Hi, everyone. I'm your host, Sam Sivarajan, and welcome to today's episode of The Future Ready Advisor. Today I'm here with John Prendergast, founder of Blue Leaf, a wealth management software firm with a focus on client engagement and experience. John, welcome to the show.
Hey, Sam. Thanks for having me, man. I'm very excited for this conversation.
Me as well. Let me quickly introduce you to our audience. John is the co-founder and CEO of Blue Leaf, and he also serves as the chief product officer. He is an experienced entrepreneur and senior executive as well as an active startup advisor. He's been part of six founding teams leading the product management, marketing and finance functions, and it is his background in banking and wealth management that has shaped that vision for
Blue Leaf. John I'm looking forward to this conversation. I think client experience and client engagement is so important in our industry and technology is going to play a really critical part. But before we dive in, let's start. You've had a diverse career before becoming the CEO of Blue Leaf. Can you tell us a little bit about your professional journey and what led you to start Blue Leaf?
Yes. Diverse. Some would say unfocused, though. For me, I'd say I have always followed my muse, and I've been lucky enough to operate at a pretty high level in in what I've tried. And, you know, I've always loved finance. And I actually paid my way through college and by training and made a fair amount of money in the very early days of Apple and I got hooked. And that's been a theme throughout. But of course, college for me
was a computer science degree and an economics degree. So I've always combined those two things and then immediately while I'm in school, I decided I know majoring in computer science and economics. So what I'm going to do is I'm going to open a restaurant and I became one of the first Boston Chicken franchisees, if you remember that business became Boston Market and eventually was bought by McDonald's. But at I love business just generally, I love building teams and I love
finance. And so I've explored all various aspect of of those businesses. I spent a couple of years as an advisor, so I knew how hard it really is. And I know that I'm not cut out for that. But combining that understanding and my knowledge of software and product development, that's what eventually led to.
What niche or hole in the market led you to create Blue Leaf? What is it? What is the problem that Blue Leaf is solving in your view?
Sure. I mean, when you talk creation, this is a very different time. We've been around since 2011, 2012 when we first served our very first customers. And at the time, the idea of an interactive client portal was actually novel that was new. And so that's sort of where we started. And that's been a thread throughout. Which is why we talk about client and engagement being sort of our North Star, because we believe that everything that an advisor does is about the client. If
you're doing reporting, it's about the client. If you're doing trading and rebalancing, it's about the client. Even if you're doing billing in some back office processes, you can draw a direct line from whatever you do in your practice all the way out to the client. So, so that's what guides us. We think about how do we help the advisor do more and better for their clients, how do we enable them to do what they do and be more
focused? And a big piece of that, we realized, is how engaged clients were with their advisors and how it was very challenging for advisors to stay in touch with clients at the cadence that is now required. And so so that became a real area of specialty for us, an area of focus. And and really everything we do is about supporting that that mission so that advisors can better serve their clients.
One of the ways that advisors serve clients is this idea of touch points with clients. And
Yeah.
when we talked before, you mentioned that a good target number was it. To me an astounding number is a 70 to 75 engagements a year. And you make the point, which I totally agree with, that quarterly statements and yearly reviews are not enough anymore. Can you talk a little bit about that?
Yeah, sure. So I'm going to up that ante. I'm going to say that actually double that would be ideal. So up to 150 touch points a year and that is what many of the very fastest growing advisors in the industry do. And it's what Jason Wenk did, the founder of Altruist, who was a customer of ours, and we really learned from people like him. But if you think about it
to two things. One, if you imagine, you know, this 365 days a year, maybe you send out four quarterly reports, you might do an annual meeting or annual update with a couple of other touch points. You might get 15 touch points a year on in a typical advisory firm done traditionally. And so that leaves, you know what, 380 days a year where your clients are not hearing from you. So what is your service? What's your your your your service offering your services? Actually, silence.
That's what you're delivering to clients. You're delivering silence, yet results, etc.. But that implies that the client will take those scattered touchpoints and put it together. That, Oh yeah, I need to pay attention to the results Sam's giving me. And that just isn't the way that people work. At the same time, the world has moved on and world has really changed.
Where if you think about services like Netflix or Facebook, my guess is you have an email or another message in your inbox or on your mobile phone that has pinged you to give you a suggestion or some other value added connection to you that might tell you something great to watch on
television tonight. And that might tell you your friend just did X and Y and Z. And we're used to being contacted almost daily by most of our favorite services and advice, just conceptually, advisors still live in the land of the thing that I personally do with my client. And what we're suggesting is the client engagement paradigm has shifted. It's much bigger. It's how does you how do you engage, but how does your firm engage, how to other employees engage with
clients? It's how do you create content that engages clients? It's how do you support simple messaging and simple reporting that engages clients so that they're hearing from you two or three different times a week, but in different ways. I made a post the other day on LinkedIn and got a comment, you know, my God, I can't imagine. Come and go, you know, connecting with my clients that frequently and then I laid it out how? Well, once a
week it might be the firm sending an email. Once a week it might be a report that sent automatically once a week or, you know, every other week. It might be an update about a service that you delivered or another another member of your team sending a video saying, Hey, Sam, we just did this for you. Just wanted to let you know. And none of those are redundant.
They don't feel like you're hitting them over and over. I think conceptually where we where we break and we really think it's bad and clients would hate it is when we think about sending the same message over and over and over again. And that is not at all what we're recommending. No one would would want that. What we're talking about is finding a way to make your services more integrated with the life of your client.
I really like that. John. to your point, it's not about hitting them over the head with the same message. It's about being creative, imaginative and unobtrusive. One of the things that you mentioned when we chatted before that really hit home with me is this idea of noisy service. Can you talk a little bit about that as as a as a way of dealing with this kind of touch point issue that we talked about?
Absolutely. We love the idea of noisy service. So if you've never heard of noisy service, this is the idea that most of the things that you do in your firm for clients are silence. That, again, is the service you're tending to provide. It's it's. It's nothing. It's that tree falling in the forest. But what noisy service does is it says, okay, add 30 to 60 seconds on that, that moment of service in the back office
that might be a quick review of accounts. It might be a quick analysis to see if if something needs a rebalance and then simply report that to the client, maybe grabbing your phone and doing a quick little video that says, Hey, Sam, we just reviewed your accounts. We were trying to see if they need to be rebalanced. They look really great, Keep doing what you're doing and just want to check in. Whoops. And and you you touch them. Now you've made an intangible service, white,
tangible. Not only that, but you've started to create a relationship potentially beyond you with the rest of your firm, with your service teammates and the people who also support your clients. It is a complete game changer. And we use a video service called Loom to do this. There are others. You could do it, and advisors that are doing this today have reported all kinds of benefits. The advisor gets their time back. The clients more comfortable talking to other other service members.
The the client refers more because they feel like they're getting more service, even though it's the same amount of services before. They just know about it for the first time in most cases. So that's noisy service.
I want to pick up on something that you mentioned, this is the emails that you get from Netflix or Spotify that we've suddenly become used to, And this is the idea of an engagement loop that
Yes.
Netflix or Spotify does. Can you explain the term and expand on how Blue Leaf captures that concept in the financial advice world and helps advisors create those sort of engagement loops?
Yeah, absolutely. So if you think about most client portals or even mobile apps, they are kind of standalone experiences and they sit and they wait for somebody to show up because, oh, that client must have a better question. But Facebook isn't sitting there waiting for you to show up. They're reaching out. Netflix isn't sitting there waiting for you to show it. They're reaching out, reminding you of the value available to you and then creating simple ways for you to
connect back. Right. So it's that outreach with a simple way to connect back that creates the loop of engagement. And with that, you can see engagement rates skyrocket, client satisfaction skyrocket. And we believe that all systems should be doing this. But of course that isn't the case. And maybe that's my product background come to come to bear here. But what we wanted to do is make sure that advisors were delivering to their clients the very best possible experience.
And where you see that is in consumer services around the web. So we took that concept and we applied it squarely to a financial advisory business.
That's an interesting concept, And when you were talking, it reminded me of my own experience. So I've signed up for a credit monitoring app, and something as mundane and relatively one dimensional as your credit rating and what's happening to your credit rating. This apps sends me one email a week at least, to say, hey, there is potential, new credit card that I could sign up for or say There has been activity in
my credit report and, do I want to engage with it? So the idea of sending I would say, different types of touch points that encourages the client to at least have the choice whether they choose to engage with that or at the very least, it's a passive reminder that, I've got a team of a wealth advisor and their team working for me. Even when I'm not paying attention. I don't have to do anything more than just see that email, delete it. But I still register in my brain that I'm getting a touch
point and I reach out for my firm. My advisor.
Right. And I think the trick here and you used a really good example because in that example, you both had service oriented message and then promotional messaging and generally what we're recommending to most advisors is to, you know, severely limit the promotional messaging. What you want is lots and lots of value added content. So it might be an automated report that just simply says, you know, this is how your your your likelihood of your succeeding in your plan
changed over the last month. It could be a message. That's the here's how your balance sheet changed or here's what happened this week in your account. Three very, very, very, very simple and it could also be on the content side. It could be you take your marketing, which most good marketing is going to be problem solution oriented. You know, did you just receive our use? Did you know that our issues can create a tax problem for you? If if so, here's the ways that you need to think
about it. You should give us a call and we can help you and connect you with a tax professional, that sort of thing. Problem, solution oriented content, that's a very value add
it, right? So so we think it's more about the value added touch points with information about how to solve problems, information about what's happening in my accounts, information about the kind of services we are providing to you, even though you're not aware of them in the in the background and in creating a volume of messaging based on that and it becomes quite powerful. And you also set at top of mind, you don't get referrals unless you are top of mind, right? That
just doesn't happen. And what we've seen is the consistency of referrals really ramp up and or the volume. So it's it's quite a powerful combination.
No, indeed. The advisers are working, as you say, when they're delivering what they're doing, when they're providing this quiet service. What they're not aware of in many cases are they are aware they're actually struggling behind the scenes with the narrative their clients are receiving from external sources, whether it is the, the latest influencer on social media, CNBC or Jim Cramer. so this is happening that the client is getting influenced or inundated with these messages.
The adviser is perhaps not responding or not proactively responding to some of those things. How do you advise financial advisers to counteract these external influences and maintain client trust?
Yeah. So when Jim Cramer honks his horn, when the latest influencer on Tik Tok, you know, tells your client that this is an and this is an insurance secret of the rich, you know, we've all seen these, right? When that happens, you have to be there. Alongside of that message, you have to be in your client's inbox or or otherwise contacting them with what we
call a counter-narrative. So basically, this is the idea that you need to repeatedly tell your clients story back to them and how their money fits into the world and what's really happening so that they have a base narrative that they hang on to, that they then compare all of these other stupid messages to because then. It's your narrative is their narrative, and that is now the story that they live by. And those silly
things coming in from media are a fact finding story. The problem when you don't show up in their inbox is the story is created
Yup.
by, you know, Jim Cramer or some Tik Tok influencer and that sort of becomes a jumbled mess
Yup.
in their story. And now when you say, don't worry, that's the fact fighting the story. So we advise creating a counter-narrative, the idea of a story, story, simple story, right? This isn't like paragraphs, but this idea. Look, your money is not the market. There are no secrets. There are simple tactics that, on repeat, get you where you need to go. And by sticking to this and being focused on the prize, eyes
on the prize, you're going to get there. Anybody who tells you different is a charlatan and repeat, repeat, repeat, repeat. Right. That's how you make your clients resilient to that nonsense on tech talk.
Look, one of the interesting things is as much as that nonsense is there on TikTok if you get that core message of your story right, you're actually being provided opportunities to create touchpoints or have touchpoints with their clients. Because this narrative from Jim Cramer or influencers, etc. is a weekly thing. I mean, you don't have to respond every week.
Daily. It's daily. It's daily out there. The
You've.
media never sees.
An opportunity to you have an opportunity every time there is or periodically when you get these narratives to use that as a touchpoint. One of your hundred and 50 a year, etc.. I use that as an opportunity to provide the counter-narrative, but that becomes one of your touchpoints.
Exactly. And look, we're not saying that anybody needs to go from, you know, 15 touch points a year to 150. But, you know, a ten tax increase just start. Right. The thing that you can add, right, if you if you're a new customer on blue Leaf, you might add those automated, you know, financial updates. If you've got marketing materials. Bill, take a look at that. Could those be repurposed to point directly to to clients? In many cases they can, and they'd be very value added, right? Just
find the next thing and take that one next step. Right. You don't have to go all the way to the top of the mountain, you know, climb up 100 feet, see? See what you think, see how the air is. And but take it a step at a time.
Totally agree. All of this is small wins. You don't have to run a marathon, as you know, one kilometer at a time. It isn't.
Exactly.
You don't run it all at once. Now, let's shift gears a little bit. Technology is, a very important part of all industries, but particular wealth management. But I would say the retail or the high net worth wealth space. Technology often gets criticized for poor service pricing and usability. But the end of the day, if the advisor and the client are not using the technology in the way it's designed, it's not fit for purpose. What would you say about that? And about a concept that I just
laid out? And how is your company addressing these issues to provide a more seamless and efficient experience for advisors and their clients?
Yeah, there's. There's a lot to unpack there, Sam. So. So let's take the idea of. Of usability usage and usability. You know, this is one of the reasons that we're so focused on client engagement, right? One of the biggest complaints we hear from advisors is I've got a I've got a portal and no one use it uses it. And some advisors assume that's because my clients aren't online or they don't want this because they haven't asked for it. But of course, they're on Facebook. They're doing a
bunch of other things. So it's very clear that your clients are online. It's just that the thing you've handed them just isn't engaging. Right? So. So not all technology, not all client portals are created equal. They just aren't. And it's why very few companies like us provide engagement statistics. Ours is right on our dashboard is we think you ought to know. So so one is you have to actually have engaging technology for all of this to work. The other disappointment, of course, is
pricing. Many advisors this year in particular have experienced big price increases from some of the larger players in the industry. Why? Because they felt like they could, right. You know, the consolidation of TD and Schwab made everybody feel like, oh, look, consolidation. Now there's less choice. So let's let's, you know, jam prices up and they're pretty big price increases. We have a pretty different philosophy at Blue Leaf. We've held our pricing for years since 2014 when we we
haven't had a price increase. The only increases our customers experience are if they buy additional services or if they use the the system more. We think that's fair and it's the right way to do business. We're not trying to gouge. We're trying to have a fair, very long term relationship. And we've got hundreds and hundreds of customers that have been with us between five and ten years. So, you know, we're clearly doing something right. You know, the other thing. Technology alone
doesn't solve these problems. Right. Technology is a tool, but technology by itself does not create. You know, It's all right. Drill as an example. Right. The drill by itself doesn't create the whole. Right. You need the drill. Plus plus the person. And so this idea of support, right, that you mentioned is really, really critical. And everybody talks about having great support.
And but it's such a hard thing to evaluate at the outset. So we talk a lot about our own statistics and how we've got between 92 and 98% client satisfaction on any given month that we have time to time to resolution of under 10 minutes are on our queue. But I think structurally, the thing that is so different about what we do at Blue Leaf is unlike virtually every other provider, we actually directly support your clients. Right? So if your clients are on our platform, you
don't support them. You don't have to deal with password reset or questions about account aggregation or any of those things. Our team does that for you as an extension of your team, and that's really, really unique. And we've had to do a lot of gymnastics to organize our team to be able to stretch that far. Because if you think about it, that means a blue leaf support
team for the same number of customers. Our number of advisors is is supporting somewhere between 50 and 100 times more users than your typical, you know, support team, which we're quite proud of.
And along those lines, simplicity and product design and incorporating the behavioral aspect of client interactions is very important. How do you create a simple, yet effective engagement system with blue leaf?
Yeah. So if you want to create an easy to use service or product, there's just one word you need to bear in mind. Humility. Now, what do I mean by that? It is about suspending your assumptions about what that client needs or what that user needs, what that adviser needs in our case. You know, we we we have obviously advisers and clients as users, and it is about actually testing that. It's not even necessarily listening to what people say.
It's watching very carefully what they do and being humble about what we think we know and what we don't know. And we rely very heavily, heavily on testing in order to do that. So that is that is a huge key because most adviser software is built in the land of shoulds. You should have this, You should do this. You always need this. And what we've found by being humble and focusing on direct research is that most of those are just
illusion, just nonsense. The other thing is, and this is kind of the bonus tip if you're trying to make something really simple, focus on the little tiny details. And what I mean by the little tiny details in, say, a piece of software and its interface, little details like what is that button called? What's that menu item labeled, Right. How many clicks do I need
to get? That's an obvious one. But the little elements of copy and the language that you use is that the language that your your customer uses, your client uses. In most cases, it's the language that the product team or the engineers thought they should use, as opposed to being careful, very thoughtful, and again, using that as a bit of a research element when people are using your software to figure out is that what does that do what they thought it did based
on the name, if not, find another name, right? So that so that the function and the intention are aligned right. Those are those are the two things that I'd say you'd need to do to create really simple software. And what you'll notice is in both cases it requires a lot of extra work. Right.
There's a lot of extra research and observation and patience, which is in short supply, particularly in technology and it and it requires you to understand that you're going to be wrong and be willing to iterate and fix things quickly so that that's what we've learned.
that's a great point. And I can see the parallels from the technology side of the equation to even the way advisors are
interacting in their practice or with their clients. I mean, this idea of testing approaches, testing, terminology, testing and, getting feedback from clients, what resonates with them, what their key pain points are, there is a danger that we all make in assuming that this is their pain point because the industry tells us, or even assuming that the pain point that the client expressed four years ago when they signed up
with you continues to be their pain point. So I think this idea of testing and asking and being humble enough to say that, the world is changing and that we need to be aware perhaps of how that's changing is pretty critical.
That last point is so important. This most experienced advisers have this sort of danger point that they flirt with all the time, which is experience. And experience is the enemy of humility. And what I'd ask experienced advisers to do is to go back and recheck their assumptions from time to time about what clients want. I don't think your knowledge of managing money or anything that doesn't change that much. The environment does, and you need
to keep up with that. And I would think about clients wants and needs in a similar way, right? That's the environment you're operating in. You can't simply assume that what people needed 20 years ago is what they need and want today. And most advisors take silence as a cent right silence, because my my clients didn't ask for this. Or they didn't tell me they wanted X, Y, Z. It's not their job to tell you what they want. It's your job to go find out.
Totally. And as you're talking, it reminds me of an experience I had a number of years ago at the firm. I was at we were trying to win the CEO of a public company as a client. And after many unsuccessful meetings, it was one of my investment counselors who figured out that it was the
CEO's wife that made the personal decisions. So she then started to build a relationship with the wife, and that led to a long standing, successful billionaire client, all because, as you said, she challenged our initial assumptions and she looked at things. She was humble enough to look at it and sit there and look at it clearly and objectively to say is is what we think the case really the case? And I think experience is
important. I think it is so important. I'm such a big believer that you learn more from experience than anything else. But if you want to continue to learn, we always have to have a degree or a dose of humility that sits there and says, okay, is this still the case? Right? Is this still the right belief in this case?
And experience can lead to assumptions, Right? And to me, one of the greatest business lessons I've ever learned came from a movie in the seventies. The Bad News Bears, Right. If you've if you've never seen it, there's a there's a scene where they talk about no assuming because assuming makes an ass out of you and me. And I replay that an awful lot in my in my business life, because every time I've gotten bitten, it's because there was an assumption that went unchallenged.
True. Too true. What's the most important lesson you've learned about client engagement throughout your career?
The most important lesson about client engagement is that they don't register all of the messages you think you're sending that maybe one out of three or four messages lands and they remember it. Maybe if you're really, really, really lucky. So even if you are sending 100 touchpoints a year, they might register that you've sent them. You know, a couple of times a month. I know that sounds insane. It's showing up in your inbox. But people aren't thinking about you.
Mm hmm.
And that's actually the point.
Mm hmm.
Right. No one cares about what you're what you're doing or the things that you've done. They care about their life. They care about their problems. And it's only when you're present, when they need something like what you've got, where they connect the two. Otherwise, it's just noise and it just gets suppressed. So you need to be there an awful lot to make them feel like you're there even a little bit.
That's an interesting point. So because they're not registering to all of your outreach or engagements. one solution, as you say, is to send and to end up with the less that they're getting. Is there something in the content or the type of messaging or how your messaging that can help, increase, call it the open rates or the registering rates that their clients may have?
See, we're not talking about that. What we're talking about is human behavior and human cognition. And I don't know if there's an advisor out there who knows how to change that. Man, we need to talk. I bet there's $1,000,000,000 product in that. But this is simply the way that people work. Right. If you think about the example of the Netflix or Facebook services that we've talked about. Even as many messages as you receive. My guess is you can't
recount that many. When you think about it, yeah, I see them often, but you have no idea how frequently it just. It doesn't. It doesn't stay. It doesn't stick. Right. What sticks is the sense that that's a service. That I'm connected with, that that's touching me frequently. So, yes, you want to increase the relevance of individual messages? Absolutely. No question. But there's a real limit to how much one message is going to be perfect and it's going to land and everyone's
going to cheer. No one cheers for your content. No one's going to cheer. Oh, wow. That is a great quarterly report. Have you ever seen that happen? Of course not. That that is. That just isn't how people work. But people remember how you make them feel. They don't remember the facts. But they remember how you make them feel and how you make them feel when you're sending out value added messages about them, about their money, about problems they may have, about things you've done for
them. They feel cared for. They are sure you care about them. And many advisors do a good job at making their clients feel cared for. Don't get me wrong. But this is another way to ensure across the entire client base, if you've got 100 200 clients that they feel that this is the way to systematize
And scale.
that sense of caring and scale it. Yeah, exactly.
On that note, can you give an example of how an adviser that you work with has used your platform to transform their client service model? What, perhaps might have been their specific challenges? And how did Blue Leaf's platform help them overcome them.
Sure. This is actually an older story, but it's one of my favorite favorites because it was it was well ahead of its time. But the best transformational story that that comes to mind for me about how Blu leaf changed a business or a service model for an advisor is an advisor. You know, $100 million firms, a good sized firm, not huge, not not small. Who wanted to simplify their quarterly reporting process. They came to us for automated reporting, very traditional need.
And within about six months, I saw a story on the Wall Street Journal, their online edition, that highlights advisors. And it was a story about this advisor who killed the quarterly report and and essentially eliminated the traditional quarterly report in form in favor of more frequent touch points. And this saved that firm. I think what she told me at the time was a 3 to 4 man days a month that they were that they were spending to
sort of make sure that all of this stuff was was together. And more importantly, she said, was it really ratcheted up their growth and their referrals.
Great.
So you land on the cover of the Wall Street Journal and your business is better off. That feels like a win win win.
Sounds like it to me. John We're coming to the end of our podcast, so I have a few final rapidfire questions for you that I ask all my.
Sure.
So number one, professionally, what is the most important lesson you've learned over the years?
Systems thinking. So everything that we do or operate in is part of a larger system, which is why so many things that we attempt have unintended consequences. And if we start by thinking about the end goal we want and trying to understand the system we're operating in. We tend to be much more effective. There was a wonderful book by a guy named Peter Sanga called The Fifth Discipline. It is about systems thinking. It changed the way I viewed the world. And I would highly recommend it.
Right. I know the book and I totally agree. It's a wonderful book. What is one practical tip you would offer listeners keen on applying your insights on client engagement?
Pick up on either noisy service as a model or on repurposing your marketing content to be problem solution focused and sending that to your clients. Either one will get you another 25 to 50 touch points a year and your clients will be better off. You could always come to blue if and get some other automated stuff, But. But those things are things you can do right now to day to change the way that you engage with clients.
It's been a great discussion. If listeners want to learn more about you or find out about your work, where do they go?
Easiest place is LinkedIn. I'm just, you know, John Prendergast is my handle on LinkedIn. We're active there every day and it's very easy to get hold of me there.
Awesome. John, thank you for joining us today on the Future-Ready Advisor podcast.
My pleasure. It was really fun.