Chris Mailander
All right, so here's what we're working with today, which is a very old industry that works in with some old processes. It's quite inefficient, that has lots of human beings doing low administrative oriented tasks. It currently manages about $30 trillion in assets. It has fees alone of about $135 billion a year. And it's expected to increase in the number of fees to about over 200 billion by 2030.
Also, we have this generational dynamic that's upon us and will only increase over the next 20 years. And this industry sits at the center of over $84 trillion in wealth transfer that'll happen over the next 20 years. And yet, the industry works in a very old-fashioned way. Today, we have the opportunity to talk to one of the disruptors that's knocking at the door of this industry. Welcome, Sam Kendree.

Sam Kendree
Awesome. Thank you, Chris. Very excited to be here.

Chris Mailander
So Sam comes from a background as a financial advisor with Chicago Partners, which is a wealth management firm that has over $7 billion of assets under management. He was the founder of another big data company, which is now fed into his current venture, which is he's the founder and CEO of WealthFeed. And I wanna paint a picture because I think this is the first place that I wanna start, which is I have this vision, Sam, of you walking into a wealth manager to talk about WealthFeed and what you're doing with a bunch of gray hairs, guys that probably look a lot like me, sitting around the table trying to figure out how do we take advantage of new technology and new ways of thinking about this industry and where it goes from there. Let's start there. Talk to me about that dynamic, that context.

Sam Kendree
For sure, Chris, and you're right. It's either gray hair or no hair, right? It's what we run into. But no, you're exactly right. We're in such an old industry, but growth and organic growth is just so important at the core. So when we come in and we're having conversations with folks who have built their RIAs from zero to seven billion, 10 billion, 20 billion, often it's met with a little bit of resistance at first, of course.
But once they hear what we're doing with WealthFeed, often there's a light bulb moment that goes off in their head and they say, hey, I'm so glad that you guys are doing this and building this because I wanted to do the same exact thing for my firm. So we've been met with a lot of those great conversations and it's led to a great company that we built so far and a good trajectory.

Chris Mailander
It's an industry that strikes me as being in crisis, quite frankly. You have this tremendous amount of money that it's managing, it's tremendously successful, these are prestigious brand names that are associated with it, but the crisis stems from some things that are happening underneath the hood. For example, origination of clients is a bear. It's very difficult to go and find new clients to bring into the system. Tell me about that crisis, tell me about how it works today.

Sam Kendree
Of course. So organic growth, when you look at it, can mean a couple different things. So the first thing that can mean is, you know, Chris, the financial advisors bringing on new clients, that's organic growth kind of, you know, we'll call it step stone number one. The second is really making sure that you're retaining your current client base and often winning a wallet share when it's for grabs. So let's say again, client Chris sells a business and maybe he has a couple different advisors. I want to make sure that as an advisor, I'm winning Chris's, you know, net new money that's coming in. So historically organic growth has been referrals and COIs. And that's been gaining back since, you know, financial advising started, you know, decades and decades ago. And the issue with that is that it's very constrained. As an advisor, if I say, hey, I want to grow my book of business, you know, to a hundred million, then a billion, then 10 billion, COIs and referrals can only get you so far and then you end up kind of doing the waiting game, right? Where you're just, you're waiting for folks to come to you.

And what we've done with WealthFeed is take this age old mentality that money in motion is truly the cause of folks hiring or firing a financial advisor. And we're automating the entire process of identification of that money in motion, but also the outreach and the conversion of that prospect. So one of our co-founders, Ryland, worked at JP Morgan. So one of the oldest financial institutions in the country, most successful institutions. And as an analyst, Chris, what they would have them do is go on Zillow in Naples, Florida and identify every home that was recently purchased over $5 million. Figure out the owners of record on their property and then try to figure out their email, phone and LinkedIn. So that's a very owner's process that takes hours and hours and hours to get a couple of names. Now with WealthFeed, we can do that in about five clicks and Rylan can have that at its fingertips. So, we're going through this massive transformative wave of tech and AI and organic growth and financial advising is one of the oldest problems that we've seen in the financial industry what we're doing is stepping in and solving that for folks.

Chris Mailander
Yes, so to break that down into a couple of pieces, the current methodology or what he experienced when he was working with JP Morgan is that they're hiring bright young talent out of undergrads or business school, et cetera, and your first task is to go out and look for what you call money on the move or money in motion in order to identify where there might be a wealth-related event. So you're using. a human being who's probably somewhere in that 80 to $120,000 range to go through Zillow, to go through court filings, and literally then have to enrich that by finding the contact, make sure that we're dealing with the right Tim Smith or Bob Johnson or a common name in the right location, and then develop out a profile associated with it versus what you're doing today with five clicks.

Sam Kendree
Exactly right. Yep. So what we're doing today is we're able to aggregate hundreds of millions of data points, put it on an easy to use web application where an advisor can come in, Chris, and say, all right, Naples, Florida, folks that have over $10 million of investable assets that went to Harvard. I'm not a Harvard guy by any means. I'm sure you can tell, but if I were, know, maybe that's the niche I would focus on and can say who just moved to Naples, Florida in a matter of five clicks. Boom, you have a list of a hundred prospects that you know you can help write with new Florida tax laws, for example, and stuff of that nature.

Chris Mailander
Yeah, super interesting. And so, and how predominant is that today still? Is that the typical methodology that I would see if I was at Edward Jones or Wells Fargo or a wealth manager today? Are they still using these antiquated methodologies?

Sam Kendree
They are, they are, I would say, you know, 5% to 10% are now starting to move over to a platform like WealthFeed , where they're able to automate, save time and get even a better result. So Edward Jones, for example, and we love working with Edward Jones Advisors, they have a great home office. They were known as the door knocking firm, right? So that's how you build your book of business. They're often in these small cities kind of across the country, you know, a random town in Kansas and they were door knock to build their name and trust and eventually win clients. And the issue was with COVID that took that completely off the table. So when we've worked with folks like Edward Jones, they've seen us kind of as that digital door knocking. And the beauty of it is because of AI and technology, we can provide them that resource where, you know, five, 10 years ago, they didn't have access to tools like that. So it's kind of this perfect wave of AI coming in. I'd say, again, we're seeing probably about a five to 10% adoption rate so far, and a lot of bigger firms, you know, reaching out to us, moving, gravitating towards us and, say “hey, how can I enable my advisors to grow?” in a, in a way that that makes sense.

Chris Mailander
So give me a little bit, take me a layer deeper into understanding how you do this. What are the five clicks? What are you trying to accomplish?

Sam Kendree
Yeah, for sure. So, and you mentioned this in the intro, Chris, which was great, which is our initial company, catalyzed what we set out to do is we said, Hey, we're going through this massive wealth transfer and you hear about it in the news every day. It's on CNBC just about every single day, but no one knows how they can kind of make it through the wealth transfer and benefit from it. So what we said is let's map out the entire wealth transfer and see where all of the inheritances are flowing.

And that's public data. So through online obituaries and newspapers and courthouses, we're able to essentially pull in all the folks who are passing away in real time. And through a data partner that we have who often sells that to pension funds. So they'll sell that to Boeing and say, hey, Chris, stop sending checks to Bob Johnson because he passed away. His wife's probably not raising her hand and saying, cut off the checks. So we're taking that data and then we're putting it through a very robust data pipeline of saying, Bob Johnson passed away, he's worth $20 million, he has a daughter that lives in Seattle. That's when we hear wealth transfer, that's where the wealth is going. So that's from the data aggregation side. We're doing that across SEC documents, we're doing that across LinkedIn, across law docs, and we're putting that into a great, easy to use SaaS platform where a couple of clicks allows them, the advisor to get to an end actual data point, which is, all right, Jane Johnson you know, 45 year old mechanical engineer just inherited $10 million. As a financial advisor, I know that she would benefit from my offerings when I can provide to her and her family.

Chris Mailander
Got it, and so what does the outreach then look like? Does the wealth advisor do the outreach to, we're using Bob Johnson as our theoretical or the daughter of Bob Johnson, they do a physical outreach associated with that or is there tools and technologies that you're using to make that happen?

Sam Kendree
Yeah. So our whole goal with Wealth Feed is just to boil everything down on one platform. So you're not having to go to Wealth Feed and then, you know, a Zoom info and a LinkedIn and whatever it might be. So we're able to automate three forms of high converting outreach for our advisors. So LinkedIn is one, email, so we plug in an email subdomain that we own. So it protects the domain health of these larger firms. And then the last one is pretty interesting. It's handwritten notes.
So through a partner of ours in Arizona, they own machines that hold a bluing pen, put a pen and paper. It looks just like a wedding invitation. And we're sending out about 20,000 of those from our platform a month.

Chris Mailander
Yeah, super interesting because you can see and I, know, as all of us do. I'm receiving more email solicitations and things in the mail or even text messages and they all are getting more personalized. You can see where they're cross-correlating information based on where I'm living and it'll say, by the way, have you tried out this? I literally got one last week which said, have you tried out this restaurant over here? Which I know that they haven't. I know that it is a mechanism designed to create some sort of affinity or a level of personalization that was historically more difficult. At the end of the day it still felt like technology underneath it. So that's always one of the issues that I'm particularly interested in now in this age of AI is how do you create that authentic relationship and something that's very personal and real in there.

Sam Kendree
For sure. And that's the second, the second part, right? The first is saying, all right, how can I find prospects that I know I can serve, right? And really help them and their families. And the second is how can I reach out to them? Like you said, in a personal way where it doesn't seem like AI, it doesn't seem like a mass outreach. And what we've recommended is leading more with advice. So being able to come in and say, hey Chris, you know, I saw you got, you know, a new job and I can help, you know, here's a piece of advice, have 60 days to roll over your 401k into an IRA. Here are some low cost options. So automatically the consumer is receiving a benefit from that outreach rather than just saying, Hey Chris, you know, have you went to Bob's ice cream shop? It’s great. Let's connect at some point, you know, so rather leading with advice.

Chris Mailander
And are you seeing a difference in the conversion rates associated with historic techniques or traditional techniques versus what you're doing?

Sam Kendree
Yeah, 100%. So we're seeing an increase in conversion rate on our platform. Maybe 2% to 3% is something that we've seen. But it's also great because if you ask advisors, new movers, for example, writing them a handwritten note, that would take probably eight hours to write 100 of those, identify and write. And again, on our platform, takes a couple minutes. So even if the conversion rates are the same, with technology and AI, you're saving eight hours of work right there, which at 100 bucks an hour sort of deal is saving around $800 worth of labor.

Chris Mailander
So the other thing that's interesting about this industry is that growth in the wealth management industry is typically from expanding into with new advisors tapping into new clients as opposed to the financial advice, know, the growth in the portfolios is typically correlated to market growth, you just the general increase in the S&P or whatever, as opposed to the financial advice being better. So you're getting growth, but it isn't necessarily attributable to the service offering.

I raise that because the way that you then grow the business and invest in new assets is to be able to do things more efficiently, right? So, this is an interesting dynamic within this industry where you're limited by the human processes, your margin comes from the human processes, that engine works well, but I know that it has a limited finite life that I've got to get into either being able to grow through acquisition of new clients much more efficiently or provide advice on the portfolios which leads to growth in the assets under management that exceeds the market, right?

Sam Kendree
For sure. Exactly right. Exactly right. And we've been in this bull market for so long where every advisor is a genius, right? Everyone's portfolios are great this year over the last 20 years. So from a growth perspective, every advisor feels like they're growing, but if you strip out the market returns, the organic growth is really, you know, it's probably zero to 3% on average, if not negative for some advisors.

Chris Mailander
Yeah, it covers up a lot of flaws in a business model. Quite frankly, when you have that bull market growth over 20 years, it's easy to be lulled into believing that everything's good.

Sam Kendree
Exactly right. Exactly right. Until, you know, and knock on wood, we don't see this. But again, you never know if we get into a got into a bear market. I think things would change on that front.

Chris Mailander
Talk to me a little bit about the ways that you're seeing these firms use AI. I mean, Wall Street is throwing lots of money at AI related initiatives. Most of the growth is associated with AI. Every CEO of a publicly traded company has to have an AI initiative and be able to go out to the shareholders and say, here's what we're doing. Some of it might be CYA, to be quite honest, which is they're experimenting. There's a new study out from MIT that's been widely reported, which is that 80 % of large enterprises don't see any ROI off of AI yet. What's going on here? What are you seeing? What's working? What isn't working? Why don't we see more ROI driven by these new initiatives?

Sam Kendree
Yeah. Yeah, absolutely. And it's funny. So in 2018, 2019, Chris, there was an AI company that came out and it's too bad. It was started by an advisor, in our space. And the whole goal was to help advisors become more efficient with AI and, you know, painting that picture, you would probably say, well, that's a hundred, 200, $300 million company right now. And the, the unfortunate fact is they ran out of money, went bankrupt and, you know, how to shut down their doors. And that was in 2018, 2019. So that's not that long ago.
And we had the first AI startup in the wealth management space, essentially go to zero. And then what we've seen in the last, you know, three years, I'd say is a big surge of AI note takers is something that advisors, you know, are really excited about, kind of low hanging fruit on that front. So, as you know, you know, record this meeting and, you know, take some notes and put any of those in your CRM, Chris, and say, “Hey, we need to follow up on this, this and this”. So if you ask any financial advisor today, I think they would say, and you ask them, how is AI changing, you know, how you're doing your practice? I think the first resounding answer that you'd probably get is well,
They're now listening on my zoom meetings and helping me collect notes. So I don't have to do that. But it goes so much deeper than that. Right. And, know, we're using it to help advisors grow. Asset managers are using it to decrease risk on the investment management side and really paint a better picture of, what should the allocation look like in this current market? So it can be used in so many different, places, but it is crazy how, if you're a little bit too early you know, it didn't pay off, right, which is really unfortunate.

Chris Mailander
Yeah, mean, timing is everything in this particular business and particularly the business that you're in, which is earlier stage companies that come in, they see an opportunity, they know how to use the technology to create some sort of disruption within a legacy. A big fat whale that looks like wealth management, which is doing things in anachronistic ways, trying to turn the ship, but the ship is going in that direction for a reason, which is that over the last 20 years, that model has worked really well and generates yield and margin and it makes sense, but you're right, which is that there's somebody who's going to figure it out, but you got to get the right timing on being able to have that impact. Sometimes the earliest stage companies that come in just can't raise the capital and get the market acceptance in time before the well runs dry. And then typically, it's the companies that are in that second wave or that third wave that have the opportunity. The timing starts to line up with market acceptance and impact.

Sam Kendree
Yeah, exactly right. Now we're at a point where... You know, I mentioned there's one note taker, then there's two note takers, then there's five, 10, 50, 100. And now it's just an overabundance of folks kind of coming into the space. And another thing that tech and you know this very well Chris with technology and AI is that it's allowed software to be built so much quicker that we're just seeing tons of software players kind of enter the space because they were able to spend five code something and spin it up within a month and get a couple of clients. So it is really interesting to see how AI has been kind of moving the industry forward, but it also is a distraction in a way for a lot of advisors.

Chris Mailander
Sure. Yeah, that's interesting. And so you've been working with a number of the major players within the wealth management industry and also the underlying infrastructure providers associated with it. When you see this plethora of growth of new startups that are coming up and coming out with something that they've either created or created through vibe coding, which the quality of that can be.

The range of quality when you're vibe coding something is vast. I mean, there's a lot of junk that comes as well that's not gonna stand up particularly in a high trust environment, which wealth management requires, et cetera. How does the machine shake that off? Who wins in that game? Who emerges out of this growth? And then there'll be a contraction, a consolidation, of course.

Sam Kendree
Yeah, a hundred percent. So I think, you know, the way that when we build WealthFeed in our whole mindset is the only way that we're going to be a successful company. Chris is if our advisors enjoy using a platform and it benefits their business and they have ROI. So if we can achieve those three things, we're going to have a successful outcome for our investors, our operating team, all that. And I think a lot of, you know, platforms are getting pushed out there, they don't necessarily have that as priority number one. Priority number one might be, let's try to get as many users as possible, as quick as possible. And maybe they don't really care about the advisor experience that much. So I think the true, you know, winners and there's this real quick aside, Chris, there's something called the Kisses map and the Kisses map is a very trusted map of technology providers in wealth management. And it's gone from having, you know, 50 to 75 companies in the last year to two years. So probably over 500 now. So advisors have, have a lot of options, right? So, you know, we think that the folks that are going to make it out on the other side of all of this are the people who really you know, put a lot of focus into their end user, put focus into the advisor having success, and then, you know, that everything will fall in the right way for us. The companies that just want to grow as fast as possible, maybe they have VC pressure that they need to, you know, increase their prices or not make a pencil for advisors, in our opinion, are going to flame out at some point.

Chris Mailander
Yeah, and it's interesting because this industry, wealth management, strikes me when I start out and I think about the old guard versus the new school that's coming in, these differences in mentality or mindset associated with how things have worked and people who've been very successful with the financial engine that underpins wealth management, but where does it go from here?
I look at it and I think this is an industry that is just ripe If you change the mindset to think about it as a technology business first, that's moving financial information as data. And then that's the currency that goes through it, that there would be so many opportunities for increased efficiencies, A, B, better client experiences, UI, UX, as well as potentially returns, returns or risk aversion associated with it. Instead of thinking of as a financial services business that was built, you know, the business model fundamentally in many ways is very similar to what it was 50, 60, 70 years ago, which is trust-based relationships with every D. Jones broker that down on Main Street in a small town and he's a good guy or she's a good gal and we like her and that's good enough. But the business is changing too rapidly. And so start thinking about it in a technology oriented way. I think.

Sam Kendree
Yeah, no, I think you're spot on. I think another thing that people don't really think about through this entire process is that end consumer, because the end consumer has so much coming at them in forms of AI, right? It's all about our ChatGPT. So you can ask ChatGPT, Hey, here's my scenario. Should I do a Roth conversion? Right. And boom, I'll give you most likely a correct answer. Um, they also have their advisors saying, Hey Chris, um, we're going to have an AI, um, tool join our Zoom meeting. It's going to help me take notes. So they're getting hit from all different angles on AI. And now the third one that they're getting hit with is saying, hey, you don't even need a financial advisor. You don't need to have an advisor charging you 1 % because you can just use AI to manage your portfolio. And you can ask any questions in regard to your financial plan or tax situation. So I think we kind of lose sight of like that end consumer is probably just go on saying I have no idea what's, you know, what it's going to look like in the next 10 years. So it's something that kind of falls by the wayside…

Chris Mailander
Yeah, super, super interesting dynamic here. As I mentioned before, I saw a statistic which is that $84 trillion in assets will move through inheritance between the baby boomers and all the way down through Gen Z over a 20 year period of time. That's a phenomenal amount of money, A;, The second thing that I saw, which is that, children or grandchildren who inherit money will tend to change their financial advisor or wealth advisor within 12 months after that event, meaning that they don't like the experience or they wanna change the way that they're doing it. So I'm interested in your perspective in terms of what does that next generation expect and demand and you touched on it with, they can go to ChatGPT, they're comfortable with it, of making financial recommendations or understanding what tools are available associated with it.
And then my expectation is that there's also an expectation around fees as well.

Sam Kendree
For sure. Yeah. The fee thing is so interesting. Um, and it's something that, you know, in 2008 when Wealthfront and Betterment came out, all of a sudden it was, you know, I don't know if advisors can actually get away with charging 1 % because there's now a new robo advisor and trade into the mix. They're charging 30 basis points. Maybe they have similar returns, similar services. Um, and it was a big, big fear in our industry.
When I started in 2018, that was the number one fear is, how can RAAs beat out robo advisors? And then all of sudden over the last seven years, we've seen that completely dissipate right up until this point, right? Where it's no longer, you know, fee sensitivity because we have all this private equity money coming in. They're buying Mailander RIA. You know, the first thing they're not, they're doing is they're saying, Hey, we're keeping their fees where they're at, right? We're going to increase profit margins and as typical private equity does. So in fact, we've seen zero fee compression over the last seven years, whereas that was like issue number one in our, in our space.

Chris Mailander
But that business model or that mindset also has a finite limitation, which is built into the PE model, which is if they invest money in three years, five years, seven years, maybe 10 on the outside, they expect liquidity, which is then you lose. So they want to cement that business model, which is at 100 basis points or a percent of assets under management is the average fee on wealth management. They're going to protect that model as long as they possibly can. At some point in time,
it's gonna get chipped away. At some point in time, there's gonna be that shift from you have to be able to do this at 75 basis points, 50, 25, and get down into the Robinhood type model, I assume, right?

Sam Kendree
100%. Yeah, no, I think you're right. And the robo advisors were threatening that and it just didn't pan out. It just, you know, they, just didn't, it didn't do anything materially to the fees that advisors were able to collect. And I think now we're going through this second wave of saying, Hey, maybe the robo advisors couldn't do it, but maybe AI can do it where, you know, AI is going to be able to kind of bring those fees down and compress those fees a little bit. But, you know, my take on it is that there's so much private equity money just pouring into our industry that the fees aren't going anywhere. So now it's a race, and you mentioned this earlier of, hey, fees are staying here, but we got to provide more services. So now we have to provide a state planning. Now we have to provide very in-depth tax planning. So now it's more of an arms race to provide more services rather than, hey, let's just undercut and charge less fees.

Chris Mailander
Yeah, yeah, super interesting. So let's go back to Robinhood and talk about them because you're right, which is that Robinhood has always had an interesting influence on the financial services industry, a measure of fear, the valuation has been insane, they make their money in a different way through the trading or through transactional fees on trading, et cetera. But they have made some plays, I believe, in the wealth management space. Can you talk about that a little bit?

Yeah, of course. And I think Robinhood is a great example to Chris of why there are all the fears of AI and robos, um, taken away financial advisors job. I think there was a Microsoft article that came out and mentioned that as well. Um, Microsoft study. And at the end of the day, people still need personal advice and personal relationships. And it's more based off of, the market just dropped 3 % today, not pressing the panic button and selling everything you have. At the end of the day, that's the true value that advisors are bringing. So Robinhood realized that and said, hey, I think the RIA market is here to stay. And they acquired a firm called Trade PMR. So Trade PMR is a custodial platform built on top of Wells Fargo. So essentially, again, Chris Mailander, RIA, could custody their assets at Trade PMR.

And it would act just like a Wells Fargo custodial platform. And the reason why Robinhood acquired them is to build out a referral platform. So Schwab, Fidelity, they have these massive referral platforms where if the consumer says, hey, I need more in-depth estate planning. I want more access to Alts, whatever it might be, they're able to refer them to a financial advisor and take a 25% trail on that ongoing. And it's a huge, huge, huge revenue driver for these large custodians. And I think Robinhood had realized that and said, Hey, we have, you know, however many user millions of users that we have, you know, maybe they're Henry's, right? They're high earners, not completely rich yet. At some point, they're going to need a financial advisor.
If we can hand them off in that process to an RIA that custodies on trade PMR or now Robinhood, they're able to collect the 25% of that ongoing. So they're not necessarily losing revenue. So super interesting dynamic. And it kind of send waves through the industry a bit when that happened.

Chris Mailander
Yeah, it's interesting because if you think about the wealth, know, how wealth stacks in the United States, it's a pyramid. And my assumption is that the wealth managers, typically you want to go for the whales. You want to go for the highest assets under management, the individuals or families or trusts that have the most value. Because if I can only support, call it 50 to 100 clients at a time, the way that I grow, the way that I increase my compensation is to have in that group of 50 to 100 people that have more wealth.
The math is just that simple. What's also underserved, I would guess, is at the base of that pyramid. So this is people that are between that, you know, call it $50,000 and $5 million in assets under management. It is the bulk of Americans who have some retirement assets, but they're not whales. And RobinHood has done an effective job of going in with low cost models and now trying to figure out how they can monetize it as people get wealthier over time. Talk to me about WealthFeed and its ability to identify people that might be at the base of that pyramid, either because they're, you know, at a lower socioeconomic level or there might be earlier in their careers and their futures.

Sam Kendree
Yeah, yeah, of course. So the reason why I think we're seeing so much success right now with WealthFeed and on the adoption side is kind of back to exactly what you were saying, but on the private equity side. So when private equity money came in, call it 2020, 2021, interest rates essentially had zero, right? Their growth plan was let's invest in a platform, REA, and acquire, acquire, acquire. you know, let's acquire for 8x EBITDA multiple and we know we're trading at 16 to 20x. So you have that EBITDA multiple arbitrage right there. You know, rates hike up and then all of a sudden it doesn't pencil as well.

Um, you have more buyers come in, not enough sellers. So they completely shifted and said, all right, organic growth. We need organic growth. We went from an organic to organic. Now let's get, we need to have both going. Um, and where we're seeing organic growth come from is from those custodial referral platforms. So from a Schwab advisor network from a Robinhood, now building this out with, with trade PMR. Um, and like you mentioned, there's this underserved market of zero to call it 5 million of AUM. And it's just getting completely eaten up with different options. So those folks have options on the REA side, or they have options on the ROBO or the AI advisor side of things, to the point where Charles Schwab recently announced that they increased the minimum for their Schwab advisor network.
So now it's two and a half million and up. So they're no longer going to refer anyone below two and a half million of assets to any RIAs. So what we've seen that is a huge opportunity for folks who want to grow and focus on that zero to two and a half, that zero to five, or just like you said, it's probably 95% of American households, if not a little bit more.
So it's a very, again, super interesting dynamic and you have the private equity side of things, you have the AI side of things, you have the consumer side of things, interest rate side of things. So it's just, there's tons of internal forces kind of pulling at what's going on.

Chris Mailander

Yeah, it's... the currents that are underneath the surface of what we see are really dramatic and could have a really significant impact. It's interesting. Talk to me a little bit about WealthFeed in terms of your journey as an earlier stage company that's come along. You've taken Seed Capital and most recently you did a strategic investment with Broadridge. Broadridge being on the S&P500 and is a core infrastructure that sits right underneath enablement for a lot of the brand names that we see in wealth management.
Talk to me about your journey so far and the relationship with Broadridge, which I assume also plays into this concept of being able to access more wealth managers and using their distribution channel for what you're doing.

Sam Kendree
Yeah, absolutely. So we started Chris stemming from Chicago Partners. So it was, you know, Chicago Partners, a great firm downtown Chicago here. And, um, I did some M&A for us on the West coast. So moved to Hawaii for a couple of years and every single advisor and firm we would acquire would say, Hey, how can you help us grow? You know, we needed for this deal, the pencil for both sides, we need to grow. Um, so we paired that with the idea that money on the move is really the catalyst event for people hiring a financial advisor. And we got together and said, let's build, you know, let's build that platform. So that was at the end of 2021. Um, we focus specifically on inheritance, like I mentioned, because that's where we saw the majority of the money in motion was on the wealth transfer side. And as early companies do, we had to pivot a couple of times, all led by advisor feedback. So advisor Chris would say, hey, this is great, but can you do this, this, and this? And at that point, we said, no, we can't do that. And eventually, we realized, we have to make a change here and that led to WealthFeed. So we raised additional capital at the end of 2023, stemming from RIA leaders, some private equity folks, all angel investors, one SPB called Thick Adventures. But we primarily wanted to stay away from the venture capital side of things Chris, just because.

Chris Mailander
Why is that? Why be hesitant about it?

Sam Kendree
Yeah, I think at the end of the day, comes down to our mission number one, which is our advisors having success. And we didn't want to have external forces forcing us to move in a certain direction, whether that's increased prices or cut down on services, whatever it might be. We just wanted to be in full control of the offering that we're able to provide advisors. And again, we knew if they were having success on our platform, if there was ROI, we're going to have a successful exit at some point, you know, for our investors and our operators. So we just wanted to have full control of our, our platform, our company, and specifically full control of the experience that our advisors.

Chris Mailander
Yeah, I mean, it's a super interesting fork in the road for a lot of early stage CEOs, which is, I wanna control this business and be able to shape that experience and build a really strong business, or do I take on venture money? And then it becomes a growth game. And you'll see on that chart that you talked about where it's gone from three, four, five technology firms focused on wealth management to 50 to 500, or whatever the number might be, that exponential growth, a lot of those are chasing that growth story, which is how fast can I build something? How much hype can I get behind it? Can I show traction? And this thing will either bear fruit or it will fail fairly quickly.

Sam Kendree
Yeah. Exactly right. And we, we wanted nothing to do with that, right? We wanted to be able to control our growth rate, control the offerings that we were able to put out there. And we really kind of gravitated towards Broderidge because they had a similar mindset of, if we can do right by the advisors and the brokerages and the RIAs and the wire houses that we serve, we're going to have a successful enduring business. And we were actually introduced to them through Kevin Mulhern, who's a fantastic, Canadian entrepreneur who sold his company advisor stream, which is the email marketing platform to Broadridge back in 2000, 2001 and he had nothing but good things to say about Broadridge and so that's kind of our second chapter of WealthFeed is you know, announcing the partnership and investment that we have with them and really excited like you said the reach that they have I think they serve 19 out of the largest 20 broker dealers. So they're literally the best partner out there, you know, that we could, that we could ask for, but it's interesting because we're a startup, we have nine folks, we're moving quick and they're a $30 billion company on the S&P that has tons of checks and balances along the way as they should. So it's a interesting dynamic, but it's been working really well so far.

Chris Mailander
Yeah, that's interesting. I saw someplace that there's like $15 trillion of assets that move across the Broadridge platform for all of its clientele over in a year, something like 7 billion communications messages go through that. So they're a big pipe underneath the wealth management industry. So it's interesting. It also looks like to me that they're probably doing a build versus buy type strategy. And there's a couple of, they made an investment in another early stage company this and then into WealthFeed as well. So it's interesting that they're putting some markers on the table around this and with WealthFeed it's probably around the origination side.

Sam Kendree
For sure, absolutely. And I think their whole goal is to kind of create that one stop shop for the financial advisor and financial institution. And typically they've been on the back office side of things. So they dominate the proxy, statement delivery, compliance side of things. And I think now they're starting to move into the front office and say, hey, we already have these great relationships with an LPL or a Raymond James or UBS or Cetera.
And we're providing great services. What if we can offer them great services on the front office front end side of things. So more advisor facing platforms.

Chris Mailander
Sure, sure, sure. Talk a little about that dynamic when you have a company with the S&P 500, very institutionally known. There's always a process orientation to large companies that have been successful like that. There's gonna be a measure of risk aversion associated with it. And then you have a nine person group called Wealth Feed that's sitting on the calls on the table and talk to me a little bit about that dynamic and how you navigate through it.

Sam Kendree
Yeah, for sure. And to be completely honest, we're a speck on the radar for them, right? I mean, they're doing a lot of bigger things than a little old wealthy over here. But it's been great because I think it's helped, you know, we needed to have some better forms of reporting, for example, and just more systems on our side. So being able to see how they operate, we operate a lot faster and that's because we don't have those checks and balances and systems. But it's been cool to, you know, work with their team and they've again, a fantastic group of people over there. They have a lot of high aspirations on the wealth side, which is very exciting for us to be, you know, we've got a very small piece of that puzzle, but, know, hopefully I think it's going to start to hockey stick up here and, you know, we've, we've enjoyed it, but for example, like, getting a PR sent out, right for us, it takes five minutes. We saying this PR looks great. You know, let's call up.
Sam and tell her to let it rip. But for Broadridge, and again, as they should, they have probably 20, 30 people that need to sign off of it on it because it's corporate communications coming from a $30 billion logo. And we're understanding of that, of course, and it helps kind of slow us down. That's points where we probably need to be slowed down.

Chris Mailander
Sure, sure.

Chris Mailander
Yeah, this is a nice segue, Sam, into the last thing I wanna talk to you about, which is give me the forecast.
Yeah, this is a nice segue, Sam, into the last thing I wanna talk to you about, which is the forecast.
Give me the forecast on where this industry goes. Give me the forecast on how that group of 500 that have just sprouted up—most of them are, I’ll bet, 70% AI wrappers on top of ChatGPT or other engines, and there’s not a lot underneath it. A lot of them have just used Cursor to create a front end. Give me a forecast on that. Give me a forecast on where you guys go from here.

Sam Kendree
Yeah, of course. So I think from a tech platform side of things, Chris, are, and again, I mentioned this two times already, but the platforms that focus on their advisor success and advisor experience, I think are going to have success at some point, whether that be acquisition or whatever it looks like down the road. So I think we'll see probably about 50 % of those startups kind of flame out.
And like you said, the majority of them probably are a ChatGPT wrapper. There's not too much substance there. And then on the advisor side, I think the advisors that really kind of lean into technology are going to have success.
The people that kind of, you know, shy away from it a bit and say, what I've been doing for the last 30 years has worked. Why would I change anything? Depending on their client demographic, you know, they might be in for a bit of a rude awakening, but, again, everyone has their own, you know, way of working with their clients. And some people are life, you know, style RIAs and companies, and some people will say, Hey, I want to grow to be the next, you know, $50, $100 billion RIA. So super interesting spot that we're in right now. So we'll see how it out.

Chris Mailander
Yeah, my guess one of the, and we'll see, and I'm like you, which is I hope that it doesn't happen, but if you have economic instability and some of that growth isn't there on the wealth management side, these firms are gonna be forced to make alternative decisions. You can't continue to just ride the horse, ride the curve that has worked. No doubt, it's worked and it produces the yield and the returns that you need in order to pay the people and take care of your shareholders at the end of the day. As soon as that gets squeezed, the decision-making will shift.

Sam Kendree
100%. It'll be very interesting to see with all the private equity money too, what happens. Cause at some point folks need liquidity, know, the, bet their investors are going to need liquidity. And so the, industry, it's so funny cause it seems like it's so boring, right? And it's just the same old industry, but there's, like you said, the currents underneath are just so powerful and there's so many of them where like if we were to fast forward 10 years it could look dramatically different or it could look the exact same. It's like you have no idea.

Chris Mailander
Sam, this is what's super interesting about talking with you is that it looks like a slow moving beast. It hasn't changed a lot over the last 20 years, but if you start to pull apart what's going on from a macro economic perspective, a business model perspective, the generational shift and where wealth is gonna move over the course of the next 20 years, and then what's going on with technology, when you put all of those shifts together, super interesting story and super interesting place to be.

Sam Kendree
For sure. And that's why we're excited every day we wake up with just so much energy because it is exciting. And we think we're helping advisors grow their book of business, which is their livelihood at the end of the day. It's their, you know, their net worth, their enterprise value that they have in their own firm. So it's a great, place to be. Never a dull moment. But it doesn't, it's not what meets the eye, you know, for the typical consumer. So it's cool to kind of see the under underworkings of everything.

Chris Mailander
Awesome.
Thanks, Sam. This has been fantastic.

Sam Kendree
Awesome, thank you so much Chris. Appreciate it.