Jack Sharry: Hello everyone and welcome. Thank you for joining us for this week’s edition of WealthTech on Deck. It was many months ago that I first spoke to our with our guest Ritik Malhotra, founder and CEO of Savvy Wealth. It was suggested back then that this early in the process wealth platform and RIA was worth checking out. I was told Ritik was taking a fresh approach to serving advisors and their clients. And there was an interesting story to be told and heard. We decided to learn more from Ritik and Savvy Wealth, but between changes in each of our schedules, the podcast was delayed a few times until today. And I’m kind of glad it turned out that way as Ritik and Savvy have made significant advances that we will talk about today from way back when we started, a lot has happened. So we’ll hear about that in a minute. I’ll have Ritik tell the Savvy story, but I’ll share some of what I read as I became familiar with what they’re up to. Savvy Wealth is a digital first platform for financial advisors centered around modernizing human financial advice. Financial advisors who partner with Savvy leverage its purpose-built AI-powered integrated technology platform to help supercharge organic growth with cutting edge software and sales and marketing automation. Savvy’s proprietary technology empowers advisors to increase efficiency, scale revenue faster, and spend more time focused on their clients. So let’s learn more from the Savvy Wealth founder and CEO, Ritik. Welcome to WealthTech on Deck. Good to have you here.

Ritik Malhotra: Thanks, Jack. It’s great to be here.

Jack Sharry: So let’s start with you sharing your background. As I look at your LinkedIn profile, a lot of tech startups, investments and building and doing along the way. And curious about that background and how that led to Savvy Wealth. Because it looks to me like you’ve taken a very different take on being a wealth platform and also being an RIA. So I want to hear more about that. So fill us in.

Ritik Malhotra: Absolutely. So story starts with the first startup. I actually ended up dropping out of college. This is back about 14, almost 15 years ago now. I started the first company. We sold that company to Box, the cloud storage provider back in 2014. And it was the year right before they went public. So Box was public in 2015. And I tell everyone I have the best problem in the world, which is I went from being completely broke to having life changing amount of money. That’s the start of the story where I have the unique problem now of being very young, don’t know what to do with it. And with all the proceeds from the IPO and I get the advice to go find a financial advisor. Now that in 2015, all the way to 2021, starting Savvy, the six year period, there’s really two things that I learned, which is, first, is actually finding the right financial advisor. And I say actual human financial advisor, because all the headlines were talking about robos and how they’re going to take over the world. That was actually hugely important. Really helped me, really helped guide me in the advice. And the other thing was that the actual head scratcher for me was that it was a very antiquated experience. I was snail-mailing my documents, no dashboards, project management was, you know, phone calls at best. So I talked to a hundred advisors and I tried to understand what the heck is going on. And they all told me similar stories that they were either at these institutions, 100 plus year old banking institutions that were not thinking technology first, so their experience is limited. So what they could offer to clients is also by definition limited. And even the ones that broke out and started their own firms would tell me that they spent more time, than 50% of time just copying data and reconciling between systems. There’s so many different, I heard about seven to 12 different software systems that they’re working with just to stay afloat and work with clients. Never could figure out why there isn’t a solution to this. So, looked for startups that were fixing this problem, never found a conviction to really invest in. And then finally in 2021, to lead you to where and how we started Savvy. At this point, we had started our second company that was a corporate wealth management company that we’d sold to a fintech. Scaled that to a 10 billion AUM business. I was managing friends and family money, using it for lectures on personal finances. But really fell in love with everything wealth management and personal finance. And I said, we just need to solve this problem. I can’t stop thinking about it every single day. And the solution has to be this combination. It can’t just be software. It can’t just be another type of wealth management firm. It needs to be a combination of both where we enable advisors to be independent on the platform by building proprietary software and service to automate a lot of that middle and back op. So 70% of time that doesn’t have to do with working with a client. And that’s going to be the way of the future.

Jack Sharry: Wow, I love it. I love it. I don’t think we talked about that a while back. It’s fascinating. And so let’s talk about how it all turned out. You’re rocking now. We’re going to get into more about some recent news. So we won’t talk about that just yet, but sort of fill us in that, you got, you had the idea and you said, I’m going to start me a wealth platform and I’m going to start me an RIA. So talk about that, how’d that go. I bet you there was a couple of snafus in the process. So fill us in, how’d you get started?

Ritik Malhotra: So when we got started, it’s funny, it’s naivete is your best friend because you just don’t know what you don’t know. And so everything seems, you just, you get started and make a plan and you execute it. The first thing that we did was, you know, we had to make the first decision, which is, this is going to be both a wealth platform and an RIA. And so, on creating the roadmap for both was what are the things that we need to build on the software end and what are all the operational and regulatory things we have to get right to get the RIA up and running. Those are effectively the two goals that we had for the first year. To do so, we need to get help from other people as well. So who are the folks that we can hire on both ends? And then to do so, what is the capital that we need? And literally that was it. This business plan could have fit in three bullet points. And that’s how we, all we had to do was execute. So the actual true first thing that we did was actually working backwards was, all right, let’s go and get capital to start the process. And to do so, we had a very long term orientation. And so we said, let’s go and find long term oriented venture capital investors, folks that we had known about, I had connections with from past startups, because that will orient, align the incentives to a very long term multi-decade outcome, which is all we’re all going for. So that’s how we got started on the early days.

Jack Sharry: So that’s year one. I gotta believe, you don’t have to tell us all the challenges and issues you came across, because the industry is full of, just fraught with all that stuff. So was there an initial round and some initial folks, and then how did you expand? In other words, how did you go from really essentially a dead start to what looks to me like you’re in the early stages of thriving? So, tell me about how you got through that and then how you then started turning the corner to sort of making the business go.

Ritik Malhotra: We spent that first two years, I would say, in really building and launching, then really getting all the nuts and bolts to work. So really stress testing, what are the issues that we’re going to run into and did run into on the RIA side, there’s a lot of operations we had to do. And what we found actually was just that there was just a wide surface area. Because when we went and talked to all the financial advisors that we could, we found that, you know, there was, we made a list of almost 200 different jobs to be done that an advisor may do on a given day. And we said, you know, we need to figure out how to solve all of these at some point. But on day one, we need to have a solution for each of these, even if it’s not the best, and then figure out which of the ones we prioritize to really make a differentiation. To give you an example, client onboarding was the one that was highly painful, no good solutions out there to do digital client onboarding. So that was our first core software product. And everything else kind of fell into, okay, we just need to have some way to do it, whether it’s an internal process or not. So those were some of the challenges that we ran into in the first two years. And really turned a corner, I think, you know, we raised two rounds of financing in those first two years. We were very kind of fortunate because there was a lot of belief in this thesis that there could be something done here. And investors got it and really appreciative that they got it, that, it was a hard problem. It’s not just building software. It’s not building an operations team. It’s, you have to do both at the same time. So they were patient. Finally, at the middle of 2023, I’d say early 24, really turned the corner, where the messaging was really striking a chord with advisors that are looking to be independent. And we figured out, okay, what are the different differentiated value props that we can offer? Go into those and to whom, which is this mid-career financial advisor who’s looking to seal their practice, doesn’t want to deal with the hassles of running the whole entity, but it’s also not looking to sell. And that was just a huge market that hasn’t been addressed. And we said, let’s go and solve their problems.

Jack Sharry: You know, I can’t help but note that, I think about this in pretty much anything I do, who’s the audience and what do they need? What’s their pain point and how can I solve it? I’m assuming that’s the exercise you went through.

Ritik Malhotra: Exactly, you have to know your ideal customer profile and whatever you decide first, probably still too broad. Make it as specific as possible. The worst that you can do is try to build something for everyone. It just won’t work.

Jack Sharry: Yeah, so say that again. I think it’s fascinating that what you chose to go after you said it was mid late career, people that don’t want to sell but don’t want the hassle. Is that fair to say what you what you were after?

Ritik Malhotra: That’s right. Yeah. Mid-career folks. They built some sort of a semblance on who their ideal client was. The advisor had built that understanding. They were not looking to sell, so they’re not in a retirement age. And they really, really just enjoyed the craft of being an advisor and wanted more freedom and independence. And we found that there were just tons and tons of these individuals. They said, look, it seems to be scary to jump out and start my own RIA. Or oftentimes they’ve already started their own firm and they said, this is way too much hassle. There’s an SEC audit that happened that it just doesn’t, you know, all of these things that aren’t adding value and taking time away from what they like to do.

Jack Sharry: And I’m assuming as you’re going along, these advisors as they joined you were telling you what they needed in terms of help? Is that how you evolved in terms of what you built step by step?

Ritik Malhotra: Exactly. Core principle from day one was, you know, it’s as simple as just listen to the feedback from the core user. And for us, it was, we’re building for the advisor first. So just, we set up a very simple process to constantly be eliciting feedback and also reacting to any feedback of asks and just still exists today. Let’s literally listen to customers and then build what they need.

Jack Sharry: Gotcha, interesting. So simple, yet not often done. Of course, you also had the benefit, also I’m sure challenges of creating a system as opposed to inheriting a system or having to deal with legacy issues and challenges and all that. I’m assuming that’s the case.

Ritik Malhotra: That was exactly right. Certainly, I think when you’re starting from scratch, there’s just a sheer ton of work to do. But the benefit is that when you have a whiteboard, you can design the process using more core first principles at the end of the day. So you don’t have to think about how do I modify something, which nine out of 10 times is actually much harder than just doing it from scratch.

Jack Sharry: Let’s talk about where you are now. I’ve been watching you in the news of late, you’ve been making some news. It looks like you raised some more money and I think it was substantial as I recall. And I also see that our friend in common, Mark Casday, the former CEO of LPL has invested through Vestigo Ventures and has joined your board. As you and I mentioned coming onto the podcast here, Mark and Vestigo was… We were their first investment, being Life Yield way back when. So I’ve known Mark for a very long time. So anyway, we have a friend in common. You’ve got a great one who’s an advocate. I know he’s been very vocal about his advocacy. So talk about where you are and then we’ll start talking about where you want to go.

Ritik Malhotra: Absolutely. We’re very fortunate to have raised that $72 million Series B. Mark was a big component of that. And honestly, his wisdom of what’s worked and what’s not has been hugely helpful. To make that real, why at this point and where we are and what we want to do now with this capital, we’ve really cracked what I would traditionally call product market fit, where it is the what exactly are the value props that we have built? Can we show that they work? And can we bring in the ideal user to be able to take advantage of that? We’re able to do that repeatedly. And so enabling over 70 advisors and teams today across nearly $3 billion in assets under management and growing rapidly, which I believe if I remember correctly, just off the top of my head is about 4X from where we were last year. To us, that is, you know, that momentum and growth means that we struck a chord. So that’s where we are today. But then looking forward, so we said, okay, well, this is a good time to go raise capital, for two reasons and the two uses of capital where you want to go. Number one is, oftentimes the answer in a company is do the thing that’s boring. It’s basically, we found something that works. We know that this is very valuable. It resonates in the market. Let’s double down on it. Make sure we can expand the platform and educate as many advisors as possible to take advantage of this platform. And then the second thing that we want to invest in was, well, also let’s not just rest on our laurels of just keep expanding the platform and the value props that are here today. Let’s figure out what are all the new areas that we can be investing in and building out that are also beneficial for advisors. And that area is effectively, what we like to call the family office suite of services where an advisor can tap into a menu of options to do, hey, I want to do tax filing with a CPA for my client or estate planning or insurance my client wants or something like that. So that’s an additional set of services that we are now building and integrating using the digital platform that we have that we think continue to be additional value adds for advisors. So that’s where we want to go over the next 18 months.

Jack Sharry: So talk a little bit, couple of things. Obviously, you built a digital first platform. That’s how you got started. That puts you in a very strong position because others are having to deal with old legacy systems that aren’t fun and often are more cumbersome than anything. So talk about that, if you would, just how that sets you up for what you just described in terms of where you’re going. And also if you would sort of talk about some of the differentiated services that you offer that maybe others haven’t seen at their particular firms. So talk a little bit about what those services are.

Ritik Malhotra: Yeah, absolutely. So digital first, to answer your first question is the advantage of doing that was we could design the systems and the systems specifically meaning the operating system in which the advisor is leveraging in order to get their work done. And so usually that was a coupling of CRM, financial planning, note taking separately, compliance system here, and just a whole horde of things that have to come together, but just never integrated. So we said, okay, let’s actually just build all of these and think of it like a layer of concentric circles, starting with the CRM. It’s where all the data is housed and every component around it is effectively a workflow that has to operate on that data. So we said the data is important and then everything around that will start to build or, and/or integrate, but make sure that the integration into the data is there. So there’s no sense of, you know, there’s no disparate systems that don’t have that data syncing in. So that’s kind of how we, what we thought and have found the value of a digital first platform is. And what that translates into is effectively efficiency gains for the advisors. So it basically speeds up a lot of the work that they do. Actually just last week an advisor told me that they saved about 20 hours per week by leveraging this than what they were doing before. And they’ve grown their business 70% over the last 18 months as a result. Great, that’s exactly the outcome we want to power. So that’s on the digital first end. Now to make that a little bit more real, it’s like, okay, well, what exactly are those services that you’re asking me about on, that are powering these efficiency gains and benefit for advisors? Generally speaking, we break into these three buckets. First is practice management, just all the stuff around CRM, note taking, et cetera. How can we make sure all those workflows are tight and integrated? Second is around operations and investments as well. So anything related to compliance and automation there, managing the actual investments, the portfolios, the trading, all of that happening at the same operating system. And the third is around marketing. Everyone’s thinking like an owner operator, which is growing their business. That’s combination of both a bespoke marketing agency internally, plus a lot of marketing software we’ve developed to help automate a lot of those campaigns and lead generation. So that’s how it comes together.

Jack Sharry: And what’s next, if you can share, in terms of what are some of the things on your menu, on your roadmap? Where do you see yourselves going next?

Ritik Malhotra: I’d be remiss if I hadn’t said something related to AI. So it’s…

Jack Sharry: Oh yes, I’ve heard of that.

Ritik Malhotra: Half joking. We’ve been early adopters on AI in terms of integrating it into every one of these workflows. So again, just taking the core principle, start with the advisor. What is their feedback and pain points? And then we evaluate, do we think that there’s value in using AI to actually help just jumpstart the solution here. So to answer your question on what’s new and exciting that’s coming next. We actually just have launched an AI investment proposal product. So it actually has cut down the average time to generate investment proposals from about 30-ish minutes that it was taking to about 90 seconds now, which is incredible time saving. So that’s a net new feature. And then of course, as I was mentioning right before, the next kind of ancillary service that we’re integrating in is launching a tax filing service. So digitally powered, we can collect all the data and pipe it into all the right areas. But then it’s backed with this real human CPA that will work with the client to make sure all their data is correct and review everything with the client. So excited about both of those and a lot of other stuff that’s coming in the pipeline.

Jack Sharry: So Ritik, we were talking a little while ago and you had mentioned that you have a case study that might be illustrative of what it is that you’re building and where it is that you’re going. So why don’t you to talk a little bit about what that is and how that works and really what the benefits are for the advisor.

Ritik Malhotra: Absolutely. So I’ll take an example of someone who joined the Savvy platform about 18 months ago. And just last week, he came on and was telling the team about some of the results, kind of as he’s measured them. So 18 months in, grown his business by 70% in terms of AUM and revenue, grown household account by 44%, and has, in his own words, seen about 20 hours of time savings per week by leveraging the Savvy platforming services. And to me, that really makes it real, right? We can talk all the time…

Jack Sharry: Yeah, I think so.

Ritik Malhotra: It’s, you know, just unprompted organically kind of hearing that data. It’s, we can talk the nuts and bolts, the operations, the technology, all of that stuff, but it’s in service of helping advisors achieve some sort of end goal. And so hearing that’s really always heartwarming. But also, for me, the number one thing that, the reason every day I wake up and I’m excited to go do what we do is that there’s something really satisfying about enabling independence in any industry, especially one like as important as wealth management. It’s something nice about helping someone beat the rat race.

Jack Sharry: Yeah, And talk a little bit… I’m going to assume that not only did he have all those eye popping numbers, but he also, I would assume, had better experience with the clients and better, feel good results. So maybe it’s embedded in those results, but talk a little bit about, what did he have to say about the whole experience?

Ritik Malhotra: 100%. It’s been, the experience for both him and his clients has been a significant improvement from what exists before. I think the two takeaways I’ve had is that there’s a nice ability for him to operate more efficiently by having a digital platform to be able to execute all those things and save the time. So it’s an interface that he can use, it really is truly an Ironman suit as one would say to click the buttons and things will get done. And then for clients as well, there’s this nice satisfaction of knowing, well, number one, my advisor is operating in the correct century, right? They’re modern, they’re looking at tools as ways to leverage outcomes for myself. And then number two, it’s also a way of building trust because they can log into the system, see easy to access data and know that everything is working. And so that feedback has been enormously helpful for the client and advisor to build this much better relationship as well.

Jack Sharry: Terrific. So as we look to wrap up, any key takeaways you want to leave with our audience about what you’re doing and how it’s going?

Ritik Malhotra: I think that’s best one. I think that the key takeaway is, you know, we’re seeing real results, and 70% growth in 18 months is phenomenal. We are in hyper growth at this point, we’ve grown 4X year over year and I think have more demand even now than we did a few months ago. And we’re excited. It’s satisfying to make these results happen.

Jack Sharry: Good for you. Congratulations. I love to hear a great story like this, especially when it’s real. So keep it up. One last question before we part. Always my favorite, which is what do you do outside of work that you’re excited or passionate about that people might find to be interesting or surprising?

Ritik Malhotra: Recently, this might be a little far out there, but with all of the AI craze that’s out there, I’ve actually started to dabble and try out these AI wearable devices. Not wearing one right now, but it’s actually quite fascinating where it’ll pick up all the conversations I’m having and it’ll actually summarize it at the end of the day, key takeaways in each conversation. Insane, insane that we live in a world like this. But to me, I was just so fascinated. I don’t know, I don’t know if I should be scared or excited. A little bit of both, but…

Jack Sharry: Yeah. Well, I hope you won’t take this, but you as a tech nerd and AI soothsayer, I made that up, but it’s kind of fascinating that, I didn’t even know such things existed. But that’s sort of fascinating. Like I know at the end of the day, my wife says, so how was your day? And I’m like, I can’t remember. It just was a blur. But that’s fascinating. And so tell me about that. What’s the experience that you find in having that monitor or that device?

Ritik Malhotra: You know, it’s I can just wear it around my neck and it’s kind of this like pendant. You can, it’s pretty small, so you can just keep it inside your shirt or you can clip it on your pocket. And so it’s pretty much invisible. I forget that I’m wearing it. But what’s nice is that anytime I’m having a conversation and it records something and I have to remember, it’s like there was something really important that person said, and then I can scroll in the app and it’ll have the summary of it. Like, here was the key takeaway so. It’s memory recall like truly actually, this is the closest I can imagine for improving your memory in the shortest amount of time.

Jack Sharry: You don’t need a memory, you just have this device. That’s great. That’s great.

Ritik Malhotra: Exactly.

Jack Sharry: Well, Ritik, this has been a wonderful conversation. Congratulations on your great progress. I try not to predict the future, but I have a hunch you’re gonna be doing more of the same. 4X seems like just the start from what I’m hearing. So congratulations on what you’ve done to date. For our audience, thanks 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 on our dedicated website, wealthtechondeck.com. All our episodes are there along with blogs and curated content from many folks around the industry. Ritik, thanks again. This has really been a pleasure. I’ve enjoyed it.

Ritik Malhotra: Jack, thank you. Really enjoyed the conversation.