#22 Lacey Shrum

In this episode of In The Harbor, Jason Johns and Scott Lindsay sit down with Lacey Shrum — attorney, former RIA CCO, and founder of SmartKX — to unpack one of the most overlooked drivers of RIA enterprise value:

Billing. Revenue. Fee transparency.

Most firms treat fee billing like “something that happens in the back room,” powered by Excel, muscle memory, and a lot of exceptions. Lacey argues that’s not just inefficient — it can be a quiet drag on revenue, client experience, compliance confidence, and valuation.

We get into:

• Why quarterly-in-advance billing creates hidden friction (especially around cash flows and volatility)
• The real-world issue of “snapshot billing” vs. what actually happened across the quarter
• Why billing methods can materially impact revenue (and what that means in a valuation / M&A environment)
• How firms can use better billing infrastructure to reduce client fee disputes and improve advisor recruiting
• The “three-part billing loop” Lacey focuses on: documentation → calculation → analysis
• What implementation looks like across different firm sizes (from sub-$1B to multi-custodian enterprise)

And because it’s In The Harbor, we close with some rapid-fire fun — Montana ranch life vs. RIA billing, NFL chaos, Chiefs vs. Lions diplomacy, and why certain rivalries feel a little… one-sided.

If you’re an RIA operator, CFO, COO, CCO, or anyone who cares about margin, scalability, and enterprise value, this episode will make you look at fee billing very differently.

Learn more: smartkx.io
 

(And follow SmartKX on LinkedIn for ongoing billing + revenue content.)

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Transcript

SPEAKER_04 0:08

Welcome back to In the Harbor, podcast where sports, finance, and leisure meet. I'm your host, Jason Johns, joined today by my co-host, Scott Lindsey. Scott, how are you doing today?

SPEAKER_03 0:20

Doing fantastic, Jason. Gotta tell you, very excited to uh be on the show with you and uh our guest, which I'll let you announce in a second, but to be between two bona fide Montanans as a Yellowstone fan is quite exciting.

SPEAKER_04 0:35

I'm I'm sure it is for you, but that is correct. Lacey and I grew up together and uh we lost touch. It's actually a great story. We lost touch probably 10 years before I ran into you in Orlando at TD Ameritrade conference.

SPEAKER_01 0:52

Like walking around a corner.

SPEAKER_04 0:54

I know it was wild.

SPEAKER_01 0:55

At a conference.

SPEAKER_04 0:56

It was wildus, right? I mean small world. We're both at the both at the conference. So our next guest is Lacey Shrum, founder of SmartKX. Welcome to the pod, Lacey.

SPEAKER_01 1:09

Thank you so much. I'm so happy to be here.

SPEAKER_04 1:12

Well, we're happy to have you, and I think what you're doing is fascinating, and it's something that I think should have been done way sooner than it has been. It's just one of those afterthoughts. So why don't we uh why don't we jump into kind of your background upbringing and then we can get into SmartKX and what led you to launching it?

SPEAKER_01 1:35

Yeah. Well, where at what where would you like to start?

SPEAKER_04 1:39

Well, obviously, your grandparents.

SPEAKER_01 1:44

Our families have been friends for what three generations? I think we're the third, maybe fourth.

SPEAKER_04 1:49

Maybe fourth. That is correct.

SPEAKER_01 1:51

Yeah. Yeah. Um, so yeah, grew up in Montana. Um, I took a different approach when I graduated and decided that I was going to go to the University of Texas um right out the gate. So I left after my senior year and um went to Texas, went to law school afterwards at SMU here in Dallas. And really, obviously, like law had a lot of impact of what I'm doing now, but um the entrepreneurial journey, I know that you want to talk about being in Montana and just having that kind of in your blood. Um now there's books and courses in colleges to go be an entrepreneur, and really it's just so baked in who you are when you grow up in Montana in a ranching family, or just, you know, everyone owns businesses there and solves problems and creates value. So went to Texas, went to SMU, uh, just by happenstance, got into the RAA world and um got into the RAA world and um started at Bernstein and learned in starting in January of 2008, which was a funny time, if you remember.

SPEAKER_02 3:16

Absolutely.

SPEAKER_01 3:17

Started learning the markets and learning how everything worked behind the scenes. Um, worked my way up from doing client servicing into the legal and compliance uh CCO roles, got out of that space and really got the technology bug, uh learning about particularly Bitcoin at that point, just how why and how it worked, and like just doing a deep dive based on curiosity about it, um, which I think that curiosity comes again from Montana Roots and just the values that were ingrained in us. And then after I kind of got into the tech scene, I was working with a law firm here in Dallas that was very venture and tech focused, and they were very good to me. Uh, we still have a great relationship and said, like, you know, if you if you want to practice and do the things that you want to do, we're not going to try to hold you back from looking at different topics. Um, like we'll let you do some whistleblower cases, we'll let you do some Bitcoin expert witness, we'll let you build this tech. And so I built it when I was in-house there for you know the first few years. So it was really a great spot to kind of get a jumping off point.

SPEAKER_04 4:37

Well, it's great to have that latitude.

SPEAKER_01 4:41

Yeah.

unknown 4:41

Yeah.

SPEAKER_01 4:42

I mean, there's not a lot of lawyers out there who are like, oh, let me go do all these random things and like learn about them. Uh, so it was fun, it was a really great time. And then um remembered and kept working in the RAAs of all these blank spaces that needed filled with technology and decided to build one.

SPEAKER_03 5:02

So did you ever wonder? So I got into the in the retail side of the business maybe two months before you, coming in in October of 2007. If you knew today, you knew then what you know today, do you think you would have continued on the path? Because I look back and think not knowing anything made it a lot easier to roll through 2008 uh as that year progressed on.

SPEAKER_01 5:26

Yeah, I mean, I I didn't have any finance background. I I mean, I took a job and starting in January of 08, where one of the questions was, do you know the difference between a stock and a bond? And I did know the difference and I got the job, but I had I'd interviewed at Lehman, I had interviewed um at Goldman, at Bear Stearns, like all in the same building here in Dallas. And so when I got in, and then I'm doing all these reports, I'm like, I don't know how these guys are making any money.

unknown 5:57

Those reports are just down.

SPEAKER_01 5:59

Is this normal?

SPEAKER_03 6:00

The market goes up and down a thousand points a day. I haven't been paying attention.

SPEAKER_01 6:05

Yeah, I was like, What? I mean, you know, I'm 23 years old. So um, yeah, I do wish because there's a lot of things I would have invested in. Um, but yeah, it was kind of nice. Like they just were kind of oblivious to what was going on and just like, you know, you're 23, you just go and do your job and try to make some money.

SPEAKER_04 6:28

Yeah, I think it's a great, great environment to learn it.

SPEAKER_03 6:30

Uh you know, it was just a different time and place, right? And and again, I had come into the into the industry a little a little bit later in my career, but the same problem was is not fully grasping what was really going on, how bad it really could have been. And I think that was the blessing for me because it was just I was more worried about learning the products and getting better at my job and being like, oh, is this always this hard? And they're like, it's never like this. And I'm like, oh, I don't know any other environment. This is what I came into.

SPEAKER_00 7:00

That's great. We we hopefully got the the bad part over early.

SPEAKER_04 7:05

Well, there will always be another. Oh, yeah.

SPEAKER_03 7:08

Well, at least very closer.

SPEAKER_04 7:11

Yeah, that's that's absolutely true. Closer than we were yesterday. Well, let's let's jump into Smart KX because I think that's a fascinating service that you're providing for firms. And I'm sure a lot of them just aren't even aware that it exists.

SPEAKER_01 7:27

Yeah, so Smart KX, um looking when I was in the RIA and I worked with other REAs, this revenue and fee calculation um was just ignored. Like it was something that someone did in the back room, and he or she had been doing it for 10 years, and they knew everything that was going on, and it just wasn't something that was really thought or worried about until a client asked, or you know, you had a SEC examination. Um and so, and I even to this day, and you know, this was eight, 10 years ago when I started looking at this project. Like, I'm the only technology on in our industry. We call it the Kitsies map of technology. It has all the different tech out there in each individual segment.

SPEAKER_04 8:21

Um I'm the only it's getting more and more difficult to read, though.

SPEAKER_01 8:25

It is getting very difficult. Well, I mean, AI. Everybody has an AI product now.

SPEAKER_04 8:30

He's gonna need like a giant, a giant printout soon.

SPEAKER_01 8:34

Yeah, until the 2008 comes, and then though they will self-take care of themselves. Um, but I'm the only one on there that's focused solely on AUM fee calculation, um, really revenue. So the whole process from clients saying yes to signing to calculating, collecting, and reviewing revenue, um, which has been very surprising for me, really, that it's just such an ignored piece of the industry. Um, if you go to the big techs, like an all-in-one platform, you know, they'll they'll say, we built this because we had to, and we built it as a report. Um, we were building performance management software, trading, rebalancing, whatever it may be. And we had to run a billing report. So we built these as an add-on reports. And so that's proved to be a huge opportunity for us because we've really been able to discover just all these inefficiencies and these places where the it's broken and everyone's kind of just accepted that for what it is, um, and just build new technology that it solves problems. And really, the problems are the advisors' clients don't have a transparent fee. It's not fair in a lot of cases across the client base, and advisors are losing money. Um, so we're bringing technology that solves those problems.

SPEAKER_03 9:58

Well, it and this isn't a new concept in our industry, right? Daily accrual has been something that has been around uh income funds or on the fixed income side. You know, why do you think that it took so long to jump the line to the other side where that the same benefits could benefit the client?

SPEAKER_01 10:19

Yeah, I think so. This is a you know a new question to me that you're asking. And and I think just off the cuff, like our industry prides itself on being really segregated from the broker dealers, the products, anything else out there. The first inclination is for someone in our industry to be like, yeah, but we're different, right? Like we're a fiduciary, we're billing by AUM, like we are very different. Um, and so that might be it. It might be that it's just quarterly in advance is very popular. Um, that is the way everyone billed because they got paid up front, which makes sense. You aren't able to do that um with an average daily balance. And really combining the two is it's not easy, right? Like you've got to build a lot of calculations and it's not a spreadsheet. You've got to build a robust 3D system. And so it just kind of like sat by the wayside um of you know, there are not independent RAAs, but when you're with a large bank or large broker dealers that do do that, and um just like a hidden gem in there.

SPEAKER_04 11:32

I wonder a lot of it's probably this is the way we've always done it.

SPEAKER_03 11:35

Oh, 100%, right? And just the the consistency, right? And you don't want to make change, right? And everybody works on the same program, so it kind of you know escalates across.

SPEAKER_04 11:48

Well, do you want to ask me what my favorite tech platform is for my day-to-day job?

SPEAKER_00 11:54

Sure.

SPEAKER_04 11:55

It's Excel. And I'm sure I'm sure there are uh many advisors out there who feel the same way, but oh, it's my least favorite and favorite at the same time.

SPEAKER_03 12:07

Well, I can I can see that.

SPEAKER_01 12:09

Yeah, I mean it's necessary, like you need it. We use it, I use it every day as well.

SPEAKER_04 12:13

100%. But maybe not to calculate fees.

SPEAKER_01 12:18

No, when you're managing, you know, 125 million up to 25 billion dollars, like the the big things need to be you need to just have that data. Like you need to have access to what your fees are, not only to calculate them, but just to understand your business. Probably the other big surprise for me is just being able to analyze your revenue and determine where the friction is, where the loss is, how to make those adjustments? You cannot do that in Excel uh easily if that's not your full-time job. And people weren't doing that before we put our product out.

SPEAKER_03 13:00

Does it help you also with projecting? Right? If you are doing this type of building, does it help you plan more efficiently?

SPEAKER_01 13:10

Yeah, I think so. We haven't gotten too far into like the projections. What it does do is it helps you capture what is happening across the quarter. So if you build quarterly in advance, you build on December 31st value, and like anything that happens this quarter does not matter to you.

SPEAKER_03 13:34

Just that day.

SPEAKER_01 13:36

Just that day. Yep.

unknown 13:37

Right.

SPEAKER_01 13:38

And so we're able to give you the access to the entire quarter.

SPEAKER_04 13:43

Well, then if there's a a and end of quarter market volatility or you know, values go down, you're worried because your revenue went down, commiserate with what the assets did on that one particular day, and then you're thinking, oh, to be even, we got to make up for it in the next quarter.

SPEAKER_01 14:03

And you're if the market pulls back before you run billing on December, let's say on March 31st, you're pulled back and your fee is set in that. And then just as you learned in 2009, you're not gonna catch the up. Because you don't catch anything going up until July 1st. So, like you you've just missed the up on your compounding on your fees.

SPEAKER_04 14:30

Right. I imagine that adds up.

SPEAKER_01 14:33

I would say it adds up to about two and a half percent a year.

SPEAKER_04 14:38

Incredible, just bleeding revenue loss.

SPEAKER_03 14:46

And the missing, right? It's just uh that that snapshot in time. And again, we still do some billing on our side, right? And I think they would do that maybe in the SMA world, the same deal, but the friction it could unnecessarily create because of timing, not because of the market, not because of performance, not because of returns. Just that day maybe the bill's high, the next day the market's down, then the client gets the statement, right? And it it just creates all these additional friction points. And I imagine that this is gonna help a lot to potentially smooth out some of those points with with with customers and clients.

SPEAKER_01 15:23

One of the biggest friction points we see is that if a client takes out or deposits cash in the middle of the quarter, they'll do advisors will do this cash flow calculation. And so all of them, you know, really like this feeling of like, oh, well, we're doing cash flow calculations. And we we tried to build it for our users. And when we got into the math, we're like, this is impossible, it's worse. Like it feels good, but it's actually worse. Like you cannot calculate a fee on a blended rate as the as the cash flows are coming in and out, like it breaks the math, and there's just all these friction pieces in quarterly in advance, and then cash flows make it worse, and it's just sort of like covered up, like it's like plaster has been put on the wall, and it's just like, don't touch this, like just let it be. Um, and it's it's a hornet's nest in there.

SPEAKER_04 16:22

And even if you're making adjustments or attempting to make adjustments based on cash in or out of the account over that billing period, it's extremely onerous and time consuming, right?

SPEAKER_01 16:35

Yeah, even in the systems that do it, like you have to, there's a lot of assumptions in and rules you have to make. Like, does that include dividends? Does that include, like, is it un you know, is there a cap? Is it one dollar or is it a hundred dollars? Is that cumulative? Is it day of? Is it the whole quarter? There's just all these rules that you have to decide on that are not transparent.

SPEAKER_04 16:59

So, you know, thinking about this, having an extremely transparent billing process, more so than we just bill on the quarterly in advance at the end of the quarter. You know, knowing exactly how that fee is being calculated on a daily basis, I would imagine that also helps from an enterprise value standpoint.

SPEAKER_01 17:21

Yes. Um, you know, what it's helped a lot on from enterprise side is attracting advisors um and giving them tools to mitigate those risky conversations with clients of, hey, you just billed me and now the market's gone down. Oh, we'll discount next month. Oh, we'll change your fee for this. Those conversations are just non-existent at this point. Um, so that's been super helpful. Um, attracting advisors. We've also done a lot of study on if you're acquiring um firms, two firms that are acquiring, let's say the same exact firm, depending on what methodology they put their billing on, is about a 5% difference in their return. So firm B is already making, yeah, firm B is already making 5% more because of the billing methodology that they put their acquired firm on. And that matters for the seller too, because that affects their payout.

SPEAKER_03 18:29

Well, I I imagine it it helps advisors have confidence in their fee. Right, as as high. And their value. And their value behind it, right? And it doesn't this doesn't apply just to advisors. Anyone who's in a service business that doesn't have that confidence in their fee, every client they talk to potentially have a problem with the fee. Right. So I think, you know, just another thing of no, and be able to explain it. This is how it works, you know, just another layer of removing that unnecessary fee conversation when it doesn't need to happen.

SPEAKER_01 19:01

And you're really putting yourself in you are advisors love to say, like, we win when our clients win, we're right alongside of you, like we're not taking commissions. That's another selling point of theirs. However, quarterly in advance somewhat does that. Like that's a that's a conflict from that story that you tell clients and really yourself. And so, with like this new feature, the smart recon we've been talking about, um you you are truly alongside the client. Like market goes up, market goes down. Every day you are billing on what you are managing, what money is at work is what you are getting compensated for, not just what it was at the beginning of the quarter.

SPEAKER_03 19:45

Complete alignment, right? Like we use that all the time, like you said. It's sitting on the same tide of the table as your client.

SPEAKER_04 19:51

Well, let's let's use a real world example. I mean, let's take 2025 as a year. So you bill on last day of March. Liberation Day. And then we had then we had liberation day. So the account values were vastly different over those two days.

SPEAKER_03 20:10

Well, then you add in, you know, folks that you know in their process may be rebalanced at some point by the end of April. Right. To to put potentially capture that upswing. Right. There's a lot of different factors I think that can get lost in the shuffle.

SPEAKER_04 20:26

Right, and there's probably I was gonna say there's probably an idea that they balance each other out.

SPEAKER_01 20:36

Yes, there in is there is an assumption.

SPEAKER_04 20:41

Correct.

SPEAKER_03 20:42

I won't repeat what my mom always used to say about assume.

SPEAKER_04 20:46

But for the end clients, I mean sometimes they're gonna be charged less than they should have been, and sometimes they're gonna be charged more than they should have been.

SPEAKER_03 20:52

But it'll balance out, right? Oh, the next quarter will be down or up, and then by the end of the year, we hope we kind of get back. Right.

SPEAKER_01 21:02

You hope you kind of get back.

SPEAKER_04 21:05

Right. Well, yeah. I mean, this isn't new to you. You've you've had this conversation before.

SPEAKER_01 21:12

The um the other thing is I a hundred percent advisors are always like, well, it works out in the end. Um and it does, I mean, sure, if you want to believe that, but it we've also done the math, like it's about 2% a year that you're losing in revenue. Like it's not working out, like you're actually leaving revenue on the table because you're missing anytime the market goes up.

SPEAKER_04 21:39

Which is fascinating. I mean, that is a meaningful amount that you change one part of your process and you can increase revenue by two percent.

SPEAKER_01 21:50

Yeah, I mean, for an eight million dollar firm, that's about a million a year at a 10x valuation, that's$10 million in your valuation.

SPEAKER_04 22:01

That's incredible.

SPEAKER_03 22:03

My head's spinning.

SPEAKER_04 22:04

I mean, this should be universal. I think it should be universal from a billing standpoint.

SPEAKER_01 22:10

From your lips to God's ears.

SPEAKER_04 22:12

That's what I that's what I'm working on here, Lacey.

SPEAKER_03 22:18

He always says if he goes back to Montana, it's easier because he's closer if he's on the top of the mountain.

SPEAKER_04 22:23

Right. But I don't know if we can uh if we can trust Lacey. Every great western started with Texans going to Montana.

SPEAKER_01 22:33

And so she's including the best one, Lonesome Dove.

SPEAKER_04 22:37

Correct. That is the best one by far. But she's more like uh Wagons East with John Candy when they're deciding it wasn't for them.

SPEAKER_01 22:48

Is that what I feel speaking speaking of John Candy? I feel more like I'm playing to trains and automobiles. I think I'm John Candy. Uh maybe I'm Steve Martin and my husband's John Candy. All right. That's that's better.

SPEAKER_03 23:12

I wonder how we like selling shower curtain rings.

SPEAKER_04 23:18

Oh yeah, that is exactly what he sold. Well, we're getting off topic, but what is what is one thing from your conversations with firms, what is their aha moment?

SPEAKER_01 23:30

Um their aha moment, I think with any with any billing, when you can show them the data of how their current system is not working, both from a numbers perspective, um, like how much money they're leaving on the table, and that can be captured with just optimizing. Um, and then also their numbers when you start to show them like here are basic numbers you should know about running your business. What's your average client profile, which they usually know? You know, how much what's your average client's AUM? Maybe they know their average client spend, but what's your average uh blended rate across your book? So most advisors will say, oh, it's 80, maybe 85, 90 bips. And like we find it's about 60 to 70 bips. And so it's significantly lower than they expect. So when you start really pointing out things of where they're missing revenue that they've earned, and I think that's also really important because a lot of them shy away from well, I don't want to raise fees. It's like you're not raising fees, you are just capturing what you've earned and you're you're being more efficient. Um, so that that blended rate, how many assets they have at no-bill is always surprising. Um so those are usually those are usually the things that get people to make a decision and turn their head when they're when we're they're looking at our product.

SPEAKER_03 25:09

But I I gotta imagine though that you catch a fair amount of skepticism initially. Right. And then at some point there's the aha moment, but rarely does the aha moment, because again, it seems so simple and logical, but it's the fighting of the way we've always done it. You know.

SPEAKER_01 25:31

Not only the way we've always done it, but like, um, I don't want to mess with this. Like, I don't want I don't want my clients to know that their fee was actually 100. I've been charging 75 and now I'm gonna charge 100. Like, I just I don't even want to deal with addressing my value or what my fee is for the work I've done with clients. That is that's the biggest skepticism for sure. And so if I just like leave this over here and I just kind of let it be, um I'll just take it on the chin.

SPEAKER_04 26:12

Well, and it's such an integral system. However, they're doing it, it's across all of their clients, they'll feel it. So maybe part of it is just let's not rock the boat.

SPEAKER_02 26:24

Yeah.

SPEAKER_04 26:25

Everything works right now. I can see it.

SPEAKER_01 26:30

Well, and everything feels yeah, everything feels like it's fine, and like I'm kind of I'm aware of these underlying issues, but also those underlying issues mostly affect the advisor. And so they're like, I'd rather just not not handle this and like just let it be and take the issue myself. Um, but you know, you know, private equity is coming into our space and they're not gonna take the issue.

SPEAKER_04 27:01

No, no, that is definitely true. Uh, you know, that brings up an interesting point. Since you started in the RIA space specifically, how much has it evolved or changed? I mean, it's a completely different landscape now than it was 10 years ago.

SPEAKER_01 27:17

Yeah, the landscape of just the the amount of people just being acquired and these big firms just gobbling up. And then, of course, you see this the PE money coming in, and a lot of the PE money that I see it it may be like their first or second or third venture into our space. Um, so I think that's only gonna grow. I mean, it is it is a very lucrative business. Um, it is a service business, but it's also a lot like SaaS because it's recurring revenue. It's it's easy. The client doesn't have to write you a check or pay you by credit card. And it's you know free, but I mean you have to pay to calculate it, but it is free to collect. You're not paying a stripe credit card fee or anything, and like the market does go up over time. So it keeps the growth, the growth is built in um to continue over time. So I I think the private equity and the outside money is just going to continue to filter in as and as tech gets better to help them optimize. Um, I think it's got a pretty long runway.

SPEAKER_04 28:31

Uh I would agree. And I Michael Kitsis just posted on LinkedIn the chart of new ad or growth by channel. And fully independent RIAs are the fastest growing and have been for some time, but there was also hybrid for a while, and now they're seeing that go down.

SPEAKER_03 28:50

The hybrid or the fully independent?

SPEAKER_04 28:52

The hybrid, because they're moving, they're moving fully independent. It's the second breakaway, they're breaking away again. So I think that's interesting.

SPEAKER_01 29:06

And it's just yeah, it's just so easy now. I mean, think about how much easier it is to just start a business than it was 10 years ago. Like everything's online, you can whip up Gmail in 10 minutes, you can have a website up, you can have decent content written very quickly. Um, it's that whole world has just been flattened and continues to be that way. Like you don't, you know, 10, 15, even when I started 10 years ago, people were like, oh, so do you mail me a CD to like load the program on my computer? That wasn't very far off 10 years ago. Yeah. And now you're just like click, you're buying and getting out, you know, buying things and canceling things with just clicks.

SPEAKER_04 29:54

Is is some of the skepticism, if we go back to that, on I would imagine every firm has nuances and certain complexities. And they probably don't believe that it could handle different splits and how they're especially if you have advisors spread out in multiple offices, multiple locations, which we're seeing more and more of in the RIA world. The super teams.

SPEAKER_01 30:20

I don't see a lot of pushback on like, can you handle this certain thing? Um, now the teams, the different offices, yes, like they've got to handle things much different because their advisors want to see their book or you know, their clients only, and then they want someone oversight of it. Um, it's not really the capabilities of like now. I do see a lot of advisors who you'll get in and look at their billing and you're like, every single one of these has an exception. And they're like, Oh, yeah, but we, you know, we we this is special, this is this way, this is all these things. Um that definitely is a problem that they're well aware of. So we can calculate almost anyway. One time I got a nasty gram from someone, he was trying to do something just absolutely chaotic. And I'm like, Yeah, we don't do that. And he's like, You said that you do anything.

SPEAKER_04 31:19

Anything within reason. Yes, depends on which day you have to do it.

SPEAKER_01 31:23

Backwards, backwards way of doing it. But um, yeah, that's where we see our biggest offices. Like they, of course, and that's really enterprise level. Like they want to be able to split up access levels and kit abilities and really compliance controls. So can you know, Jason in our South Carolina office when he meets with his clients, need to do all these, you know, can he do all these things? When Scott in our Detroit office, um, he can, but Jason can't. So things like that, like control issues for sure.

SPEAKER_04 31:59

All right. If someone were to engage with you, what is how onerous is that process as far as implementing Smart Recon across?

SPEAKER_01 32:08

Yeah, so it's not that onerous anymore. Um, certain uh portfolio management systems out there that they may be running billing on, we have capabilities now to just bolt on to that. Um, so they don't really have to do any of the onboarding that they had to do before. We can actually ingest the data every day as far as values. A lot of times, if you get over one to two billion, you have multiple custodians, small custodians. We can take all that from your portfolio management system or a data lake, um, as well as all the initial setup. Um, so it depends how big you are. If you're under a billion, we can get you on in a week. Um, and then of course, when you get up into the nines and tens, like that usually comes with some customization on reports. Um, so that's anywhere from a month to probably three or four months to do the onboarding and testing and review and adjustments that are needed.

SPEAKER_03 33:06

I mean, as far as some of the ancillary benefits, I have to imagine this could be a game changer for recruiting. Right. Because it is going out and you identifying as the person who is the acquirer. You know, is this something that is viable? How are they running it? And then going back to them as the recruiting side of, hey, when you come in, this is how we run our billing. This is the benefit, you know, it's just an unbelievable value add.

SPEAKER_01 33:34

Yeah, it's fair, it's more fair to clients, it's more transparent, it's easier for you to explain. Um, you know, you see a lot in recruiting, they're all they're upselling what their back office is. And yeah, this is a huge one. Uh it is all these great things for clients and for you, and it also increases revenue.

SPEAKER_04 33:58

The true win-win.

SPEAKER_03 34:00

Win-win-win, right? You gotta throw the third one in there.

SPEAKER_04 34:03

Easy to explain, transparent. Well, if we move on from Smart KX, what is I guess any any last words on your conversations, how people are finding you, and then of course, where they can find you.

SPEAKER_01 34:27

Yeah, so I think the most, you know, one of the questions you ask is like, what are advisors, most advisors missing, or what, what is taking out like a sore thumb in their process? And I I would definitely say this quarterly in advance is hugely ignored, um, because that's the way it's always been done, and that's what people are continuing to do. The cash flows thing is a huge operational and compliance nightmare. Um, and just having advisors know that there's better technology for billing. Like it's not, it's been sitting on the sidelines, it's been ignored, and there's so much innovation that we've made. I mean, in here, we haven't even hit on the piece with documenting the fee, being able to make those adjustments in real time just by clicking rather than having to send out new documents. And just like we're the only people out there pouring money into innovation and billing. Um, all of our products has been user-based and off their feedback. So we're product led and um it's been really fun. Like we've been able to help a lot of advisors just have a lot more confidence in their system and be able to just truly ignore it, right? Be like, I know that not only do I have this great product, but I have this great team behind it that they're they are experts and we are looking out for all the things and we're building around all the issues that pop up and bubble up with running a business for them. Um that's the most exciting part for us.

SPEAKER_03 36:06

Well, again, it lines up with probably one of the oldest adage about business and going out of business, which is the epitaph usually will read, This is the way we've always done it, right? Failure to change, failure to keep up with it. As you've had these conversations with folks, have they had any other aha moments that surprise you in terms of as they thought about they're meaning a simple fix? But is this spread into any other areas of their business that you weren't prepared for? Or have you guys thought about things differently outside of billing that might be something right in front of our face that we're looking past?

SPEAKER_01 36:40

Yeah, our biggest piece outside of billing, which I'm excited about, which is really where we started from, was we build we view billing as a three-part cycle. So the documentation, here's what I'm going to bill you, the calculation, and then the analysis. Um and those three things go in a loop. And that that's happening in every firm now, whether they're actually doing it or not. Um, but those those two things, the documentation should happen. The calculation has to happen, and then someone reviewing and managing their revenue should happen as well. But those are all manually kept together. Like someone's running those reports, somebody's putting those in Excel, somebody is trying to make all those things work, and we automate that in a three-step cycle. Um, so while large enterprise firms come onto our platform for billing, um, what's really exciting is that we also have that client agreement piece so that when they do recruit that new advisor, they can immediately send the agreement with the calculations, everything that needs to go to the client. And that account is ready to be billed immediately. Um, whereas right now you're seeing anywhere from the shortest firm I've heard that they tell me they're doing it is under 20 days up to nine months. So we can shorten that down into a few hours, um, which that's the next we we have those capabilities, and our enterprise users will start rolling those out um mid to end of this year, which will be really exciting.

SPEAKER_04 38:19

So if we think about the RIA firms that are currently on the platform, who do you find within the firm is the happiest customer? Is it the chief compliance officer?

SPEAKER_01 38:30

Is it the They're never happy? As you've been one before.

SPEAKER_03 38:38

Anyone who's on the reporting side.

SPEAKER_01 38:40

Um, the happiest once we onboard is usually the direct user. Um and that's for a lot of reasons, but the biggest one is that we're product led. So that, you know, the CRO is happy, we've we've made more money. The compliance officer is happy we can check off massive compliance issues for them. Um, the ops person's happy because things can run in an automated flow, but that end user is usually the happiest because at the end of the day, the they're the person that we ultimately serve. Like they're the ones using the product, they're the ones in there every day. And so they're the ones that we get feedback from and reiterate and enhance based on um what they want and need. Um so usually those are the ones that in the end we're we have the closest relationship with.

SPEAKER_04 39:34

Oh, that's great. Well, I I encourage all of our listeners, if they're interested or they think there's a better way they can handle their billing, to check out Lacey at smartkx.io.

SPEAKER_00 39:46

Yep.

SPEAKER_01 39:48

And we're gonna or if you just like want, I love we've had actually a lot of people come in and ask us like, could you help me do an analysis? I'm getting ready to sell, or I'm going to join forces, or I'm going to acquire. Like review, you can I can do so much analysis. I do do so much analysis. Anyone who comes in um for a sales demo, like I can review so much and tell them where the bodies are buried um so quickly based on their public information. And so that's been really exciting to do too for those who have started to contact us in that regard. Like, can you can you help us see for ourselves or a target where gaps are that we could fill and see an instant return?

SPEAKER_04 40:40

Oh, that's pure value add.

SPEAKER_03 40:42

Oh, 100%. I mean, again, the the people that are willing to admit they don't know what they don't know, right? And and that's what this exercise, especially when you're at that critical point when you are looking to evaluate your business, a mistake there can be costly. And catastrophic. Or a target. Right. Yeah, or yeah, exactly.

SPEAKER_01 41:04

Like you you target if if you have the methodology that makes the least amount of money, you target somebody who makes the most amount of money, and then you bring them back to the least amount. Again, like you just lost five percent in your acquisition, and you don't, and you don't really have any idea about it, right? Like it all just kind of gets washed. It's like, oh, the market's moving, or oh, clients you know, took out money, and it's just that's not the case.

SPEAKER_04 41:31

Yeah, and it's proper due diligence. I mean, uh a friend of mine said the other day, any idiot can overpay for something.

SPEAKER_03 41:39

Yeah, but that's good.

SPEAKER_01 41:41

I'm gonna use that.

SPEAKER_03 41:42

But on the on the flip side, any idiot can undersell their own product, right? You know, I don't want to use that in terms of our guys, but you know, the point made.

SPEAKER_04 41:54

Well, I think we're at the we're at this stage of the episode where we're gonna get into some fun rapid fire questions, and this is where we can tie in a little little sports.

SPEAKER_03 42:03

Perfect. All right, so I I always get to start off, Jason gives me the super hard questions, right? I know you grew up in Montana, you're in Texas, you're doing in the REA billing. What do you think is tougher? Ranch life or the current state of REA billing?

SPEAKER_01 42:23

Uh ranch life a hundred times. Have you ever ran a shovel?

SPEAKER_04 42:29

I have, just not on a ranch. Try picking rocks.

SPEAKER_01 42:37

You know, now the picking rocks, this is a parenting tip. I think picking rocks is the best punishment for children ever. Like it is, and I I try have tried to find a way to emulate it here in Dallas, which is really difficult, but like it's such a good lesson. It's like a little bit painful, also safe. You gotta sit with your thoughts for a while. You've got to like work through to like fill up the bucket. There's just so many great lessons about it that I try to, but whenever we're home and my kids get in trouble, I just really just send them pictures.

SPEAKER_03 43:18

You you can do what they used to make me do for spitballs in school, which is throw a hundred spitballs out in the yard and don't come back till you find them all.

SPEAKER_01 43:27

Oh, that's good.

SPEAKER_04 43:29

Well, and then you're outside. Okay.

SPEAKER_03 43:31

You're outside, you're with your thoughts, you're doing the same thing, but it's just you throw them out in the grass and then that that's your punishment. Let me tell you.

SPEAKER_00 43:38

That's good.

SPEAKER_03 43:39

You don't you don't like to do that twice.

SPEAKER_04 43:42

All right. So little known, little known fact about Lacey, she is a Kansas City Chiefs fan. Recent?

SPEAKER_01 43:51

Um, we've been a fan fans for quite a while.

SPEAKER_03 43:53

Okay.

SPEAKER_00 43:54

So not Taylor Swift if that's where it's or Taylor Swift, if that's where it's

SPEAKER_03 44:00

So it was it was Patrick Mahomes. That's what it was.

SPEAKER_04 44:02

I can confirm it was pre-Taylor Swift. Whose program's in better shape right now? Kansas City or Detroit?

SPEAKER_01 44:12

Well, we have to say right now is midday on January 22nd because I feel like the NFL world has like I I wish I had my own podcast about all the craziness of NFL right now. Like it's just things are just happening so fast.

SPEAKER_04 44:32

I think they exist. We just we gotta find one. A lot of head coach moves, a lot of coordinators, a lot of head coaches team coordinators.

SPEAKER_03 44:43

Yeah, and vice versa, right?

SPEAKER_01 44:47

I don't know. I mean, I I think I you know today Kelsey's coming back, they're saying. Um today they're saying they're getting a new uh yeah, they they're saying they're getting a new OC. I have not seen official word on that. I think Detroit's missing an OC as well, right?

SPEAKER_03 45:04

Uh not anymore. Just just hired one. Just hired a new one.

SPEAKER_01 45:07

Oh, who'd they hire?

SPEAKER_03 45:09

Arizona. Yeah, the offensive coordinator.

SPEAKER_01 45:12

Oh god, that was a good move for him.

SPEAKER_03 45:15

Close personal friend of the prior successful offensive coordinator. So I think they're trying to keep within the same with the same uh guardrails. I do, I like Ben Johnson, but well, isn't Kansas City building a brand new stadium, right? Arrowhead, the loudest place on earth. I hate it. The new one?

SPEAKER_01 45:36

I hate a dome. Sorry, but I just do. I know y'all have one in the channel. I would love to go. Well and um Chicago's getting one too.

SPEAKER_04 45:49

They are in such soldier fields, so historic.

SPEAKER_03 45:53

I know the outdoor arena arena is is because it it's not a multi-use facility. It can't, you know, you think about putting that down there and justifying it sitting. You can only have so many outdoor hockey games, right?

SPEAKER_04 46:08

As they move those things around, but well, I think it's the concert revenue.

SPEAKER_03 46:12

Yeah, it's just it makes it a use facility off season. Right. 100%. I mean, especially if you're having to foot the bill, you know, as a community or a state.

SPEAKER_01 46:23

I mean, as a community, right? It's not the like they're putting most of it.

SPEAKER_03 46:28

No, that's what I mean. They can generate the revenue back.

SPEAKER_01 46:33

Yeah. Um I don't know who's in a better position. You know, I would say the Chiefs, but I'm a huge Dan Campbell fan. Um, I think he had the biggest trend of the season, even though not having a great season, was fourth and one. You know, last season he started like he was the man for that. Everything was fourth and one, he was going for it, and now like every team's going for it on fourth and one.

SPEAKER_04 46:58

It is it is kind of funny because I think the analytics would support that.

SPEAKER_03 47:01

Well, and that that was what I was gonna get to, right? Right back to your world is somebody ran the analytics on it, and it literally tells you going for it is the best outcome that you could hope for.

SPEAKER_01 47:15

Now, I will also say somebody's ran the analytics on going for two instead of kicking every time, and it also is better to go for two than kicking if you do it every single time.

SPEAKER_03 47:29

Not voting well for kickers in the NFL.

SPEAKER_02 47:32

No.

SPEAKER_04 47:34

We still need field goals, yeah. But if nobody's kicking field goals, I mean, Chicago fans are probably like, why didn't we kick the field goals?

SPEAKER_03 47:42

Well, and we had a few games this year where, again, live by the sword, die by the sword, right? I mean, I don't play football, but if I did, I'd want to play for Dan Campbell. I mean, he's a great guy, but me too. How many games did we have this year that we were going for those fourth and two inside the 15-yard line and not getting it?

SPEAKER_00 48:00

Yeah.

SPEAKER_03 48:02

That's an outside. So let's see.

SPEAKER_04 48:04

Lacey's ever the uh ever the diplomat appeasing both fan bases.

SPEAKER_03 48:08

All right. So now you look the next question you cannot answer the Detroit Lions. What's your other team that you would love to follow in the NFL besides the Chiefs?

SPEAKER_01 48:20

Oh, I thought you were going to say other team, and I would say Texas Longhorns, of course. Um who do I like to follow? I mean, uh I love the NFC because there's just so many quarterbacks over there right now, which is such a strange time in our playoffs. Like, you know, we don't have a Josh Allen, we don't have Lamar Jackson, we don't have like all those people over all the quarterbacks, um the Houston Texans quarterback. Um I loved following Mike McDaniel from the Dolphins, and I'm very excited to see him back in some good pressers because he didn't have any good pressers this year, and I think he's like the best Twitter entertainment.

SPEAKER_04 49:04

I would agree with you.

SPEAKER_01 49:05

Um, I like the 49ers. I love I like George Kittle a lot.

SPEAKER_03 49:10

Um I gotta imagine if you're pretty like if you're a Longhorns fan, who obviously it is is Arch as good in person, right? We get to see him on TV, but well, I mean halfway through the season we weren't saying that, but yeah, but he had a nice road and he's coming back.

SPEAKER_01 49:30

Yeah, we'll see. Yeah. Um, but I just I really do love watching football. I love Kevin Harlan's my favorite announcer. That's probably the that's the 11 o'clock game I watch almost every Sunday because I think he's the best announcer in sports. So there you go.

SPEAKER_04 49:47

When do you think daily accrual billing is gonna come to the NIL with these students moving so quickly when they sign their contracts? I mean, it almost has to be daily accrual, right?

SPEAKER_01 50:00

I should start pivoting my product.

SPEAKER_04 50:02

I I think so. Absolutely.

SPEAKER_03 50:04

Well, it wasn't it John Calapari, who has now got an insurance carrier to to write insurance policies on the kids who move or leave after NAL? There's definitely other people thinking about what to do. Because the option's not gonna be Troy Aikman, which is I'm not giving any more money to NAL. Right? And he came out and said that, but how do you how do you think?

SPEAKER_01 50:31

Oh yeah, didn't he say that he they never wrote him a thank you note? And so he just was not gonna give them any more money.

SPEAKER_04 50:37

And left the team. So it's like why am I why am I giving money? And then you can't constantly go back to the the well, right? Eventually you're gonna run out of alums that are giving money. So it it almost you almost have to treat it like a business. Which is unfortunate. An endowment model.

SPEAKER_03 51:00

Well again, I didn't get into it, but like the way the I I read the insurance, and again, I'm not an expert on this and don't pretend to be, but you would go out and let's say you know you paid someone a million dollars into the NAL for a student, and then there was an insurance policy on it, the student leaves, the investor gets their million dollars back. But the reality is we know where the million dollars is gonna go right back into the NIL pool. So creating a loop to protect kids from walking away and investors that's actually a good idea, because you don't feel like you lost anything. You don't feel like you lost, and then you don't feel like you got you know screwed over, so to speak, but you're still able to put it back. But the problem is is what it they're gonna start doing contracts, they have to.

SPEAKER_01 51:44

Yeah, I was gonna say that's just a restrictive covenant on the player.

SPEAKER_03 51:48

You know, and it's a hey, you get paid this, and if you're here at the end of the year, you get this. It's this upfront program. I mean, we've seen it in any industry, it it never works over the long haul.

SPEAKER_04 51:58

No, and it's probably really I mean, at the end of the day, these are academic institutions, it's probably really difficult to pay attention in class when you're making$10 million being on the football team.

SPEAKER_03 52:10

Looking out the window at your brand new car.

SPEAKER_01 52:13

Well, I mean, that was on display on Monday in the national championship. I mean, wasn't that that was like a huge Twitter subplot that I saw was that what's his name? Carson Carson Beck? Yes, he was making a ton of money. And Mendoza, I mean, I'm sure he's made some, but their head coach wasn't making any money.

SPEAKER_04 52:37

No, and well, and they asked, I think they asked, did they ask Beck about uh class?

SPEAKER_00 52:44

Oh yeah, and he's like, I I'm I was out of year.

SPEAKER_04 52:47

I graduated two years ago.

SPEAKER_03 52:51

Well, that the the five-year program should be coming and to an end soon because that was a COVID, but I don't know if they extended that that fifth year of eligibility that everybody loves to take advantage of. And again, for COVID, they had every right too.

SPEAKER_04 53:05

Well, they always had a fifth year if you redshirt.

SPEAKER_03 53:08

You had to redshirt though. Now you have a fifth year of actual eligibility, and again, it was COVID.

SPEAKER_01 53:12

And you can come from different um divisions too. Like if you come from a different division and go up, it doesn't count against you.

SPEAKER_03 53:20

I mean, when we were in when I was in school and and I was an NCAA athlete, if you left your school, you sat out. Either the remainder of that season or the you know, a full year, and you lost that year of eligibility. And now again, uh ultimately I think it's a good thing. It just like everything else, that like RAA billing, it it needs some refining uh to get it to a better place.

SPEAKER_01 53:46

All right, and there I think speaking of national championships, Jason has not addressed another Montana national championship.

SPEAKER_04 53:58

The uh the Montana State Bobcats is who Lacey's referring to.

SPEAKER_03 54:02

Uh he did address it, Lacey. So, in fairness, I I gotta I gotta get Jason on this. He was so excited that the only cheer that Montana State could do when they won the national championship was their favorite cheer against their rival Grizzlies.

SPEAKER_04 54:17

Correct. I mean it's it's just reeks of little little brother syndrome.

SPEAKER_01 54:22

It's the only cheer.

SPEAKER_04 54:24

I mean, you just won the national championship, and all you can think about is your in-state rival.

SPEAKER_01 54:29

So I I've we've got our own little brothers here that are, you know, hor I mean AMM and NOU are the same way. But yeah, now Texas Montana State played what?

SPEAKER_04 54:44

Oh, now Texas Tech is in the mix.

SPEAKER_01 54:49

I mean, they got a lot of money coming their way. They've got one big donor that is massive.

SPEAKER_03 54:57

And then of course Mahomes, but I was gonna say, and they got a mark player in the NFL doesn't hurt either.

SPEAKER_04 55:02

I I call them unrequited rivalries in those, like what's Texas's biggest rival?

SPEAKER_01 55:12

Um, AM or OU?

SPEAKER_04 55:14

I was gonna say OU. OU. I would have said OU.

SPEAKER_01 55:17

Well, just because AM's been gone for so long and like they're in the same state, so AM really likes to claim that like they are the you know top-tier football program of the state. Um, which they're not. They're I mean, they're essentially Texas's little brother. But did S.

SPEAKER_04 55:37

So they're the Bobcats, they're the Bobcats of Texas, is what you're telling me.

SPEAKER_01 55:43

Yeah, but they've not won a national championship in any recent memory.

SPEAKER_04 55:47

So just like the Bobcats, I mean, until this year, it was 1984.

SPEAKER_03 55:53

All right, so I I I have a great trivia question for you on the national championship. It was just a stat. How many years has it been since an NCAA football national champion was a first-time winner?

SPEAKER_01 56:12

Oh, I saw this and I can't remember who it was. Was it like 20, 25 years?

SPEAKER_03 56:20

A little bit higher. I don't know, but it was 30 years. This is the first, first time national champion in 30 years. That's amazing.

SPEAKER_00 56:35

Who was it?

SPEAKER_03 56:37

Don't don't ask me that. I we looked it up the other day and uh and uh in the office, and certainly I can't remember, but the stat that came out was just first, first-time winner in 30 years, which is insane.

SPEAKER_01 56:51

I I will I will say I know Montana and Montana State pride themselves on being a great rivalry, but if you ever get the chance to go to a Texas OU game in Dallas at the Cotton Bowl, I would suggest doing so sooner rather than later. Every year I feel like it might be the last one at the Cotton Bowl. It is a it is the it is the best game. I've been to really big games, a lot of football games, and that is just the best audience, like the best experience out there. I reco.

SPEAKER_04 57:26

All right, that's I'm gonna put that on the list. I think that's a must. That's a must attend a football rivalry game.

SPEAKER_03 57:32

Well, again, from a non-football community up in Boston, Massachusetts, our only association with the Cotton Bowl was the fluety Hail Mary at the Cotton Bowl.

SPEAKER_01 57:44

Other than that, that did probably happen at the Cotton Bowl.

SPEAKER_03 57:47

Yeah, it did. Gerard Phalan, back of the end zone. You know, the football team's only good at BC on a national level, not quite as often as as we see in Texas and in here in the Big Ten.

SPEAKER_04 57:57

That's that's the truth. Well, we've taken a lot of your time, Lacey. This is an awesome conversation. Uh I'll put in the show notes where they can reach you if anyone's curious or you know, at least just wanna just want to check it out, see if there's a better way to do things. I don't think that can hurt anyone.

SPEAKER_01 58:16

And you can always follow us on LinkedIn. Um, we've got a lot of good content on there. Um so you can check us out and follow both SmartKX and resolve there.

SPEAKER_03 58:27

Great to meet you.

SPEAKER_01 58:31

Thanks for having me.