Wealthbar & Snap Projections with Tea Nicola (CEO) & Pawel Brzeminski | E103
Bringing together robo advisory and financial planning software.
Summary:
In this 103rd episode of Fintech Impact, Jason Pereira, award-winning financial planner, university lecturer, writer, and host welcomes Tea Nicola, Co-founder and CEO of Wealthbar, and Pawel Brzeminski, Founder and CEO of Snap Projections, to talk about what led to their companies’ partnership, fintech’s rise and the financial planning industry’s move towards technology, and more.
Episode Highlights:
● 00:46: – Wealthbar is one of Canada’s first robo-advisors.
● 01:18: – Snap Projections is a financial planning platform for advisors.
● 02:38: – Tea was interested in Snap Projections after using it herself for years as a solution to having to do calculations in Excel and then manually transfer data over into reports for clients.
● 04:33: – Pawel was interested in the relationship because he wanted a partner to help grow and improve the platform.
● 06:44: – Snap Projections has helped Wealthbar grow because it has been helpful to own software that allows advisors to work more efficiently and effectively service more clients.
● 08:15: – Pawel believes Snap Projections has added a lot of value for advisors over the years, including estate planning. In the future he’d like to develop APIs.
● 11:11: – Tea’s vision is for a platform that automates routine tasks but has a human safety net to help you understand your finances.
● 13:09: – Tea envisions her advisors as salaried employees on the same level as her developers as opposed to the current model of advisors as sole proprietors of their business.
● 17:33: – Pawel intends to reduce friction and heavy lifting for advisors by providing recommendations to advisors while acknowledging that no one algorithm can account for all scenarios.
● 21:19: – Snap Projections has between 600-700 feature requests on their list right now.
● 21:40: – Pawel wants to spend more time exploring issues around stress testing.
● 22:03: – Algorithms are better at doing the heavy lifting but a human still needs to be involved to make sure the recommendations apply to a client’s reality.
● 24:21: – If Tea could change one thing about the industry it would be that the average Canadian’s financial literacy level would go up tenfold.
● 25:45: – If Pawel could change one thing it would be to change the backend of financial planning software to focus less on the individual and more on the household.
● 28:26: – The biggest challenge Tea has faced in scaling Wealthbar to where it is today would, again, be the issue of financial literacy.
● 29:33: – Pawel’s biggest challenge in scaling Snap Projections was lack of resources.
● 32:40: – What most excites Tea is the way the industry is changing and moving towards more technology, including AI.
● 35:33: – Pawel is most excited by helping people and seeing the impact he’s making.
3 Key Points
1. The ideal robo-advisor platform would automate routine tasks while allowing clients to
speak to a human for deeper understanding and specific issues.
2. Increasing the level of financial literacy among the population is crucial for the growth of
fintech.
3. Canadian tax code poses a challenge for advisors because of its focus on the individual
rather than the household.
Tweetable Quotes:
● “I’ve always had this vision in my mind of a busy mom walking into her house with a bunch of groceries and getting a push notification from Wealthbar... and she can react to it with one button and at the same time have access to an advisor if things aren’t clear enough.” –Tea Nicola
● “It’s all about making planning pleasant and easy to use. We don’t have to use all the complex tools with lots of inputs. It’s all about making sure that information that we’re using to make decisions is right in front of us.” –Pawel Brzeminski
● “FInancial planning and investment management is a slow and boring process. If it’s exciting, you’re doing it wrong.” –Tea Nicola
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● Wealthbar Website – https://www.wealthbar.com/
● Snap Projections Website – https://snapprojections.com/
● Tea Nicola Twitter: https://twitter.com/teanicola?lang=en
● Pawel Brzeminski Twitter: https://twitter.com/pawelwb?lang=en
Full Transcript:
Jason Pereira: Hello, and welcome to FinTech Impact. I'm your host Jason Pereira.
Jason Pereira: Today on the show, I invited back Tea Nicola of Wealthbar and Pawel Brzeminski of Snap Projections.
Jason Pereira: Recently, Snap was acquired by Wealthbar, and prior to that, Wealthbar was acquired by CI Investments. So, I thought I'd bring them both back on to discuss the merger, or the acquisition and see what the future holds for these two. And here's my interview with Tea and Pawel.
Jason Pereira: Tea, Pawel, good to have you on.
Tea Nicola: Thanks for having me.
Jason Pereira: No, my pleasure.
Pawel Brzeminski: Thanks for having me as well.
Jason Pereira: Thanks for taking the time.
Jason Pereira: So, you've both been on before, so you know the routine, but we're going to go through it again. So, we'll go with Tea first.
Jason Pereira: Tea Nicola, CEO of Wealthbar, tell us about Wealthbar.
Tea Nicola: Yeah, so Wealthbar is one of Canada's first robo-advisors. We do everything that your traditional advisor can do, but we do it all online for a lower cost. We have a modern mobile app and a pretty spiffy dashboard, and yeah, so that's Wealthbar.com.
Jason Pereira: And Pawel Brzeminski. I got that right, right?
Pawel Brzeminski: That's perfect.
Jason Pereira: Okay. [crosstalk 00:01:12]
Pawel Brzeminski: Much better than most.
Jason Pereira: Pawel Brzeminski, CEO of Snap Projections. Go for it.
Pawel Brzeminski: Wonderful. Our value proposition hasn't really evolved much in the last five years. We're a financial planning platform. We help financial advisors ensure their clients won't run out of money in retirement by providing a robust, easy to use, customizable and trustworthy financial planning platform.
Jason Pereira: Okay.
Jason Pereira: So, you've both been on, so the obvious reason you guys are on is you decided to get hitched. Nothing to be [inaudible 00:01:43] I'd call myself a matchmaker, but you're the second pair of guests who decided to get hitched, so glad to hear it. And for the record, Pawel, Tea, in case you're wondering, Pawel kept this very quiet because when I asked him point blank if anyone had made overtures about buying him out, he said, "Well, there's been a couple of inquiries but nothing to talk about yet." And I should've seen it coming based on the look on his face. So yeah, I guess our friendship isn't as good as I thought it was. That's okay.
PawelBrzeminski: It's still very strong, Jason. It's still very strong. There are some things I couldn't talk about at the time, so you know.
Jason Pereira: Yeah. So, I know where the line is. You will not tell me anything you're legally bound not to tell me. Got it.
Jason Pereira: Okay. Moving on. So, let's talk about the reason for this merger or this acquisition. Each of you, ladies first, is the process here right now. So Tea, tell me from your standpoint, what was the appeal of Snap Projections and why you wanted to get hitched.
Tea Nicola: Okay. So, as I mentioned to you earlier in our conversation, I met Pawel over four years ago. He basically sent me an email out of the blue and said that he had a financial planning tool that he would like to demo for me. Having come from the NaviPlan world, I did not really want to use NaviPlan in going forward. So, I was literally creating a workbook out of Excel and I had a report made out of pages that had branded, so I would do the calculation in Excel and then fill in these fields in this report and then push it out to the clients.
Tea Nicola: And Pawel showed it to me and I had this hallelujah moment. It's exactly what I
needed. It was a one screen overview and it was robust enough to be able to scenario plan really easily. And it handled split income taxation both in retirement, which is exactly what we were doing. So, we started using Snap Projections right away, and then over the last four years our relationship developed.
Tea Nicola: And then after we joined CI, and CI and the subsidiary of CI have a very strong affinity to financial planning and to complex financial planning. This just made sense.
Jason Pereira: Excellent.
Tea Nicola: So here we are now.
Jason Pereira: Yeah. So, it was not an overnight fling, it was a long-term wooing of clients. Okay. Perfect.
Jason Pereira: And just for those of you missed it, Tea, you were acquired by CI back when was it?
Tea Nicola: In January, 2019
Jason Pereira: Yeah. So that was well after we spoke for the first time on the podcast.
Tea Nicola: Yes.
Jason Pereira: Okay.
Jason Pereira: So Pawel, from your standpoint, what was the appeal of this deal?
Pawel Brzeminski: Well, as Tea mentioned this was a great relationship, and as we were joking just before we started, it's a long distance relationship but it's a long-term relationship as well. But it really, as Tea mentioned, really started making sense. And from my perspective, it's been about five years since I started Snap Projections, I was at a point that we were growing, basically, the company in a self-funded way, right? So, of course there's a lot of challenges around growing the business, especially a fintech business, especially a software-based business in that way.
Pawel Brzeminski: So, I was basically looking for funding and partners. I pretty much went through all the different options, all the way from angel investors to VCs to private equity, even personal loans, and I, basically, through this process I realized that, "Well, we need more resources." Because I wanted to invest in the platform. I really want to build a better product, and we built something really decent, I would say, but I think we can really add a lot more value for advisors by improving the product, by further scaling the team, and really ensuring that our customer support and, as we call it actually, customer success, is very strong and we can really double down on that and provide not just the platform, not just the tool and say, "This is how you use it." But how do you become successful with that?
Pawel Brzeminski: So, when Tea actually started the conversation I thought the timing was perfect for us, and that's probably one of the reasons why we basically were able to discuss the details very quickly and decided to work much more closely together.
Jason Pereira: Excellent.
Tea Nicola: Actually, serendipitously I approached Pawel exactly on our four year anniversary.
PawelBrzeminski: Yes, that's true.
Jason Pereira: That is hilarious. That is fantastic.
Jason Pereira: All right. So, basically, you've been working together as a vendor and client relationship, tell me about how you see this evolving over time from both your standpoints. So Tea, besides buying out someone you were paying a check to and no longer picked up that check, how do you see what Pawel's built helping you evolve what's going on with Wealthbar?
Tea Nicola: Well, we've always had a very big emphasis on financial planning and we deliver comprehensive financial plans to a large segment of our clientele and we continue to do that. And in addition to us being able to now serving all the advisors and working with the advisors on our platform, it just made sense to basically own software that is going to eventually become what I want to see, which is a vision for a full practice management platform for an independent financial advisor.
Tea Nicola: So, a backend office of wealth management, financial planning, tools for marketing and share of wallet analysis, and all of that stuff, so the advisors can truly focus on building relationships, prospecting, servicing their clients, and not necessarily fiddling with back office processes or calculators. And that's really the vision, to help the advisors get more efficient and be able to effectively, you know we talked about this before as well, but effectively service thousands of clients as opposed to hundreds of clients that they can do right now.
Jason Pereira: Okay. So, I mean, from your standpoint, it's safe to say that this was a required tool for basically giving you greater control over your own destiny?
Tea Nicola: Absolutely.
Jason Pereira: Okay, good.
Jason Pereira: So, Pawel, from your standpoint, what excites you the most about being able to work on that vision? Where do you think you can add the most value in that regard?
Pawel Brzeminski: Yeah, I think this is a really good question. So, I mean, there's a lot of value we've been really adding to advisors over the last five years. And I think it's worthwhile to stress that we're not really changing dramatically a lot of things at Snap at this point. I mean, this is really acceleration of what we've been doing, plus a huge opportunity to work hard, to work with Wealthbar and with Tea.
Pawel Brzeminski: And from our standpoint, there's a lot of value that we've been able to generate for advisors all the way from just starting five years ago, the focus on retirement, estate, decumulation, estate planning and decumulation planning. I mean, there's a lot of opportunity still. I think we have a fairly comprehensive platform at this point but there is a lot more value beyond that.
Pawel Brzeminski: I think you've, Jason, probably talked so many times about APIs, for example, and connectivity between different systems. I think the ability for us to actually work so closely, that just opens up another opportunity to really look at the number of things that Tea just mentioned. Plus from a planning perspective, again, we have the insight into what's happening in investment management and we can start integrating, at some point, the two platforms. And again, we can really focus that advisors are doing what they are doing but just faster, easier, better and they can better serve their clients.
Pawel Brzeminski: I think one thing that I wanted to add about the partnership is that ... I think there is a Chinese proverb that says: if you want to go fast, go alone. But if you want to go far, go together. And I think this partnership is really just, for me, it's really a milestone and starting on a relationship that we can really build something amazing together.
Tea Nicola: We're going to go far and fast, right?
Pawel Brzeminski: Well, it's not or, yeah, we can go fast and [crosstalk 00:10:03]
Jason Pereira: I'm not a believer in or’s, I'm a believer in and’s. And secondly, why is it there's always a Chinese proverb to fit every situation?
Tea Nicola: Because they've been around for 6,000 plus years.
Jason Pereira: Fair enough.
Tea Nicola: They've experienced a lot.
Jason Pereira: There's no proverb guy in charge of that who's supposed to make sure that this gets nurtured and there's always a category, like, "We need a proverb for this case." Anyway, let's move on.
Jason Pereira: So, let's talk about what some of this moving fast and far looks like when it's actually done. So, we talked about your ability, Tea specifically, we talked about the ability to service 1,000 clients. Now, I'm of two minds on this. At the end of the day, I'm a believer in things like the Dunbar Number and [inaudible 00:10:42] Law, which basically limits the number of people we can actually deal with, but that's on a comprehensive, very high punch basis, right?
Jason Pereira: You're on the other end of that spectrum. You're a robo, which is meant to basically be designed for simplicity, speed and mass market, right? Tell me about how you envision the final kind of, you know, if you had your way, now that Snap's on board and you can drive this agenda, if you had your way what's the end product experience look like from the client and advisor standpoint?
Tea Nicola: So, it's interesting because I've always had this vision in my mind of a busy mom walking into her house with a bunch of groceries and getting a push notification from Wealthbar that something, some trigger has, either RSP season started, or TFSA contribution limit increased, or it's time to deposit money to RESP, or something, and she can react to it with one button. And at the same time have access to an advisor if things aren't clear enough as to what she has to do or not to do regarding that action.
Tea Nicola: So, it's basically a one stop shop that is guided, that is as automated as possible on the routine tasks, but yet have that human safety net that lets you understand your finances in the context of your life, and lets you move on with your life and not necessarily managing your finances.
Tea Nicola: So, that's a very storified vision where I envision financial planning, investments, insurance, mortgages, lines of credit, credit cards, personal finance solution for a Canadian household all in one place with an advisor, a human advisor with technology enabled as a quarterback.
Tea Nicola: And for the advisors ...
Jason Pereira: Yes. Second part of that question.
Tea Nicola: ... I think that the way that I envision advisor of the future is to be slightly different than maybe perhaps the way that they work today, and move a little bit away from being the sole proprietor and the marketer of the personal business, and move further into the realm of professional, salaried individual. And it doesn't necessarily mean that they won't both exist, but at least in our model I envision my advisors to be on the same level as my engineers and use technology to do all of these tasks that advisors, let's face it, they don't really like doing, they're not necessarily even good at it, and focus on really understanding how finance fits, keeping abreast of their field in terms of budgets and legislature, so that they really know how to advise clients in the moment in a just in time.
Jason Pereira: It's interesting, we're starting to see technologies that leverage artificial intelligence and greater automation and algorithms start to push into financial planning software which, Pawel, I'm going to ask a couple of questions about that shortly. But it's interesting, so when I talk about this I often get some advisors pushing back to almost feeling angry about it because they feel like they're cheapening their experience and knowledge when really, you know, what you're talking about you said not necessarily liking it or not necessarily good at it. You're talking about the heavy lifting work of financial planning, right?
Jason Pereira: And these are things that, frankly, technology does a much better job than any individual typing their own personal spreadsheet ever will. It's interesting because, in a lot of ways, it's funny, you embrace something else that threatens advisors yet again, threatened by robo-advisors, threatened by technology but, again, part of the reason I started this podcast was to bridge the gap, to say, "Hey, no, this is a technology that's going to enable you, not basically threaten you." And I think you're right, it's that, again, human aspect, that interaction in the handling of people that we will not be able to replace with technology, short of some really good general proposing.
Tea Nicola: Yeah. And recently I actually read an article by Graham Hicks, he's one of Canada's elite insurance-focused advisors, and he had an article about wealth management, sorry, not wealth management, time management and how to move from being an average advisor to being an elite advisor. And the four tasks that he recommends that advisors stop doing or start doing less, and he has percentages of time that elite advisors do these tasks, and then percentages of time that average advisors do these tasks versus the ones that are actually making you money. The four tasks that he wants you to reduce spending time on are the four things that could be replaced by a robo-advisor.
Tea Nicola: And I found that incredibly, you know, backend processes, researching investments, doing transactions, filling forms, all of these things. That's basically what my platform is. And focus on servicing your clients, relationship building with your clients, because that's where the bread and butter is, right? That's what gets you, in the end, gets you more clients, and gets you referral, and keeps that connection.
Tea Nicola: So, I found that really interesting that even he actually recognized it in a round- about way. I think the time will come when the twain will merge, we have to just be patient and wait until we get the critical mass with the advisors. But I think there will be a time when the technology will mature and, just like with anything, adoption will hit the majority and it will just go mainstream. I hope. I know I'm right.
Jason Pereira: Well, [inaudible 00:16:20], you're talking about this, I think it's also partially generational, in that you're talking about people who felt like their job was to get all this work done and they did that for 20, 30 years. And then you're telling them, "No, your job is not to do that, it's to do the other stuff." Right? And you know what? Some of us actually do like, you know, some people got into it because they did like thinking they could research investments, and do the heavy lifting on the planning and that was the skillset.
Jason Pereira: But the reality is: anything that can be replaced with an algorithm is not long- term viable and, frankly, is going to be done more effectively by said algorithm in many cases, right? So, I totally agree with that viewpoint. And this is a model that exists elsewhere, the US is more automated than we are, and TAMP model usage in the US is increasing every year, and TAMPs basically in a lot of ways just like robo’s: they help you with onboarding, the management, the rebalancing, all that stuff.
Tea Nicola: Yeah.
Jason Pereira: So, Pawel, now let's talk about your contribution to Tea's vision, or your shared vision, as I joke around here. So, basically, this is a tall order. So, you talked about accelerating the things you wanted to do, tell me about some of the automation tasks, or the way you're going to eliminate the friction and heavy- lifting for the advisors lives going forward.
Pawel Brzeminski: Yeah, so again, that's a really good question, Jason. So, let me just start with something, just how we think about really about building the technology, right? Because there's one big vision, for example, this 10 year vision or 20 year vision, hopefully 10 year vision instead of 20 years, or longer. But just how we built, and really how we built the product so far is it's not just one feature that's going to change, that's going to adopt, make a big change in the workforce for advisors, but it's really the constant attention, making those small adjustments, small enhancements to the product that basically ends up offering a great experience.
Pawel Brzeminski: So, for example, the one thing that's about Snap, how we're thinking about implementing that, well, it's just planning is different in investment management. There's a lot of qualitative information and quantitative information that you have to take into account. But when you're dealing with qualitative information it's really difficult to design one algorithm for handling all of the different cases. So, the one thing that I think we've done really well is just we basically designed the software with having this one-page view.
Pawel Brzeminski: So, advisors can, for example, see, "Okay, well, after entering all the information ... " And it's [inaudible 00:18:41] really streamlined process, they get to this one planning stage. And then they get to, for example, they see what the platform would recommend, for example, in terms of withdrawals in retirement. But they get to make decisions about it. They can make changes. And that's one thing that's really critical, especially planning retirement, and especially with long-term income planning, you're dealing with many different sources of income. You could be dealing with, I don't know, eight, 10, even more sources of income, all the way from CPP to OAS to, let's say, different benefit pension plan, different contribution pension plan, RSD accounts, TFSA accounts, [inaudible 00:19:19], maybe a holding company, there's dividends, maybe a salary, and so on.
Pawel Brzeminski: So, ability, for example, for the advisor to take a look at every single situation, let's say after ... Let's assume that at this we can get the data into the software, and forward the data into the software automatically from the investment side, now [crosstalk 00:19:38]
Jason Pereira: I should hope you can do that now that you're owned by Snap Projections. So, let's just hope [crosstalk 00:19:42] that that integration at the top of your list.
Pawel Brzeminski: Yeah. So this is the first step. It's an easy step, right? But it's basically once we have the data in then we can basically start looking and making those adjustments. And in a lot of cases it actually takes an advisor to make those adjustments. I don't really think we can really have a fully automated tool that can provide the best, let's say, the best solution for every single case. It's all about providing recommendations to the advisor.
PawelBrzeminski: So. I think there is a large opportunity for us to basically make this process even better and that's what we're trying to do, really: capitalize on expanding on this one-page view that we have right now in Snap Projections.
Pawel Brzeminski: Another thing is, I mean, of course, there's a lot of challenges around data entry, so that's one thing, about, for example, generating multiple scenarios. That's one thing that, again, Snap really shines in. You can, for example, create multiple different scenarios very quickly. Let's say you have one scenario and you're, for example, talking with a client about maybe an alternative approach. Instead of thinking about, I don't know, applying some rules, rules of thumb that you should be revving up 71, for example, well, you can test another scenario very quickly, and I think that's another op that we're going to expand the platform.
Pawel Brzeminski: It's all about, really, taking away, just making planning really pleasant and easy to use, right? We don't have to use old, complex tools with lots of inputs, and it's all about making sure that information that we're using to make decisions is right in front of us.
Pawel Brzeminski: So, that's how I'm really thinking about developing further, developing the platform. I mean, of course, from our perspective, we have, I don't know, 600, 700 feature requests on the list right now, and we're very careful about how we're picking and prioritizing different features but, again, the feature focus for us: APIs, I mentioned this already, right? Decumulation, so a lot more focus on decumulation. Stress testing of the portfolio. And so, for example, things we've looked, we've been looking at for quite a while at Monte Carlo and some of the issues around stress testing. So, I think that's one huge area that we haven't really explored that much that I want to spend a bit more time.
Pawel Brzeminski: So, again, as I said, there's a lot of opportunity for us to basically still work with Wealthbar and make sure that we can capitalize on the relationship, and better expand on the platform and on the capabilities.
Jason Pereira: Yeah. So, a couple of points here, because you covered a lot. Let me correct my previous statement, in that the algorithm's better at doing the heavy lifting but the human being's still involved in making sure it's going to actually match up with the client's reality. So, it can give us the various options you've talked about, AFFs in a better, more effective way.
Jason Pereira: And a couple of things too, like I complimented on this last time. The first time I looked at your software I thought, "Well, this is an online spreadsheet." And then I thought to myself, "That's the genius of it!"
Pawel Brzeminski: It's not a spreadsheet.
Jason Pereira: It's like everything is, you know, there's so many planning softwares, you work through all these different screens to end up getting to a final screen that basically allows you to audit everything, you've built the audit into the interface, so that's smart. Also, I think the approachable-ness of the entire thing is significantly better than the other ones, like you said, overly complex and it can be difficult. You've Occam Razor'd the entire thing. You've kept it simple, you've kept it focused and I think that makes it far more approachable.
Jason Pereira: The two major push back on advisors that have been in this business for a long time who don't do comprehensive planning has always been, quite frankly, A ... Well, there's a bunch of excuses, but A, it takes forever. Well, you've shortened the span of that and I think it's only going to get shorter from here on out. B, it's too complicated and they get intimidated by the software. You don't have that problem. And C, it takes too long. Which, again, keeping it simple and this straightforward helps do that and provide high value.
Jason Pereira: So good. This marriage is a couple of months in, things are going well and I expect good things from you people, so keep it up.
Tea Nicola: I think Pawel and I expect really good things from ourselves, so we're both very over-achievers, so it's a good thing.
Jason Pereira: Good. I mean, honestly, when I saw the announcement, I thought, "That's a great match up." In a non-sarcastic tone. I sounded a little bit sarcastic there. I didn't want it to come out that way. [crosstalk 00:23:54]
Jason Pereira: Yeah. So, normally I talk, I ask you individually more questions, but we're going to run super long if I do that. But here's the thing: we're going to wrap up my three questions, which I'm going to ask to both of you, and that'll take us well beyond the half an hour we normally do.
Jason Pereira: So, the first question I have for both of you, and again, Tea go first, if you had one wish for something to change in your business, in the industry as a whole, or in the world as a whole, what would it be?
Tea Nicola: The level of financial literacy in an average Canadian would go up tenfold.
Jason Pereira: Well, yeah.
Tea Nicola: That's my wish.
Jason Pereira: You know, what's interesting is that I read a study that said that we actually scored amongst the top in the world in financial literacy, but that score was still a C minus. So yeah, it's congratulations, we won a race of people who lost, so yeah, that definitely needs to happen.
Tea Nicola: Yeah. Being the best of the worst is still not good.
Jason Pereira: I agree. I agree.
Tea Nicola: You know, people tell me who my biggest competitor is and I always say the lack of education. The lack of understanding and the lack of ... And people, through no fault of their own, buying into fads, and marketing, and sensationalism of the media and not really ... Financial planning and investment management is a slow and boring process. If it's exciting, you're doing it wrong.
Jason Pereira: Yeah. I often say, you know, [inaudible 00:25:16] and say, "So, you've seen movies about people burning money in Hollywood? Yeah? Ignore all that. It's all a lie. It doesn't work that way and we don't pretend for it to work that way." And this is where I actually take issue with the commercials that the CPA's put out about how they've put this ... Did you ever see these ones where they're on helicopters and on top of job sites, and doing all this sort of stuff. And it's like, "No, you're at a computer inputting numbers. Stop pretending that you are an action hero. This is not true." Anyway.
Jason Pereira: So Pawel, your wish.
Pawel Brzeminski: My wish? You know what? I'm going to be focused very much on financial planning. What I'd like to do change one thing in the tax system. And ...
Jason Pereira: One thing? [crosstalk 00:25:53]
Pawel Brzeminski: One thing. So, if I'm going to pick one thing I'm going to say that let's assess taxation on a household level versus individual level, because as much as ... you know, we spent five years building financial planning software, it doesn't really make sense and it's not fair to basically assess taxation on an individual level. It's so problematic and it creates so many issues. For example, pension income splitting, income splitting, attribution rules, there are spousal, for example, loans. There's so many different planning practices that basically have developed only really [inaudible 00:26:29] an actuary system that has not been architected in the right way.
Pawel Brzeminski: So, if I would have one ish, let's change that and try to go from there.
Jason Pereira: So yeah, that's one of the top things on my list in terms of tax reform. For those of you in the US listening to this podcast, you're like, "What do you mean you can't tax at the household level?" Well, welcome to Canada. We have a bunch of things backwards.
Jason Pereira: Interestingly enough, when I saw that in the US I started doing the USCFPS kind of thing, thinking about the merits of it, or if it was right or wrong, and whatever else. And frankly, yeah, it makes so much sense. Individual taxation fails to take into account the contribution of stay-at-home spouses who, frankly, if not for them staying at home and taking care of various other household affairs, other people such as myself, like entrepreneurs, my wife's not a stay-at-home spouse, nevertheless, would not be able to achieve the things that they can without the support, right? It makes little to no sense, in my mind.
Jason Pereira: And a small fact, it was a small, interesting point, the Carter Commission in the '70s, which established our current tax program in Canada, actually initially recommended that and it was not followed. And then, one last side note for the record, a very well-known tax aficionado in this country, when I spoke to him about, "Are they ever going to look at this?" He said, "No." And I'm like, "Well, why is the list [inaudible 00:27:42]?" He goes, "You're not going to believe this but ... " By the way, this should outrage every feminist in the world. They said, "Well, they're afraid that if they do that it's going to encourage more women to stay at home." I was like, "That's the most condescending thing I've ever heard said in tax policy."
Tea Nicola: That makes no sense. Okay, whatever. [crosstalk 00:27:59]
Jason Pereira: Anyone from CRA listening to this, or finance listening this, which is probably next to none, just please get your heads out of your butts on this point. Pawel's right. Anyway. That and we need a new Carter Commission, but that's a different story altogether. Unfortunately, the tax [inaudible 00:28:12] only getting worse, not better.
Jason Pereira: So, second point. And actually, the second question, Pawel, which I'm going to ask may actually come back to tax, but we'll come back to that. Second question: what is the biggest challenge you face in scaling to where you are today? Tea, you first.
Tea Nicola: Can I say lack of financial literacy again?
Jason Pereira: You can, because I think you're absolutely right there. I think with proper financial literacy the demand for everything you do would be significantly higher, wouldn't it?
Tea Nicola: Exactly. So, basically, I set out to introduce a dose of benevolence to the financial industry with our product offering and our fiduciary responsibility, even though this is a word that all the PR managers tell you never to use on a client facing or public facing podcast or media. But basically, we have the best interest of our clients at our hearts, and we have the best interest duties [inaudible 00:29:05] from day one, even though it's looking like the regulators are actually going to make it a legal concept.
Tea Nicola: But yes, if everybody knew what I know they would clearly choose Wealthbar.
Jason Pereira: Way to give yourself a ringing endorsement.
Jason Pereira: So Pawel, what is your answer? And you can say tax code if you want.
Pawel Brzeminski: No. I don't think it's going to be tax. I mean, tax, well, I think we can get around tax. But I think the challenge, this is kind of interesting, right? Because, for us, scaling a fintech company in a self-funded way, that was a huge challenge for me, right? Just being able to invest in a team and in the product, it was essentially the lack of resources. And that's essentially literally solved with the partnership, right? I mean, we basically, not too many people probably know that I started the company back in Edmonton, Alberta, and then about three years ago we moved to Ontario and then I just basically moved the company to Ontario, so I actually incorporated another company in Ontario. And when I was basically ready to, I was looking to partner up and so was essentially looking for resources, looking for the right partner, and yeah, the timing was perfect for that and I don't think ...
Pawel Brzeminski: I mean, I don't know what's going to be the next challenge for us on the list, but I think that one of the biggest challenges for me was basically a lack of resources which was largely addressed by the partnership.
Jason Pereira: Yeah. I've seen a grand total of one financial planning software ever attract a check from a VC. They do not look at it as the exponential growth market that it should be looked at because, frankly, if people had the financial literacy piece down it would be an exponential growth industry. Okay.
Pawel Brzeminski: Absolutely. And you know, Jason, for sure, this is not a [inaudible 00:30:50] where you can basically deploy 10 million and get 10x return within three years, right? I think there's a lot of opportunity for ... I mean, there's even education, for example, it's not about, "Here's the platform, here are the tools." But we've launched our podcast essentially, what? 18 months ago? Maybe a little more, just 2018, we've had over 80,000 people downloading and listening to the podcast in such a small industry. I was actually shocked.
Pawel Brzeminski: There's a huge need for education, not just in the consumer market but even for advisors. Developing software products and platforms is one thing, but another thing is actually basically showing people, "This is how you use it. This is how we can be effective with this." This is how you change, basically, the mindset of advisors, as you said earlier in the conversation, right? People were trained to do something different, I don't know, 20 years ago and then there was a massive mind shift. They had to basically adopt a new reality. So that's why the traditional investing that may work in, I don't know, Silicon Valley for global businesses it's not going to work in the fintech space, especially the fintech in Canada.
Jason Pereira: No, it's difficult. I know even in the US it's been difficult. But nevertheless.
Jason Pereira: So, the other question I have to follow up that one is how many of those downloads were my episode? [crosstalk 00:32:06] I'm just highly competitive.
Pawel Brzeminski: Well, you've been doing very well. I think it's number one still, so yeah, you've done something very, very well.
Jason Pereira: Good. I managed to [inaudible 00:32:21] everybody. That's fantastic.
Jason Pereira: So, the last question I'd ask you both, and financial literacy can't be your answer again, Tea, is: what excites you and gets you out of bed to keep going every morning and do what it is you're doing?
Tea Nicola: Oh, that's definitely not financial literacy. That is the way that industry is changing. And I think that the level of automation and technology proliferation that I can see on the horizon. Not very many people know that I attempted to do something like this with Chris back in 2001, and we were actually going to incorporate a company called Fintech Inc.
Pawel Brzeminski: I didn't know.
Tea Nicola: I remember, I sent a request to a mutual fund company, and I can't remember which one it was, but I sent a request for data feeds, for electronic data feeds ...
Jason Pereira: Did they laugh?
Tea Nicola: Sorry?
Jason Pereira: Did they just turn around and start laughing?
Tea Nicola: Well, no. They said, "Yeah, sure. No problem." And I was just shocked as to how easily they agreed to do this. And so, three days later I received, via ICS, a CD with PDF statements.
Jason Pereira: They didn't understand the word feed.
Tea Nicola: Right. And I was also a bit shocked at the lack of questions that they asked as to like, "Okay, where are we going to send the feed? Maybe our IT department should call your IT department." Or something.
Tea Nicola: But no, they sent me this and I said, "Okay. I don't think that the industry is ready, I don't think that the clients are ready, so we're going to park this for a while." And then we resurrected it in late 2011 and incorporated it in 2012.
Tea Nicola: So, what really excites me, that despite the fact that it took 10 years longer than I thought it was actually coming. And because fintech, or financial services, is such a heavily regulated and very, actually, domain is relatively difficult for tech industry, we were slow adopters of the tech revolution. So it took us, you know, dot com started in the 2000s, and Facebook launched in 2007, and fintech didn't actually gain their legs until early 2010s. But it's a really, really interesting world to be in the financial services industry. And the way that I can see that even AI will play some part in the not too distant future in certain transactions in the financial services industry is really, really exciting.
Jason Pereira: I can only imagine if they had said, "No problem. We'll send you that data feed by courier."
Tea Nicola: Yeah. They didn't say that. They didn't say by courier [crosstalk 00:35:15]
Jason Pereira: Like, "What do you mean you're surprised that we sent it by courier?" Oh god. I could laugh about that for the rest of the day.
Jason Pereira: Pawel, same question to you. Pawel, what excites you the most about what it is you're working on and keeps you going every day?
Pawel Brzeminski: Yeah. It's going to be rather similar to what Tea had mentioned. I mean, [inaudible 00:35:38] for me the things that really excites me is just really helping people and having an impact, and helping people that's really ... When we started, actually before we began writing first code for Snap Projections I thought, "Well, first of all I want to have a problem that I can work for 10 years plus, and finish the planning and really helping improve the industry." That seemed like a great problem to solve and we started with financial planning.
Pawel Brzeminski: So, we [inaudible 00:36:00] working with advisors and we managed to help tens of thousands of Canadian consumers right now, and I think we can scale up to millions at this point. So that's definitely motivating.
Pawel Brzeminski: And having an impact. I mean, that's another thing. The industry is changing right in front of our eyes. FPAC is being [inaudible 00:36:18], Jason, and so thank you for that. And I very much think about what we're doing as arming the rebels. And by the rebels I mean the independent financial advisors because a very healthy independent channel, I believe, is really critical to the health of the financial services industry here in Canada.
Pawel Brzeminski: So, that's really incredibly exciting to see the impact, and I feel grateful for being able to be part of it.
Jason Pereira: So finding the rebels. Funny side note, when I was working on starting the Financial Planning Association of Canada we had the first group and we had our Slack channel. The original logo was a pirate flag. And then I quickly changed it to the logo. The temporary logo until we had a real one was a pirate flag, and I quickly changed it to logo for the Rebel Alliance from Star Wars. [crosstalk 00:37:04] You can make a guess who the Empire is in Canada. Or Empires are. Very, very intent on blowing up the Death Star while we're at it.
Jason Pereira: So, both of you, thank you very much for coming on. I think this is the most laughing I've done on any podcast [crosstalk 00:37:25]. And I now have a new anecdote about couriering data feeds that is going to be retold across the industry, so that is fantastic. Thank you for that, Tea.
Tea Nicola: Awesome. Thanks for having us.
Jason Pereira: All right. Thanks. Take care, and best of luck to you.
Pawel Brzeminski: That was a lot of fun, Jason. Thanks so much. Bye bye.
Tea Nicola: Cheers. Bye.
Jason Pereira: So, that was my interview with Tea Nicola and Pawel Brzeminski. I hope you enjoyed that. I particularly hope you enjoyed the joke about the data feed arriving on a CD as a bunch of PDF documents. That is an anecdote that will live in infamy forever now.
Jason Pereira: So, as always, if you enjoyed this podcast please a review on Apple Podcasts, Stitcher, or wherever it is you get your podcasts. Until next time, I'm Jason Pereira. Take care.
Speaker 4: This podcast was brought to you by Woodgate Financial, an award-winning financial planning firm catering to high net worth individuals and their families. To learn more, go to Woodgate.com.
Speaker 4: You can subscribe to this podcast on iTunes, Stitcher and Google Play, or find more episodes at FintechImpact.CA.