Summary:

In this 100th episode of Fintech Impact, Jason Pereira, award-winning financial planner, university lecturer, writer, and host welcomes Michael Kitces of the Nerd’s Eye View blog, XYPN, and AdvicePay, to talk about product iteration, specialization within the field of financial planning and more. 

Episode Highlights: 

● 01:40: – Michael ended up in financial services by accident after majoring in Psychology and minoring in Theatre in undergrad. 

● 02:55: – Michael had a job selling life insurance policies, and he hated it and was bad at it, but luckily ended up finding mentorship from the one certified financial planner in the company. 

● 06:25: – Michael sees the evolution of the fintech space as having several small epochs. 

● 08:35: – Developers tried making a holy grail all-in-one software which resulted in every area of the program being mediocre. 

● 09:02: – The rise of APIs have turned the industry upside down, allowing financial planners to create their own perfect all-in-one solution. 

● 12:55: – Small companies that specialize can evolve so much faster than any enterprise software ever could. 

● 16:22: – Michael observes that most fintech software companies in the US are homegrown, with developers trying to solve problems, rather than big venture-funded startups. 

● 18:00: – Scaling your product to enterprise solutions means pivoting to a lot of enterprise features and iterations instead of iterating on your core product for end users. 

● 19:45: – Because enterprise companies evolve more slowly, when they approach smaller companies for solutions they’re often asking them to move backwards to match where their advisors are in their mindsets. 

● 22:20: – Michael believes that financial planning software has the most room for disruption of any software category. 

● 25:30: – It is still useful to know old, antiquated programming languages because companies that have evolved slowly and are still written in old code need people who understand that architecture in order to modernize it. 

● 27:45: – Michael sees a lot of companies trying to solve culture and training problems with technology instead of addressing the real issues. 

● 29:20: – Companies trying to pivot to financial planning advice without certified financial planners means the employees are selling the plan as a product rather than providing advice as added value. 

● 31:10: – In order to reduce liability that comes up with offering advice, companies centralize their planning departments and put excessive compliance procedures in place. 

● 33:24: – A lot of specialized programs are cropping up to streamline processes for things like planning for your money management in the event that you are cognitively impaired with dementia, for parents and children managing student loans, etc. 

● 37:50: – If Michael could make one change to the industry it would be to decrease the requirements to be called a financial advisor. 

● 39:00: – The biggest challenge Michael has faced is figuring out how to get out of his own way. 

● 40:53: – What excites Michael and gets him out of bed in the morning is, surprisingly, checking his email. 

3 Key Points 

1. The development of APIs has allowed for much faster iteration and development. 

2. You can’t solve company culture problems with tech. 

3. The fintech space has so much room for disruption and specialization. 

Tweetable Quotes: 

● “You’re still going to get out-expertised, out-devved, out-scaled, out-manned, because the independent companies have been able to get so large. I think it’s a thing that could not have happened until the internet showed up and API connectivity became possible.” – Michael Kitces 

Resources Mentioned: 

● Facebook – Jason Pereira’s Facebook 

● LinkedIn – Jason Pereira’s LinkedIn 

● FintechImpact.co – Website for Fintech Impact 

● https://www.kitces.com/ 

● https://www.kitces.com/blog/category/21-financial-advisor-success-podcast/ 

● https://www.xyplanningnetwork.com/ 

● https://advicepay.com/ 

● https://twitter.com/MichaelKitces 

● https://www.pinnacleadvisory.com/ 

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