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Experimentation, the Impact of Consumer Trends, and How Tech Will Transform the Advisor Space with Dani Fav‪a‬

In this episode, Jack Sharry talks with Dani Fava, Head of Strategic Development at Envestnet. Envestnet’s mission is to make financial wellness widely accessible.

Having entered the financial tech world in a non-traditional way, Dani encourages others to embrace what makes them unique. After unintentionally impressing a firm with her technical abilities, Dani found herself catapulted into the world of wealth technology, eventually landing at TD Ameritrade where she launched a web-based rebalancing platform. In the process, she realized advisors could use tech to better serve their clients.

Today, Dani lives on the pulse of consumer behavior, following the latest tech trends and predicting how they’ll ultimately impact what clients need from their advisors. Her long-term vision is to develop a connected intelligent system that seamlessly manages a client’s current and future financial wellbeing.

Jack and Dani talk about the importance of experimentation, user experience, and why technological advancements will only help advisors stay indispensable.

What Dani has to say

“Everything we do is intended to give the human advisor more freedom and time to be that coach for their clients. In my view, the advisor space is becoming more irreplaceable because of the use of technology.”

– Dani Fava, Head of Strategic Development at Envestnet

Read the full transcript

Jack Sharry: You’re listening to WealthTech on Deck, a podcast about the future of wealth management technology brought to you by LifeYield. here’s your host, Jack Sharry. Hello, everyone. Welcome to our podcast well, tech on deck, where we talked with the industry leaders around our industry about the future of digital and human advice. Today we are talking with Dani Fava. Dani is the head of strategic development at invest net, a longtime advocate of working with TD Ameritrade, I’m sure she’ll touch on that a little bit. And now and invest that. So Dani is a highly regarded industry voice on the topic we’re here to talk about today, which is the future of technology and advice and how they all come together. So Dani, welcome. Good to have you here. Thanks so much, jack. It’s great to be here. We’ll have some fun. So let’s start wanting to provide our audience with some perspective on how you got here. You’ve been someone who’s been well known and while regarding the business for a long time. So a little bit of a highlights tour, brief highlights tour, where you’ve been and how you wound up on this podcast.

Dani Fava: Yeah, the Dani Fava origin story, I would love to tell it I’ll try to I will try to keep it brief. So I would consider my path to have been non traditional into finance and wealth management. I remember when I was very young, my dad, and I’m on the poor dad’s side of Rich Dad, Poor Dad, my dad used to say have a saying that, that when money goes to money, and he said it often. And I never knew what it meant. I have a firmer understanding now about what he meant. But I just knew this meant that I should be around money. And I majored in finance and when, after college, took my first job at at an investment manager in New York City, and I was a trade Support Specialist. And for those of you who know me, you know, I had my daughter very young. And so I was a young single working mom traveling commuting in Manhattan every day. And what I did was when I got into the office, I had to run a bunch of reports and print out all of these reports for all the traders on the floor. And so how I got into wealth tech was I hacked the system that I use to run these reports. And I pretty much scheduled these jobs to run on their own and print out on their own. And I would be able to spend more time at home with my daughter and come into work later. And no one was the wiser, because all of my reports were done. And the firm that I hacked, called me one day and I was real nervous. I said oh no, I’m in trouble. So they said, you know, we see that you’ve scheduled these things to run on your own and, and then they offered me a job. So that’s how I got into. That’s my non traditional path origin story into financial technology.

Jack Sharry: Gotcha. Gotcha. And a little bit more. What did you wind up at TD and how do you invest in them? Maybe a little bit more about that?

Dani Fava: Yeah. So at TD Ameritrade, I was hired at TD Ameritrade about 10 years ago to build a rebound. I was kind of a rebalancing and trading specialist and TD Ameritrade had a specific need, they wanted to launch a web based rebalancing platform. And so I started at TD Ameritrade with that job, spent a few years with a great team building and launching I Rebel on veio. And as I launched, I rebound, I got to learn so much about the advisor space about what independent advisors were doing, about what made them special about all of their inefficiencies. And going through the launch of this rebalancing system, I started to say to myself, hey, I have all of these ideas on how we can make advisors better and more efficient and able to serve their clients using technology. And I kind of really started tugging at my boss to say, Hey, give me a bigger role I want to be I want to innovation role, I want to build cool technology to help advisors. And that boss was now one of my best friends. He made that space for me, he made me the director of innovation. They gave me some freedom to go out there and build. And that’s kind of what I’ve been doing since then. And now I’m the head of strategic development at invest net doing a lot of the same things.

Jack Sharry: Gotcha. So you’re a real pioneer in this thing we call the confluence of human and digital advice about how to leverage technology to provide a better level of advice. That’s what I’m trying to do. That’s great. Talk a little bit about what you’re doing at invest net. I know as we’ve talked, your job is to figure out what’s coming three to five years out. So talk a little bit about that. What is it What sort of stuff do you look at? What do you think about who do you talk to all that kind of stuff?

Dani Fava: So first, let me start by saying I consider myself extremely fortunate I have such a fun job. And I’m, you know, learning and doing cool things every day. So, yes, it’s my job to figure out where the industry is going, what the trends are not only in the advisor space, but also in consumer finance. So I kind of have this theory, that has become more true over the last, I would say, 10 to 15 years that the advisor space is really following the consumer finance trends, right. And I’ll give one quick example that that can be debated. But I really think cryptocurrency is going to be the best example of this, we see things that are happening in consumer finance, that are happening in consumer behavior and social behavior, that are then sort of leading into the advisor world and the advisors need to transform what they’re doing because of these new consumer behaviors. impact investing is another great example of how a consumer or social movement and behavior has kind of made its way into the adviser space in a very meaningful way. So it’s kind of my job to follow those trends, to really keep my finger on the pulse of what’s happening in society in consumer behavior. And and inside of FinTech, and to be able to kind of foresee how that is going to transform advisor tech and perhaps invent how it should transform advisor tech to a to a large degree. And, you know, this all kind of ties together very nicely with investments mission, which is why I worked at investment, by the way, I love their mission. And I’m very aligned personally, with what investment is trying to do as a company. And that is to make financial wellness a reality for everyone. How can invest that serve the needs of our consumers and enable financial wellness for everyone, every single person out there, it’s a big mission.

Jack Sharry: That’s great and fun. If I could just back up a little bit. So you’re paying attention to trends, consumer trends, advisor trends, I’m sure FinTech trends, you know, the those of us that serve that marketplace. How do you do that? As a conversation? Is it reading all the above

Dani Fava: All of the above, it is especially making my compliance department crazy, I’m really good at that. The way that I do that, I pretty much download and try every app I can find that I think will impact social behavior or consumer finance. And that includes things more recently like clubhouse, and public and rally road, anything cryptocurrency related, I am trying everything out there and trying to figure out how it can enable financial wellness, and how advisors might leverage it in the future. And I have this kind of overarching concept that I’d love to talk about that comes right from our CEO Bill Krieger. And it’s this concept of an intelligent, connected financial life, right. So while I’m traversing all these apps that I’m playing around on, yo Lee insights, which I love, and I’ll talk a little bit about, well, I’m trying, you know, the new features in, or I’m doing some alternative investing using rally road, I’m thinking about this concept of an intelligent, connected financial life. And what that is, is how we have all of these kind of these financial happenings that are going on in our current life. And we have all these sort of plans and dreams about our future life. And, you know, we have all of these separate apps that manage these things that are happening today, we have apps or things we do that manage what’s going to happen in the future. And this whole concept of bringing the two sides together in one place to make this all work seamlessly, as a connected financial life as kind of like the killer app. That’s this concept that I’m always thinking about and circling around that I really think investment is in the best position to solve that.

Jack Sharry: So that’s gonna be a bit challenging. I’m a push back a little bit, invest that’s bought a lot of stuff, money guide, and yodlee and Tamarack. And the list goes on all good stuff. And the challenge, of course, is integrating all that and to your point of the killer app, which needs to draw on all the above and a lot more. How do you translate that that’s got to be a challenge because that, given the success of invest that I’m sure tech resources are at a premium? In fact, I know they are. So how do you translate your bright ideas, which I’ve no doubt are fabulous. How do you turn that into code and into our user experience.

Dani Fava: Yeah, I mean, I think jack, that’s the hardest part, right? And nothing, nothing worth doing is easy. So we expect it to be difficult. And we probably spend, you know, most of every day working on the answer to that question. From my perspective, one of the things that I that I love to do, and that I think I bring to a larger company is experimentation. Right? I think that is one of the most important things about getting something right about moving the ball forward about making progress. And I think it’s one of the things that a lot of people in our industry are really afraid of, especially the bigger brands, right, it’s very hard to be a well known, established company with 1000s of customers, millions of customers, and then say, I’m an experiment and I might fail. But I do think it still remains one of the most important things that we can do is get out there, put things together, try, fail, learn, iterate, that is the way that I kind of view my job and takes a lot of energy for me to kind of combat people on this, you know, oh, but what happens is we found and I’m like, Yes, well, if we fail, we’ll we’ll learn and we’ll celebrate the failure. And you know, we’ll try again, there are certainly things in this industry that make that harder. Me, the press, for example, you don’t name names Do you invest that creates the space to do this, we’re always thinking and trying, and I really, really believe we’re going to get it right, I really believe we’re going to solve this problem of this intelligent, connected financial life. And I think you’re going to start seeing some really exciting things coming out of investment in the very near future, depending on when this podcast is dropped, maybe. Maybe even in the very recent past.

Jack Sharry: Inquiring minds need to know. So let’s talk a little bit more about that. That’s really interesting, because they certainly pick the right person to figure this stuff out and then advocate within it sounds like a big part of your role. And then prioritization and budgets and all the rest of that stuff follow. Talk a little bit more about what that sort of experimentation looks like, is that biting off a little proof of concept? Or what does that look like in reality in terms of trying ideas out?

Dani Fava: Yeah, so the first misconception about experimentation is that you need to have some kind of a technology out there that you’ve built in that works. And I don’t believe that I believe that experimentation can happen through a lot of conversations, a lot of surveys voice of the client, it can happen through drawings, wireframes, it can happen through just collaborating over an existing app, you know, it can happen over giving pieces of data in very raw format, to advisors over email, you know, we have a great analytics product and great analytics dashboard, but the way that that starts is just by providing the data in its raw format to an advisor and then saying, look at this data, does it help you that is a form of experimentation, and a very low tech form of experimentation at that, then, you know, the next step is the UX design. And a lot of people ask me, you know, if you’re starting an innovation lab, with one of the most crucial pieces that you want to add first, one of my answers is user experience. And I’m very fortunate at invest net to work with a great group of UX designers who can kind of listen to an idea and turn out some pretty high fidelity screens pretty quickly. And that’s a form of experimentation, right? We put those in front of advisors, in front of customers, and learn from those. And that, to me is all of how we iterate and experiment before we ever build. I think that that works. Well. Another thing that investment is really great at doing is, as you know, we’ve grown through acquisition, I think that will continue to some extent. And we’re really great at sort of partnering with with other businesses that that sit outside of investment, let’s say, right, so getting something outside of the core company is really important for speed and freedom. And, you know, it’s like the mothership, sometimes because of serving existing clients will sometimes kill new ideas, because something that has no revenue is never going to be more important than something that has a ton of existing revenue. Let’s be honest, right? We’re all running businesses here. So investment is really great about building innovation on the outside so that I can see that it has the freedom to breathe you You know, all of those things are kind of components to how we do things quickly and how we continue to innovate.

Jack Sharry: So you’re talking a lot about technology and experimentation, trial and error, and all good. Let’s talk about the other side of the equation. That’s the human side. So how do you incorporate that? And obviously, there’s code and all this technology stuff that gets done. How do you factor in that human element, then surely it gets to user experience. And just you’re well connected to advisors. So talk a little bit about how that you’re making sure that the advisor is taken care of, because it doesn’t get said unless they say it. And then you mentioned earlier that you talk to you pay attention to what consumers want need, or maybe like getting somebody to talk about that human aspect.

Dani Fava: Yeah, I mean, this this goes to one of my core beliefs in my philosophy on on the advisor space in general, I think the advisor space is completely evolving. And advisors are becoming more relationship managers, life coaches, and guidance counselors. Really, an everything that we do everything that we’re automating everything that we’re building, everything that we’re bringing together, is intended to power the human advisor and is intended to give the human advisor more freedom and time to be that coach for their clients. In my view, the advisor space is becoming more irreplaceable, because of these of technology, rather than less. I know a lot of people view these technology advancements as threats to advisors, I don’t believe that. I believe that technology right now, especially a lot of the stuff that I’m experimenting with that I play around with a lot of the apps that I’m using, the technology is creating and curating and incubating future advisor, clients, advisor, as client, you’re saying, No, I’m saying tomorrow’s advisors, clients like, I’m more likely to go reach out to an advisor, because I have invested in Bitcoin. And because I have used rally road for private placements of securitized assets, I’m more likely to you go reach out to an advisor because I failed on Robin Hood by myself. Right. So I think that all of these technologies that people are trying and using are making them more likely to reach out to an advisor in the future for help for complex financial needs for tax purposes. For everything that that these technologies are creating, I think that the advisor space becomes even stronger in the future. And that’s why I really embraced this stuff. And the best thing that we can do for advisors, and we continue to focus on this, that investment as well, is educate them and give them all of the tools that they need to deliver access for their clients to products like this in the future. Just today, we launched a new impact investing education series for advisors, we have all of the tools that an advisor needs to marry their clients values with their investments, the next thing we had to do was educate them so that they can easily talk to their clients about this and use this technology. To us, it’s all about giving the advisor education and access and making the advisor look good, right? We want to make the human advisor look good to their clients and give them this kind of ease of use. So I’m very, very, very bullish on the human advisor in the future.

Jack Sharry: So let’s talk what it might look like three to five years out, we’re simpatico on the topic of technology job is to make the advisor look good, and deliver greater value. I’m biased, as I think, you know, around quantifying the benefits so that the advisors say here’s here’s what I can do for you. And here’s how much more money you’re gonna have. I think that’s part of the future from least where I sit. So technology that needs to be become easier and easier for them not only to use, but then to share with a client. So that when they’re providing that coaching, counseling, there’s some validation around what they’re doing and why they’re doing it and so on. I expect that to speed up to get word, you know, in place, you know, less input and more output, more wisdom, then the process might suggest that all said What does it look like? We go out three to five years. What do you think the future of advice looks like in terms of what that advisor client interaction looks like?

Dani Fava: I think it looks a lot like what’s happening in social and consumer behavior. today. It’s all about access. And it’s all about changing behaviors, actually, and it’s going to become a lot more behavioral. So I’m also a user of neum. You think I spend all day staring at my phone, maybe that’s why my neck hurts. So I’m also a user of neum and and really what that’s doing is it’s changing my behaviors and my habits to help me live a healthier physical life. And I think the future of financial advice looks a lot like this, where the data, and the access empowers an advisor to help their clients live a healthier financial life. So I see in the future, this moment where no one has to shop for the best financial products anymore, it’s all delivered through the advisor, the advisor can say, hey, Dani, don’t spend that money, we’re gonna borrow that money because you’re doing better in the market. And here’s the best loan for you. You don’t have to shop, you don’t have to talk to anyone else. I know what you need, I have access I, the advisor, have access to the best financial product for you. And I’m going to help you get it easily and seamlessly. You don’t have to shop, you don’t have to compare, I’ve got it at my fingertips. And that is going to go for investments and loans, and insurance products, and thinking products, any kind of financial product, the advisor is going to have access to the best thing for you curated at her fingertips. Easy. And then the role of the advisor becomes not only giving you that access, but also helping you change your behaviors to live a healthier financial life, whether that is in spending, or in you know how you’re how you’re allocating your assets, how you’re handling your income, it’s all going to be behavioral nudges. And it’s all going to be you know, attract and using data, the same way that a product like like neum does with your eating habits, let’s say,

Jack Sharry: Well, I couldn’t agree more. And of course, the challenge is what you just described, goes back to something you said when we first got started in this on this podcast, and that is everything needs to be interconnected that your risk and tax and cost and all the other factors, your desire to invest in a particular way ESG kind of orientation, all that gets factored in. So the best product that might come up, it’s far less, you said this earlier, but just to reconfirm, it’s far less about which product per se, but that’s how you connect all of the products that add up to the best solution and get that right.

Dani Fava: Exactly, exactly. And if you think about I hate to make this a pitch for investment, but my goodness is investment in a really great place to be the one to deliver on this considering we have the data, we’ve started really moving along our exchanges. And exchanges are just what you said jackets, taking all the products, putting them together and giving the advisor access to them. So if you need a loan, I have the best one for you.

Jack Sharry: One explain that not everyone may know about the exchanges, because I know you haven’t for insurance for credit for when he explained that a little bit.

Dani Fava: Yes, we do. Yeah, yeah. So we have invest that has created these exchanges. And we’ve done them, you know, outside of the core of investment, which is what I was explaining before how we get things done quickly and are able to innovate easily. We’ve created an insurance exchange, and advisor credit exchange, which is lending a trust exchange. And I believe there was another exchange that I I’m not quite sure if that’s public at the time of this podcast or not. But really what it’s doing is it’s giving advisors, the access and the ability to deliver these solutions for their clients. So I’ll use the credit exchange as an example, if an advisor looks at this dashboard of credit, what they’re seeing is a long list of their clients. And it’s giving you right up front, what that client qualifies for in terms of all of these different types of loans, whether they’re residential, or securities backed, etc. And it is giving the rates right up front. That’s right. And it’s giving the advisor like a one click sort of print out or email of that loan option for the client. So it’s easy access delivered right from the advisor, and the client never has to interact with you know, you don’t have to send them to the bank, right, you don’t have to go send them to somebody else who wants to dig into their financial picture and who wants to talk to them about their investments. It’s a really fantastic way for the adviser to get access to the best product at the best time for their client. And that’s, you know, credit exchange is just one example. Like I was saying there’s also the insurance exchange and the trust exchange and we really see the future of advice being and the adviser being the facilitator of these financial products that will help their clients full financial picture.

Jack Sharry: That’s great. So we’re going to move toward wrapping up I want to ask you a couple questions as we say farewell. And I like talking to you so much. Actually, we could go on one of these are trying to do with our podcast is actually we’ll have you back Because we just scratched the surface on the stuff that you’re working on. But in this crazy environment where we all live, there’s not enough time for anything. So we try to keep it short. But with that in mind, if you were to pick three things that you’ve touched on a bunch here, what are three takeaways? What What would you want people to remember from our discussion today that might prove valuable in their, in their daily lives?

Dani Fava: I will say, and I’m going to go all the way back to the beginning of this half hour and say, you know, with my non traditional path of getting into finance and wealthtech, one, not fitting in sometimes is your superpower, right? So doing things differently, not fitting in having a different perspective is your superpower It is not something that you should hide, too, I think experimentation, experiment as much as you can build in public talk about the things you’re doing, let people come disagree with you. Because those disagreements, they just make your idea stronger, right? In the long run. We want we want those things. And don’t be afraid of failure.

Jack Sharry: And you exemplify all the above and really advanced our industry you have and you continue to sounds like you’re in the perfect spot. So let me ask you one final question before we say farewell for now. And that is what is something about you that is not part of your day job. But another part of your life that people don’t know about you that they might find interesting,

Dani Fava: I would say surprisingly, and this is sort of opposite from what you would think of me. I just moved. I bought a new house in Pennsylvania and I picked a 220 year old home that is rich with history still has some of the original woodwork and has all of the paperwork, including handwritten wills, bequeathing the property and the and the area around it through generations of families. And so I’m kind of a history buff, and I really love to learn about and really immerse myself to the point of living in it. The history of everyone. And that’s surprising, I suppose about me since I’m so tech forward, and I spend a lot of time looking down at my phone.

Jack Sharry: So as I recall, aren’t you from Staten Island? I am Yeah, but you’ve come a long way. Yeah, we’re You are right. Yeah. Well, just to complete the thought I too live in a 200 year old plus house.

Dani Fava: Wow. I didn’t know we had that in common jack.

Jack Sharry: Yeah, our house was built in 1813. And it was actually the Continental Army didn’t have money. So they gave a chunk of land to Captain Daniel Draper who led the local militia at Lexington and Concord in Westwood mass, which is West Dedham way back in the day and west of Boston. And the house across the street is the son’s house in the house behind us. That was the granddaughters house and the property we’re on is now a development but was a farm at one point a dairy farm. So let’s go back.

Dani Fava: So cool.

Jack Sharry: Yeah, it’s fun.

Dani Fava: Yeah, really fun. I’ll send you pictures.

Jack Sharry: Yes, we will do that. So this has been a blast. Thanks so much for sharing your thoughts and we look forward to the next time there will be a next time. So thanks so much for spending some time with us.

Dani Fava: Thank you, jack.