Adrianna Adams:

There is a drive towards life planning rather than just money management. So historically, financial services was very much about the money that was in the account and how it was invested, and I feel like the youth is really focused on what their goals are and what do they need to do to reach those goals. So the investment piece is still very important. How your money is invested, making sure it's aligned with those goals and will help accelerate you on that path. But it really is more about what they're looking to achieve and then tailoring their strategy to.

Bianca Lopes:

That voice you just heard belonged to Adrianna Adams, Head of Financial Planning at Domain Money, a New York-founded fintech. For years financial planning worked one way, you paid 1% of your assets under management. But for younger generation, many of whom don't yet have large investment portfolios, that model was just difficult.

Nora Hocke:

Enter Domain Money. Domain focuses on an emerging market of millennials and Gen-Zers that share many of the same goals as older generations, but face their own unique challenges in getting there. That's what we will be exploring in this episode of Fintech Files from BCG Platinion.

Bianca Lopes:

What makes Domain different from other planners? How are they leveraging new technology? And how will millennials manage money differently in the future? To answer these questions, I sat down with Adrianna and started off by asking her what drew her to financial planning.

Adrianna Adams:

I found myself in a room quite a long time ago with people saying a bunch of words that I did not know. The word that comes to mind for me is, Roth IRA, and I was like, "What is a Roth IRA? I need to know what this is." And so I found myself down this rabbit hole of financial planning and the desire to just learn anything and everything about it. So I went on to get my CFP, which stands for Certified Financial Planner, because I thought it was crazy that there was not a lot of education around this, and everyone else I knew didn't know what a Roth IRA was either. So there was a lot of opportunity for me to learn everything and then share my knowledge with the people I cared about, and it happens to be financial planning.

Bianca Lopes:

By the way, a Roth IRA is a type of individual retirement account in the U.S., that provides users with certain tax benefits.

Adrianna Adams:

I think what drives me the most is watching people turn their uncertainty or anxiety into confidence, so that is what I'm really passionate about, and I think that is what draws a lot of younger generation to understanding their finances, because when they don't understand it, they feel a lot of anxiety or uncertainty about what they're doing or are they doing the right thing. So I think people now more than ever are thinking about, am I doing the right thing? What is the right thing? What do I want out of my life? And I do think this is a point where social media actually plays a role in that, because we see so much of what everybody else is doing online, that it gets our wheels turning to start thinking about that. So that is part of why I'm so passionate about it. I love helping build that confidence and seeing it in other people. And I think that the reason other people are interested, is because they realize that they can carve their own path and they need to figure out how to do that.

Bianca Lopes:

According to the World Economic Forum for 18 to 34 year olds in many developed economies, social media has already taken over traditional professionals as a source of investment advice. For a generation raised online, it is no surprise that financial advice looks very different from what it did before.

Adrianna Adams:

One of the big challenges in millennials and Gen-Z is comparison. And I see a lot of younger clients comparing themselves to what other people are doing. For example, I was just chatting the other day about a client who, they're still in school, they're in their thirties and they're getting a PhD and they feel like they're really behind. But when we look at their goals compared to what they're currently doing, they're really setting themselves up for success for the life they want to live, but they have this anxiety that they're behind because they see their friends buying a house and paying for a wedding, and right now they're just increasing their debt load in school.

So I think understanding what every person wants is so important, and we can't play this comparison game, and there's always been "Keeping Up with the Joneses." But I think because of social media and technology and how easily we can access what other people are doing, I think it's really creating a challenge for people to figure out, are they doing the right thing that fits their goals, because there's just so much out there that we see about other people these days.

Nora Hocke:

You know Bianca, that's a really interesting point, and I did a bit of research ahead of this and I found this Chase report. And it said that nearly all Gen-Z and millennials do use mobile banking apps. Now guess what's that number for Gen X and the baby boomers?

Bianca Lopes:

50? I don't know. What do our listeners think? But somewhere between 50 or 60?

Nora Hocke:

You really don't have a lot of trust in our baby boomers.

Bianca Lopes:

No, come on.

Nora Hocke:

No, it's not that bad. So it's about 85% for Gen X and 70% of baby boomers. But I mean that's still almost a third of baby boomers that do not use mobile as their primary banking app, but either web banking or non-digital banking at all. So there is definitely a trend showing how more comfortable the younger generation is in using mobile first financial services

Bianca Lopes:

Totally ,and expected when we look at what technology does to enable, and that's what Domain is using for their approach, to be different, they talked about digitizing onboarding, holding meetings virtually, and automating routine processes. This has allowed them to scale and service all these younger clients who historically wouldn't have had access. And Adrianna says that that's a fundamental shift.

Adrianna Adams:

Having a tech-forward platform is really important for helping the next generation understand their money, because they do want something that's savvy and easy to use and easy to understand. The other thing that I think is so important, is taking the jargon out of it. So we try at Domain Money to keep everything in layman's terms and really speak in words that anybody could understand, rather than having to explain everything and make it super complicated. There is this theory, that in the industry some financial professionals use a lot of really complicated words because they want you to just sit back and say, "Okay, I'm not able to do this on my own, you do it for me." And at Domain we really do the opposite.

So we build a financial strategy for you from the ground up, and help you implement it, but you still always have control of every move that we make. So you are pushing the buttons and opening the account. I'm doing it with you on Zoom or a virtual meeting. Which is also a great aspect of technology, is we can meet with people anywhere, anytime. So instead of it being based on the traditional model, we're able to really leverage the technology and help more people that may not have had access to this before, because they didn't have a certain amount of assets or something like that.

Bianca Lopes:

Millennials like me or some of you listening, our hosts, we grew up used to dashboards and starting to become familiar when it became fitness apps, productivity tractors, obviously operating systems.

Nora Hocke:

Yeah, but not always for money, right?

Bianca Lopes:

True. And I think we've seen sort of the fail or connection around PFM, Personal Finance Management. But what I thought it was really interesting listening to Adrianna, and at Domain is, that they were looking at technology to do this.

Nora Hocke:

So how exactly are they doing it?

Bianca Lopes:

They were using multiple APIs and consolidating things like tax planning, investment, retirement, information, all into one place. So allowing the user to have the value of not just being transparency, but being able to see and understand how one decision ripples across their entire plan in real time.

Adrianna Adams:

Our proprietary dashboard at Domain Money is so important to me, because it really helps me align with clients on what the action items are and what they need to be doing to implement their plan. And sometimes implementing the plan is the hardest part for people. You can get this advice and these recommendations, but if you don't actually take action on it, then you're not going to make steps towards achieving that goal. So our dashboard does a really great job of connecting our CFPs, our certified financial planners with the clients to make sure that that loop gets closed. And then the other piece that isn't proprietary to Domain, that I'll give a mention to, is our tax planning software. We use a platform called Holistiplan, and I really nerd out on tax strategy because there's a lot of cool things to model out. Not everyone feels the same way. But I think the tech that we have allows us to help a client visualize what we're suggesting in the strategy and really understand how it will benefit them. So I think that visualization piece is really important to get buy-in from clients as well.

Nora Hocke:

One of Domain Money's biggest innovations is its flat fee structure. What makes that such a good innovation though?

Bianca Lopes:

Most planners still charge a percentage of your portfolio. So if you don't have a big portfolio yet, that model shuts you out.

Adrianna Adams:

Historically, to get access to financial planning advice, the most popular way to pay for access was assets under management fees, which is typically 1% of the money you have invested with that person. So at Domain Money we offer flat fee financial planning. So it is a range. Depending on the planning tier, it's $3,200 to $7,800 on an annual basis, and that is very different than 1% because if you look at how that 1% compounds over time and what it adds up to, it might not align with what you were looking for.

Another thing I usually say is, just because you have more money doesn't mean the planning you're looking for is more complicated. So I really prefer to have the fee structure align with what you're looking for, rather than how many dollars you have. So I think it's really important to also see how that's going to change the industry and also I think give more access to financial planning because you don't have to have a certain amount of assets to gain access to it anymore.

Bianca Lopes:

In this world of always new and fresh technology, I know you're clearly a huge listener of podcasts and an avid participant, right? Because I think one of the things I always like asking our guests here is, there is such a state as tech overload and how many tools and too many tools or too many prompts. And as Chat is all our dear friend, how do you decide who else other than Chat comes into the mix?

Adrianna Adams:

Yeah, so it's very strategic decision. The beautiful thing about Domain, and what I think sets us apart, is we are half tech product engineers and then we are half financial planners. So we have an awesome team that really helps us understand that. Because as a solo practitioner, there's so many options out there for financial planners, it would be impossible. You would have a full-time job of just analyzing the different tech options available to you, like you mentioned. So I think having a team at Domain that is very tech-savvy and able to help us figure this out, has made the biggest difference in accelerating our growth and our ability to really be a tech-savvy financial planning firm.

And then this might get a little technical, but I think we always look for tech that does integrate into our platform with different APIs. And so I think that's really important, is making sure that your tech all speaks to each other. If you have 20 different platforms that don't talk to each other, you're probably not going to realize the efficiency and the economies of scale that you're looking for, so that's also another huge driving factor in us. But you also mentioned, I just love to stay up on the latest news, listening to podcasts, and seeing what else is working in the industry for other people, and really coming together to figure out what the best strategy is going to be for us and our firm, and how we want to deliver advice to clients.

Bianca Lopes:

What trends do you think are going to shape your industry when you look at really what's going to change this relationship with money?

Adrianna Adams:

I think now that we are getting people involved younger and earlier in their money journey, I think it's really going to shift how we plan and do things later down the road, because you're coming in with more of a foundation and hopefully more knowledge up front. And the other thing that I've noticed too, and this is something that is one of the ways I define a successful relationship with a client, is confidence. And so I think people can make better financial decisions when they have confidence in their strategy. So that's another thing, I'm hoping that by having financial planning, not just for the wealthy and for everybody, because everybody deserves to confidently make these financial decisions, I think it actually will really accelerate just the financial well-being of our entire country or everybody who is digging into financial planning, and hopefully will just accelerate the good for everybody in their financial journey.

Bianca Lopes:

When you look at how historically people have handled money and financial planning and how the youth now does, what are some of the changes beyond the tech?

Adrianna Adams:

There is a drive towards life planning, rather than just money management. So historically, financial services was very much about the money that was in the account and how it was invested, and I feel like the youth is really focused on what their goals are and what do they need to do to reach those goals. So the investment piece is still very important. How your money is invested, making sure it's aligned with those goals, and we'll help accelerate you on that path, but it really is more about what they're looking to achieve and then tailoring their strategy to that. So I think that's really the biggest shift that I've noticed.

Nora Hocke:

And of course, yes, we had to bring up AI again. And I know there's not a day that passes currently where you do not get a news article of another crazy, huge AI investment, or a newsletter from your favorite brand that announces a cool, new AI feature. In financial planning, it actually has a role, and it's not necessarily to replace the planners fully end-to-end, but it can be simple things, as simplifying the onboarding process or cutting out the boring paperwork. AI at the end of the day is a tool that makes our jobs easier, that enables us to focus on what actually matters. And that's where the fun is, isn't it?

Adrianna Adams:

Where I see AI making the biggest impact right now, from a client standpoint, is in some of the customer service sides of things, and helping clients get onboarded to different platforms or getting the right information from a client. And we typically use it paired with a real human right now. So it's more about, how can we really incorporate this more into our product? It's not about replacing the human, it's about how we can make the experience more tech-savvy for clients and more streamlined and easier for them really. Rather than having them go through a handwritten onboarding questionnaire, we can make it more conversational. And if they say something specific, then we can piggyback off of that. And so this is something that one of the firms that we work with for estate planning uses. So you still have a concierge onboarding, it's a very customized experience, but they're using the tech to help create efficiencies so that estate planning doesn't have to be $10,000 for each person. So that's one example that I think of.

And then I think the other piece that we use from the Domain Money side, is we pull everything into one financial model and dashboard for our clients. And it does take a lot of tech to get all of that to work well together, rather than it being like, "Okay, here's your tax report. Here's your investment analysis. Here's your retirement calculator." We really tie it all together so that you can see how a change in one piece of your strategy affects the rest of your plan. And then the other piece I would touch on is our dashboard at Domain Money. Because historically you would maybe get a follow-up email telling you what you needed to do or there'd be another session, but it is very much checklist style, here are the steps you need to take to get your strategy implemented. And I think showing clients how to do complicated financial tasks in a very easy step-by-step way is super important. So just having our dashboard, giving the ability to the client to be able to really see what they need to do, I think is important.

So as far as financial planning, I don't see it as a threat to my specific industry because of that human connection that people want related to their finances. But I do think there are potentially jobs or pieces of financial planning that it could replace based on certain things that we do in building the financial plans and things like that.

Nora Hocke:

What a great interview, Bianca. What stood out about your chat with Adrianna?

Bianca Lopes:

You know what I really liked, when we talked tech and bringing it all together. Because, like we said before, it's really scary to see your whole financial life in one place, and there's this place of trust with your financial planner, and it's different than what you would think of maybe a banking relationship. To me, when we talked about it off air, and Adrianna brought up the word of therapy, it's a place where you feel safe, and that's what she was trying to create when helping people manage their money. Which to me makes a ton of sense and is a huge challenge we're going to have in this era of AI, of making all of this feel human.

Nora Hocke:

That's actually a really good point. And I'm not sure if it's... It sounds so easy, integrating all that data to create that transparency. But in reality, just looking at the banks, most of the incumbent banks that I'm working with, it is not. And I would assume even for a fintech, because as soon as you integrate data from the existing ecosystem, basically, you're also dealing with a lot of legacy tech stack behind. And A, getting that data into your application in the first place, but then also making sure it's accurate and it's the most recent. I mean, you really need that. If a user sees their data and it's not as to what they think it should be, you might endanger that trust. So getting that data integration right is really important.

Bianca Lopes:

You're totally right. And there's different countries. I'm from Brazil, and when I look at open finance today in Brazil and there's 70 million account holders that today integrate and pull API, but we're still talking about financial services to financial services company, we're still talking about what state is that API, what kind of real information is that? And what we talked about before in this world of what millennials expect, of a dashboard of everything, from my productivity data to my fitness, those are things that today are not regulated. So as you said, they're not only not standardized from a tech stack perspective or cleanliness of APIs, but they're truly not interruptible.

So when a global citizen, like me, looks at this money problem, the responsibility as you said of, am I making the right decision on data, real life, real time, this becomes just an exponential thing when you start to talk about delegation. And AI agents bring a whole new slew of opportunity, but as well as responsibility for custody. I think I've been saying this for 15 years as an identity expert, like, "Okay, banks, are you going to be the discretionary manager of data?" If all of this becomes... And it is, data integrations and data back and forth, yeah, this is a challenge.

Nora Hocke:

Absolutely. If you integrate data, let's say you integrate Facebook data, like the calendar of a customer, who's in the end responsible for that data if you display it in your app, or also if you use it to make recommendations?

Bianca Lopes:

Exactly. This whole opportunity of trust becomes then a really interesting game. And then also in the user experience, we talk about the challenge of the user interface, where is that going to reside? We see obviously super apps in some places like China, but you even just talk about the interface with the human. And across the different channels, how are you going to secure all of that? So I think a lot of this challenge of not only decision-making, brings an opportunity of real relationships, and I see the passion through of like, "Okay, how can I become the human side of all of this if everything's automated?" What kind of questions am I asking then?

Nora Hocke:

Absolutely. I mean, we spoke about the risks of using AI or agents, but I mean there's obviously a huge risk related to using AI in the area of financial planning. But I mean, as you discussed with Adrienne as well, there is a huge opportunity in it. And you can actually create that trust that you want to have your customers in financial planning by using AI, by creating a truly individualized, personalized experience. Having an agent that actually knows the customer, what their spending patterns are, what their behaviors are, how they're thinking about life, literally in the future state. So I'm keen to also hear our audience's view, what kind of data would you like to see integrated in your banking app? What kind of information should your bank have about you, to give you better financial planning advice? And also, what would be the preconditions that need to be fulfilled so that you trust your bank or your fintech to use that data? Leave us a comment on whatever app you're listening to us on and share your thoughts.

Bianca Lopes:

This has been Fintech Files, a podcast from BCG Platinion.

Nora Hocke:

This season we're digging deep into the groundbreaking ideas that are reshaping the future of fintech, and we've got some amazing guests lined up. I wish I could tell you, but I guess you're just going to have to wait and see. So make sure you're subscribed to not miss the next episode. Thank you so much for tuning in, and we'll see you next time on Fintech Files.