Voice of FinTech®

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Wealth tech solutions for newly wealthy + NYC FinTech women + Dreamers & Doers with Michelle Tran

by Rudolf Falat
August 24th 2021

Michelle Tran, the adviser to Harness Wealth, founder of More

voice of Fintech. Okay. Yeah. Okay. Welcome to voice of Fintech, a podcast mapping out the swiss and global Fintech scene connecting Fintech enthusiasts with startups, incubators accelerators, business angels and VCS and incumbents interested in partnerships. Voice of intake will help you navigate the Fintech ecosystem here. You can listen to the startup, found the stories what investors and incumbents are looking for when dealing with startups and find out more about resources provided by incubators and accelerators. My name is Rudy followed and I'll be hosting this podcast. Hello and welcome to voice of Fintech podcast. We're going to talk today to Michelle trend from new york. We're going to talk about wealth take in America, we're going to talk about new york city Fintech women. I'm really looking forward to hear from Michelle what's going on in terms of gender diversity in the U. S. But also in terms of wealth and technology, wealth management etcetera. Is there something finally shaping up as a, as a leading platform or solution? What are the pain points all of this and above.

Welcome Michelle, how are you today? Thank you so much for having me really excited to chat with you today on everything from wealth tech trends to what we're doing at NYC Fintech women, which is really important as well. Wonderful. So thank you for making the time in the middle of the summer. Let's see how it goes for the rest of the year. Right. It's been quite crazy weather as we are getting used to every year. First of all I always like to start with with the back story. how did you get to do what you do today? But even more importantly, why? It's a great question. So my background, I think is a very typical background right out of college, I decided to go into financial services. I'm a first generation um from an immigrant family that migrated from Vietnam to the U. S. And so for me it was, what's that traditional track I need to take? So financial services, very stable, very easy joined Black Rock for a number of years. I was very fortunate Blackrock to do a global tour. I lived everywhere from san Francisco to Hong kong to new york. But what really got me started within this Fintech space and well, tech space was an opportunity to lead our strategy efforts in the Fintech strategy in coverage at Black Rock.

And so this was back in say 2014 when it was every news headline that you heard was about robo advisors and how these robots we're going to take over wealth management. Obviously that hasn't happened, but from a Black Rock perspective was really interested in a couple different questions and what they wanted to solve was one, how are these firms, these new Fin Text using more traditional products that Black Black Rock offers. And then also is there an opportunity to better engage in this space And that's really where I got my start within Fintech and from there, I just really grew to love the fact that technology is really powering all this innovation and access for people to financial services. You think about everything from Robin Hood democratizing and providing access to trading to all the different robo advisors, giving better access to investing to the various different platforms that from a lending space goes on and on. But I think from a scientific standpoint, it's it's been a wonderful let's say five or so years where we really heightened the time and attention that Fintech has had and its impact on the world.

So that's really how I got started. Once I got that bug, I think I kept on looking for the most innovative product out there. So worked at apex, which is backbone behind a lot of these robo advisors and digital brokers I joined recently started a couple years ago called harness wealth, which is a marketplace in wealth and wealth tech space. And so there's a lot of really interesting products out there from a health perspective that's really changing how people invest in how people interact with money. Exactly, I'd like to hear a lot more about this because Switzerland, it's a home to wealth management and sometimes there are wealthy, well take solutions that are amazing that are popping up, but let's hear what's going on in other markets as well, right. And as you mentioned harness wealth, let's take that as an example. So what is that venture and how does it work? The problem that harness wealth saw in the marketplace was you have a lot of these, you have these these people who are receiving their wealth and in different ways in terms of they are getting equity compensation, they're finding liquidity events.

So you think the use case of, hey, I'm an early engineer at lift and then lift goes through an I. P. O. All of sudden I'm sitting on millions of dollars, but I don't quite know what I should do from a tax perspective or an investing perspective. Maybe I don't want to use my father's adviser, Maybe I want to use someone that knows the situation I'm going through. And so what harnesses really trying to solve is hey, there's so many different conversations that you need to have about your wealth. How do we provide you with the right type of experts To talk to you about that and to help you manage your wealth. And so I joined harness in 2018 as head of business development and what harness really is. It's a marketplace and so for someone who is that example of that early engineer, lift. they probably don't know who to go to for wealth management advice. They don't know which C. P. A. Is best to handle their situation in the US, it's taxes is a big hit on your income. So it can be as high as 40 50% at times.

And so you really want to have a good CPA who can help you manage your taxes because you don't want to give all that money away to the government and also from a protection standpoint, what type of legal documents do you need? What type of legal structures do you need to really protect yourself from wealth perspective. So the idea of bringing a family office approach and where harnesses really playing a role is identifying good advisers in that marketplace to help these people. And so that's really what harness built over time was a really strong marketplace of wealth managers, C. P. A. S. Attorneys to really help those individuals through their wealth journey because they're new at it and they don't know financial services very well. And so harness has really come out and done a lot of really interesting things in terms of providing that help that that this population needs. All right. It sounds wonderful. On the other hand, look to scale, you need to product eyes your services, right? And it sounds like you're building a marketplace for those services. Now in the good old days, marketplace for services has been quite challenging.

Right? It's different than buying goods and physical, standardized good. So how do you let some advisers to be part of your platform? And how do you match them then with your dark good clients so that it's efficient. Right? You don't want to just be a directory and then people need to call each other or what have you. So exactly that matching process work. So there's a lot that goes into it from a due diligence standpoint. So When you think about good advisers and what does that mean? What's the definition of a good advisor? There's a lot of different things that harness looks at or they require all advisors to go through due diligence process. So something around over 120 questions that we ask of advisors. So when they are interested in joining harness wealth, it's everything from size of firm to investment strategies, really getting to understand who is this firm, What type of clients who they work with, what's their history etcetera. So there is a full process, so not any advisor can joint so very specific in terms of what type of advisors are able to join the platform.

So that's a big part of it. Right is making sure that there is a very high quality curated list of advisers. The second piece of that question is how do you ensure that you are identifying the right advisors for that right? A client and that's somewhat of the secret sauce of what harness does in terms of an algorithmic approach, really understanding clients through data and then using that data to really match them to the right advisor. The belief that harnesses really at the end of the day, there is it's a mix between good use of technology but also that human interaction is important. So understanding while technology can get you really far in that journey, you still do need to have a phone call with the advisor because this is a, this is a trusted relationship. You're about to entrust someone with a lot of your wealth. So you want to make sure that there's one credible people to your aligned on values, you're lying on strategy and you want to have a connection there because you you hope these are going to be lifelong relationships or at least a long time. So there is definitely the kind of the use the use of technology and identifying the right mix.

Great. So basically I guess you use a I to help your advisors to provide inside or provide advice as well in some way or in the matching process. Right. Can you leave the reviews as well for the advisors? They're like people do on trust pilot or when they're looking for a doctor in some countries, you can also search what people are, what are people saying about the doctor that you want to see? It's not an open directory and there are definitely some other platforms that are more open directory esque where you can dig through and and put in filters to find an advisor, there's smart asset in the space, there's no financial, there's wealth minder but the harness approach is different. The harness approaches well let's understand who you are as an individual and then do some specific pairings that way. Alright, understood. And you mentioned your target clients are the tech people who maybe came to new wealth, any other categories or segments that you're focusing on for now. You can just think of the clients who are, these are individuals who generally have more complexity in their wealth journey.

So it's not someone in the U. S. Let's say, I have a more simplified situation, can use TurboTax so they can use a robo advisor. These are people who say, Hey, I have, I have equity in 10 different companies. I might be a VC partner on my own two or three homes, whatever is you need someone really to help you and I don't have the time or the expertise to do it myself. I think about me personally, right? Like I am, we have a lot of complexity in our lives. We have a couple kids, we have home ownership, we have equity holdings, we have a number of different income streams. And so for me to spend the time is not a good use of my own time. I'm not very good at it either. So for me it's really making sure I can find someone who knows exactly what they're doing to help me through that journey. I can think about my wealth in a smarter way. And so that's really the type of client and I, sorry, I should preface to, but I, my role currently at harnesses that I'm advising with them. So I'm an advisor with harness when it comes to everything that's and business development. Great. And so the complexity is one thing sometimes when the banks or wealth managers are looking at clients are also looking at the size of the wealth that they bring so that it's worthwhile for them to spend time on them.

So is that also a factor here or it's a it's the complexity and the type of the client or do they have to bring in X. Million so that they can be part of your platform? It can be sometimes it depends on the advisor. I think that's the problem with a lot of the big banks and the big wire houses like the morgan Stanley's And the Merrill Lynch's is like they want someone who's already wealthy to walk through the door because that's a better revenue stream for them. And that's not always the case. Especially as you think about the last 10 years, how are people getting paid and how are people driving wealth? Like you see all these I. P. O. S. It's been a very frothy I. P. O. Market, you have blend, you have coin base, you have Robin Hood, everybody's I. P. Going or they're going public via spec you know these are different scenarios where it's not just your earning money becoming wealthy and saving it's you have you have all these different scenarios um you know the wealth is coming in from different places and so for, I think a lot of the bigger banks and a lot of the bigger wealth managers for them, they don't necessarily have the time and attention or the need to, to let's just say bet on some of these individuals or these employees, but we know through trends that this is how people are gaining their wealth these days, right.

Anyone that's millennial and lower or younger are gaining their wealth through equity compensation most likely. So it's, it's a much different market. I'd be really interested to see to how some of these traditional institutions evolve to capture their interest and you're seeing them do it now, they're launching digital versions of themselves to get people in the door. So they become perhaps a lifelong client or become a client later down right now, when we take a step back and look at different fintech industry verticals. Right? And you would probably see that people started to be interested in payments or in lending years ago and then maybe the wealthy came along and wreck tech and other verticals. So how do you see the wealthy adoption versus other fintech verticals in the US? Well check is really interesting. So there's, I think there's different channels of wealth text, but there's the retail channel wealth text where I say most of the, where you see the headlines in the news in terms of it's a direct to consumer product, it's a retail product, it's a, it's a product being used by the public.

So think about the Robin Hoods, the wall front, those splashy stories in terms of their fundraising and how they're doing I think really captures the majority of the time and tension in the public space. I say the wealth text space, when you look at the wealth management and advisory space continues to grow and there's been a lot of changes in the past year. Two. So this is the B two B solutions where you're building out wealth technologies for advisors and for wealth management and it's becoming I think a more interesting marketplace where you have so many different fin text that are approaching investment management that are doing a kind of special E. S. G. Or direct investing platforms. You have multi platforms that are facilitating the lending piece, right, when you have private clients, they still want loans and commercial product. So how do you facilitate that in a more digital way? So I do think there's there's still a lot of growth that is there for the B two B wealth text space. I mean you see this with J. P. Morgan just bought open invest and that's a direct indexing S.

G. Platform devise, which is a portfolio management platform raising, I think something over $100 million in the last year and a half or so. And so there's definitely a lot of capital but what you're also seeing in the past year is a lot of consolidation and a lot of acquisition and changes. And so from a b to B standpoint, you have some firms that are being swallowed up by the bigger entities because they all know they need to be in this space. So I think it's a changing market, It's a good market. It's really interesting to see a lot of Founders still tackle the B2B wealth management space because there's there's still so much opportunity there, right, everyone wants someone of the piece of the pie. And so I think the next frontier, when it comes to wealth management though, is going to be digital currency. And what are the right kind of, what are the fintech platforms that are being created right now to help advisers and wealth management think about crypto and that's everything from hey, how do you think about crypto and an investment standpoint, are they building Grayscale is building a TFC for crypto?

How is that being consumed by advisors? How do you manage crypto against all other assets? Is it an alternative asset? Is it should it be part of one's core portfolio? How do you manage crypto from a tax perspective? Right. That's a really interesting question. Is thinking about crypto from tax solution? So you see tax bit, which is, it's not necessary, wealth tech, but it's a crypt attacks management tool that can be used by financial advisors. They just raised a crazy series a of 100 million. And I think there's there's still a lot of focus on traditional well tech Fintech platforms. But I think crypto is really going to be some one of the next frontier. What do you think about how wealth management's consuming technology? Yeah, great to hear about all these well tech possibilities. And I like to talk about me to be a lot because I think it's a little bit under the radar right? When you just open up the paper. Well, if you if you do open up a paper these days, but still and then crypto digital assets of course becoming more and more mainstream, even by some of the big incumbents who were very resistant earlier on.

Right, Larry Fink who says I'm not touching crypto but then he has multiple teams working on figuring out how do you bring it into into their conversation into their investments? I think the other story here though, to just think a little bit more about crypto currency in wealth management is regulation. So regulations really going to lead how advisors consume and use crypto. So I think we're getting there. It's still early days, but once regulation really opens up to Cryptocurrency, I think you're going to see all advisors jump in and so which technology is going to be ready for these advisers. Yeah, let's see, let's also change the attack because I know you're you have many, many activities, right? And you're also the founder of new york city Fintech women. And I'd like to know what led you to set it up and what are your key activities? Yeah. One of the, as I was going into or starting my journey and Fintech at Black Rock and then went to apex. One thing that I continued to realize was that it was really hard to build the right network and as everybody knows, you need to have the right people in your corner and the right network or what we call the personal board and really to be able to capture any opportunities and to get ahead.

I was going to a ton of, let's just say women in tech events and I had to go find that one Fintech person. It's changed nowadays. What kind of like five years ago? That's what the story was? Or I was going to a ton of fintech events and it was finding the 10 females in the crowd. And so for me, I built or started NCC fintech woman just out of the personal desire to Build that network and also needed that support. I was one day I was at a meeting and I was literally one of 10 females, which happens a lot all the time. I was leading the conversation and really just dawned on me. It was like why are there not more women here were having a very interesting Fintech conversation. There should be definitely more females at the table. So it really started on a new york city. I I put up a meet up and 16 women met up on a on a rainy Tuesday at a mexican bar in the middle of flat iron which is now a lot of people dubbed Silicon Alley. And so we met in at this bar and that's really where we started and my co founder Sasha Pilch there and she was really equally as passionate about building a network and so we are went from 16 women on a rainy Tuesday to now over 7000 women the U.

S. And internationally as well. Our mission is to connect empower and promote women in Fintech. So those three action items are really important that connection that empower and that promotion piece for me a lot of what's important is making sure that women have a platform and women have a voice to talk about themselves because if you're not talking about themselves you're not working on your brand, your reputation, people don't know about you and that's really important. And we also want to use and show amazing amazing women doing amazing things and the things in the Fintech space to really help motivate and to show others that they're the success stories and so we offer everything from networking events too panels, we work a lot with conferences to making sure that one they have, they they're eyeing 50% women on their panels and they also have a good roster of women speakers who are subject matter experts and we also do a lot of promotion pieces and we have our our Fintech female friday. So every friday we feature an amazing woman who is in the Fintech space. We're really passionate about diversity too.

So everything from racial diversity to level diversity to geographic diversity to roll diversity. So it's it's not just your ceo but it's everyone from your marketing person to your CTO to your compliance. So you're showing a lot of different roles within Fintech a lot of different levels. So there's really excited to be out there in the marketplace and it's just been wonderful to hear all the stories from people about how it's had an impact on their lives. Great stuff. Well obviously you had lots of conversations with your members with with other stakeholders. So what do you think are the main issues that you see on the fintech scene in the U. S. In terms of diversity? What I'd like to hear is more when the issues start happening and how could we actually fix this? Yeah, I think the issues start from the very beginning, right? Like it's access how do you make sure you are when you're hiring you have a view point in getting women in seat and that's at all levels from junior levels all the way to executives.

A lot of those kind of founder tables or about us pages on on these Fintech websites, you'll see that they still tend to be very male heavy. So it's making sure you're very intentional about your higher Hey, if I'm looking for C T. O. Focus on finding a female CTO, I think that's really important. Like you do have to be extremely intentional. I think the other big piece though is fundraising. It's pretty, it's pretty sad. The fundraising amount that goes to female founders in 2019. It was 3% of all institutional money raised went to female founders In 2020. It actually went down, it went down to under 2%. It's now trending on its way back up, but that's still sub 5% which is, which is crazy for half of the population. We should get at least half the money. And so what I really love is seeing all these different Vcs come out and really focused intentionally on giving money to female founders or female lead teams and that's not the venture collective is very focused on that. You have, the Fintech studio is very focused on that and they're not just saying it to, it's not performative.

They're actually giving money to these two female founders and we just did a feature over the past month to highlight all the female founders that just raised money. It was everything from our stone to to morty. They've all female lead firms, Female founders who've raised money in the past couple months, which is fantastic to see. Yeah, you're absolutely right. These numbers are crazy, right? Because it's not like even in the business school you only have 5% women, right? I actually heard that in the upcoming Worth an NBA class first time ever, there will be a majority population in the class, but it's always been close enough right to 50 50 so there are definitely some issues already at the educational level and transition to hiring as you said, when people want to go to Fintech and and become an entrepreneur, you also the founder member of Dreamers endures. So what is that? And what is your mission and what are your activities there? Yeah, so dream person endures is a fantastic organization. It was started by this wonderful woman Gachet and she create, had this idea to create a really strong network and it's not Fintech only it's all different industries, but she's created this great team and her, her mission is really similar to our mission where it is, how do you provide all these opportunities and access to women to elevate their voice.

And so she's been fantastic and doing things like making sure she works with the likes of Forbes and Fortune in CNBC to give people bylines and to get them featured on news stories and so as a member of Dreamers and Doers, that's what we have access to, we have access to all these different platforms where we can be thought leaders and they, she continues to plug us for speaking engagements and continues to plug us for any type of articles or just to get that voice out there. So it's been a really great community to be a part of something that I joined when they were just starting off and have really utilized a lot of their, their people and their resources. And I think it's also for me because I do so much in the Fintech space. It's really nice to also have a community that's so not just Fintech because I think I learn a lot from it too. We can get a little bit of siloed when you're in only in one industry. So you having that diversity is really nice. Yeah, exactly. So it sounds like you are incredibly busy, right? So if you ever have a vacation or a moment for yourself, what would be the book that you would take with you?

It's a great question. I am extremely busy wanna Normalize that. I also have Children. So they keep me 100% busy. If I was to take any book, Here's there's a book that I've been trying to finish for the past year and it's only because I've been so busy, I haven't been able to finish that Michelle Obama is becoming, I am almost done with. And so I just need an extra 30 minutes on a beach in order to finish it. But I've loved her story thus far, she's just a hero of mine. And so the once I can finish that I will be very happy. Great. So from Michelle to Michelle, of course all right. Just to wrap up, what's the best way to reach out and find out more about what you do and who would be the most relevant to reach out for you? You can find me on NYC Fintech woman, my email address there or find me on linkedin. I would love to connect with any woman who either wants to be in Fintech or get started in Fintech and this is at all levels because I want to be a connector and to help people build their personal brand and personal network.

It's so important because going back to the question of how do you get more women in Fintech app? It's all about that network piece. There's a reason why you don't have a lot of senior female leaders is because the founders tend to look at their network and their network that tends to look like them. How do you ensure that you get more people involved? And so we'd love to to talk to anyone that's interested in the fintech space. I'm personally consulting with a number of firms right now. So I think there's a lot of opportunities across many different sub Fintech industries for for women who are looking to take on big roles. So let me know if you're interested in and I'm happy to help great stuff. I always say there is a selfish argument to this when people are looking for co founders, that they should have different co founders from themselves, right? Because they're not building a business for themselves, they're building it for other people, so it's impossible to have copycat kind of friends around you and be successful. I think my favorite old is from male founders who call me and say, hey, I want to bring on a female co founder, I don't have anybody in my network.

Can you introduce me to, you know, some amazing women and absolutely hands down and that's, that's why I love to hear is that it's not just the females are changing the game, but the men are also being intentional and recognizing the fact that they need to bring in diversity onto their team to build a better product. Absolutely! So good luck to new york. Fintech women dreamers endures and also harness wealth of course and your yourself Michel, thank you very much. Great, thanks so much. Okay, thank you for listening to voice of Fintech podcast if you haven't already check out also Voice of Fintech dot com where you will find all the episodes and additional resources related to the podcast. You can also subscribe to voice of integer on apple podcasts, Spotify, google or any other podcast app that you like if you have any suggestions on the topics or guests or how to make this podcast better for you. Please email us at info at Voice of intake dot com. Happy to hear from you. Thank you. Okay. Okay.

Wealth tech solutions for newly wealthy + NYC FinTech women + Dreamers & Doers with Michelle Tran
Wealth tech solutions for newly wealthy + NYC FinTech women + Dreamers & Doers with Michelle Tran
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