30TH JUNE 2020
Inspired by Apple: How Creativemass is getting to the core of wealth management.
A former General Manager of IBM, Michael Rouse now leads fintech startup Creativemass, based in Melbourne and New York. The company’s flagship product, WealthConnect, provides an end-to-end wealth management solution built on the bedrock of Salesforce, with dashboards for everything from core portfolios to sales leads. Here, Michael discusses his vision for the product, how he was inspired by Steve Jobs and how his company is using AI to make wealth management smarter.
Can you describe your inspiration for the product?
Well the immediate trigger was a report by an Australian Royal Commission report last year, which highlighted the fact that across financial services, the customer had been forgotten. One story was that an elderly lady has deposited a large sum of money as a risk management strategy, and over 10 years the fees had actually outstripped the interest. The institution hadn’t even been looking at the client outcome.
But we’re also seeing a deeper trend, what we call a complexity shift. Things that RIAs and fund managers used to worry about – the portfolio system, for example – are now commodities. Really, they just need to work. The real complexity lies in engaging with clients and helping them understand products and services.
We’re technologists first and foremost, and that allowed us to examine the problem from a neutral standpoint. We found that many financial products had been developed under more complex regulatory environments, and a more client-centric option was needed.
One of our real inspirations was Apple, and the concepts of ‘subtraction’. When Jony Ive and Steve Jobs took the BlackBerry and decided to put their own keyboard on the screen, they made their product more usable – by taking something away. People are using amazing technologies in their daily lives, like google and the iPhone. Our goal is to replicate this experience, and reduce the gap between the specialists and the client.
How have you applied this philosophy?
We deconstructed all the standard wealth management workflow processes and got to the core elements that people actually use. We’ve automated as much as possible in the back office, lowering the cost of service.
If you’re advising on a switch to a new product, our platform can offer an instant assessment on a five-year performance, the fee differential, and then assess whether it passes the ‘client best interest’ test.
Another example is the product disclosure statement. Often, these documents are 70 pages long. We’ve broken it down to four main pages with only the key information – the basic price, the fees, a performance graph.
But we also want to replicate the intelligence of the technologies I’ve mentioned. Their ability to adapt to the user. So, with our platform, you can rebalance around both listed and unlisted investments, but we’ve taken it a stage further: you can rebalance around your goals, too.
Let’s say you’ve got a college education fund, and it’s gone down. With our system, you can say ‘hey, i need X thousand dollars to get back on track. I actually need to put some money in from another asset.’
A pure financial system can rebalance equities and asset classes, but it can’t factor in your personal goals. We think this is a major advantage of our system.
I guess Salesforce is a major asset…
At the outset, we asked ‘what’s the best engagement tool on the planet?’ It was a CRM tool.
Salesforce understands the concept of an investor, an advisor… and the ways to engage with clients. A typical advisor might write 300 updates to individual clients every day. The Salesforce approach is ‘let’s write three emails.’
Salesforce is also an incredible development framework, used to build over 5,000 applications. We get access to all new Salesforce capabilities, which has helped us leapfrog larger competitors laden with technical debt.
Can you talk about some of the specific innovations?
One example is the rules engine, which provides an alternative to traditional manual compliance. fundamentally, compliance is about data; things like a person’s age or risk profile can be easily codified. And the data’s right there in the CRM system.
On our platform; all the key information gets entered into our database, and we can build bespoke rules on top. When those rules are infringed, the system generates a note or an alert for the compliance officer – thus allowing the compliance team to be proactive, rather than reactive.
We’ve also created a financial planning wizard, which strips planning down to its base components and presents client data in a common-sense way. So we offer a list of assets and liabilities, populated automatically from a webpage the client has filled in, and this data builds into more advanced functions like cashflow and networth modelling.
AI is a big part of fintech today. How have you incorporated it?
Using Einstein, Salesforce’s AI software, we’ve created ‘Next Best Action’, which represents significant events in our clients’ lives, like buying a new house, and advises them on a particular course of action. We’ve also developed an Investment Assistant, an intelligent chatbot that examines data in our database and gives contextual responses.
We’re now working on a ‘Best Interest Score’ for our next release. So rather than a binary ‘yes or no’, we offer an understanding of a client’s overall best-interest performance relating to things like documentation, fees, service and product complexity. So clients can show how they are meeting compliance expectations in a concise manner, which can be presented during regulatory exams or routine audits.
Who is your core audience?
Well we thought it was entry-level investors, but we’re actually getting a lot of tier-one companies who like the simplicity and the fact we’re a major player on Salesforce.
You’re active in seven countries. How have you ensured universal compliance?
Actually, there’s a lot of commonality between all regimes. Essentially, it’s all about the umbrella of ‘best interest.’
What we’ve done is create a macro set of rules across Canada, the US, Australia, New Zealand, South Africa and the UK, and we tend to adapt or turn off rules for particular jurisdictions.
Of course, our compliance officers stay up to date, but in truth regulated best interest is just a subset of the more codified tests in Australia and the UK, and it’s relatively straightforward to adapt to the U.S.
Aside from compliance, what are your main challenges?
We’ve got north of $20 billion on our platform, and that’s growing. So as well as being secure, we have to be incredibly robust operators. Again, Salesforce is a real help: not only is it encrypted, it offers a specialist governance platform called Salesforce Shield, which secures the entire network down to the field level.
At the same time, we want to evolve beyond a financial platform. Things like client surveys and engagement scores… we’ve got all that capacity straight out of the box.
Finally, where are you looking for expansion?
We’re really building out our first infrastructure in the U.S., and we see UK as another key market. We’re also having success in Australia and South Africa, and we believe the secondary markets – Canada, Singapore, Hong Kong – will come afterwards.
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