Jack Sharry: Hello, everyone. Welcome. Good to have you on board for this week’s edition of WealthTech on Deck. I look forward to each of our discussions, but today’s conversation is especially appealing to me. As we’ve said in just about every episode of WealthTech on Deck we examine what I call the confluence of digital and human advice. For today’s discussion, we’re going to talk with someone who knows a lot about both, particularly the human side. We’re gonna speak with Tom Rieman on today’s episode. Tom is the CEO and founding partner of Practice Intel. As he states boldly on his LinkedIn page, he is a relentless advocate for great financial advice and a believer in the profound power of the truth. Tom, welcome. Thanks for joining us on WealthTech on Deck.

Tom Rieman: Jack, thanks so much for having me. I appreciate being here.

Jack Sharry: Yeah, it’ll be fun. So let’s start with you giving us the headlines on Practice Intel so we know what you’re all about and what you do. And then we’ll get into details a little bit later on. But at a high level, if you’d describe that. I think an important part of this may be your career journey. So maybe you put the two together, talk about Practice Intel, talk about your journey, how it all came together.

Tom Rieman: Yeah, so Practice Intel is a data driven platform designed to help both advisors and firms replicate the best client relationships and as a result, scale organic growth. The platform itself, the thing about my career is grounded in research that I was able to do and model in my role at JD Power, which is where I was preceding the founding of Practice Intel. But ultimately, we recognize that the power of financial advice can be really profound, having a tremendous impact on a client’s life, their family, their communities, even society as a whole. In fact, one of my board members refers to financial advice as the fourth great profession. And I love it. I agree with that. So when we think about how we approach that, we want to help more advisors deliver better advice to more clients, because the way they… we know experiential, but also the data shows that not very many advisors are delivering on that full promise of financial advice. So the good news is when we help advisors succeed, it really helps everybody succeed. It helps the client, and it helps the broker dealer as well. So all across the value chain. Now you wanted my career, you know, I’m not 30 anymore, Jack. So that might be a long story.

Jack Sharry: But talk a little bit if you would just how this evolved, because I know a bit about your background, we’ve chatted offline. And how did this evolve to get here because you, you know what you’re talking about.

Tom Rieman: Well, thank you. So it really goes back like many ideas, there’s a seed that gets planted in kind of your mind or your, your kind of your heart. And this happened some 25 years ago. I started my career out of college as a salesperson, as a sales rep for a human resource consulting firm, actually then was recruited to join The Equitable, and this was back in the early 90s. And back then The Equitable was a life insurance selling shop. But I happened to be recruited by one of the more successful agency managers, a guy named Jose Suquet, who still is kind of legendary in our industry. And during that time, as I went through that couple, three, four years, I had a little bit of success. But I decided it wasn’t for me, led me back to graduate school, I wanted a little more depth and complexity in my life. And I actually got a master’s in organizational science, organizational learning, which very much framed the rest of my career and is a big part of why I am where I am today. But that led me then to affirm that all we did was train wholesalers on presentation skills. Any of our distribution partners out there know the name the Fusion Group, I remember because they’ve been through it, you do as well, Jack, right? In fact, that’s how I met the folks at Phoenix, going back to our shared history. And it was after a couple of years of doing that training that I realized everybody was saying the exact same thing. And we were this incredibly product focused industry. And there had to be more. And this was, let’s say, 2000. And that just stuck in my kind of my craw that said, how can we replicate the best advisors, and that’s where it started. And over the last 20 plus years in a variety of roles, having my own consulting practice, working at JP Morgan asset management, at Brinker Capital in a variety of roles, wholesaler as well as head of practice management. I’ve always been kind of grinding, trying to figure that out and try to try to move the needle on that. But it wasn’t until I landed at JD Power that that missing piece locked into place and it was the data because I was able to model using consumer data using all the really great consumer research that JD Power generates and in turn I published I was able to model what makes the best advisor the best advisor through the eyes of the client and because you can model it, you can measure it, it means you can replicate it. So aha, and that’s exactly what led to the launch of Practice Intel.

Jack Sharry: So let’s talk about Practice Intel. What do you guys do? Who do you do it for? How does it operate? Tell us more.

Tom Rieman: Yeah. So it really does a couple of things. So I like to view data… We’re a data driven platform, I said that. And we’re a research portal. So we allow advisors to deploy surveys, very targeted surveys, that replicates that JD Power research, identifying the best client relationships. We’re an advisor education portal to help advisors actually engage in process and practices more in the realm of advice versus selling. And we actually have an AI component, where we provide an AI powered conversation simulator to help advisors practice and hone their narrative with AI persona.

Jack Sharry: Interesting.

Tom Rieman: Right. But fundamentally, if you think about it, data is at our core, and data does a couple of things, really three things. First, data motivates. This is really important. I can’t tell you, Jack, just last week, two different conversations. And it’s very representative of many of the conversations I have with the C suite level, where folks will say, hey, we know the top 10%, they’re great. We want to give them the resources, get out of their way that how do we motivate the next 10% or that next tranche of advisors to act? It seems so difficult. I had a conversation last week with a CEO of a large OSJ, some four hundred advisors, and it was… He almost seemed resigned to the fact that we couldn’t get any other advisors to act, you know, to really dive in and to improve performance. And if we accept that narrative, by the way, that’s troubling for our industry. But data creates an irrefutable moment of truth. Data motivates. If you don’t think you’re out of shape, and you think you’re good, but you step on the scale and the scale says something different, that motivates. We are that scale in many ways. And it’s not data from our perspective, but it’s the client data. And that’s what’s so powerful. Jack, you may think, my advisors love me. And I’m gonna go, you’re probably right. But once that data comes back, the survey results and the analytics come back from the client that speaks the truth, and that motivates. But then secondly, data provides strategic direction. And that’s really important as well, like, what do I do and what do I need to do to improve? And so we provide that strategic direction, through the core attributes that we measure, so advisors know what do I actually need to improve on, and then we also track improvement. That’s a really critical part as well. So I know that might have been kind of a long answer, but this is for advisors, for firms, for RIAs, for broker dealers. And there’s another nuance as well, I’ll bring up in a moment. But that’s, that’s kind of the short answer.

Jack Sharry: So I find this fascinating because what you’re doing is you’re… the whole behavioral aspect is actually measurable, which is very hard to measure. And you’ve described it a little bit, I’d love to have you go deeper, if you would. But the idea is that you want to understand what clients want. And just one of things I observe as an industry, I’d love to get your thoughts on this. Having been around a while, four decades so far, I observe that our industry is very product focused. You and I have chatted about that a bit. So as you look at sales, and the way our industry has transpired over the past 40 years, when you have a hammer, everything looks like a nail. So you’re just trying to do the same thing over and over and prove to that client, convince that client that what you’re doing is something they they must want and need because you’ve deemed it so. I see that shift, we see that a lot of our guests on the podcast, where it’s shifting, we’re really doing true marketing, we’re trying to understand where the consumer resides, what you’re describing, with research, trying to understand what the consumer is thinking, what the client or potential client is thinking, talk a little bit about, about that shift, I’m sure you see that as I do that it’s shifting away from a pure sales effort, which just doesn’t seem to apply anymore. It doesn’t seem to fit. Into how do I find out what that customer wants and needs, they may not even know it, and how do I then provide what… a solution, advice, guidance.

Tom Rieman: Well, what’s interesting, Jack, is in many ways, the way you just framed that both of those things could be selling. So the first.. so one, yes, we are. As I said, I cut my teeth, The Equitable, Variable Universal Life salesperson, everything was a nail. Absolutely. We have, by all means, you know, migrated from the you know, cold calling days of broker and all that we’re, we’re getting better. But the data will show you that somewhere around 45% of clients still consider their advisor to be highly transactional. Yes, another 45% of clients say their advisor is delivering a pretty decent experience. And this is based on the seven attributes that we measure that came out of the JD Power research, and only a little over 10% of clients say their advisors delivering on it in the ideal. But by the way, when they do that, net promoter score is in the 90s. And that’s the thing we can replicate. But to your point, we’ve made progress but we’re still, it’s like think about the pace of progress, we’re a little bit like a glacier. In many ways, it’s the embedded sales legacy culture that’s getting in the way, the things we value, all the processes in place. And process is really important. So if I say to you, I want you to be more client centric, you have a sales engagement model. And again, those are very discernible. Selling has a very distinct goal versus advice. And the goal of selling is to get someone to act on your recommendation, the process is to discover and prescribe, no matter how eloquent, how sophisticated, if that’s the process, you tell me everything, I’m going to come back with a prescription that is selling. Well, we’ve gotten better with that, no matter how much we try to get better within a process, you never change the product, you never change the outcome of that process. So in many ways, what we need to do as an industry to really push this forward, and to make marked change and we can… the good news is we can measure this now. We can know, I can’t wait for the day when we can see that 12, 13, 14% that JD Power has measured move to 18 to 20 to 25% of clients that say yes, my advisor is delivering on this ideal. What a cool thing that would be. But it requires process. And the advice process is what can lead us there, which is a very collaborative, co creative process. It’s actually grounded, not to get too wonky here in organizational science and process consulting. So it’s a turnkey process that maps and really well 50 years of practical and academic grounding and experience that goes into process consulting that is again, great thing about process, it’s scalable. So I don’t need you to be like super artful in your execution. Think about selling, you got to be pretty artful to do it really well, in advice, the process of advice, you just have to do it. And so that’s our goals. We get people to open their eyes and wake up, hey, maybe the kind of relationship I have, the way the clients view my advice is not as good as I thought it was, one. Two, oh, here are the key strategic drivers. And by the way, I’ve mentioned that a couple times now, they’re really simple. It’s does my advisor provide comprehensive advice? Do they understand my values, goals, and aspirations? Do they have my best interest in mind? Do I understand the fees I’m paying? Is there a plan? And a couple others, Right. So they’re basic things, but they provide real strategic direction and that’s, that is what will move us forward from yes, the progress we’ve made. But man we, listen, Jack, we could be sitting here, we’ll see each other at Tiburon in November probably. Are you going to go in November?

Jack Sharry: Yep.

Tom Rieman: So I mean, will anything really have changed in our industry between now and November? Or now and next May? Or now and a year from now? I mean, it’s a shame. We got to accelerate this. And that’s really what we’re all about.

Jack Sharry: One of things I do see emerging, I’d love to get your thoughts on this. I do see a recognition and, frankly, came for me from Tiburon. I’m sure you’ve heard the same thing is that organic growth, you know, taking out markets and taking out mergers and acquisitions, what have you, organic growth is at a two to four percent level, has been forever. It’s only becoming real as markets got choppier not too long ago. And, and all of a sudden, the tide went out. And we found out when some of us didn’t have bathing suits on… I always did. But the point is that it’s been revealed that organic growth is hard. And then another observation I’ve been writing about this a lot, and we’ve talked about it on our podcast is that if you notice the owner, founders of a lot of these important major firms are going away and taken over by private equity firms. I’m not sure they’re going to be any better, I would make the argument they’re going to be worse for a while before they get better. But the point is that organic growth is hard, as we say in Boston, Tom, because you spent some time in Boston, it’s “wicked hard,” very hard. So I’d like to have you comment on that. So how do you generate organic growth? I mean, I hear process, I hear it’s advice. Go a little deeper, if you would, what does that mean? What does that start to look like? And that I’m not looking for trade secrets so much because it’s, I’m quite sure it’s around the process that you’ve articulated or developed. But talk a little bit about that just give our audience a sense of what’s required to make organic growth real.

Tom Rieman: So, Jack, I think one of the things and I’ll answer it this way is first, we need to ask one more question. And I think that’s one of the challenges in our industry is we fail to ask that next question. So the first question is, yeah, so… showed us that only 7% of RIAs are realizing any significant growth, 93% hardly any. McKinsey shows 10% of advisors realizing really significant organic growth drops off the cliff to the next decile, and negative when you go beyond that. The first question is why?

Jack Sharry: Sure.

Tom Rieman: Like, why is that happening? And no one seems to want to ask that question. So we, we ask that question. And we go back to that fundamental truth around value creation and product market fit. In any industry, if you have a highly valuable, compelling, differentiated offering that really meets a need, you get growth. I mean, it’s just, it’s a truth. So what that is saying then, and this is the hard thing, it’s like the Emperor’s not wearing any clothes.

Jack Sharry: So, Tom, I want to I want to interrupt you, you just said something really important. I want you to say it again. Because that could be a fly by if you’re listening in the car, you’re listening, wherever you’re listening, you’re out for a run. Say that, again, that’s pretty important.

Tom Rieman: Right. Well, so answering the question, why don’t we have organic growth, and that organic growth is driven, when you have a great product market fit, when there’s a lot of value created, when there’s something that is actually compelling. And by the way, think of the word compelling, it means drawing you in.

Jack Sharry: Right.

Tom Rieman: A compelling, differentiated offering, it’s a fundamental truth that that is a driver of organic growth. So that means by the way, since we don’t have organic growth, let’s do what lot of folks won’t do in our industry out loud, and say the Emperor’s not wearing any clothes, which is we for the majority of advisors are not delivering or presenting a compelling, differentiated offer that people really care about.

Jack Sharry: Yep.

Tom Rieman: Right. So that once we know that, that’s good, okay, that’s the problem. Now, how do we fix that? Well, we create help advisors, deliver an experience, an advice experience, a client experience, an overall experience. And there’s a difference between the two, by the way, an overall experience that clients do find compelling, do find highly valuable. And guess what? The research shows when they deliver on these seven advice attributes in aggregate, that we model at JD Power that we help advisors deploy at the practice level through the Practice Intel platform, advocacy is in the 90s. And it’s not only advocating for… high levels of advocacy, but it’s advocating demonstrably for a higher quality and high value experience.

Jack Sharry: You know, one of things that strikes me of what you’re saying, which I find immensely fascinating, we share a background in being curious as to how to make things better, and how to be more effective and how to advance the cause really, is what we’re talking about, at least the way I characterize it. And in my estimation, I actually wrote a book on this, our audience has heard me say this a few times. It’s called Authentic and Ethical Persuasion. And it’s about listening, committed listening, and storytelling, committed listening is to really understand what the other is concerned about, fearful about, committed to, what’s important, what’s a pain point, understanding them as human beings. And out of that, you can then make suggestions. And the best way to make those suggestions is in the form of a story. So my hunch is we’re pretty aligned on that. But I’d love to hear your thoughts on the two aspects of this. The high level aspects of this are listening and storytelling. What do you think about that?

Tom Rieman: So, I agree completely. And if we think about the advice process, I’ll frame that as just saying the the best client advisor relationships is one, not where the advisor is trying to get the client to act on their recommendation. But instead, and this is the definition of advice. Helping clients make good decisions.

Jack Sharry: Yes.

Tom Rieman: That’s the definition, there’s the difference.

Jack Sharry: Yes.

Tom Rieman: That align with their values, goals, and aspirations. The cool part about when you recognize they are two very distinct and different goals, you act differently and you engage. But this idea of listening is so important. And when you’re listening to help people make good decisions, the clarity, and the freedom in which you can listen expands pretty dramatically. If you’re listening to get them to make a decision. We know how that plays. You know, the moment they say something that is at all relevant to the thing you’ve got in your bag, to the hammer or the nail, right? It’s like, bam, I have a solution for that. But if it’s really in that context of understanding, and we delve into this pretty deeply.

Jack Sharry: Yes.

Tom Rieman: It’s the process of inquiry. Inquiry means seeking the truth.

Jack Sharry: Yep.

Tom Rieman: And it just not only means me understanding your truth, but it’s actually helping you understand your truth.

Jack Sharry: Yes, yes, yes, yes.

Tom Rieman: So there’s all these different it’s, it’s a really cool and I, by the way, I look forward to, as we navigate forward and I shared earlier, we’re, I look at my calendar here, a year and 29 days since the concept launch of Practice Intel, and we are a fully robust platform with users. And we are, we hope to have a really great remainder of the year and land some meaningful enterprise contracts as we’re very deep in conversations, and it’s just great. But I kinda look forward to the opportunity to take a step back and get back into the work around what we’re talking about. Because the deep thinking… think about this way, Jack. We view the task at hand as not just behavioral science, but decision science. And those are two very different things. And part of decision science is not only the science of knowledge, how do we know, how do we convey what we know, how do we learn? All those things. It’s the science of interpretation, which is how do we read life? And that’s a very deep, deep philosophical body of knowledge that brings a lot of cool things to bear. So anyway. Hey, Jack, Don’t let me forget to talk about RQI, Relationship Quality Index, because I know you and I…

Jack Sharry: Let’s do it. Let’s do it. Tell me more.

Tom Rieman: So one of the other things we measure and this is really critical is what we call the relationship quality index. So we believe that satisfaction and retention are flawed metrics, and a lot of people use those two as metrics to the quality of a client relationship. But satisfaction is a function of expectations, which can inherently change based on experience. And retention seems to be disconnected from actual NPS and advocacy. So RQI, every advisor should know their number. RQI is a measure of the level of advocacy and the value and quality of the experience being advocated for. It measures the level of growth and/or the level of embedded… risk within a book. There’s five metrics that go into it, and algorithmically land up of one number. It includes advocacy, NPS, trust, loyalty, and a couple of others. Powerful number. The higher your number, the more your practice is worth. Because there’s more embedded growth, there’s more quality, the cash flow is higher. And I say that because some of the conversations we’re having are with acquirers. And so as they do due diligence, this is a pre acquisition due diligence tool to do an x ray to create greater transparency in valuations, to understand the quality of the cash flow. Because the variation in quality and client relationships greatly impacts the quality of the cash flow in the near and longer term in what they’re buying. So it’s a really powerful tool, we are offering all advisors everywhere, the ability to know their RQI for free. That is something we believe is really critical. So they can come onto our platform, they get 50 free client surveys, and they will get their RQI back because we believe everybody should know their number.

Jack Sharry: That’s great. And if someone’s listening and they want to make this available for themselves or for colleagues, how do they reach you?

Tom Rieman: Yeah, so you can always you know, by the way, I’ve never been a Facebook guy, I actually joined JP Morgan right when Facebook came out, and they were really anti social media. So I never got on Facebook, but LinkedIn has become my new Facebook. You can always message me on LinkedIn, you can go to our website, which is pracintel, Practice Intel for short, pracintel.com. And click on the demo button, click on the connect button, or email me at tom@pracintel.com. Happy to chat.

Jack Sharry: Cool. So as we look to head down the final course of our conversation, which I found endlessly fascinating, this has been wonderful. What are some takeaways you’d like to share with your audience? You’ve covered a lot of ground here. And this sounds to be a deep and rich vein of really cool stuff and smart stuff. So what are some key takeaways you’d share with our audience?

Tom Rieman: So first, I think recognize that what we do in our industry, what financial advisors do, is incredibly valuable. But we’re not tapping, we’re barely tapping into delivering on that value. Now what that means is not only do clients fall short of realizing the greatest success, but of course advisors and their firms do as well. So the impact of delivering a better client relationship, driving net promoter score up, advocacy impacts that entire value chain, so let’s just recognize that. Two, recognize that it starts, getting better starts with knowing where you are. I do know you all have great client relationships, I believe you. But how do you know for sure?

Jack Sharry: Yep.

Tom Rieman: So know for sure. Make those strategic improvements to get better. So I think that’s what we got to do. It starts with data. So Mike Durbin said it really well. He said, data hydrates, right, it brings things to life. So that’s the powerful part. And then secondly, just know that you now have a platform, a mechanism to actually start markedly moving forward and improving on the things that matter most to clients, and helping driving greater success for everybody.

Jack Sharry: That’s great. Well, Tom, this has been terrific. I really have enjoyed the conversation, we may have to have you back because I think we just scratched the surface of the stuff you know and the stuff you’re doing. So thanks for taking this time. One final question before we head out, my favorite, what do you do outside of work that you are excited or passionate about that people might find interesting or surprising?

Tom Rieman: Yeah. So first of all, thank you, Jack. I’ve enjoyed this as well. And I think it’s going to make our Tiburon conversations that much more rich as well. So look forward to that. I’m not gonna just say one thing so, I’m gonna say three very quickly here.

Jack Sharry: Great.

Tom Rieman: First, I mean my family, right. My wife, my family, and, yes my dog. All are just so, so incredibly important to me and part of… that’s grounded in really deep faith. All that is so so very important to me. I am an avid fitness nut. You may know that from my LinkedIn stuff, but I… and I do it because I like to stay fit and I’m no longer 30 or 40 or I’ll stop there.

Jack Sharry: Yeah.

Tom Rieman: And so I’m an avid fitness nut for the sake of staying in shape, but also mentally.

Jack Sharry: Yeah.

Tom Rieman: So that is just something I go at really hard even on hot summer days in Florida. But part of it is because I want to be ready to do one of the things I love the most and that’s to surf. I’m an avid surfer.

Jack Sharry: Oh, great.

Tom Rieman: So all those going to Future Proof in September, just know when you see me likelihood that I will have served the weekend before or that morning at Huntington pier is pretty high. So I love it a lot. Yeah.

Jack Sharry: That’s great. That’s terrific. So, Tom, this has been a great conversation. Really have enjoyed it. We’ll, we’re gonna have you back. We just… I think we just scratched the surface here. For our audience, if you’ve enjoyed our podcast, please rate, review, subscribe, and share what we do here at WealthTech on Deck. We’re available wherever you get your podcasts. Tom, thanks again. This has been a ton of fun.

Tom Rieman: Jack, I appreciate it. Look forward to seeing you sometime soon.

Jack Sharry: Yeah.