In this week's episode of the Financial Planning Podcast, Todd Rovak talks about making fintech software to help financial advisors serve an overlooked segment of the population.
Rovak, founder of financial services platform Carefull, said he is on a mission to support financial caregivers. Those are the ordinary people who, often without warning, are put in the position of managing the finances of a loved one who can no longer do it themselves.
And while his own personal experiences played a role in the creation of Carefull, Rovak said the idea really came from financial advisors. During his time as CEO of product innovation firm Fahrenheit 212, where he led the creation of new products for Fortune 500 companies across financial services, he often spoke to advisors who said they wanted to better serve aging clients and their families.
He also knew the number of people in the country filling the financial caregiver role was climbing.
"There's about 45 million people in the U.S. alone who are involved in their parents' finances," Rovak
During his conversation with FP Podcast host and lead editorial producer Justin L. Mack, Rovak talked about how Carefull supports caregivers via financial behavior monitoring; why irregularity in an elderly client's finances can be a sign of more serious issues; and his belief that tools like Carefull will be powerful allies during the "great wealth transfer."
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Transcript:
Justin Mack (
Good morning, good afternoon, and good evening. Welcome to the Financial Planning Podcast. I'm your host, Justin Mack, wealthtech reporter with Financial Planning. And it is my pleasure to introduce this week's guest, Todd Rovak, Founder of Carefull. Todd, thanks so much for joining us this week.
Todd Rovak (
Thanks for having me. Great to be here.
Justin Mack (
Absolutely. Now Carefull, which Todd co-founded in 2019, is a financial services platform that is focused on financial caregivers. And as we know, that definition can extend to so many people, and it can happen in an instant. Suddenly someone important in your life, maybe the most important in your life, needs help with some or even all of their finances. You've got a big job, but you don't necessarily have the experience for it. Especially if that loved one has a complicated financial picture. The kind that often requires the guidance of a financial advisor. That's where Carefull comes in. And Todd, before we get into how the platform provides support to those financial caregivers, what gave you the idea for this in the first place? And what problem are you trying to solve?
Todd Rovak (
You know, I spent last 10 years of my life building new products for banks and wealth managers. And the whole time all of the ideas and products were pointed at millennials and Gen Z. Or new ways of portfolio management. All good, but they all seem to ignore where the money actually is. They seem to treat an older adult, however you define that — retirement age, 55, 65, whatever — as, I hate to say this, but almost as the past. When you look at the numbers, as much as 60% or 70% of their book of business is older adults, and in this space you find over 45 million people today who are monitoring other people's accounts for fraud. Looking through their parents accounts line by line or setting budgets. They're commingling money, doing all these things, all these hacks. And there's just no tools, no permissions, no AI, no efficient way for advisors to help. They see this stuff, but they just don't have an answer. So it was kind of just seeing that lack of an answer and yet this huge underserved population … that was the inspiration behind it all.
Justin Mack (
Absolutely. And I think what you hit on is something that's very, very real. And probably hits home for most people listening because either you have been, or you know someone who has been, or you might be preparing to be in that situation that we describe where you've gotta help out. Because it's often a very informal thing that's done out of necessity. If I don't do it, no one else will or can. So I just gotta jump in there and get it done. But like you mentioned, there's no permissions, there's no formal handoff of management of these accounts. It's, "I need to manage these accounts, or someone I care about is gonna lose their house, their car, their whatever." It's just, "this is your job now. Go do it. I hope, hope you're good at it." <laugh> That's a rough spot to be in.
Todd Rovak (
It's almost kind of shocking that in this day and age you have over 45 million people. Again, that's the same amount of people that have student loans, right? Everybody talks about student loans. If you have 45 million people involved in the finances of an aging loved one who have no tools and no permissions and have to hack together their own stuff, it's kind of crazy given how much technology and investment you have in the space. And everybody gets here. Everybody gets here, right? Whether it's an older adult client who needs a second set of eyes just to stay independent, or it's that younger person helping out. Everybody gets here. So totally agree. Definitely.
Justin Mack (
And tell me a little bit about how Carefull aims to fill in some of those gaps, and also how advisors can use that to help themselves, help their end clients … how does that all come together with what Carefull is providing?
Todd Rovak (
We provide a couple of things to advisors. But the first and probably the most important is … really an AI engine that we call financial caregiving monitoring. And to make it simple, advisors turn this on for their clients, and we look for everything that banks just don't look for today. So, they do this for older adults. And not, you know, senior citizens. I'm talking 55, 65 and 65 plus. You turn this on and we're looking for things like charitable donations and political donations. Why? Because older adults make them a lot and they often wind up being recurring. We don't care if a 35-year-old makes a political donation, but if you're 75, we wanna make sure that recurring deduction is something you did on purpose. We're looking for duplicate payments.
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We obviously see a lot of that. We look for gift cards, which are money laundering techniques. Behavior change, very personalized behavior change. So it's a body of AI that is built for people who are 55 and older, which is really just a different set of things to look at, right? Did your pharmacy spend drop? Are you shopping? Is money systematically moving out of your account? Because it's not just elder fraud. We talk a lot about that, but a lot of the $50 billion of fraud that we see today comes from, unfortunately, within the trusted circle. And so we want to see, is that caregiver, is that cousin, is that new spouse moving money out slowly? Advisors see this all the time, but we just have now a systematic way to spot that under-the-radar stuff that we call systematic drain.
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So that's the first thing. It's also got the basics like identity theft protection. One million dollars of identity theft insurance. So that's the core kind of AI engine that advisors just give to their clients. It's hands off, really simple, and it starts looking for stuff, right? And that's the (thing that) keeps them independent. That second set of eyes. The second thing we do for advisors is we are a much smarter trusted contacts engine. When that 65-year-old feels that they do want to get a financial caregiver involved or get a child involved, we're a tool to do that, right? And so we offer an advisor not just a view to share of wallet, but we call what we call share of family. We can now identify and see those kids that are contributing or are involved.
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You can permission those kids to get alerts or get passwords or get documents. Stuff like that. So our job is to build a bridge between the generations because nine out of 10 people will not use their parents' advisor. And so if we can add value to that next generation and the advisor can offer something that lets those kids have the right level of visibility … it's not takeover time, just a little bit of visibility. Then you can start marketing to them. Involve them in conversations. Build a relationship before there's a moment of crisis. That's a second of three. And then finally the content. We write articles every week for advisors to give to their clients about the very specific questions they're getting every day that take up an advisor's time or a planner's time. So, should I open a joint bank account with my kids? How do I do my parents' taxes? There's a Zelle scam going around! … We want to know what's going on so that we keep these people safe. So it's content, it's AI and it's building that cross-generational infrastructure.
Justin Mack (
Absolutely. And what you described, too, sounds like a powerful set of tools, and you've already described an example of a way to use this tool to not only help clients and have clients help themselves monitor the comings and goings of the finances of their loved ones when they become a caregiver. Also powerful tools to build business as an advisor. You mentioned that relationship building that just happens by naturally including people who aren't just the primary contact. The loved ones of that aging person. Those children. And that kind of connectivity that can come by just having more people involved. Talk to me a little bit more about the benefit of that and, I guess, how this can change that advisor-client relationship beyond just being able to provide tools that monitor what's going on. Outside of that, how can this add to something a little bit closer, something a little bit more real between advisor and client?
Todd Rovak (
Yeah, so it's a great question. So look, the simple truth is cross-generational money conversations are hard. They're hard. They're actually awful, right? And they're awful to a point where you don't want to have them. And it is a very high-denial current state of affairs, right? Dad's getting older. He's forgetful. He doesn't really want me involved. Five out of six people you'll talk to will say my dad wants to stay in control. My dad's grumpy. Whatever it is. What they're really doing is giving you reasons why they don't wanna have a tough conversation, right? And that is very normal and very natural. And you have at the same time advisors who are sitting in the middle of this and they have a one-to-one relationship with somebody, and they're sitting in the middle of truths like the following.
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Like the Johns Hopkins study that came out last year that showed that Alzheimer's and dementia can first be diagnosed in the wallet up to six years before it can be diagnosed in the doctor's office. So that means like missed payments or money mistakes, credit score hits … advisors can see and feel this stuff. Cognitive decline is a massive, systemic issue for financial planners and self-directed investors. Because what do you do when somebody who has been in charge of their finances for so long might not have the best judgment anymore, right? So you have that current state of affairs. And so the way to help here is not to give people takeover tools, right? This is actually a way to fail miserably here.
(
And you've actually seen this a couple of times. Like, let's go give people a way to get power of attorney faster. Okay, well that is the nuclear option, right? And so it is really important and you're gonna have to have it at some point, but really the way is for advisors to build actual relationships with the next generation or to find things that create value for them. So for example, this is a small example, but it's kind of a funny one. So we built a password manager as part of Carefull, and it's just included as a feature. It sounds small, but why? Because a password manager has multi-generational value. It's two-sided value. Say an older adult needs a password manager because they don't trust the technology. They don't trust LastPass, they don't trust 1Password. And all their passwords are sitting in a notebook in the kitchen drawer or on a Post-It note actually attached to the computer.
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So that's fine. That adds value to that client. But when you think about that next generation, those passwords are the keys to the kingdom. Those are the ways that they help their parents. They gotta find the passwords. Gotta dig 'em out. Gotta help. So if we can, we created a password where you can permission the next generation. That's a light touch, right-now value-creation moment and a way to sort of start to bring the next generation into an advisor's world. Doesn't mean you're selling them. Doesn't mean you're pushing something hard at them. It just means that you've got something that has kind of cross-generational value. And I use that little example when I talk about ways to create value for the kids right now.
(
It's not, "here's a power of attorney toolkit. Go get it." The conversation's gonna be over then. So how do we start to build, whether it's password management, document fault, let them get alerts. Really shallow and light ways into these conversations. Make them easy conversations, right? I don't wanna talk about takeover. I wanna talk about, here's a way to have passwords and keep dad safe. Great. Here's a way to store things in a place where we'll know where they are. Fantastic. We're gonna tell you if, when you're ready, you could add your kids to this. Only when you're ready. That keeps the older adult in control. So it's language like that that takes conversations away from, "who's the kid that's gonna take over?" That's a deal ender, right? That's a conversation ender. We wanna say, "what's helpful to you? What keeps you independent and in control? What kids would you want to know if there was a medical emergency?" Those are very much more natural conversations to have.
Justin Mack (
Definitely. And like you said, a lot more natural and pleasant conversation to have than some of the ones we sidestep and why we don't often get to the heart of a lot of these issues. With that, we're gonna take a quick break and hit the old pause button to take a word from our sponsors. But when we get back, we'll have more with Todd Roak, founder of Carefull. We're gonna be talking about fintech innovation and some of those FP Podcast good vibes. Stay locked. We'll be right back after this break.
And welcome back to the Financial Planning Podcast. I'm your host, Justin Mack, and we're diving back into our conversation this week with Carefull founder Todd Rovak. Now Todd, before the break, we talked about your inspiration behind the idea of Carefull. How it's dispatched to clients and advisors to empower those financial caregivers, those people who have the toughest jobs and often didn't put in applications for them. But now they've got to do them extremely well.
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And what you describe about Carefull is interesting as a powerful tool for advisors. You talk about how it can build business, change relationships and really improve things between client and advisor. But it's a tool that really has nothing to do with money or returns when you think about it. It's not about making sure this person earns more … this is a people-focused, goal-focused tool. And we're seeing, thankfully, a lot more tools like that. That's a trend that is in line with advisors being asked to be able to be more to their clients. That holistic or complete financial planning, which is about more than money. That's not the heart of everything. Just your thoughts on creating tools like this at a time like this where I think more people are realizing … and maybe it's just the conditions we're living in, but whatever motivates it, more people understand that we've gotta kind of take care of each other before we can take care of our pockets. Thoughts on that trend?
Todd Rovak (
Yeah, you know, I think we sit in the middle of that trend. But the way I think about it is, the only way to create value for somebody is to solve an actual problem. And making more or earning a few more basis points is good, but not the only problem. Human beings have all kinds of real, actual problems. My dad is getting old. I don't really know how to involve my kids in a way that keeps me in control. These are human problems. And for someone who is focused on building a relationship, to only focus on the kind of commercial or financial problem, it just misses the other 80% of what a human being thinks about all day. And I just don't think about my basis point level rate of return as much as I think about the human reality that I have with my family every day.
(
Want more help with that as a person. And I think what you're seeing now, from an innovation standpoint and from a technology standpoint, is understanding and people waking up to the actual human problems that exist adjacent to money. And I think that's a fantastic place to play. I think it's a growing place to play, and it's just an under-leveraged tool for advisors who at the end of the day can't even control what happens in the market. What you can control is can you help families? Can you help people get to their definition of success? So playing along those lines is hugely exciting and important.
Justin Mack (
And that sounds exciting and something that would push you forward because that's a noble goal. On the other side of that, what's the toughest part about creating tech to support advisors and financial services firms and clients? Because you have to do so in an environment that is always changing. A lot of that understanding and that feeling that we've gotta take care of each other is based on what's happening in real life. But also what's happening in real life in the industry makes it tough. You've got regulation changes. You've got the market doing whatever the hell it wants. You've got a lot of competition because, as we've mentioned, a lot of people are understanding that we've gotta come up with some new ideas here. What are the toughest … and I imagine there's many, but some of the challenges when coming up with solutions for this industry?
Todd Rovak (
I have a really tactical answer to that one, Justin. Which is, it doesn't matter what you build for an advisor or wealth manager if you're not building with an idea of their time. Take what Carefull does, right? We bridge generations and facilitate wealth transfer and retain assets. That's all, that's all great. Well, advisors know about these problems. Why aren't they doing anything about it? It's not because they're not good people. It's because they don't have time. And they don't have the ability or the bandwidth to always sit with somebody and sort out tough conversations. Not because they don't want to. It's time. And if you zoom back out, if you're developing new tools for an advisor who's literally managing their own time the best they can, giving them more jobs, more dashboards, more ways to split things … even if they on paper do good things, it's not gonna land.
(
And I think that's one of the biggest challenges to innovating in this space is you can build the coolest thing in the world. If it's gonna take an hour or a week of somebody's time, don't even do it. Don't get started. The hardest thing we had to figure out early at Carefull, I think we did figure it out, is how do you do this in a way that (advisors) can create a ton of value without having to do anything themselves. Where something else can do the work for them, and they can still have a big impact on families. You gotta find that sweet spot where, set it up, check on it once in a while or someone on my team checks on it once in a while, but I have a really big impact with low … we kind of call it cognitive overhead, right? I don't have to think about it all the time. But I think that has missed so many times with everybody rolling out their newest dashboard and wanting to be your newest place to log in. Or integrated with another thing. That can be quicksand in this space. It's not that advisors don't wanna help. You gotta give 'em a tool to let 'em help efficiently.
Justin Mack (
Definitely. And finally, and what we like to do here on the Financial Planning Podcast, we always like to wrap with a few good vibes. And if you didn't know, listeners, tell your friends. But for you … again, the motivation behind not only what you're doing now. Even beyond Carefull, that desire to create problem-solvers in other industries, and now doing it here with what you're doing with Carefull. As you look back, we talked about the challenges, the highs, the lows, everything else. And I'm sure the other ideas you've got bubbling in your head there. What do you love most about the work you do and what keeps you in this industry?
Todd Rovak (
Yeah, you know, I've been lucky enough to build a few businesses over my career. Some for myself, some on behalf of others. And I am drawn to the rare types of businesses where everybody wins. Where you create wins for more than one or two parties or stakeholders. And what do I mean by that? You build a widget, you get some people to pay for that widget. Great, right? You can make money, maybe you don't. It's okay. And we've all (done that) it's fine. But I'll use Carefull as the example, but it doesn't need to be. You can protect an older adults' assets. They win. That family wins. The advisor wins when they retain those assets. The insurance company wins when they're not on their long-term care insurance too early.
(
You can create wins for that many stakeholders. You found a little bit of magic, and those types of businesses are not that easy to find. But when you do, it just changes your … if you're thinking about starting something or if you are trying to decide between projects, I always love to make an actual list. How many people win and who loses when this business works? Let's just jump to the end. And if I'm like, well, I'm gonna win but I'm gonna take from this guy. Or, I'm gonna win, it's gonna take from that share. So that becomes my enemy. Well, that's fun and that's how most businesses get going (and) most projects get going. But when you can wake up in the morning and work on something that people are happy to see or people are relieved when they get, you solve an actual problem.
(
And it does that for more than just like you and your customer or you and your vendor. Or it does more than just make you more money. You can do something that creates multiple wins. It just changes your day. The very nature of every Zoom call, every email, it's got a different spirit to it. It's like, let's do this. That, for me, is such a motivator when building anything is hard and selling anything is hard. So I like to find stuff that solves real problems and creates multiple wins beyond the customers right in front of you. And I always encourage people who are thinking about something to push as far as they can to find those other wins.
Justin Mack (
Well it's hard to argue with W's all around. So with that, I would just end with a "win win win no matter what," an adage of DJ Khaled himself. And Todd, thank you for spending some time with us this week on this edition of the Financial Planning Podcast.
Todd Rovak (
Thanks for having me. Really enjoyed it.
Justin Mack (
Absolutely. And thank everyone for listening to this week's edition of the Financial Planning Podcast. This episode was produced by Arizent with audio production by Kevin Parise. Special thanks again to our guest, Todd Rovak of Carefull. Rate us, review us and subscribe to all of our content at www.financial-planning.com/subscribe. From Financial Planning, I'm Justin Mack. Thanks for listening.