Aaron Klein (@AaronKlein) is the CEO and Co-Founder of Riskalyze. Founded in 2011 with 3 employees, today Riskalyze serves thousands of financial professionals who manage over $139 billion on their platform and employs 100+ employees just 5 years later. Aaron’s led the company to twice being named one of the top 10 most innovative personal finance companies in the world by Fast Company Magazine. He’s also been honored by InvestmentNews as one of the Top 40 Under 40 in the financial planning industry.

Riskalyze

“Imagine if you could provide a risk number for every client and custom build their portfolio to match it. This is Riskalyze.”

This conversation with Aaron was a lot of fun as it was the EAB podcast’s first venture into Fintech. For those of you unfamiliar, I was actually a Computer Information Systems major in college, so this conversation allowed me to combine my love of finance and tech, Aaron didn’t disappoint!

We cover a TON in this conversation, including:

  • How to avoid that awkward annual review conversation when a portfolio underperforms the S&P 500
  • The ONE THING in a changing world of robo-advisors that will ALWAYS differentiate true advisors (i.e. humans)
  • How do you scale a company from 3 employees to 100+ in just 5 years?
  • The book Aaron has reread multiple times and credits with much of the philosophy behind building Riskalyze
  • …and much more!

Already heard it once or twice? Please leave a short review here, and tell me which guests I should have on!

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Scroll below for links and show notes… Enjoy!

SELECTED LINKS FROM THE EPISODE

SHOW NOTES

5:30 “It’s kind of like if you could Google your ideal investments that match your portfolio and goals.”
5:55 Psychology of Riskalyze’s target audience for Riskalyze
7:20 Concept of the “Risk Number”, a tool for the advisor to turn a fearful investor into a fearless investor
8:15 How Riskalyze helps investors understand comparisons to S&P 500
10:50 Concept of Stress Testing, and how to use Risk Numbers in comparison
12:40 Risk the client wants versus the risk the client needs, and how Riskalyze helps the client understand this
14:20 Riskalyze’s backend 
15:40 Cash under the mattress
17:00 Where are financial and tech efforts going over next 5 years?
20:00 Importance of the behavioral coaching aspect of financial advisory
21:00 Comparison of robo-advisors to human advisors
22:30 Aaron shares his opinion on Wealthfront & betterment advisory products
25:00 The beginning of Riskalyze
26:00 The initial approach of Riskalyze and how that differs from today’s approach for the company
26:55 Riskalyze was a “successful failure”
28:00 The phenomenon of investors not buying and holding, but buying and ignoring
29:15 How Riskalyze was shifted to be geared more towards advisors
30:10 Making financial advisor’s information more accessible to investors
33:00 How do you scale quickly and successfully like you have?
37:00 Core values of a company, e.g. open and direct communication
37:30 Discussion on conflict over ideas and that being okay
38:30 Aaron wants the people in the company to “own” their work and their output
40:15 Any books that have been important to getting you where you are today?
42:00 Building a company is one of the hardest things that can be done
42:40 “The work of building a company is unnatural” 
44:00 Patrick Lenioni’s career
45:50 Ben Horowitz use of stories
46:25 What have you found to help the transition from 4 to 100 people working in the company?
48:00 Discussion on hiring process and important interview techniques
49:30 People who have experience versus people who have studied up on something
50:30 I’m looking to hire people for their strengths, not their lack of weaknesses”
51:50 Aaron’s biggest mistake has been in regards to the company
53:00 Why Riskalyze doesn’t match competing offers
55:30 Comparison to Steve Jobs and the original Macintosh team
57:00 Favorite advisor story
58:50 Favorite book, as far as business, that you’ve read—why? A most gifted book?
1:00:00 Was Riskalyze your entire idea?
1:00:30 First memory of money?
1:01:40 When you hear the word success, who do you think of and why?
1:03:15 What’s one piece of advice you can give everyone on the call today that has led to your success?

PEOPLE MENTIONED

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This information is provided through a strategic partnership between AE Wealth Management and Riskalyze. Although AE Wealth Management may promote and/or recommend the services offered by Riskalyze, we do not guarantee the accuracy or quality of their services.

Compliance Approval: AE05164320