The Integration Chain: Why Great Products Don't Sell

0:00This show is brought to you by the Global Talent Co, a marketing leader's best friend in these times of budget cuts and efficient growth. We help marketing leaders find, hire, vet, and manage amazing marketing talent for 50 to 70 % less than their U.S. and European counterparts. To book a free consultation, visit globaltalent.co. Hey, everybody. Thank you for tuning in. My name is Andres Figueira, and I'll be your podcast host for the day. This show is brought to you by The Global Talent Company, a company that's connecting top remote professionals from Latin America, South Africa, and anywhere around the world with leading tech companies worldwide.

0:37So if your team is looking to hire world-class South American or South African talent, just head on over to theglobaltalent.co and see how we can help. And today, with me here, I am speaking with Thadass Ryback, a partner at Fusion Asset Management, which is a company that specializes in portfolio management and advisory services for institutional, corporate, and private clients. How's it going, Thadass? It's a pleasure to have you on the show. Hi, Andreas. Thanks for having me. Yes, it's all going well. Thank you for inviting me. I'm very glad. Yes, no, we're very happy to have you here. And Thadass, just so that we can get to know you a bit better and the audience is put a bit more in context, would you be able to tell us a bit about your background and about what exactly Fusion Asset Management is?

1:20Yeah, absolutely. So my name is Tara Sreinbach. I'm partner at Fusion Group. I'm going to tell you a bit more about Fusion, but a few words about myself. So I'm from Ukraine. Originally, I came to London 20 years ago in 2004. My first job in London was actually in a kind of first for a few months in a hotel that I was working in direct sales in insurance. And since then, I had a quite unusual kind of career. I worked in executive search as a headhunter with investment banks covering emerging markets. And since 2011, I was no less running my own business. So I worked in Middle East, China, Russia, Ukraine.

1:57And for the last seven or eight years, I've been with Fusion. So within Fusion, I'm responsible for strategy and rules. And what we do, we have three lines of business under the same kind of umbrella, under the same calling company. So we started business 20 years ago as an institutional asset manager. So we run hedge funds, specialized in form strategies. But from 2011, the business started kind of evolving and pivoting towards working with private clients and private wealth. So right now we have three lines of business, which are complementary to each other. So one is a company called Loyal North.

2:35So what we do, we acquire and operate independent financial advice companies. So it's very similar. I mean, IFA in states is the same as the registered investment advisor. So people who provide financial planning, financial advice, savings, investment for retail and more supplement market or like for private clients. Fusion Asset Management runs portfolios for private clients, but we do it via intermediaries. So financial advisors. And we also have a well-stack kind of business within our purchase and growth component. It's Justify technology. So Justify technology is a platform which holds client assets, but it's more than a platform.

3:16It combines advisor per office, full advisor tech stack together with investment platform, custody of client assets and investment options. And that's an avalanche FIM Techbit. And you can think about it in terms of, obviously we're going to talk more about it, but Justify is, I mean, I like to describe it and you definitely understand it's like Shopify for financial advisors. Okay. So, for network advice is very kind of traditional face-to-face business, a lot of manual processes. Now advisors use different parts of the tech, the coffee system, Zoom teams for calls, electronic signatures, but the tech stack, it automates certain parts of the process.

3:55But now the challenge advisors are facing, they have too many different tools and some of them are integrated, some of them are not. So managing the whole tech stack becomes kind of a job of its own. Okay. And we combine this full tech stack in one ecosystem and one environment, which allows basically which kind of democratizes financial advice, allows advisors to improve efficiency, sales to more clients and stuff like that. So yeah, that's why we across the group, we manage around 2 billion assets, 2 million pounds, assets are the advice and not the management and we're growing. Wow, that is amazing Thadass.

4:30And then just to make sure I understood properly what Fusion Asset does and like the solution you guys provide is that you're giving the trader or the financial advisor all the tools they need in one single environment so that they don't have to be jumping into different technologies or different programs or softwares but it's all just done within the fusion asset management platform it's just a platform so it's a separate business it's called just a technology or just a platform so yes asset management it runs money just a technology is a custodial platform ah okay yes It is private, but it's justified.

5:06Okay, understood. Understood. Wow. And in terms of Fusion, I know you mentioned that you're also in charge of like growth. And have you had, because you mentioned private clients, and I feel, is it difficult to offer wealth management services to somebody that, for example, just made their first million pounds and that they maybe aren't sure what to do with their money? But like, how do you market what you guys offer to these high-end clients? It's not exactly high-end clients. For someone who just paid one million pound, it's relatively easy and someone like that will have a lot of options. Okay.

5:39What happens in UK, at least in the UK, I mean, similar in States, but US market is much more developed. It's like five times bigger and it's different market structure. But in UK, a lot of people would have, I don't know, three or four or 500 ,000 pounds. Some of them would be younger, who want to start saving for retirement. And financial advice is not only about investment, but there is a component of, okay, how you allocate certain portion of your assets into different or effective tax profits, how much you put in pension, how much you put in individual saving account. You know, you get some tax benefits.

6:16Sometimes you need to think about inheritance and stuff like that. So, I mean, the core, so within financial advice, the core kind of client base would be more of a mass affluent. Also, we have some clients with one million plus, but usually kind of average ticket size would be like three or four, five hundred thousand pounds. And on the region, it can vary. So, for example, in south of England, London, people would have money. If it's like up north, there would be, you know, the average ticket size would be kind of smaller. But yes, it's not easy to get these clients. But within our business, some services were marketed to financial advisors.

6:55So just a fair platform and our managed portfolios, we market to financial advisors who then use it for their own client services. On the other hand, there are companies that will buy and go organically. They work with end clients directly. Okay. So challenge actually in the market, the challenge is not to find new, I mean, a lot of advisors that don't have problems with finding new clients because they have like referrals and stuff like that. It's more about their capacity and that the problem we're solving with just a fake. So, you know, typically one advisor can service 100, 150 clients just by kind of, you know, time.

7:33Okay. And by all three of them, kind of by adding a digital advice channel, it opens almost a whole new market for them. It allows them to service like three, four, five times more clients, and then they can focus, they can basically take on more clients. So that's kind of what we experience. Okay, you can understand. And that helps then optimize and help the financial advisors be more efficient. That is super cool. And that is in regards to when you contact a financial advisor to offer your, what's it called, justified, or if you need then to a financial advisor for Fusion Asset Management, are there any specific marketing channels that you feel are the ones that work the most in terms of how you reach out to these potential users and clients?

8:21Yes, absolutely. So we have a sales team who contacts advisors directly, speak with them on a regular basis. An advisor community in UK, it's not like it's a relatively small market, but there are 15 ,000 AFA companies, and some of them and most of them are medium and small. So it's a kind of limited market. It's not like millions of people. Okay. What we find works best is kind of, And then these advisors, they go to the same conferences, they rate the same price. So they're not like, it's relatively easy to target them. So what we found best working for us in our business is mentioning in a trade, the trade press and the trade media.

9:00And if we can come up with an interesting angle, rather than just talk about kind of ourselves, that's why we see the biggest kind of inbound kind of source of leads. So yeah, that's what works. And then in terms of a messaging, again, instead of kind of talking how great you are and what we can do, what do I see is working best is if you can help to solve a real problem for clients and you can demonstrate that you can do it. That's kind of land of mouse. And, you know, this kind of profitability helps to convert clients much better than, you know, spending kind of with a thousand in a month. Of course.

9:39Of course. Wow. I love that. And it's also kind of like in a certain way, I feel like finance is still an old school industry. And the way you guys are marketing word of mouth and that type of networking, I think it's something that will never die there. And Tadas, in regards to, you mentioned that you have your sales team. How big is Fusion Asset Management, like the company per se? How many people do you have working there? So across the UK, we have 13 offices. We have also development teams that work remotely, mainly kind of in Europe. I saw 13 offices in the UK, around 100, 70, 140 people.

10:15Most of these people will be sitting within advisory businesses across the country. And in terms of sales and marketing, it's about five people. Okay. Okay. And the owner, that was nice. But I think as a kind of senior manager and every member of a team or every employee should really, to some extent, a salesperson and a marketing person. They present the company and, you know. Of course. They should be talking to the people. That's what I'm talking about. And Tanas, I imagine that you just started with one entity at the beginning and now it's become 13. How have you known during your process and during the journey of Fusion Asset Management that you guys needed to like open up a new entity or that this is a proper place to have a new spot and grow your team?

10:57Because I know it can be a bit daunting at the beginning to just make investments in new places and more people. And how have you come around knowing that it's time to do that? It's time for growth. I mean, it's a long story, but initially we saw kind of we wanted to expand in the retail space organically, but our core team has more of a kind of institutional DNA. There was one opportunity for consolidation. There was actually a lot of consolidation going on in US and in the UK, this advisor community, just because the market infrastructure changes. A lot of these businesses are more like a lifestyle, so there would be few advisors working with certain group of clients and maybe their money, they're doing all right.

11:36But now they're kind of moving towards retirement and it's a cash flow producing business. You know, it has value. And then there is an opportunity with technology, with kind of like where things are developing is basically consolidate. I mean, there are different ways of consolidation, but ultimately you consolidate, make a bigger company, you introduce technology, automate the processes, you improve client service, you make it better, offer a wider, you know, kind of range of product services. So yeah, we can move this kind of naturally. And then when we acquire companies, we have set some kind of criteria, but ultimately, you know, culture is important, people are important.

12:13So when we buy the business, we keep the offices, we keep the staff, we keep the business legacy. Usually kind of this company keeps the brand, but we do it under one umbrella. So whatever we can kind of optimize, automate, improve tech, add tech, we do it. But ultimately, the most important asset are people and advisors. us. So we're trying to kind of ledgerate. I love that. And that's incredible because people really are what makes the essence of the company and more so in a financial institution like you guys have that you need trust and your clients need to be able to trust somebody. And if they feel it's just like, I don't know, a random AI that's behind the email they're being sent or whatever, it might not produce the most safe feeling when you know your money is or you might feel that your money is not being properly handled.

12:59And that takes me to another question I have, which you mentioned automation and it's how are you guys leveraging AI, which I know everybody is nowadays, but I would just be very curious to know how you guys are using it to your advantage. Yes. Before I start talking about AI, I just wanted to mention that with kind of financial advice, financial planning, it is all about trust. So yeah, you need to see human and you need to trust this person. But what also is important is that advisor, it's a regulated activity. him. So, yeah, it gives you an advice and it's a bad advice and you lose money. It's your fault.

13:32Of course. It's a client. Of course. If an advisor provides advice and it's a bad advice, either an advisor will compensate or a government will compensate. So, retail clients and, you know, how are the advisors? They are super protected by government and by the regulator. So, that's why, you know, there is an element of trust, but there is also this kind of regulatory element. So that's kind of an interesting point. That's why in UK, robot advisors, when they started appearing kind of 10, 15 years ago, everyone thought, okay, financial advisors are going to disappear. It did not happen. Robot advisors, they got their market share, but I think and will believe it, I strongly believe that the future is more hybrid.

14:13So you cannot automate as many processes as possible, but you really need to have a person. And you can think of it as a robot doing a job, and quite often it would be done. Or you can think of a human with an exosuit, where you pull the suit and you can run time 10 times faster and then live 10 times heavier the way. I love that, man. So yes, that's what we're trying kind of to do. In terms of AI, kind of a big fan, early adopter, early user. I actually, I mean, it's probably part of my job within a company and just by kind of, you know, by curiosity, personality and also part of the job is just to try, kind of try new things.

14:51Of course. So, you know, change EPT, different tools. I think I tried everything. I personally use it more kind of on a daily basis. Within our, but at the same time, you know, the term AI is kind of, it depends really what you mean. So large language models is one thing. Automation is different. So within just a way, we do a lot of automation, but we don't have AI just yet. Okay. However, working on adding AI capability and mostly from kind of note taking and we're also looking at AI agents. Okay. That's kind of introducing kind of note taking because when you speak with a client, the model is trained on a certain terminology of, you know, kind of regulation.

15:33So you can speak with a client, you can basically take the note, you can structure the report, you can highlight the recent kind of bits and pieces. So, yeah, kind of in process and where I think it's probably more or less next on our roadmap. However, there is a kind of compliance and regulatory element to that. Obviously, you can't, you know, outsource to AI completely. You still need to kind of human and compliance oversight. But generally, yeah. And I think my view on AI is same as, you know, kind of hybrid advice. If you expand, it will do a job for you. It's probably not going to happen.

16:08it will be, you know, fun. It's true. But if you think, you know, basically, I mean, I'm pretty sure that everyone would agree with the more detailed form and the more detailed questions you give, the better outcome you can get. It's just a basic question and a basic answer. For the same application, you really need to think where it really improves the efficiency or makes kind of life easier and try to use it not to replace person, but to kind of amplify, you know, the capability. It is true. And I totally agree with you because AI mainly, and let's just say like large language models, I'm using chat GPT and stuff to help me in my more monotonous task and my more mundane things that I have to do day to day that could be deliberate to an AI agent or something that helps you out with easy tasks.

16:55But when it gets into a more, as you say, into a more regulated space, like the finance sector, and with all the risk that financial advisors take when they give their advice, you could not be able to delegate that safely to an AI bot or somebody that or something that just replies to the customer, just making them feel well. However, it could be amazing just having AI analyze the data that financial advisors go through and have them then do the insight of what the AI provides, because that's like how you're saying it's like you're a human with a nexo skeleton. That's the AI that helps you be better.

17:28I love that. That is so cool. And okay, Taras, in terms of how you market to different segments, for example, if it's first generation wealth that you want to bring on to Fusion Asset Management so that your financial advisors could help them out, or if it's inherited wealth, do you have different ways of speaking to these different clients? Or is it just like a one size serves all type of thing? I mean, there are different levels kind of people. I am a Facebook company, so I mean, in terms of my personal beliefs, I think kind of quality content allows you to attract clients, allows you to spread the word.

18:09I follow some more content creators. I see some of them are kind of, you know, like, okay, average. Some of them are really good. If you have your opinion, message, that really works, but it takes time to build. And it's very slow. You own your distribution and ultimately people trust you if you kind of manage to, you know, if you get this message across on that consistently. In terms of our financial advice services, I mean, there are different ways to market it because ultimately when it comes to financial planning, I mean, some people have, I don't know, you need pension, you need savings, you need mortgage, whatever.

18:42I would say that, and that's probably the kind of audience I work more closely, They are more like entrepreneurs, founders, people who have risk-takers who might be, you know, kind of running their startups, they sell it and they have money or they start kind of, they are like business people. So their approach or their expectations are different. As they are more sophisticated, they want to have more control. What is the moment is that, okay, you can have, I don't know, you sell your company for 10 million or whatever, and then you can either go to like traditional private bank and then you would be paying high fees and getting kind of mediocre service.

19:20Of course. And private banks, a lot of them are very good, but in terms of what they can offer is limited. In the meantime, these people want to have like more control. They want to have more access. With technology, you can set up almost like a digital family office very quickly and very kind of cost efficiently. And run this and run your money as a business. And then it would be different. And it also depends on what people want. Because in the past, we've been thinking about kind of investments generally as a performance. You need to have better performance, but then one year you have, you know, you outperform by one percent, next year you underperform by one percent.

19:57So performance per se is not a differentiator. However, over the last kind of couple of years working with people, I see that different people want different things. So for example, you got inheritance, so you made money and I don't know, you just want want to have a quiet life, put on something kind of on your hobbies, traveling, whatever. Of course. And we just, you just set and return low risk. You just want to put your money somewhere, look at it once a year, get your income. And that's it. That's not what people need, but what people want. What I want in the meantime is that someone made money, they can potentially retire, but they don't want to.

20:35And they're looking for something else for their next challenge. And a lot of people move into investing because when they start thinking, okay, what I'm going to do with my money? Of course. Investing comes in. Because then it's almost like a next challenge. And then people try and think, okay, I'm a risk taken. I don't used to take a lot of risk and successfully made money. That is a bit of a challenge because investing is different. So you can't really invest everything in VC because you can lose it. I mean, you need to think about liquidity, different kind of risk portions and stuff. But then people really gonna kind of get involved in it.

21:07And then it's not like they need to make, you know, 10, 15, 20, 30 % return, but they want it. And because they want it, they will either find someone who is based far away in a regulated space and, you know, there are high chances of them being scammed or being promised something that can't be delivered. Or you can, with a professional say, okay, you want to invest in stocks on this year, we will help you with that. Yeah, we will do a screening. You can have accurate choice. Well, you know, you want to take a risk and get high upside. We can help you with that. And obviously, it's a slightly different approach.

21:40Of course. And that is, do you have or do you guys have any assets or investments that you steer away from? Like, for example, if cryptocurrencies or I don't know if you guys just manage stocks, but like, is there anything that you guys prefer not to handle because the risk is too high? Or do you follow the client's wishes? per se. Not exactly. I mean, within our kind of core business financial advice, it's because it's advisor kind of takes responsibility. So it can be client wishes. If client wants to invest in something, they do it, but it's a risk. Okay. And it comes down to regulation as well.

22:17So it's not like we steer, I mean, yes, we steer away with it, but crypto is not within this, you know, not under our kind of. Not really, but just wanted to ask because it's a very hot topic. And I know some people might be interested to know if Fission Asset manages that. Well, we can't do that, we don't do that. However, things, I mean, over the last kind of year in UK, regulator becomes a bit more kind of open to it. So maybe over time, there will be a portion of, you know, portfolio allocated to crypto, maybe through any ETF or something, but no, at the moment, we're not kind of covering that.

22:52Okay. Private markets, it's like we see private equity, but then it just depends on the client. Of course. You need to have kind of are running to have access to it. We can do it on the different kind of regulated regime. But yeah, so it's probably just kind of more is a tag. No, no, I can imagine. I can imagine. And I think it's wise as well because cryptocurrency, that's the wild west. It just goes up and down and nobody knows what's going to happen. And that asks, do you guys have to also, because I know it's a very regulated industry and sector. Are there regulations in how you can market what you guys offer?

23:23Like, I'm not sure if you're able to say like, yeah, efficient asset, well, 100x your investment, come to us. or is there any things that you cannot say or that you need to stay wary of? No. I know that's an oversell, but I'm just trying to be hyperbolic to express my point. Compliance, kind of compliance calling me straight away. No. So if we market to ultimately it's about kind of lifestyle financial planning. And if we market our services to advisors, it's like a different conversation and they look at different kind of parameters, different factors. What highly regulated? So basically, I mean, it's not necessarily related to us, but just generally.

24:01So if you're talking about the fund is an investment product, and then like promotion of investment products is highly regulated. So there are definitely, you know, you can't guarantee any investment, promise any investment, but that's poor. If on the other hand, your marketing service as a financial planning investment, that's like, it's still regulated, but it's not a product. So there is a difference between service you provide within the space, or I don't know, even the strategy. or a product as a fund, a tier, hedge fund, whatever. No, no, I wasn't clear of exactly how it worked, but that explanation now puts me in further context.

24:35So I appreciate that. And that as we're almost getting to the end of the episode, but I would love to ask you one more question that is more for the audience than for anybody else. But the thing is that if you were launching Fusion's brand today, just from scratch, without having all the knowledge you have right now, What would you do differently that you, after the hindsight you've been able to gain, that you would say, hey, I would have loved to know this when I started out? Yes, that's a good question. And I can tell from my experience and also from experience when people sell to me or people sell to us.