Interview with Brian McLaughlin, CEO of Redtail Technology

Figuring out a financial strategy is hard enough, but advisors have to worry about different tools and technologies that are being pitched to them as “super effective” and “super efficient.”

Some tech firms offer advisors all-in-one solutions. The premise is that if everything is in one place, daily routines and workflows will go more smoothly with significantly lower software expenses. McLaughlin isn’t a big believer in all-in-one solutions because he believes they’re difficult to manage and might result in mediocre products. Long story short, all-in-one solutions aren’t easy to get right.

It is possible to have an all-in-one fintech company that builds and maintains its own solutions. But McLaughlin cautions that one cannot be an expert in all of these tools and technologies. Again, it is possible to build two or more pieces of software and become experts in both. But what happens when resources are limited?

“I feel like even if I spent the energy and brought on a team to build another software component, it’s always two companies that will be battling each other for who gets the resources,” McLaughlin says. “How do we spin up innovation properly, and how [do] we operate it in parallel?”

This first scenario is optimal, but there’s also a second way to build comprehensive solutions: consolidation. Instead of hiring tens—maybe hundreds—of developers, companies are buying and merging with other fintech firms. One example is Envestnet, which bought PIEtech and MoneyGuide to bolster its financial planning technologies. This is a good strategy if you can afford it; Envestnet’s acquisition cost was $500 million.

For McLaughlin, there’s no need to delve into other spaces. Redtail is a CRM central hub built to improve the practical efficiency of running a business. His focus is building out with integrations where they are needed. Redtail does have email and document sharing tools that are critical for managing clients and prospects, but McLaughlin and his team also integrate with a number of other companies including Smarsh and Laserfiche.

Real-Time Integrations
Currently, the industry is crisscrossed with integrations that provide ways for companies and services to communicate with each other. So instead of an all-in-one solution, it’s possible to exchange data through “push-pull” work. One company gives data, the other receives data and vice-versa.
“The majority of the exchanged data is client-driven: ‘Oh, I want to send this to financial planning,’” McLaughlin says. “Okay, click, it sends it.”

Brian is changing this model by adopting webhooks and other technologies that allow Redtail to send changes to data in real time and simultaneously update the information across all platforms. An example McLaughlin highlights is if a client’s last name is changed in the integrated financial planning tool, the CRM and other tools will grab this information and auto-update its own database.

McLaughlin calls these real-time updates a synchronization engine. Although this process is easy for one-to-one integrations, it becomes tricky when it is necessary to add another modular component (this can be thought of as Lego bricks). Redtail has already developed a way to sync Office 365 data fields in real-time with Retriever Cloud. Essentially, Retriever Cloud is an intermediary among APIs that compares data structures in real-time and makes sure they are all the same.

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