00:02:20 · Mark Swan
[00:02:20] S1: Look, I have a thesis, which is that service businesses are going to be the biggest benefactors of AI and what is coming out of AI. Why? Because AI unlocks so much opportunity to help streamline a lot of the operational workflows that professionals and professional service people across legal, accounting, wealth management, and so on. And if you look within the financial services space, wealth management is the area where actually the admin burden is the highest. For every one financial advisor, they are typically supported by a number of administrative and operational staff who are doing the day to day work, the busy work around servicing clients. And so what we saw as the opportunity in this space was to be able to build a platform for them and to help them grow. And I think that wealth management particularly has an amazing macro tailwinds behind it. Number one, demand for financial advice has never ever been higher. In The US, there are 50,000,000 clients who last year were getting served by professional financial advisors and that is growing rapidly. And the number of affluent households, so people who have more than 500,000 in assets, is growing eight times faster than the rate of the population. And so demand has never been higher. The problem is actually on the supply side. There are more advisors retiring than coming into the industry. And where companies actually have tried to approach this in the past is to leverage AI to replace the advisor, right? So like robo advisory and try and replace the advisor. And we think that that approach is completely wrong. And the reason why is because clients are number one, trusting their whole life savings to this advisor. But also number two, they're going to an advisor to help them navigate some of the most important life decisions, planning for retirement, putting the kids to college, this type thing. And so we believe that financial advice will always be human led. The problem is this admin burden. Advisors are spending more than 80% of their time on admin. And so the opportunity in this space is help build AI platform or build an AI platform to help streamline the administrative work of a financial advisor's day to day. And that will help unlock all of that capacity so they can be serving many more clients and many more people can be benefiting from professional financial advice as well.
00:04:46 · Sebastian Johnson
[00:04:46] S0: Yeah. It's interesting you talk about the growth in that sort of affluent class and robo advisors, whatever. That thesis was such a big thesis within fintech a few years ago. Right? You saw so many wealth techs cropping up to kind of capitalize on the opportunity of those people talking about the generational wealth transfer from baby boomers to millennials and below, and this very rapidly growing group of people who are going to be very, very affluent, but who are tech savvy. So the idea with the thesis was people like Nutmeg or Chip or whatever to try and build tools for them. But the approach that you're taking is actually people are always going to want to have that personal relationship. What you've got to do is you've got to equip the people with the tools to best serve their customers.
00:05:27 · Mark Swan, Sebastian Johnson
[00:05:27] S1: Exactly. I think what people kind of naively think in this wealth management space is that the average client only cares about performance. And that's actually not true. They care a lot about service, right? And they care about what more can my financial advisor offer me from comprehensive financial planning to helping with my taxes, to helping with estate planning, and really the list goes on. And so, you're going to an advisor because they offer that full suite of products, which you cannot simply get with a robo advisor. But also the trust element is super important. You want to be able to pick up the phone and have a conversation with your financial advisor to help navigate some of those most important parts of life, as I mentioned. And so we believe that those moments will always be human led because of that high trust and relationship led part of financial advice. Again, we don't think that will ever change. [00:06:31] S0: And how are you getting into the real weeds of what you can automate, what you can use AI for versus what's never going to be AIFI? And how are you going to learn the real ins and outs of the day in the life of a financial advisor?
00:06:31 · Sebastian Johnson, Mark Swan
[00:06:31] S0: And how are you getting into the real weeds of what you can automate, what you can use AI for versus what's never going to be AIFI? And how are you going to learn the real ins and outs of the day in the life of a financial advisor? [00:06:46] S1: We spend literally countless, if not hundreds and hundreds of hours with financial advisors every single day. From the moment that we founded Nevis to now, my calendar is full with working with financial advisors and understanding their workflows, right? Understanding where are the burning problems, where are the areas to automate. And we have prioritized Nevis' roadmap specifically to help unlock those highest burning areas. And so we feel like we have a very deep understanding of what can deliver the biggest impact to the wealth management firms that we work with and the market as a whole. And so we feel like we have a very good ear to the ground in terms of where the problems are and where the opportunities are to streamline with AI. [00:07:33] S0: And what's the reaction been from some of your early adopters?
00:07:33 · Sebastian Johnson, Mark Swan
[00:07:33] S0: And what's the reaction been from some of your early adopters? [00:07:36] S1: Incredibly positive, right? As I mentioned, we work with some of the really largest firms and fastest growing firms in The US. The biggest impact we see is that number one, you have several hours that are being saved every single week and helping streamline a lot of core workflows, like helping advisors prepare for meetings and streamline a lot of the follow-up post meeting with clients. And there's going to be a huge opportunity as we move deeper into the middle and back office and the operational workflows there. And that's where you're going to really unlock a lot of this operational leverage for the firms that we work with. And so we've got a lot of exciting new products coming out next year and a lot of a large roadmap that we are executing against. And with every one of those new releases, we are going to be unlocking more hours saved and operational leverage. Firms can grow assets, but not have to grow headcount of their team. In other words, advisers can start managing more clients and with the same team that they have.
00:08:37 · Sebastian Johnson, Mark Swan
[00:08:37] S0: And what balance would you say at the moment you're striking between being product focused to kind of fill more of those gaps or to automate more of the back office processes versus now being at the point where you're ready to go to market and scale and sell? Where's the balance lie at the moment? Are you still thinking we've got so much more to build until we can capture a lot of the market? Or have you got to a place where you're thinking we're saving enough core use cases that we could just sell this for a period of time and keep building in the background, but that enough is a solid product? [00:09:09] S1: Yes, scaling is always a little bit like a two by two matrix. You have a product, you have something that is adding value and that's what we have today. And for that, you scale across the market and you sell to every RIA across The US and get them to have the same benefits that our customers today have. And so dimension number one is scale number of customers that are benefiting from Nevis. But equally and at the same time, you're also scaling the depth of the product offering. So we are going to be building rapidly more and more modules, which are getting added into the Nevis platform so that we can begin automating more workflows and delivering more value to our customers. So you always have to do both. [00:09:53] S0: Yeah, yeah. I want to talk about the round itself. So Sequoia has led this round. They also led your seed, if that's right.