So I think all of that will go away because we can have different technologies help execute on those things. What will happen is, what I think will happen, is that that person will be elevated to act more like a life manager, similar to what entertainers have, where they say they have a manager that’s working not only for their business and business appointments, but also personal things and managing the surround sound. That is what I foresee as the next advisor. And there will be things where we interact with technology and it doesn’t necessarily mean the advisor is not involved or aware. It’s just that they’re not spending their time doing that part. They’re there for the phone call. They’re there for those emotional decisions where they need to create collaboration and agreement amongst a couple, amongst a family, that only a human can do. Technology cannot do that.
Jack Sharry
Yeah, and there’s a fair amount of education that comes along with it, right? It’s all parcel. And then once people learn a little bit more, they still want to say, what do do about this? I’m doing this personally where I actually know what I’m talking about. And I’m asking, well what about, real estate question, what about buying this property? Does that make sense in the context of my portfolio? There’s no app for that. You know what I mean?
Allie Carey
I think there could be one day and maybe you get an answer that both you and your advisor or life manager react to and talk to. But if you have that moment at 11 p.m. and you just want something to noodle on, you could ask and then have the conversation after the fact.
Jack Sharry
So I’m going to invite you back, Allie, because we’re just getting started on the future of financial advice, our favorite topic here at WealthTech on Deck. So I love where we’re going with this conversation. I love how you think and love your experience. But given we try to keep these to a half an hour, I’m going to make a part two decision here on the fly. And we’ll continue this conversation in the not too distant future. But thanks for this so far. Before we… as we look to head out for today’s session, any key takeaways you want to share with our audience in terms of any advice or observations that they might benefit from?
Allie Carey
Sure. So I think the first key takeaway is banks are well positioned to win in wealth management. They have that near in client base. They have the breadth of services to really serve the whole client. They have work to do, but I see a path forward and it’s an exciting one. And I think the next takeaway is I’m excited to see what unfolds here. There’s just so much opportunity.
Jack Sharry
Yeah, I’m with you every step of the way. So our final question, always my favorite. I’m looking forward to hearing what you have to share. What do you do outside of work that you’re excited or passionate about that people might find to be interesting or surprising?
Allie Carey
So I have an ambition to be a professional public speaker. So I don’t know what I’ll speak on, but what I do outside of work often is I write. I just try and write about things that interest me, things that I found curious, things that… So I have journals among journals of just getting things out of my head to one day, you know, decide that I have an interesting story to share and tell that could help people. I’m going to need to load it into some AI one day to like decipher it down. But I spend a lot of time doing that.
Jack Sharry
I love that. So offline, I’ll share with you my, I’m actually writing a TED Talk.
Allie Carey
Oh, I would love that.
Jack Sharry
Yeah, I’ll share that with you and we’ll have some fun talking about that. I’d love your perspective, but I’ll tantalize our audience because I’m actually thinking of sharing it more broadly, but that’s for another day. So, Allie, thanks. This has been really fun. I had high expectations. You’ve exceeded them, as I knew you would. So thank you for this conversation. There will be more, many more as we go down the line. For our audience, thank you for tuning in. If you’ve enjoyed our podcast, please rate, review, subscribe, and share what we’re doing here at WealthTech on Deck. We’re available wherever you get your podcasts. You should also check us out at our dedicated website, wealthtechondeck.com. All of our episodes are there along with blogs and curated content from many folks around the industry. Allie, thanks. This has been a lot of fun. I really enjoyed it.
Allie Carey
I had a great time. Thank you.
Jack Sharry
We’ll do it again.
