Especially on the technology front, the Institute has always maintained financial services firms should not look at technology decisions as a “vendor purchase”, but as an ongoing strategic partnership. This is an operating dynamic that requires companies to build a solid cross-firm foundation with the agility to grow together and incorporate new ideas and possibilities as the business environment continues to rapidly evolve and challenge leadership for financial firms. This entails combining resources of talent, knowledge, expertise, and often, finances. While each entity retains its own autonomy, strategic partnering relations can help participants expand their business base and attract more clients because they can offer a broader range of coordinated products and services. They often draw from each other’s areas of strength and share their professional contacts.

To learn more about the true art and science of strategic partnering, we reached out to Institute member Mac Bartine, CEO of Smartria – an award-winning, cloud-based compliance software platform designed to comprehensively address the needs of compliance consultants, compliance officers, operations teams, investment advisors, wealth management firms, asset managers and the staff who support them. Their advanced compliance software solutions serve both small RIA compliance teams and large, complex financial organizations such as the high-profile, strategic partnerships Smartria announced with Dynasty Financial and MarketCounsel. We asked Mac – who trademarked “Software as Partnership®” to express his firm’s commitment to client partnering – to share with us his thoughts on how the FinTech–RIA working relationship can embody that level of strategic partnering into the future.

Hortz: How do you define what a strategic partnership is and what does it practically look like in the real world?

Bartine: The point of partnerships is to actively work together towards a common goal, but in my experience, the vast majority of partnerships are in name only. Companies will put each other’s logos up on their websites, maybe write a blog post or press release or some social posts, and hope that leads to something. That is not a partnership and it sure is not strategic. It’s wishful thinking, which has no place in a partnership or any other aspect of a successful business. In short, strategic partnerships take a lot of thought and an equal amount of work.

There needs to be a deeper benefit beyond just “we can make money together”. Without that, it is just a partnership with no strategy involved. This scenario brings to mind the old axiom “If you fail to plan, you plan to fail.” A good strategic partnership has to have components that make the involved companies benefit from each other’s strengths and shore up each other’s weaknesses, creating a stronger and more effective unit than the two companies would be apart, specifically because they have done the work of figuring out what makes their combined efforts special and worthwhile.

Smartria’s business model and operating philosophy focus on working with our strategic partners to help their businesses to be better for their association with us, and that focus will help us to drive revenue and achieve other mission-critical goals. Good strategic partnerships also last longer than transactional relationships. They build personal connections between people in business, and good business is all about relationships.

Hortz: How can you as a FinTech company and a technologist, be most helpful in addressing financial service industry regulatory and compliance issues? 

Bartine: Our Software as a Partnership® (SaaP) model was built on our relationship with our larger customers, but SaaP has become part of every aspect of our business.

For example, we partner with multiple subject matter experts (SMEs) – consultants, attorneys, and chief compliance officers – for every business category in our industry to make sure we have the correct tools in place for each problem our broader customer base might experience. These are the people we speak with on a daily basis to keep a deep understanding of regulatory changes, what is happening in regulatory exams, etc. By partnering with more than 100 of these professionals, we have a clear picture of everything we need to know to build and maintain a comprehensive and accurate compliance management platform.

Importantly to these professionals, we are also partnering with them as customers who give us constant feedback on what works and what does not, both before and after we launch a solution, so we are not operating in a vacuum. We pay attention to how they operate and build solutions into our platform that helps them to be more efficient and modern in their service delivery.

This becomes a next-level strategic partnership for Smartria and our SME customer/partners when we start looking at the broader industry together. The entire industry is consolidating, including the compliance services space. Our independent SME partners need great tech to offer to their clientele to help them remain fully competitive with PE-owned compliance services firms that own and offer their own compliance tech. By working together, we are offering our mutual customers a “best of both worlds” scenario: great compliance tech that’s customized to their needs and personalized compliance services from professionals who also have a partnership mindset with their customers, not a transactional one.

Hortz: How do you look at partnerships with other FinTech companies?

Bartine: Technology strategic partners are also critical to our success. Compliance for the RIA industry is a very broad set of problems with specialized workflows and data sets necessary to solve nearly every one of these issues. We cannot build solutions for every single type of problem out there, but we can seek out best-in-class providers of solutions that we do not offer and partner with them to offer those solutions in our platform to be able to offer our customers a more seamless, comprehensive solution with a single login.

We have to choose the right tech partners that can help our customers and other partners to succeed. We have to learn to recognize leverage points between our customers, solutions and partners that can turn 1+1+1 into 4 or 5, not 3. All of these different types of strategic partnerships are critical to our success, and we are critical to theirs. It is a great way to do business.

Hortz: How exactly do you integrate different technology from your outside partners?

Bartine: We chose to build a platform that is flexible – able to mirror the complex organizational structure of firms with multiple business units, and able to solve the most pressing of their compliance workflow problems. We also chose to build a customizable role for the SMEs so they could serve any type of business in our industry.

Then slowly, we started adding on modules for specific problems within the industry based on the feedback of our RIA customers and what we are hearing from our SME partners regarding future regulatory directions. Employee trade reporting for code of ethics was our first module. Then data governance, an early answer to the increasingly important subject of cybersecurity, with a focus on vendor due diligence, employee access to data, and incident tracking and reporting.

Hortz: Can you share an example of strategic partnering decisions you made and how you determined the right partnership?

Bartine: We believe our core platform is a best-in-class solution so whenever we start looking for tech partners offering a solution our customers want, we look for other modern platforms that are striving to be or already have achieved some best-in-class status. In the case of portfolio risk analysis and related problems, we asked our customers who they liked. One multi-billion-dollar AUM customer’s answer that intrigued me was StratiFi, a fully modern, data-driven solution that Bob Veres wrote a glowing review of. The founder Akhil Lodha came from institutional risk management and believed that the broader market needed and could benefit from the same types of sophisticated algorithms for risk management that institutional investors use.

Everything I learned about StratiFi and Akhil led me to believe they were the right partner for us. I learned that they were leveraging their analyses in unique, understandable ways to drive client and prospect-driven communications and help grow business with many other bonuses to their approach to the market.

Together with StratiFi, we can offer compliance obligations and reporting plus risk analysis and reporting and business development capabilities – all through a thoughtfully-created strategic partnership. Today we have an integration with StratiFi that was recently launched, and we are approaching larger customers together. It’s a great partnership, mutually beneficial, unique in approach, and exactly the type of relationship we want to help us and our customers to grow and succeed.

Hortz: How did you tangibly structure your firm to be able to be a good strategic partner and ensure successful outcomes?

Bartine: We created a key position in Smartria called our Chief Experience Officer (CXO) which is responsible for leading and coordinating our customer experience and customer success teams. With over 2500 companies in our software and a couple of dozen pretty active strategic partners, our CXO Amy Easterly and her team are critical to partner success.

The CX teams under Amy are constantly evaluating customer and partner best practices in using our platform and communicating opportunities for growth and improvement for our partners. They are also taking what they learn from our partners and their clientele to share opportunities for growth and improvement with our product and sales teams. All our different teams feed each other, and they are all organized around making our partners and customers more successful.

In short, we have to walk the talk of Software as a Partnership, and that is exactly what we have structured Smartria to do.

Hortz: Can you give us some examples of how the two sides of the relationship can evolve together?

Bartine: A great example is our partners Dynasty Financial Partners and MarketCounsel, who are also shareholders of Smartria. When we first met them, we were just trying to earn the business through our Software as a Partnership® model. But, as Dynasty saw what we were doing and became aware of the degree to which we are swinging for the fences in our niche, they decided we could be a great investment for their corporate development office. So, we went from a strategic solution provider relationship to a much deeper partnership in much more than just name.

Hortz: What best advice do you want to share with asset management firms about how to reach out and partner with FinTech firms such as yours?  

Bartine: Whether the FinTech firm is well established like Smartria, or they might be newer change-makers like StratiFi, look for their focus and business model to be reliant on truly partnering with their customer base to continuously offer more and better solutions specifically designed to help them succeed in today’s market, not yesterdays or last year’s. Those are the companies wealth managers should want to work with.