By Vasyl Soloshchuk/ INSART
Continuing our series of interviews with wealth-industry gurus, I traveled to Chicago to meet Bryson Pouw. Bryson created Blaze Portfolio to be a streamlined, electronic-trading platform with powerful rebalancing solutions, real-time trade management, and a focus on user experience.
Founder and CEO of Blaze Portfolio
Bryson Pouw received his BS in finance from the University of Colorado Boulder. He started his career in a brokerage firm and eventually landed a senior consultant position in Advent Software, where he led software implementation projects for high-profile, financial-services clients. After more than 20 years in the finance industry, Bryson launched Blaze Portfolio—the most comprehensive and user-friendly trade-management platform we have seen to date.
Bryson shed light on the past and future of WealthTech and how the transfer of wealth will affect the industry in the coming years. He also shared his opinion on the advent of blockchain in wealth management and why the human element is still an essential aspect of an effective WealthTech solution.
Bryson points out a big trend—consolidation. As firms get larger and larger, they take a greater portion of the assets of wealth. Blaze Portfolio is in a good position to take advantage of this with their capabilities and order-management solutions. Another strong trend is moving away from bundled offerings, including accounting, CRM, and trading in a fixed package. Bryson feels that bundling works for commoditized products but not for technology that varies widely in capabilities.
At the end of the day, Bryson and his team are trying to get the most out of their interface whilst making it easy for investors and advisors to add their own value to the process. Blaze Portfolio’s client-driven approach will lead to other enhancements and features:
“There may be a trend towards more direct index investing where you don’t necessarily have to buy an ETF or a mutual fund and pay the management fee, where you may be able to invest directly in the S&P 500. Something like Wealthfront—basically does that. But soon you will be able to just do that directly while adding personal customizations and tax optimizations.”
Big data and blockchain tech trends
The financial industry is run on data and this data needs to be analyzed in a complete and structured way. To accomplish this, many firms look to big data and big data analytics because traditional data-processing software is wholly incapable of handling this type of data processing. Bryson informed me that Blaze Portfolio is currently using asynchronous data processing and that they are dealing with what he calls small-to-medium data. Of course, in the process of growth and expansion, Blaze Portfolio may need to accommodate big data processing:
“What I’m envisioning is, not necessarily looking at everything in an unstructured way, but providing better analytics for our customers and more predictive capabilities around some of the things that they’re already doing within their environment.”
Bryson expressed his feeling that there is a big opportunity for blockchain tech to make landfall in the industry, although this is dependent on the pace of integration and infrastructure changes on the part of big banks. There is value in this field in terms of security, speed, and accuracy, but full adoption will be many years down the road.
The transfer of wealth
All businesses run into the generational wall eventually. The success of FinTech is no exception, because wealth managers and advisors will need to take a look at their technology to be sure that it is fulfilling the needs of the generation of millennials:
“The mobile experience will be important and very valuable in the future. But it depends on the types of the individuals. Even now, there are plenty of self-directed folks who will trade on their own and want the details, then there are other people who hire a wealth advisor so that they don’t have to worry about it. So those types of people may not care about a mobile experience, because they are already paying someone to worry about that for them.”
In this way the industry is very fragmented, with many different variations and strategies available to firms. Bryson is focused on his own niche of electronic trading and rebalancing, and this may be the key to the company’s success in the future:
“Flexibility is very important. I know for us, now and for the future, being able to address a wide variety of different clients and different needs is critical. The industry is so fragmented that the more products you have as a company, the harder it is to solve the evolving industry challenges and needs.”
Robots taking over?
Artificial intelligence (AI) is an exciting new field that is moving at lightning pace. AI tech plays a big role in finance in the form of robo-advisors and chatbots. Bryson stresses that it may be possible to fully replace humans for things like modeling, investments, and trading. However, a robot (or AI) will likely never be able to reassure clients in the same way that a person can. This goes beyond the level of crunching numbers and making pretty charts to psychological and behavioral aspects of human nature. That is why hybridization is a trend that Bryson firmly believes in, where robo-advisors are now adding a human element (for example, Betterment and Vanguard):
“It will be a long time before humans are completely eliminated from the process, there is that reassurance and comfort that people will expect from a human experience.”
Finding people with the right skillset
The 20 years that Bryson has spent in finance have given him insights into how valuable it is to educate tech employees on investment and industry. It is difficult to find people who have both finance and tech experience, which is why Bryson developed his own set of training materials for his team:
“We’ve been typically hiring people with more of an engineering or technical background and [then providing] training around the investment knowledge, it takes more time to get people up to speed that way but it benefits clients if they can talk directly to a support person with in depth knowledge. I think there’s not as many people with both finance and technology experience to hire from.”
Interviewed by Vasyl Soloshchuk, CEO and co-owner at INSART, FinTech & Java engineering company. Vasyl is also the author of WealthTech Club, which conducts research into Fortune and Startup Robo-advisor and Wealth Management companies in terms of the technology ecosystem.