Lacy Shrum of SmartKX [Episode 66]
In this episode of Perfectly Integrated, host Matt Ackermann welcomes Lacy Shrum, CEO of Smart KX, to demystify the topic of financial advisor billing, a subject often avoided or misunderstood within the industry. The conversation focuses on how Smart KX is bringing transparency, confidence, and innovative technology to the complex process of fee calculation.
Lacy Shrum explains that traditional advisor billing—often done quarterly in advance based on just four market days per year—creates tremendous regulatory and business risk. This method leads to problems like:
- Advisors feeling pressure to time the market around those four billing days.
- Clients feeling overcharged when the market drops after a bill is calculated at a high point.
- Complex, opaque, and time-consuming manual adjustments for cash flows and portfolio changes.
- Advisors feeling pressured to offer discounts, which erodes their internal value and creates regulatory risk.
The core innovation, Smart Recon, is a feature that allows RIAs to maintain quarterly billing in advance (which firms need) but introduces a reconciliation at the end of the quarter. This provides a fairer calculation by compensating the advisor for the value of all days in the quarter, mitigating the risk associated with relying on only four market days.
Lacy shares that the next major innovation for Smart KX is a comprehensive fee analysis tool. This tool will provide advisors with actionable data on their book of business—such as average blended rates and client spend—to help them understand their business better and identify holes. It will include “what if” capabilities to model the impact of changing fee structures and provide the tools to quickly document and implement necessary fee changes, optimizing the full revenue lifecycle from months down to minutes.
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