Scaling Personalized Advice Starts With Better Data with Kevin Knull

What are your thoughts on it?

[00:00:15] Kevin Knull: I've been coming to this conference for a long time. It's, I feel like it gets better every year in the attendance and the, just the quality of the people and the programming, it just keeps getting better and better. It's, great.

[00:00:26] Doug Heikkinen: Did you get a chance to see the ex-president yesterday, Mr. Bush?

[00:00:29] Kevin Knull: I did. Hopefully everybody got to see it. That was great.

[00:00:32] Doug Heikkinen: They banned media.

[00:00:34] Kevin Knull: That's right. I forgot about that. Well, you missed a good one.

[00:00:40] Doug Heikkinen: Crazy market out there. How are advisors feeling these days? What are they telling you?

[00:00:44] Kevin Knull: So, as we think about all of these cycles and, you know, I can remember back in 2001 when everything was coming apart in 2008 and '09.

You know, advisors often forget that they're paid to work really really hard in these times. These are the most challenging times to keep the client's expectations managed and keep them on track and manage the behavior. so I, you know, I hear the experienced folks saying that their clients were prepared and trained for this, and they expected it.

And some of the newer folks are, this is the first time they've really seen a downward market cycle with a lot of unknowns. So, you know, I think the, those that are communicating well are going to be fine. And those that aren't, probably have to step that up a little bit.

[00:01:32] Doug Heikkinen: Yeah. So the, new ones who haven't experienced this before, what should they be talking to their clients about the market?

[00:01:39] Kevin Knull: Well, you know, I'm not one to prognosticate and I always question whether anyone really knows what's about to happen, particularly right now. If we watch what's happening with the administration and the world stage, there's probably more unknowns and less stability than we've seen maybe in our lifetime.

You know, again, I think we get back to the basics of being diversified and, being smart and following the financial plan and so forth. It's making those erratic decisions in these times, what erases those returns. And, you know, that behavior going out of the market when it goes down and then going back in at the top, it's about the worst thing you could do.

[00:02:19] Doug Heikkinen: You're here talking about TaxStatus. You've built a fantastic tool. Give me some highlights.

[00:02:25] Kevin Knull: Well, very simply, we've built an integration with the IRS to help solve some massive massive problems that the industry has been struggling with for decades. One of the biggest challenges as an advisor is getting the information you need to render a fiduciary recommendation, a robust recommendation in the best interest of the client.

And if you only have a little bit of the information, there's just no way that you can render a sound, sound recommendation. You've gotta get the info. And so what we do is we've made it very easy for a client or a prospect to provide consent to go to the IRS and get their information and share it with their advisor.

So that advisor then has a full picture and knows every dollar of income and where it came from, knows where all of their accounts are, knows their tax, the details from their last 10 years of tax returns and can then take all that information, assimilate it and design a better financial plan and make better recommendations.

[00:03:21] Doug Heikkinen: Can you share any big roadmap items for TaxStatus?

[00:03:24] Kevin Knull: Yeah, we have a few. So right now, the, ones that I'm most interested in are things that help the advisors deliver better advice. Both scaling the advice as advisors age out, and we've got a younger generation of advisors coming in that haven't had the time to learn and grow.

And so anything we can do to help scale that advice and make sure that they aren't missing things, on top of all of the data that we have. So, you know, with massive amounts of data, potentially hundreds of thousands of data points for a given family, being able to serve all that up and then use AI on top of it to identify where those, here are the top 20 tax planning strategies that client could, should consider and discuss with their CPA and things like that really change the efficiency of the firm and the advisor and improve that quality of advice.

[00:04:12] Doug Heikkinen: So as you're talking to advisors about this, what are some of the pain points that you're hearing from your conversations?

[00:04:19] Kevin Knull: So, if I think back to my time running Money Guide Pro, you know, it's still the same today. It's really hard to get the information from the client. So how do you onboard a client or a prospect?

How do you get the information that you need to build a financial plan? That's the biggest friction point, right? Is getting the data. And so that's where we're seeing the number one use case right now for TaxStatus, coupled with finding the held away assets. But you know, today, right now, particularly if you're bringing on a new client, they may only share a little bit of their information because they've got two other advisors, or maybe they don't have an established a level of trust yet, or maybe they just don't remember all the accounts that they have.

And so, helping firms find everything and build that complete plan is is probably one of the, maybe the third biggest issue is, how do we help them find the data?

[00:05:09] Doug Heikkinen: You've had so many different roles in the industry. What are the biggest opportunities out there?

[00:05:16] Kevin Knull: Ooh, I think there's a few.

At the end of the day there's so much room for improvement in the quality of advice, in my opinion. Much like in medicine where doctors are faced with the challenge of spending just a small amount of time as they, as they examine their patient and then move on to the next one, we have the same challenges here in our industry.

It's, difficult when you're trying to produce a very customized, bespoke service to a bunch of different clients that are all, have different situations and different scenarios and be able to allocate enough time. So I think the big, one of the biggest opportunities is finding ways to scale that advice and spend the time communicating with the client instead of analyzing data and inputting data and doing all of the kind of grunt work that's necessary in order to build that plan or deliver those recommendations.

That is where we truly should be leveraging AI and machine learning. But, I think there's an opportunity right now with the aging out of advisors to bring on new clients, to grow organically, to do things that frankly we've got an interesting moment in time that there's, just not going to be enough advisors here over the next decade or two.

[00:06:33] Doug Heikkinen: You mentioned AI and it's talked about in every conversation I've had here, but you have a bit of a different perspective on it. What, is that?

[00:06:42] Kevin Knull: So, you know, if you think back over all the years, there's always some buzz word that's got everybody's attention and, I hear everyone saying AI, but I'm not sure most people can spell it yet.

Just to be sort of funny. You know, to me AI is just that continuation of improving the quality of programming and computing and so forth. It's just getting smarter and smarter. What I don't hear anyone talk about is what the basis of the AI is based upon. AI doesn't mean anything unless you have data.

The more data you have, the better the AI. But the fact is many of the AI companies are really struggling because they just don't have the data. And so it's a difficult thing. They come to you and say, we wanna show you what we can do, but in order to do that, you have to give us your data.

Well, in order to give you the data you need to, you need to show us what you can do with it. They're stuck in this never ending cycle. And I think where, I think the real power here over the next few years, 10 years, is going to be what kind of data can you get access to, to leverage that AI and machine learning on top of.

And, that's the conversation I'm not hearing people have enough right now.

[00:08:02] Doug Heikkinen: So follow up on that. How should advisors figure out how to incorporate AI and where can they look for resources?

[00:08:10] Kevin Knull: Well, shoot, there's a lot of resources. I mean, here at Elevate, there's a lot of AI companies and a lot of conversations around that. Lots of very smart people here.

I think most of what I'm seeing right now leveraged in the AI spaces, what I'll call workflow improvement or enhancement efficiencies. So note taking in your Zoom and Teams calls, you know, helping collate the, all of your notes into an outline and summarizing your notes and so forth.

And now that expanding into CRM to prep you for your next meeting. I think those are all great use cases. They're less interesting to me, but they're very important, right? So that, that again, is going to help folks not miss key data or things to follow up on. Because we are all so busy it's hard to find time to, to review our notes.

I get really interested when I think about like, some of our data, like we know every stock trade that happened last year across a client's entire portfolio and all their custodians. That becomes very interesting to me as I think about AI because if a firm said, Hey, I wanna look at that to see what my client's behavior is in certain market cycles.

When do they go in and out of the market? Or how is their portfolio manager managing that money in and out of a market. When you have thousands of stock trades for a given client in a given year, looking at that data and then overlaying whatever the current events are, you know, all the economic factors and fundamentals, it's going to be fascinating what we see when we start actually consuming and looking at and analyzing that data.

[00:09:45] Doug Heikkinen: Any big takeaways from the conference?

[00:09:49] Kevin Knull: So I might have a different perspective here. You know, these conferences to me are just such a great way to interact with your peers and colleagues, customers, vendors, and the asset managers to hear what's on their mind. And so I really value hearing the feedback and what people are worried about, where are their challenges. I feel like I spend much more time listening at these types of events, wanting to gather that firsthand, not over a Zoom call or via email or text. I wanna see face to face.

And, that's to me, the greatest value of this conference, and frankly, most conferences these days is, you know, we're back to face-to-face, having those interactions. So, my biggest takeaway is, everybody's still struggling right now, you know? We've got a volatile market and challenging times.

Everybody's trying to figure out how to grow organically and I think having these conversations is, keeps me coming out for these types of things.

[00:10:47] Doug Heikkinen: Kevin, thanks so much for joining us. Your tool, and "tool" is belittling it, is fantastic. So thanks for joining us.

[00:10:56] Kevin Knull: Thank you so much, Doug. Take care.

[00:10:58] Doug Heikkinen: For more information, please visit TaxStatus.com. Please follow us on X, LinkedIn and Facebook all @Advisorpedia. For everyone at Advisorpedia, our producer Tory Miller and the Power Your Advice podcast team, this is Doug Heikkinen.