Mark Wickersham, Host 0:05

Hi, welcome back to the Wealth Tech Podcast. I'm your host, Mark Wickersham. On this episode, I sit down with Tom Nicholson from Aleta. Excel is that liability that family offices can no longer rely on, the evolving roles of COO and CFO in the modern family office, data aggregation challenges that family offices still face, where AI fits and where it doesn't in family office operations. We wrap up the conversation discussing the future of the family office and what we see for the next three to five years. As always, we end the podcast on a personal note. Let's get started. Alright, Tom, welcome to the Wealth Tech Podcast. I am happy to have you on the show. Would you mind giving a brief introduction of yourself?

Tom Nicholson 0:56

Absolutely. Yeah, well, thank you for having me. It's a it's been nice getting to know you over the years, and uh I'm always always excited to be on a podcast. So this is uh this is my second official podcast appearance.

Mark Wickersham, Host 1:09

So um You were on the Mac podcast, right? I was on the Mac Podcast earlier. Great one. Brian Adams does a great job. I saw that one. That was a good one.

Tom Nicholson 1:16

That was a lot of fun, yeah. So um well, yeah, we'll put like I said, thanks for having me. So um I've been in the space now for about a decade. Um actually most of my career was spent in-house within family offices, both single and multi. Um, and one of my main major roles in those firms was was running technology. So um I've been I was been on the user side a lot longer than I was on the provider side. Um I think that's it's been a fun kind of journey shifting from from one side to the other. Um, obviously there's been a lot of focus on tech in the marketplace and what it can do for these firms. Um, you're seeing family offices started at a much smaller scale. They have a lot of the same complexities as their bigger counterparts, um, but they're they you know they're lacking with resources, lacking with budgets.

Mark Wickersham, Host 2:02

Tell me a little bit about some of the common problems that that family offices have come to you with. And then also if you could share your perspective, if that's kind of shifted over time.

Tom Nicholson 2:16

I think the biggest problem for a lot of families um from a technology perspective, is they stay on old systems too long, right? And the the one we all know is Excel, right? We have we all we've all spent most of our career in Excel, it's kind of our security blanket. Um but you stay on it too long. And now, I mean, there's to me, and that's what I always encourage most families, like regardless of the software that you pick, get it, get it in the platform, get it organized. That's you know, that that exercise of gathering all your information together. Um, you know, we work with a lot of families directly who don't have external staff, and the implementation process is always a bit of a um you know, needle on a haystack type exercise where they're like when you know, we'll we'll we've got our spreadsheet here, but then we've got iron mountain boxes still, where we got an email account that's closed down, we can't access anymore, or you know, so it's um whereas if you go through the exercise to implement a platform and get off of Excel, um, because Excel just, you know, if one person built it, you know, 20 years ago, the model, and it's still the same thing you continue to use. And um I think the it's unfortunate, but the whole, you know, if it's not broken, don't fix it mentality definitely holds true. Um, but a lot of times they don't realize how broken it is because it, you know, it hasn't needed to change. It still serves their purpose for what they need it for, but it could be a lot better, right? So um and I know for the families I work for any, especially now that I'm on the provider side, I think the best um, you know, mentality is to adopt, you know, is to always be looking for new software, you even if it's not a full-on evaluation, but like always be aware what's out in the market, especially nowadays where there's you know a new platform appearing every other day. Um that's probably a little extreme.

Mark Wickersham, Host 4:05

But um but it's there are a lot more new entrances though. You do have to pay attention.

Tom Nicholson 4:09

Exactly. So and and there's and I think then the like like ourselves, the newer providers are are growing quite fast, right? Whether it's features or just for the firm itself. So being aware in regards to, hey, maybe so-and-so is not ready yet for us, but they could be ready in six to twelve months, or you know, they could be ready in a year or two. So regardless of of whatever platform you pick, make sure it's easy to get your data out of it. So that you know, because things are happening fast right now, some of these you know incumbent players might be outdated in in, you know, in the in not too not too distant future.

Mark Wickersham, Host 4:46

Yeah, I think those are a lot of good points, Tom. I I think, well, first off, Excel, the studies out there, like 90% of Excel spreadsheets have a material area in there. You whether you're copying and formatting the the right calculation or not. Um, it's not auditable. Um, tends to be expert systems based on whoever the um person was, and that person leaves, then you have issues. You do see too, I think a lot of the buying behavior for single family offices in particular is is event-based, right? Something happens. Maybe the Excel spreadsheet becomes corrupt, a person leaves is kind of a key trigger that kind of had all that institutional knowledge in the head. I miss a tax deadline. And instead, if they could be a little bit more proactive about you know managing and monitoring their vendors, hey, is my my vendor uh accumulating a lot of technical debt? I mean, to take a look at things like is my vendor SOC 2 type 2? Is my vendor have plans to be that soon? What's the I AI roadmap? These things are, I think, important that to check in with your vendor on a regular basis, be a partner with them and provide feedback, but also understand, you know, what their roadmap looks like. Does that roadmap meet my needs? Are they continuing because the ownership, these these for vendors are like stocks, right? They're going up, they're going down, they change ownership, uh, they have momentum in some cases, and and um in other cases maybe maybe they don't. So it's always important to be keep keep uh abreast of what's going on in the market. There's a lot of great resources now. Uh FOTEC Hub had a great conference. Yeah, Family Wealth Report, FinTech Summit. I mean, there's a lot of different conferences out there that you can kind of do a market scan and stay current on the market, which is great. Um, one of the things I what I love about having this conversation with you is that you've been like on both sides of the fence uh as an operator and also on the vendor side. Can you talk to me? I know you shared a little bit on uh with Brian Adams on the Mac podcast, but the role of the chief operating office, the COO, it's so important within a single family office, especially when it comes to technology. Can you talk to me a little bit about that role and why that role is so important?

Tom Nicholson 7:08

Yeah, I think it's it's most important now than ever. I think there's um with this new cohort of kind of these these smaller family offices that are coming into play, um, there's a lot, a lot to be gained from, you know, they're operating at a much smaller scale than a lot of their kind of counterparts. Um, but they continue to be rather inefficient and dysfunctional. Um, whereas um that right operator at the helm can really drive kind of the the right model in place. Um, I think it's it's you know, now sometimes there's not always a COO, sometimes it's a combination of a CFO or the CIO. So like whoever wears that hat, if you go back to Excel for a minute, you know, um it's not a bad place to start. Doing things manually for a little bit helps you understand kind of your data flow um and your data model. But then, you know, there's but make sure you have a clear path to exit. Um so because I think with AI coming into mix and all this automation automation, there's um there's a lot of a lot of problems that can come because you're not, I mean, I I always pride myself with being very aware of our data, you know, where it comes from, how how it's entered, you know, how how to rec and check it. Um when you start pulling making audit when you start applying automation to a lot of that, you lose control, right? So um so I think those two things, like maintaining control, but also balancing that with efficiency are super important for that that COO type role. Um, and thankfully, you know, you you know, you have no excuses now because you have a lot of tools at your disposal, is making sure, you know, that you find the right tool. So it's it's gonna be like kind of what I said earlier. It's it's making sure you have a thorough evaluation process and vendor selection, but always keeping kind of up to date in regards to the market, um, talking to your peers. I think traditionally a lot of family offices are being more closed off and have not been collaborative. Um, I mean you still see the kind of on the investment side of things because they're a little bit more competitive there. But from an operational standpoint, there's a lot to be gained by kind of understanding how other people do it, you know. Um, especially because, you know, there's you're kind of at this point, we're kind of rewriting the set of best practices in regards to how to run these firms. Um, and there's a lot that you can learn from bigger firms, but there's a lot that you can't that you can't reuse, right? And I think family offices have have fallen to the trap before of benchmarking themselves on kind of their you know, the de the Dalios and the Dells of the world, which you should not, right? That's not it's not a it's not a realistic um kind of model to to to to strive for. And it's it's unfortunate because the industry still kind of continues to kind of um not pressure them to do so, but has already set kind of the expectation in regards to what to achieve. Um, I mean, frankly, a family office of 100 million will never be you know a multi-billion dollar family office, more than likely, right? Unless something massively changes. And those firms are gonna operate very differently. So I think it's being being realistic is super important too. There's the person, whoever's in that seat, there's a lot for them to do right now um to kind of help you know structure these firms correctly. Um at the end of the day, I think what I see a lot is is obviously it's important to know, and I I've been this myself too, but it's important to know what you know, but it's also important to know what you don't know. And I see a lot of family offices not knowing what they don't know, um, and that can get you into trouble later on if you haven't done your diligence and haven't kind of um you know really kind of been thorough in regards to kind of your your operational setup.

Mark Wickersham, Host 10:46

Yeah, I think those are are good points. There's um a number of peer organizations out there. There's there's forge and and others. I think single family offices are they're not competitive, that that the peer interaction is really important. I think it is important to recognize that the difference is and they're not trying to compare themselves to to um somebody that has a much different operational setup and mandate than than they have. Uh you know, I know that that's saying if you've seen one family office, you've seen one family office. Well, you know, I don't think they're unique snowflakes. There are um different bands and in and kind of subgroups within the family office ecosystem that they can match up against founder's office, embedded family office. Um there's a number of maybe even family offices that don't even recognize that they're family offices, um, at least by that label. Let's talk about the democratization of family offices. There's certainly the technology and services are now available that have been able to lower that bar to entry. That bar to entry was creeping up. It was 250 million, it was 500 million, it was starting to get beyond on that. Now you're starting to see that really um become lower. There's so many more service providers and vendors that are focusing on the space. What are you seeing in terms of new office creation? And where can the these family offices get sideways in their setup?

Tom Nicholson 12:16

Um, like you know, I talk to firms on a weekly basis who are under 100 million in assets, and some of the more traditionalists in the space will say that's not a family office. And maybe it's not, but like that's not for me to judge or define, right? You know, um, and I think the definition of family office has changed. It used to be, you know, a very specific definition. You had a full team in-house, you had this, you know, you had a if you you had a trust structure, you had, you know, an endowment model portfolio, you had all it kind of checked all these boxes, full comprehensive, you did tax, you did the financial accounting, you did the investment management of it, you did that endowment style model, right? Exactly. Yeah. So now I think, and this kind of goes back to our combination about the COO type role, a lot more is being outsourced. Um, and I think because I think I mean it's this is a this is more of an opinion necessarily, but I think a lot of multifamily offices have failed on it kind of serving wealthy individuals. Um, they they've seen a lot of them have gone the wealth manager route. They try to get more discretion on the assets and they and they're they fail on the services aspect of things and they try to scale, right? A true multifamily office isn't designed to scale, and it's it's a very purpose-built. Um so I think because in the in the in an ideal world, if if if uh more true multifamily offices existed, maybe you wouldn't see the creation of as many as these new single family office offices. Um but at the end of the day, I think you know, if a person has the willpower and the need to create this type of structure to kind of hyper-personalize their their needs, um, maybe you know, that's that's up to them, right? People jumped to the family office, like immediately, like, oh, I need a family office because I have this much. It's like uh you need structure, structure, you need you need clarity, you need organization. You might not need a full-on family office. Um, like I heard the other day I was talking to someone, so I felt like it was like two guys in a garage throwing together 50 million and building out a full team. I'm like, well, that just sounds like it's destined to fail, you know. Um, so so I think it's once back back to kind of it's having you know being realistic about what you're building. Um, but I mean I I I would fully encourage someone to you know explore that that route. I think I think the the key thing is, you know, set your own expectations, your own benchmarks, right? And have some kind of some guidelines, some parameters, because I think that's where people go wrong. They kind of just they either they they don't personalize it to themselves in regards to okay, what does this firm need to be? It's it's back to the point earlier. It's like, well, it needs to be, you know, like so-and-so's family office, because that's what I would aspire to be. It's like, sure, then there's some there's things to learn from that, but I think um really the goal is to serve your wealth, right? That's the ultimate goal. Um now, if that's because you want to hit a certain benchmark, that's fine, right? But if if other otherwise it's just to steward the wealth in the next generation, you know, but make sure you have a clear kind of mission behind it. Um, because otherwise you, you know, you probably you know, you lose your direction, and then from there it kind of kind of on, you know, um, it just kind of you know becomes more dysfunctional and kind of unravels in a way. Um But I I think though the other thing is you need to become well prepared. The more time you spend preparing, the better off you will be. I see a lot of a lot of people who are starting family offices who are wholly unprepared. There's a lot of like uh, hey, you know, you know, I met John the other day and he has a friend who who talked about a family office and like it was at a party somewhere. Like he must know what he's talking about. Let's go hire him. It's like there's a lot of that. Now, now trust is important and hiring people that you trust is super important, but you shouldn't um over-index on the trust factor versus the experience because you need to have expertise, you know. Um, and and to me, like you're gonna spend more time and money cleaning up someone else's mess who wasn't ready to start it for you than you are going to, you know, if you were to kind of spend a little more time up front to find the right person if you take that route, you know. But having someone, whether it's the COO or a CFO, to kind of quarterback the setup is super important. Someone who knows what they're doing, who knows the the vendors, who you know can manage relationships. Um, because that's only gonna, you know, this kind of ends up becoming the backbone you build upon.

Mark Wickersham, Host 16:28

Yeah, I think that staff is is I mean, trust is important. You may need to be that general expert, though, that that that can be really adept at a number of different areas and and categories. Um I think there are, you know, on the multifamily office front too. I I think part of the problem is that that the word family office kind of gets used and abused in the market there. Yeah, a lot of people will will throw that that shingle out. And and there are they necessarily maybe they they like the idea of servicing a hundred million dollar client, but are you are you well suited to be able to handle the complexity that comes with that type of family? Um there that being said, there are some very good multifamily offices in the industry today. And some of those multi-family offices support single family offices as well, and that could be a great way for a single family office to be able to partner with a multifamily office to be able to broaden the services, provide the level of professionalization. Um starting a family office. If you're gonna start a family office today, what to walk me through your your your thinking. You hit the lottery, Tom. All right, you hit the big one, you hit the the the powerball, you got the billion dollars. What what what are you doing? Logging off this podcast first thing and getting out.

Tom Nicholson 17:45

We all have dreams. Um of course it depends on the level of wealth we're at, right? You know, um, it also depends on the background of the principal. Because what you're seeing now is that you know, maybe the pr you know the principal was a venture founder or whatnot, and has some kind of skill set that can be, you know, this is you know, this is their retirement project, effectively. You've seen you've seen a lot of that, right? And that's great because because that can offset some of your your your costs in regards to employment. Um I I'd say probably the first thing to do is um either find a good consultant um or find that good kind of expert journalist, which you probably need to find a consultant first to help you find the expert journalist, right? You know, um assuming you're you're you know you're you're literally you're coming from maybe maybe you worked in, I don't know, completely different industry. You're not working from finance at all. Um, and you're coming, maybe you're smart, but you still have no idea what you're doing from a financial standpoint and a structural standpoint, hiring the right person is gonna be the first most important step. Um because from there, they'll know what to do and can lead you in the right, the right direction. I I've I work I'm I'm fortunate enough to work with a few good consultants in the space like prayer advisory. I know that team quite well. Um, and kind of they do a lot a lot of that work as a kind of I mean their goal as a firm is to kind of come in, help set things up, and then you know be replaced and eventually kind of go off into the sunset, right? You know, um, so I I think that's those types of firms are great to kind of get started and work with. Um, because they'll set like really uh setting you on the right path is is super important. Um and if you if you're if you're set in the wrong path in the beginning, it can create a lot a mess of problems down the line. And then from there, I think it's once again working with the right people to develop the structure that works for you, not for someone else. So maybe there's a trust, maybe there's not, you know, maybe there's just some accounts at different banks because you don't want to be in alternatives because you don't know how to manage liquidity, right? Like you're being you know, managing your own expectations, managing, you know, to your own abilities and kind of risk tolerances. Um, because I see a lot of family offices, especially from a portfolio standpoint, overallocate to things they don't understand, um, because that's what everyone else does. And alternatives is a big plays a big role in that. We're in a kind of a part period in the markets now where you know look, you're kind of everyone's scratching their head about liquidity needs, um, and that could get yourself into a lot of trouble if you've never managed through a liquidity crisis before. Working with the right people and it kind of setting yourself on the right path that that you know is realistic in regards to kind of what is achievable for your office.

Mark Wickersham, Host 20:16

So that's good advice, I think. One is call Brian Adams over at Mac International if you're looking for somebody there. Linda Mack and Brian are some of the best in the in the business in terms of of executive search for family offices. Um, liquidity is another one. I mean, they there's they definitely family offices can have high exposure to illiquid assets, real estate, capital commitment type of investments, and managing that liquidity is so important that you can uh get it get sideways on that really quick. And and that's even in good times, never mind if there is a some sort of financial crisis. Let's talk about buy versus build. I can't believe this question's still out there, the debate's still out there, but I think what's happening with the advent of some of the newer technology nowadays, especially with uh AI, it's starting to bring up that that question again. Um, talk to me about the realities of building your own solution versus the benefits of kind of going with a vendor-provided solution.

Tom Nicholson 21:16

Yeah, absolutely. Actually, I did a LinkedIn LinkedIn post about this recently. Um, it comes up a more often than you'd think. You you see it most with some kind of entrepreneurial founder who's very much kind of roll up your sleeves, kind of like, you know, well, you know, if I'll make it happen, I'll make it work, I'll I'll build it myself, kind of mentality. Um, and that's fine. Like I think I I mean I appreciate that. But I think time and time again has shown now now there are obviously some success stories, like um, because I think I think if you go about building, and now there's obviously the temptation now because there's a lot more tools at the average person disposal to help to to facilitate building, right? You know, you can whether AI kind of coding tools and whatnot and different, you know. You know, applications and interfaces are a lot easier to build out in general, but you're only ever building for kind of what you currently know. I mean, you even if you think like, hey, well, in 20 years I'm going to be investing in these asset classes, there's still other things that you'll never kind of think of that you're going to encounter that could leave you kind of in um kind of you know, you're a big blind spot in terms of your system. Now, it's funny because I I had a uh I'm I'm buddies with Greg Silverman, who's uh I don't know if you if you know Greg, but him and I had this kind of debate. Um we have a monthly call where we catch up and um now he makes the argument where there is an opportunity to buy if you're kind of more bolting or sorry, build if you're more bolting on. Like, you know, you have family offices who are running like deep cuts here, but like advent access, right? And they they they have all their data very well organized there, they're very used to that. Now, obviously, you you could argue that that isn't you know they're better platforms now, but but if it works, if it works, and it's a it's a a decent data management platform. From there, like you know, if there's things that you're not getting from a reporting standpoint, maybe you do build on top of that platform because it's a good foundation, foundational element for you. But I would not encourage building completely from scratch. But I you know, I think it all just comes back to you buy, not build.

Mark Wickersham, Host 23:18

So the thing with buying is is that or from the vendor side is that it never ends, right? I and that people shouldn't understand should understand that it's not that you just you build the thing and you're done. Like it, there's really no such thing as that. That that there's continuously more demands, more requests, more that you can do, the ability to optimize whatever that solution and product is. And a good vendor is doing that, and good vendor has a roadmap of a good vendor continuously um automating and updating their system. Good vendor is is is following the best data security and privacy practices as well. Um that that can be difficult for uh if you build it to stay on on top of. Let's talk about data ag, good old data, data, data aggregation. Still a challenge out there for family offices. Um, there's been so much progress made on that front in terms of eliminating that low value first mile type of of activity. What are you seeing in terms of the challenges that family offices have in terms of getting that consolidated um complete view?

Tom Nicholson 24:32

So I think a lot of it is um expectation setting. I think because this this goes back to you know, we talked about earlier in terms of automating things, but losing control. Um so now if you do everything manually, you have a lot of control, right? And you and you know, um might might be potentially more error prone. Um now usually when I think of of aggregation, like I I kind of section it off kind of two or three ways, right? You know, first is is anything kind of coming from your bank or custodians? Um, I think we we've seen now that that's better left to the professionals to do yourself than doing yourself in regards to like rather than trying to kind of mine data off of PDF statements, like your bank statements, just you know, make sure like you find a provider that has the feeds built out. Um now some some providers are using a plaid type product which has its limitations, but it offers but some of the cheaper solutions, more retail-ass solutions, that's what they leverage. And you know, if you're cost constrained and you you don't mind kind of I mean, for instance, I use Kubera for my own sake because it's it's a fun tool just for kind of a personal reporting standpoint. It costs me about 200 bucks a year. Um, it uses plaid, it's not gonna have great performance numbers because it's not it's not picking up transactions. That's okay. I don't need it to. Like I'm not my my tax accountant's not getting this for any kind of you know, um it's not meant to feed a system that's doing performance measurement. Let's put it that way, right? It gives me a net worth number, helps me kind of think of allocations a little bit, but also it just store this information over time, right? Whereas if I were to switch different bank providers, you lose all your historical data, right? Um from so that it's a it's a fun, a fun tool for me to use. It's not very serious from a family office standpoint in that sense, because um now if you s if you the the next kind of now if you go up to like data feeds, like true data feeds, kind of like what a Sora does, like an Atapar does or a Master does, and I'm sure others do it too, but those are the ones I know. The direct data feeds, taking raw data from custodians, wrecking, checking that information, right? That's gonna get you a lot a lot more detail, a lot more granularity, and a lot it's a lot more robust, right? So I think most family offices need that at a bare minimum from a custodian standpoint. Um, then if you if you kind of switch to the offline assets, um obviously there's a lot big strides have been made, like Arch and Canoe in terms of alternatives. Um, I think there's a lot a lot to be used kind of to help help with that process. It also helps with your implementation effort too, because you know, usually you know you want to get all your historical data from your alts. Um so and and you can leverage those tools to pull historical documents, and that's really helpful. Um, but then if you move kind of to the even less liquid stuff, like the you know, sometimes real estate or or direct deals, um, it just knowing that that might never be automated.

Mark Wickersham, Host 27:28

But I mean data aggregation, like that a lot of that a lot of problems been solved, and people should be using it. Public um brokerage accounts, there's a lot of data, there's a lot of transactions, there's every security is getting a valuation update. There's a lot of providers out there. Either your investment reporting system is doing that as part of their suite, or there are other providers that can be added on to that, as you said, around alternative investments. I mean, that is one of the biggest areas. That was a pervasive problem in the industry that had no solution that really required a high-level person, a CFO, to be able to interrogate these documents. That that that problem has been greatly solved. I mean, AI has been a huge with that, and then you're seeing vendors really focused on that problem and some very good vendors in that. So I hope people take take a look at trying to automate that that those aspects of it, the public brokerage accounts from the mid using an institutional custodian that's going to provide a feed versus using a retail type of provider that maybe doesn't provide a data feed is something that firms should think about. I'm at Fidelity, don't be at Fidelity retail, switch it over, get on the institutional side, and so you know your provider can get access to a data feed and automate that process.

Tom Nicholson 28:42

But well, it's fine to say that because um we just we just implemented a system called or solution called Aquoia, as you've come across to Quia. Um and Aquoia, we used to be in-house at Fidelity, and um they they spun out and now they provide data feeds for a lot of the retail brokerage accounts. So we used to have to leverage plaid for that, but we know yeah, we found that the data quality from Plaid isn't the greatest. Um, and those feeds tend to break because you know credentials change, those type of things change.

Mark Wickersham, Host 29:12

Yeah.

Tom Nicholson 29:13

Whereas Okoya provides the same level of data quality as the institutional feed, but for the retail accounts. So like you can get now finally we can get Fidelity Retail alongside your advisor accounts. So um now, and the only thing I I'll say further about kind of I I mean, I definitely agree you're better off using like an Arch or Canoe type solution to aggregate your alt, especially if you have a high volume of them. But know that a lot of these solutions aren't perfect, so don't expect them to be, right? You know, there's still there's still some effort required to get them right. Um I I I definitely see especially with AI now, there's this mentality of people where like, well, it's just magic, you know. I just I wake up in the morning, my data's just already there. It's like, well, maybe every other day, but not every day. Like, don't like don't like get don't completely let like let go of control um and kind of take hands off the wheel because um if something were to break, you don't you won't know how to fix it. Um and I think back to my you know point earlier is knowing your data flow, knowing how it all works, you know, knowing what needs to be done um is super important and kind of being self-aware. Um because I mean I think we're still far from especially from a financial data standpoint, everyone fully trusting AI to automate everything. Because we anyone anyone who uses ChatGPT, for instance, I I I use it quite regularly. It's it you know, it it hallucinates, it doesn't give you perfect answers. Um so and I think we're still so far from you know a fully autom fully automating everything.

Mark Wickersham, Host 30:51

So yeah, I think that you still need a human in the loop to be able to evaluate that. Maybe you're not putting fingers to keyboard, but there should be some sort of human that's doing the evaluation of the of the results. AI is getting better and better, but it's not perfect by any means. It is being really good for big data sets, being able to look at anomalies. I know a lot of vendors are using it as part of the reconciliation process behind the scenes to be able to help with that. So um, but I I still think at the end of the day, people should be reconciling often and and should be part, there should be a human in the loop on that for sure. Absolutely. Let's take a look at at the family office, the future of the family office industry, which is obviously bright. It's a dynamic time in the industry. Where do you see the industry in in in five plus years?

Tom Nicholson 31:41

I think it's gonna look very different. I think we're we're in a point now where things are changing quite rapidly, whether it's technology, um, whether it's the serve, the firms serving these these offices, these people, um, and then it's the offices themselves. Obviously, this this as we've been discussed at length, this new kind of cohort of smaller family offices, whatever you want to call them, you know. Um, you know, I I think there's a I think we'll we'll see kind of how the whole democratization trend plays out. I think there'll there'll inevitably be some correction at some point. I think we're not that we're in a a bubble necessarily, but we're definitely, you know, definitely in a um a major growth phase for family offices. Um and you know, maybe too many are being created, I don't know. Um, but you'll see some trial and error, you'll see some fallout of that. Um, I think you'll see some people try it and say, hey, you know, this was much a lot more work than I thought it was gonna be. You know, I'd rather just have hand over the keys to someone else and do it for me, like a family office services firm or a bank. Um But I think there's there's gonna continue to be, and I I I don't there's a major gap in the market of kind of what a wealth management firm can offer versus what the traditional institutions kind of their family office services pick up, right? You know, um and I think I think a lot of people are are are aware of that. Um, but I don't I don't see like you know, for instance, uh a bank just to throw a number at the wall, like maybe their family office services start at 300 million and above, right? And then maybe wealth managers designed designed to serve a person who's 50 million and below. So yeah, there's a gap there. Um so I'll be interested to see kind of how that gap gets filled. I think technology will help a lot. Because I think that I think that's really what people need most at the end of the day, is organizing their data and and getting and gaining more clarity and insight. Um but then from from there, it's like it's I think it's more a matter of kind of personal preference. Like do you what what sort of what additional services do you need? Um, so um, so yeah, I don't know. I think it it we're we're gonna I think we're gonna continue continue to see a lot of growth, which is great. We know we're gonna see a lot of kind of new structures and trial and error in place. And then I think from a just purely from a technology standpoint, um I I'm very bullish on a lot of the newer platforms gaining traction. Um I think there's what there's a lot to be learned from the mistakes of our of our the incumbents, you know, um especially when it comes to serving family offices. So um I think there's a there's definitely some room there from a solution standpoint to offer some very powerful tools to these firms and kind of maybe not uh maybe not dethrone some of the big players, but um, you know, make make a good case that you know the these newer, leaner firms offer a really compelling solution. So we'll have to see kind of how how the you know the the market what in the competitive landscape changes because of that.

Mark Wickersham, Host 34:42

Um yeah, I think family offices ultimately have a data problem. They sit on a huge pile of data that they can't necessarily manage or organize. I think technology will solve that problem, is solving that problem. I think there's lots of providers that are entering into the market that are helping solve that problem, which are great and are purpose-built. I think we'll probably see a little bit more of that in terms of more providers entering into the marketplace to solve that problem. It's creating some buying confusion already. I think they'll probably get a little worse. I do think at some time, some point you'll probably start to see consolidation. I think there's a lot of you know, zombie kind of vendors out there that that that need to get they'll they'll be cleaned up, that they'll the legacy products will eventually the AI value prop and AI native capabilities are are so great. Um, and and the the value prop is just gonna be so compelling with the firms that are offering AI capabilities on a consolidated data set that that it's legacy software and and and some of these firms that have maybe grew to like 20, 25, and and never really grew beyond that. That uh there should be some sort of consolidation in the marketplace with uh there's a lot of those too. Yeah, there are a surprising number of of those. And I think that it's not that the new entrants are you know, maybe some people will buy each other and there'll be some consolidators on that front, but I do think there's gonna be some uh consolidation elimination of some of these legacy platforms as well. Um, on Tom, on a personal note, I'd love to end the podcast with three questions that have nothing to do with wealth tech. We both love the ride bikes. What's your favorite spot to ride?

Tom Nicholson 36:34

Well, I haven't been riding as much as I'd like to right now because of our our young child young children. But um but usually what if I get out for a ride, it's I live um close to a park system in Philadelphia called Wissycan Creek, and there's some pretty good mountain bike trails there. It's nice because like I I I probably I don't foresee myself having the time for a five, six hour road ride anymore. So mountain bikes nice, it's fun because you can you can go out for you know two hours or so, um, get a good punchy ride. Actually, there's a there's a group ride on Saturday morning, but there's a bike shop in um in in in Wistican Creek called Paper Trail. And the guy who rides it, his name is Paul. He does a Saturday morning ride, which is great for for the dads who want to get out, you know, it's 8 a.m. So it's pretty early, you're done by 10. You know, not not too much guilt from your wife. Um so that so so yeah, mountain bike trails in Wister Creek is definitely my go-to right now.

Mark Wickersham, Host 37:26

Or I would say that you know, one of the things that that I love about the Boston area is that that there's a ton of uh conservation land all around in the state of Massachusetts, and there's a ton of really great single track outside the greater Boston area. The we're we're fortunate is it's an embarrassment of riches. Um best cheesesteak in Philly.

Tom Nicholson 37:50

There's a there's a shop close to my house called Dela Sandra's, which which gets pretty good reviews. I actually pass it almost every day, dropping my kids off to school. Um but um my personal favorite in the in in Philadelphia, in the in the city itself, is called it's called Angelo's. It's pretty famous. Um, you know, they they they really up they they're game in regards to the quality of the ingredients they use, and and the bread is is key. The bread is key.

Mark Wickersham, Host 38:15

Um but then actually and uh a book you've read recently that you recommend.

Tom Nicholson 38:20

So I'm actually not a big book reader, and definitely not much time for the now. Um I'm actually a big podcast listener, so um I figured I maybe I'll share some podcasts that I listen to. That'd be great. Because I I I listen to a lot of podcasts when I like walk by dog outside, or you know, it allows me to multitask and do other things. Um, so the um the two I've been like swearing by lately, um, they're kind of related. Um, and I I listen to a lot of like economics podcasts and like macro kind of landscape and and geopolitical geopolitic stuff. So this guy who I've I've met now, his name's Jacob Shapiro, and he runs the podcast called the Jacob Shapiro podcast. He's a geopolitical strategist, very, very smart person. Um so his podcast, his own personal podcast is phenomenal. He publishes almost weekly, I think, now, and it's very timely. There's a lot, a lot going on now in the news, so it's good to keep kind of up to date, especially if you work in the markets. The last one I always like to mention, because I've I've been listening to it for a very long time, is that is a podcast um by a guy named Grant Williams. And Grant Williams has been in the podcasting space and in investment research space for a long, long time. And it's it's it's one you have to pay for, but it's worth uh 200 bucks a year. I pay for it. Because it's not there's no sponsorship, so he handpicks all the podcasts. And it's it's the biggest names in the space, you know. He had Sam Zell on a few times before Sam passed away. You know, he has, you know, just big hitters who just it's just you know, once again, you're humbled by their knowledge and just the insights that they share. So um, so that that's that's my rather than books, those have been the podcasts have been my kind of source of knowledge and information in in my kind of the recent years.

Mark Wickersham, Host 40:02

So love it. Well, that's those are great recommendations. Thanks for for doing that. Appreciate that. It's been an outstanding conversation, Tom. Thanks so much for being on the Wealth Tech podcast.

Tom Nicholson 40:15

Likewise, thank you for having me. It was a lot of fun. So we'll have to do it again.

Mark Wickersham, Host 40:21

Thank you for listening to this episode of the Wealth Tech Podcast, brought to you by Seta AI. Seta is on a mission to modernize the family office. I really appreciate you listening, and don't forget to subscribe so you don't miss future episodes. Talk to you soon.