Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm PIM
Speaker 1: Fox along with my co host Lisa A. Brahmowitz. Each
Speaker 1: day we bring you the most important, noteworthy, and useful
Speaker 1: interviews for you and your money, whether you're at the
Speaker 1: grocery store or the trading floor. Find the Bloomberg p
Speaker 1: m L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com.
Speaker 1: Right now, we are broadcasting live from the Commonwealth Financial
Speaker 1: Network's annual National Conference of Advisors from the Marriott in Austin, Texas.
Speaker 1: And PIM we've been talking about the dollar revival. The
Speaker 1: flip story to that is the significant decline in emerging
Speaker 1: market currencies, and to talk about that, let's bring in
Speaker 1: Damian sass Our, chief Emerging market credit tragist for Bloomberg Intelligence. Damien,
Speaker 1: I'm looking right now at the biggest one day drop
Speaker 1: in the M S c I E M Currency Index
Speaker 1: since early October and more than a month. Is this
Speaker 1: all just the dollar or is there something else going
Speaker 1: on with a rethink of investing in the developing world? Yeah,
Speaker 1: at least you no, I think there is a little
Speaker 1: bit of something else going on here. I mean, if
Speaker 1: you just look back at was a test of what's
Speaker 1: called the external durability of global economies. And I think
Speaker 1: the way things are shaping up here, you know, heading
Speaker 1: into yourn for is you know, with with a lot
Speaker 1: of shorts and liquidity metrics kind of rolling over. And
Speaker 1: by that I'm talking about US liquidity metrics, you know, um,
Speaker 1: you know, oh I s t to libor and and
Speaker 1: TED spreads and all of this. I think we were
Speaker 1: maybe setting up to see a test of sort of
Speaker 1: the structural fiber of financial markets, and I see the
Speaker 1: credit markets as we get into the new year may
Speaker 1: very well be tested for the first time in a
Speaker 1: post TFC more tightly regularly. Hold on a second. So
Speaker 1: great financial uh, great financial crisis. H Hold on a second.
Speaker 1: This is what you're saying is really important, and I
Speaker 1: want you to sort of articulate this. You're concerned about
Speaker 1: the sustainability of current credit markets given some of the
Speaker 1: stress metrics that you're seeing build right now. Is that correct?
Speaker 1: That's art I think the said unwind is crowding out
Speaker 1: competing asset classes. Damian Sassaur what is going on in
Speaker 1: Mexico and we see a stock market that is lower
Speaker 1: by about two right now and the new president on
Speaker 1: low this is not reassuring at least two investors. What's happening. Yeah,
Speaker 1: you know, I mean we're gonna see a lot of
Speaker 1: credit differentiation here, I think as we as we get
Speaker 1: into the end of the year. I mean, you know, look,
Speaker 1: Trump has gone some way toward unifying forces against the
Speaker 1: dollar and against the US, from China to Russia, to
Speaker 1: France and Germany, you name it. But I think we're
Speaker 1: going to see foreign governments pay a lot more attention
Speaker 1: to currency denomination and the PACEO is then you know,
Speaker 1: it's the most liquid emerging market currency out there, and
Speaker 1: I think people are going to use that either as
Speaker 1: a head vehicle or a way of speculating against the dollar.
Speaker 1: So I mean, you know, there's a little bit of
Speaker 1: that going on. And I think, you know, Mexican equities
Speaker 1: and a lot of other Mexican assets are just really
Speaker 1: kind of um, you know, a byproduct of that, but
Speaker 1: you know, just kind of taking that that that fall
Speaker 1: it a little bit, you know, I think I think
Speaker 1: the real themes as we get into the new year
Speaker 1: and emerging markets PIM you know, China struggling to find
Speaker 1: a way to fix its slow growth problem, and they're
Speaker 1: going to be hard pressed to find one that doesn't
Speaker 1: involve taking on additional leverage. Um. You know, if you
Speaker 1: just look to Russia, now that the midterms of behind US,
Speaker 1: we have new sanctions that are expected soon and then
Speaker 1: this could be registered regulated US funds are not able
Speaker 1: to participate in new Russian sovereign auctions that could be
Speaker 1: a major hit to them. And then the other big
Speaker 1: theme I think that we're looking at is Brazil, right,
Speaker 1: I mean Brazil. You know, everything is all rosy in Brazil,
Speaker 1: but now the country needs to deliver and both in
Speaker 1: our as an uphill battle if they if they plan
Speaker 1: on passing hugely unpopular pensruon reform and other structural agenda. Well, Damien,
Speaker 1: I want to go back to something that you were
Speaker 1: talking about with respect to the stress that seems to
Speaker 1: be emerging in credit markets that basically the FED is
Speaker 1: withdrawing liquidity from markets and you're starting to see investors
Speaker 1: go back to treasuries and withdraw money from emerging markets.
Speaker 1: I'm just wondering how much further you think this could go,
Speaker 1: because I'm looking right now at the biggest dollar denominated
Speaker 1: emerging markets debt et F and it's down six and
Speaker 1: a half percent year to date. I mean, this hasn't
Speaker 1: been a good year for it at all. Are we
Speaker 1: looking at much deeper losses than that even potentially next well,
Speaker 1: I mean if you just look back at the modern
Speaker 1: era of emerging market debt and I'm talking post global
Speaker 1: financial crisis, you know, this is the first environment we've
Speaker 1: ever seen where you know, we're duration and I'm talking
Speaker 1: losses that are due to rising US yields are really dominating.
Speaker 1: You know, uh, you know, any other factor that might
Speaker 1: generate you know, that might that might impact the end returns.
Speaker 1: And the other big factor, as we know, is spread.
Speaker 1: We'd have we've come come to some the taper tangum
Speaker 1: a number of episodes, November elections, you name it, where
Speaker 1: spreads have blown out quite considerably in the e M
Speaker 1: debt and we've not seen that this time around, and
Speaker 1: that is a real risk. And I think the reason
Speaker 1: that spreads has kind of held their own here has
Speaker 1: a lot to do with the fact that other spread
Speaker 1: asset classes here in the U S, specifically high yield,
Speaker 1: have not really witnessed the same sort of you know,
Speaker 1: um hit that emerging market, you know, so, so I
Speaker 1: think I think you make a very good point. I
Speaker 1: think there's a real risk here that not so much
Speaker 1: that the set isn't doing its job, but it's going
Speaker 1: to be very very difficult for it to navigate an
Speaker 1: environment where you know, dollars are being squeezed out of
Speaker 1: the system. Damien. Are there many professionals who are betting
Speaker 1: on a recovery in e M debt and equity and
Speaker 1: have not seen that recovery and now are faced with
Speaker 1: issues about redemptions or just past performances not prologue. Well,
Speaker 1: I mean yes, and and there's there's certainly gonna be
Speaker 1: pockets of that. But you make a really you're hitting
Speaker 1: on a very very important nerve here, Pim. As we
Speaker 1: get into the new year, you know, everything resets, right,
Speaker 1: And I mean I've been crunching the numbers here and
Speaker 1: I don't see how you can have exposure to some
Speaker 1: of these very high BIDA, high risk UM you know
Speaker 1: e M themes like Turkey and Argentina. You know, because
Speaker 1: if we go into a risk on environment, you know,
Speaker 1: at some point next year, those credits are going you know,
Speaker 1: they're going to outperform significantly, just given the embedded data
Speaker 1: that are in them, so you know, you just can't
Speaker 1: afford not to own them, you know. And I despite
Speaker 1: the weaker fundamentals, the higher idiosyncratic risk, I really can
Speaker 1: see buyers emerging over the next few weeks into year end,
Speaker 1: you know, before conditions turn a liquid into the holidays.
Speaker 1: So just to follow on that theme right now, at
Speaker 1: least looking at retail funds, we really haven't seen outflows.
Speaker 1: Are we seeing outflows from other areas or not yet?
Speaker 1: We have We've definitely seen active funds take their share
Speaker 1: of out flows. A lot of that's already kind of transpired.
Speaker 1: I think it's safe to say that you're going to
Speaker 1: see some rebalancing, as you do most years, you know,
Speaker 1: as you kind of you get through the thirty feet
Speaker 1: into the into January. I mean what happens is is
Speaker 1: usually a bit of a lag because the redemptions start
Speaker 1: to come through, at least the redemption orders come through.
Speaker 1: Now you know, they usually have a month or two
Speaker 1: before they have to meet those redemptions and then we're
Speaker 1: talking feb one. So really what you're looking at and
Speaker 1: this is you know, just talking about credit conditions, Lisa,
Speaker 1: which you and I are just kind of, you know,
Speaker 1: harping on here as we emerge from the holiday, you know,
Speaker 1: sort of Christmas holiday. How US credit markets react to
Speaker 1: that and whether they normalize where they remain type is
Speaker 1: going to be absolutely critical to performance in Thanks very
Speaker 1: much for sharing your time with us and your expertise.
Speaker 1: Damian sassau Are Bloomberg Intelligence knows everything about emerging markets
Speaker 1: and emerging market credit and indeed, just taking a look
Speaker 1: at the Eye Shares m s c I Emerging market
Speaker 1: et F, it is down more than twenty percent since
Speaker 1: the beginning of the year. And it's time to talk
Speaker 1: about fees. You know, Lisa, whenever we talk about exchange
Speaker 1: traded funds, we speak about why they are popular, and
Speaker 1: of course one of the big reasons has to do
Speaker 1: with their low cost fee structure. Specifically when it comes
Speaker 1: to big index funds, let's say those that are offered
Speaker 1: by Van Guard. So I want to know about in
Speaker 1: the advisor space, what is happening to fees. Greg Gore
Speaker 1: is the senior vice president of wealth Management for Commonwealth
Speaker 1: Financial Network. He is east in Boston, as many of
Speaker 1: those people at Commonwealth are, and he joins us here
Speaker 1: in Austin, Texas. Greg, it's a pleasure to have you
Speaker 1: here with us. Tell us the latest when it comes
Speaker 1: to the trend in fee structure and how it's working
Speaker 1: for the advisor community. Yeah, thanks for having us him. UM.
Speaker 1: So there, you know, we're in the midst of probably
Speaker 1: a ten or fifteen year secular trend away from commission business.
Speaker 1: UM and his advisors have you know, migrated UM away
Speaker 1: from commissions and into fees. Uh. The entire industry, UH
Speaker 1: is moving toward lower cost, greater transparency. UH. It's great
Speaker 1: stuff for clients. You know, they're seeing expense ratios go down.
Speaker 1: In many cases, they're seeing the total overall fees they're
Speaker 1: paying their advisors go down. UM. So clients are big
Speaker 1: winners here. And you know, it seems like as this
Speaker 1: trend progresses, UM, you know, commission business will continue to
Speaker 1: erode and we may eventually get to a point where
Speaker 1: the vast jority of advisors are fee based. So you
Speaker 1: said that most advisors are most clients anyway are going
Speaker 1: to be lower paying lower fees. That means that the
Speaker 1: advisors are earning less. Do you expect some to go
Speaker 1: out of business as a result. It's interesting and that
Speaker 1: you know, client fees there, there's different components to it, right,
Speaker 1: So we started this with the exchange traded funds, which
Speaker 1: certainly you know carry you no far lower expense ratios
Speaker 1: than your typical actively managed mutual funds. So a lot
Speaker 1: of advisors UM have migrated clients from higher cost expense
Speaker 1: ratio products to exchange traded funds UM, you know, maintain
Speaker 1: their fee structure or only modestly adjusted it down UM,
Speaker 1: and clients ultimately may still benefit there. And then you've
Speaker 1: also seen some advisors reduce their asset management fee UM,
Speaker 1: but charge a separate financial planning fee, so sort of
Speaker 1: an unbundling of the advisory fee if you will. UM.
Speaker 1: We we definitely see a trend towards that as well.
Speaker 1: What is the breakdown if there is one based on demographics?
Speaker 1: In other words, older customers, younger customers, because many younger
Speaker 1: customers they've never lived in a world where commissions were
Speaker 1: the basic way in which he got paid. Yeah, that's
Speaker 1: a that's a great one, PIM. I think what we're
Speaker 1: seeing among our advisor group is, you know, the older
Speaker 1: clients I think are very comfortable UM. You know in
Speaker 1: both the commission and a few world A lot of
Speaker 1: them grew up with commissions, you know, sort of came
Speaker 1: out of that era where there was still stockbrokers, you know,
Speaker 1: where there was right Jacole Jamada trade and then you've
Speaker 1: got your slip and you realize that you paid, you know,
Speaker 1: you paid the demission. You know you paid, you paid
Speaker 1: for the transaction. So so they're very comfortable with that.
Speaker 1: I think, um as you move into the younger generation
Speaker 1: that you know, they just consumed services differently, right, So
Speaker 1: to them, they've grown up in the world where you know,
Speaker 1: to them, commission is just they have no reference point
Speaker 1: for that. They don't pay commissions. Um. So, so that's where,
Speaker 1: particularly as we think about next gend clients, a lot
Speaker 1: of our advisors are adjusting their fee schedule for those folks,
Speaker 1: charging things like you know, recurring financial planning fees that
Speaker 1: could be on a monthly basis, that could be on
Speaker 1: a quarterly basis, like a subscription, like a subscription fee.
Speaker 1: That that's how they you know, these folks like to
Speaker 1: consume services exactly. I have to wonder if there is
Speaker 1: more transparency and given the fact that fees have been
Speaker 1: compressed across the board at what point will clients just
Speaker 1: say I wanted to be lower and if you don't
Speaker 1: lower it, I'm gonna go elsewhere we I'm gonna go
Speaker 1: to a rob robo advisory and I'll make it work myself.
Speaker 1: I think you're seeing that now. I think, um, you know,
Speaker 1: clients are asking, they're better educated, and they're asking hard
Speaker 1: questions around fees that probably ten years ago they weren't.
Speaker 1: Now for us, as we think about you know, our
Speaker 1: advisors sustainability, UM, I think as long as you're providing
Speaker 1: far more than just investment management, it gives you a
Speaker 1: nice mode, if you will, protection from like a robo advisor,
Speaker 1: it's primarily focused on investment management. So most of our
Speaker 1: advisors do play in the comprehensive financial planning space. So
Speaker 1: investment management is just a small part of what they
Speaker 1: get paid for. Insurance products, annuity products. They all come
Speaker 1: with their own fee schedules based on the products that
Speaker 1: may be sold. Do you see that that is going
Speaker 1: to be an area that is going to change over
Speaker 1: the next couple of years. I do, UM. I think
Speaker 1: you know, the insurance industry maybe hasn't been on the
Speaker 1: leading edge of this movement from commissions to advisory fees.
Speaker 1: But I think we're starting to see signs that they're
Speaker 1: going to move that direction. UH. Some of the major
Speaker 1: v A carriers now have moved aggressively variable annuities have
Speaker 1: moved aggressively into advisory based contracts UM. I was just
Speaker 1: talking today with one of our insurance partners, asked ash
Speaker 1: Brokerage UM, and they were talking about the evolution among
Speaker 1: some of their insurance partners that are getting more into
Speaker 1: the fee UM advisory based insurance products UH to support
Speaker 1: you know, advisors who can't receive commissions who have made
Speaker 1: that move in their affiliation model that their ent fee.
Speaker 1: So I think the evolution is going to continue and
Speaker 1: we're going to get a lot better products from it.
Speaker 1: It's funny as you were talking and you were saying
Speaker 1: they need to provide something more than just investment advice PAM.
Speaker 1: Based on some of the conversations we've had here over
Speaker 1: the past two days, it seems like being someone's family
Speaker 1: therapist is part of it because you have to talk
Speaker 1: about what their life goals are, what they envisioned for
Speaker 1: themselves when they're olders, how their relationship is, how they
Speaker 1: would like the world to be. Is that accurate, and
Speaker 1: that is accurate. And uh, you know, we think about
Speaker 1: what our advisors do and and all the services they deliver,
Speaker 1: and all the conversations they have, and if you brought
Speaker 1: ten of them over here, I bet you they'd tell
Speaker 1: you they spend less than ten percent of their time
Speaker 1: talking about investments with their clients. UM. It's really, you know,
Speaker 1: it's not what most clients want to focus on. Um
Speaker 1: that you know that they want to know, do I
Speaker 1: have enough money to retire? You know? And am I
Speaker 1: going to be able to take the trip? And I
Speaker 1: am I gonna be able to fund my grandchildren's education? Um?
Speaker 1: So it it the the investments, you know are important,
Speaker 1: and certainly from the advisor's perspective, they do pay the
Speaker 1: bills to some extent. UM. But but I don't think
Speaker 1: it's you know, always the top priority for clients. Fiduciary rules,
Speaker 1: that was a big topic last year. It's less so
Speaker 1: this year. Do you believe that many firms are going
Speaker 1: to just adopt fiduciary rules standards because it's good business.
Speaker 1: I think we're in a wait and see right now,
Speaker 1: you know. Um, certainly the d L fiduciary rule UM
Speaker 1: was a wake up call. I think for a lot
Speaker 1: of firms to sort of look at their business and say,
Speaker 1: are we future proofed? Are we in a position that
Speaker 1: you know, we can comply with this UM Now everybody
Speaker 1: got a reprieve from that. UH, that may route to
Speaker 1: be temporary. Right. The SEC is out now with the
Speaker 1: best interest proposal. We've heard from UM the d O
Speaker 1: L that they may take take another run at some
Speaker 1: regulation here. UM. So our advisors, I mean of our
Speaker 1: business is already fiduciary. So so our advisors are very
Speaker 1: comfortable with that. Ultimately I think goes that direction, we'll
Speaker 1: be just fine. Greg Gore, thank you so much for
Speaker 1: being with us. Greg Gore as senior vice president of
Speaker 1: Wealth Management at Commonwealth Financial Network normally in Boston right
Speaker 1: now in Austin, Texas. Definitely, one thing that is shaking
Speaker 1: at least the energy stocks in the SP five hundred
Speaker 1: and beyond is the ongoing decline in oil and the
Speaker 1: ten day losing streak is setting it up for possibly
Speaker 1: the worst route on record. The ten day loss has
Speaker 1: been the biggest since November two, sixteen, and that was
Speaker 1: one there was basically a free fall going on in
Speaker 1: the price of oil. So it's using a lot of
Speaker 1: questions here, given the fact that we have entered a
Speaker 1: bear market. Now to talk a little bit more about this,
Speaker 1: Julian Lee Bloomberg oil strategist joining us Julian can give
Speaker 1: us a sense of why what is the mean driver
Speaker 1: behind the oil price declines recently. I think there's a
Speaker 1: number of things going on. We are seeing that forecasts
Speaker 1: of demand growth of being revised downwards by all of
Speaker 1: the major agencies. But I think that the bigger thing
Speaker 1: is is really a supply issue. UH. The US government
Speaker 1: has raised its assessment of how much oil the United
Speaker 1: States is producing. Both the most recent weekly and the
Speaker 1: most recent monthly data show that production is growing at
Speaker 1: a rate of two million barrels a day year on year.
Speaker 1: That is a staggering amount of oil. I mean that
Speaker 1: is adding as much oil as is produced by Nigeria
Speaker 1: and Gabon to OPEC members in the space of a
Speaker 1: single year. UH. That I think has really spooked markets
Speaker 1: and there's more shale to come. Julian. If you take
Speaker 1: a look at the price of crude on the NIMAX,
Speaker 1: since the beginning of October, the price has fallen more
Speaker 1: than twenty per cent. If this was a stock market indicator,
Speaker 1: people would be jumping out of windows. They would be
Speaker 1: seeing their stock portfolios lower by a five. Is there
Speaker 1: a rebound that will happen. There may be a temporary rebound.
Speaker 1: I mean we are moving towards a period of of
Speaker 1: much stronger seasonal demand. I mean, if you look at
Speaker 1: one indicator, if you look at US refinery runs, the
Speaker 1: amount of crude oil processed in US refineries, it's just
Speaker 1: coming to the end of what is typically a seasonal
Speaker 1: low point, and the amount of oil being processed will
Speaker 1: pick up over the period to the end of the
Speaker 1: year by as much as one and a half million
Speaker 1: barrels a day. That's going to give a a short
Speaker 1: term boost to the demand for crude oil UM, and
Speaker 1: that might provide a bit of relief for a while. UM.
Speaker 1: But I think eyes are going to be on on
Speaker 1: Opaque and Russia, the group of countries that said they
Speaker 1: would cut output. They are meeting on Sunday. This is
Speaker 1: not a policy making meeting. It's a meeting to sort
Speaker 1: of assess how their current agreement is going. But it
Speaker 1: will set the tone I think for their discussions over
Speaker 1: thecoming coming weeks. Is there a price point Julian at
Speaker 1: which basically people start to go back to fossil fuels,
Speaker 1: go back to using oil. That stymy is the development
Speaker 1: of alternative energy sources. In other words, that's good for
Speaker 1: the oil industry long term. In other words, three dollars
Speaker 1: a barrel, it would be actually for the long term,
Speaker 1: probably pretty good for them. For the oil industry now,
Speaker 1: it would certainly be good from a demand point of you.
Speaker 1: I think the problem with thirty dollar a barrel oil
Speaker 1: is that that really starts biting into investment in future production.
Speaker 1: And we saw that when oil prices fell, when they
Speaker 1: were getting down to those sort of levels, in investment
Speaker 1: in new projects just dried up um. And we're still
Speaker 1: I think seeing the tail end of that. Now. What
Speaker 1: is you know, what everybody I think agrees is that
Speaker 1: we need some sort of stability around a price that
Speaker 1: doesn't choke off demand too quickly, but also is high
Speaker 1: enough to allow the industry to continue to invest. What
Speaker 1: that level is is is the thing that nobody can
Speaker 1: agree on. When oil prices were thirty dollars a barrel,
Speaker 1: OPEC said it was round about fifty. When it got
Speaker 1: to fifty, they were talking well maybe it's round about seventy.
Speaker 1: When it got to seventy, well maybe the target was eighty.
Speaker 1: So you know, this is a very much a movable
Speaker 1: feat all right, it's a movable feast, but the feast
Speaker 1: is sometimes stuck in the ground. Reserve values they are
Speaker 1: used for collateral purposes if you happen to be borrowing money,
Speaker 1: which many exploration companies in the shale patch actually do.
Speaker 1: They taken on a lot of debt. When do they
Speaker 1: have to revise those assumptions for how much that oil
Speaker 1: at fossil fuel is in the ground, how much it's
Speaker 1: going to be worth well, I mean most of these
Speaker 1: companies are looking at a sort of revising the estimates
Speaker 1: of their break even prices and the value of oil
Speaker 1: in the ground on a usually on a six monthly basis.
Speaker 1: So the next one is is probably coming up towards
Speaker 1: the end of this year. But at seventy dollars a barrel,
Speaker 1: sixty dollars a barrel for w t I I sort
Speaker 1: of work in a Brent world being in Europe, but
Speaker 1: you know, sixty dollars w t I, most of these
Speaker 1: companies producing in the shale patch have probably cut their
Speaker 1: break evens two round about thirty thirty five dollars of arrel.
Speaker 1: So from that point of view, I think they're still
Speaker 1: fairly comfortable. The people who are going to be suffering
Speaker 1: as prices fall if they continue to do so, are
Speaker 1: the people who are looking at investing in very big, expensive,
Speaker 1: long term projects, and that's where the investment has really
Speaker 1: dried up. Julian Lee, thank you so much for being
Speaker 1: with us. Definitely oil in the spotlight today and your
Speaker 1: perspective is greatfully, really insightful. Jeffrey, Julian Lee is Bloomberg
Speaker 1: Oil strategist. Uh coming to us. We are currently in Austin,
Speaker 1: Texas at least RAMA. What's along with my co host
Speaker 1: and colleague Pim Fox. This is Bloomberg. Then we're going
Speaker 1: to talk a little bit about financial literacy financial education
Speaker 1: and joining us now to help us do this is
Speaker 1: Maggie John Drew. Maggie is the president and owner of
Speaker 1: Gendre Wealth Management based in Farmington, Connecticut. Maggie, thank you
Speaker 1: very much for joining us, ke you for having me.
Speaker 1: Just by way of introduction, I just want to mention
Speaker 1: that the not only do you have a b a.
Speaker 1: In economics from Providence college but also an m a
Speaker 1: Master of Science rather from the London School of Economics.
Speaker 1: You've taken your educational perspective and you've decided to turn
Speaker 1: it into a trivia game having to do with financial information.
Speaker 1: Tell us about your your your trivia game. Sure absolutely
Speaker 1: so UM. I actually joined my partner Laurie, who's been
Speaker 1: in the business for over thirty years, and a goal
Speaker 1: of mine was to reach out to the next generation
Speaker 1: of investors. And everyone's done the sit down seminars where
Speaker 1: you have the state dinner and you know, maybe you
Speaker 1: leave with a prospect, maybe you don't, UM, and not
Speaker 1: necessarily everyone gets a lot out of it. So I thought,
Speaker 1: how can we make this for the next gen and
Speaker 1: UM we started doing him at more interesting places like
Speaker 1: breweries for instance, and we would have a trivia game
Speaker 1: which include your typical trivial questions but then also financial ones,
Speaker 1: and at the end of every round I would give
Speaker 1: some financial advice, so anything from basic insurances to for
Speaker 1: owen k plans in your match too of course student
Speaker 1: loans UM. And they've been wildly successful, to the point
Speaker 1: that some corporations have started asking me to bring them
Speaker 1: in in house. So Maggie, You've worked at a lot
Speaker 1: of Well Street banks, from Barclays and JP Morgan, uh
Speaker 1: most prominently among them. I'm wondering, our millennials really different
Speaker 1: from anybody else? And is it really a group that
Speaker 1: can be isolated with a characterization and when it comes
Speaker 1: to investing sure, UM, I think a little bit yes
Speaker 1: and a little bit no. I mean, in the end,
Speaker 1: everybody wants to have a good life, right and however
Speaker 1: they define that. But I think one place specifically that
Speaker 1: millennials are different than boomers is that they do believe
Speaker 1: in social socially responsible investing. In fact, I believe sixty
Speaker 1: six percent of millennials want that that social peace and
Speaker 1: boomers about half. UM. So often when I am working
Speaker 1: with millennials, I have clients asking me to invest in
Speaker 1: of course clean energy, Um, they want to invest in
Speaker 1: companies with a lot of women on the board. They
Speaker 1: want to invest in bettering the water supply. So that's
Speaker 1: a major difference, I would say. And then the second one,
Speaker 1: of course, is the student loan debt. I think we
Speaker 1: have to deal with that a lot more. The use
Speaker 1: of technology in order to stay connected with your clients,
Speaker 1: with your customers how has that changed your ability to
Speaker 1: actually run the business but also to give that kind
Speaker 1: of advice on a continuous basis because people are much
Speaker 1: more mobile today. Absolutely. So, while headquartered in Connecticut, I
Speaker 1: spent quite a bit of time in New York as well,
Speaker 1: um and I have clients there. So when I'm in Connecticut,
Speaker 1: we skype. We have used FaceTime before. In fact, I
Speaker 1: had a client that was spending a whole year in
Speaker 1: Italy and she inherited money from her father and wanted
Speaker 1: it figured out before she came back years a long time,
Speaker 1: and we did everything or skype. One other sort of
Speaker 1: cliche about millennials is that they're scared of the stock
Speaker 1: market because they grew up at a time during a
Speaker 1: lot of turmoil in equity markets. Is that true? I
Speaker 1: would say it is. Yeah. We we have seen of
Speaker 1: course two eight most recently, and then some even saw
Speaker 1: the dot com crash. Um. But the way I've been
Speaker 1: commanding that is through education. Um. So again, the trivia
Speaker 1: nights are a great example, or just having small group
Speaker 1: group events in our office where we can explain the
Speaker 1: impact of long term investing and how even after those
Speaker 1: that stayed invested are relatively Okay, today, what is f
Speaker 1: our next Gen. This is something that you put together.
Speaker 1: It's a subscription service for financial planning. Tell us about
Speaker 1: f R next Gen. Sure, So, a lot of professional
Speaker 1: millennials who would be wonderful clients don't have necessarily the
Speaker 1: a M that a traditional assets under management. That's right.
Speaker 1: They don't have the money to have a financial advisor
Speaker 1: manage it, but instead a lot of that money is
Speaker 1: tied up in their four own K. And I've seen
Speaker 1: people come to me and their default in their four
Speaker 1: owne K is simply a money market. So they're really
Speaker 1: not getting the benefit of that investing, but they're putting
Speaker 1: away for a four owne K. And so for people
Speaker 1: like that, they can come to an advisor, pay that
Speaker 1: subscription service on a monthly basis, and we can give
Speaker 1: them advice on their four owen K, how to better
Speaker 1: allocate it, on student loans, on buying a home, really
Speaker 1: providing that holistic financial planning without necessarily having the assets
Speaker 1: er management. Maggie, I want to go back to something
Speaker 1: that you said, which is the student loans. That's a
Speaker 1: serious issue that we need to deal with. How has
Speaker 1: the massive student owned a student loan debt, which is
Speaker 1: has surpassed one trillion dollars in United States, affected family formation,
Speaker 1: retirement savings, etcetera. For millennials. Yeah, I think everyone's putting
Speaker 1: it off a little bit, meaning buying a home, starting
Speaker 1: a family, not only because of student debt, but I
Speaker 1: know from speaking with clients that is definitely a reason. Um,
Speaker 1: I think another reason though his career. Right, So in
Speaker 1: the past, if you had a child, maybe you had
Speaker 1: to make some some decisions without about your career, whereas
Speaker 1: now people really want to be set in their career,
Speaker 1: paid on some of that student loan debt, and then
Speaker 1: be able to start a family or buy a home.
Speaker 1: And in fact, I am starting to see that I
Speaker 1: get a lot more questions about home buying and five
Speaker 1: plans than ever before. Unfortunately, sometimes it all doesn't work
Speaker 1: out and there are divorces involved, and as someone that
Speaker 1: helps family plans, those families can change in disposition over
Speaker 1: the course of years. Tell us a little bit about
Speaker 1: that part of your practice and how you specifically are
Speaker 1: able to help women who are going through those issues.
Speaker 1: Great questions. So we actually are women practice, uh, not
Speaker 1: necessarily but by design, but definitely enjoy that peace and
Speaker 1: because of that, we do have a lot of women
Speaker 1: coming and seeking advice about financials. A lot of women
Speaker 1: were home caretakers and hadn't worked in many years um
Speaker 1: or they've never dealt with the finances before. Uh, and
Speaker 1: so when they come to us, we definitely do holistic planning.
Speaker 1: So we start with a financial plan, making sure that
Speaker 1: the budget is sound. Then maybe they're they're likely inheriting
Speaker 1: money that they haven't had before from their spouse, right, well,
Speaker 1: inheriting is the wrong word, but but obtaining, right, And
Speaker 1: so what does that mean? And now retirement is no
Speaker 1: longer with somebody else, it's alone, and what does that mean?
Speaker 1: Both emotionally and financially. So that's definitely a part of
Speaker 1: our practice we've developed. And just real quick, I'm wondering,
Speaker 1: how many people do you say that you work with?
Speaker 1: How many different clients? Sure? We have a hundred and
Speaker 1: fifty households. Yeah, all right. It's really interesting to hear
Speaker 1: about how the different generations are different, to try to
Speaker 1: extrapolate out into what we're seeing in markets and how
Speaker 1: that's reflected. Thank you so much for being here, Thank
Speaker 1: you for having me. Really interesting Maggie at Jendrew, President,
Speaker 1: owner of Jendrew Wealth Management in Farmington, Connecticut, but obviously
Speaker 1: not today. She is here in to in Texas at
Speaker 1: this conference, at the Commonwealth conference that we have been at.
Speaker 1: So we are looking right now at markets that are
Speaker 1: in the red. Perhaps this is just another bout of
Speaker 1: concerns about overvaluation, with the NASTAC leading the way down
Speaker 1: one point four percent decline, uh SMP five hundred down
Speaker 1: a little a little bit less than nine tenths of
Speaker 1: one percent. In the bond market, you can see yields
Speaker 1: actually coming down across the board, despite some speculation that
Speaker 1: the deficit is only going to increase and the FED
Speaker 1: is on pace to raise rates. Coming up, we're gonna
Speaker 1: take a look at emerging markets. What does the FEDS
Speaker 1: path of rate hikes mean for them. I'm Lisa Bromo
Speaker 1: was pim Fox, and this is Bloomberg Markets. Thanks for
Speaker 1: listening to the Bloomberg p m L podcast. You can
Speaker 1: subscribe and listen to interviews at Apple Podcasts, SoundCloud, or
Speaker 1: whatever podcast platform you prefer. I'm pim Fox. I'm on
Speaker 1: Twitter at pim Fox. I'm on Twitter at Lisa Abramo.
Speaker 1: It's one before the podcast. You can always catch us
Speaker 1: worldwide on bloom or Radio m