WEBVTT - Why Women May Control the Next Generation of Finance

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>You're listening to Bloomberg BusinessWeek with Carol Masser and Tim

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<v Speaker 2>Stenovek on Bloomberg Radio.

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<v Speaker 1>So women are controlling ever greater sums of money around

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<v Speaker 1>the world, setting the stage for major shifts in wealth

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<v Speaker 1>management and philanthropy. In the US alone, McKinsey expects women

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<v Speaker 1>to control thirty four trillion dollars are roughly thirty eight

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<v Speaker 1>percent of investable assets by twenty thirty. That's close to

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<v Speaker 1>double last year's total. The figure was just seven point

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<v Speaker 1>three trillion. That was twenty nine percent. That was about

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<v Speaker 1>ten years ago.

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<v Speaker 2>Tim, the world of finance, wealth management, and banking are

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<v Speaker 2>all recalibrating for this great wealth transfer. With more in

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<v Speaker 2>our new weekly discussion on Women, Money and Power, where

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<v Speaker 2>we explore the economic implications of these changes and how

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<v Speaker 2>to navigate them. We welcome April Rudin, founder and CEO

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<v Speaker 2>of The Rooting Group, and Nick Rice, director at Brunswick,

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<v Speaker 2>are the co authors of the forthcoming Wealth Management With

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<v Speaker 2>the Difference, Your Guide to achieving client, generational and business success.

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<v Speaker 2>It comes out late next month. They both join us

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<v Speaker 2>here in the studio. Welcome to both of you. We've

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<v Speaker 2>been talking about this great wealth transfer for quite a

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<v Speaker 2>bit of time. I mean purely demographics when we think

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<v Speaker 2>about aging baby boomers and then who ends up receiving

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<v Speaker 2>those funds. I want to start with you, April, the

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<v Speaker 2>economic implications of these changes and what it means for

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<v Speaker 2>new trends when it comes to investing, saving, and of

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<v Speaker 2>course giving.

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<v Speaker 3>Well, it's huge. It's as you said, it's the intersection

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<v Speaker 3>of all of these different factors coming together. There's never

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<v Speaker 3>been a better time to be in wealth management. I

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<v Speaker 3>would say the opportunities for financial advisors and for all

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<v Speaker 3>firms that are serving in financial services. That sector of

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<v Speaker 3>women is gigantic because you have financial advisors that are retiring,

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<v Speaker 3>you have women inheriting more money. It's actually more of

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<v Speaker 3>a wealth transition going to talk about rather than a

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<v Speaker 3>wealth transfer. Is actually vertical. Right, Women live longer, and

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<v Speaker 3>so before that wealth transfer has happened, there's going to

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<v Speaker 3>be a wahy Is.

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<v Speaker 1>That an important distinction?

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<v Speaker 3>So I started my firm seventeen years ago talking about

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<v Speaker 3>the wealth transfer, it actually hasn't really happened. You still

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<v Speaker 3>from those McKenzie stats, you have people still talking about

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<v Speaker 3>it's going to happen. It's happening, is it happening? And now?

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<v Speaker 3>And people were under the impression that the transfer was

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<v Speaker 3>also going to go to gen Z, right, But actually

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<v Speaker 3>it's going to go to gen X, and gen X

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<v Speaker 3>are now in their sixties and approaching retirement themselves, some

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<v Speaker 3>of them. So I think it's more complicated than what

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<v Speaker 3>people think, and so it's important to pull it apart

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<v Speaker 3>and understand more about what's happening.

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<v Speaker 1>Nick, I want to bring you in, So how much

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<v Speaker 1>do things change when it comes to the investing world

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<v Speaker 1>and the approaches, Like how much is going to be different?

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<v Speaker 1>Because I you know, it's interesting that you know, we

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<v Speaker 1>sometimes men for swimmen and the distinctions, but is it

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<v Speaker 1>all that different?

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<v Speaker 4>Yes, so that it's going to be significant change. I

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<v Speaker 4>think all the data shows that women are very, very

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<v Speaker 4>passionate about using their investments and their philanthropy to fulfill

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<v Speaker 4>specific purposes and to ensure that they have impact in

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<v Speaker 4>a way that might not have happened in the past,

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<v Speaker 4>or they might not have had the tools to do that.

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<v Speaker 4>Always in the past, there's been a strong trend towards

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<v Speaker 4>philanthropy among older generations, but female clients, particularly a younger

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<v Speaker 4>generation are more focused on measuring that impact, generating that impact,

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<v Speaker 4>and also making money through purpose driven activities.

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<v Speaker 2>So where on the impact side of things, where does

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<v Speaker 2>that end up going? So it varies, right.

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<v Speaker 4>So you can look at it through a sustainability framework.

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<v Speaker 4>A lot of clients prefer to look at a sustainability framework,

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<v Speaker 4>targeting things like the environment or social causes that.

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<v Speaker 1>We stopped caring about that.

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<v Speaker 4>Well, some clients don't choose to look at it through sustainability.

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<v Speaker 4>It varies depending on the client, but a lot of

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<v Speaker 4>clients target the same underlying causes whether or not they

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<v Speaker 4>use the sustainability framework. You can target healthcare as a

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<v Speaker 4>client through your investments, through your philanthropy. You can use

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<v Speaker 4>the sustainability framework to do that, or you cannot use

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<v Speaker 4>the sustainability There are various different ways of cutting the

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<v Speaker 4>pot I want to bring.

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<v Speaker 1>You in on the same thing, like, you know, why

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<v Speaker 1>is it so different? But we hear from Nick that yes,

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<v Speaker 1>it will be different.

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<v Speaker 3>Also to your point, I think sometimes US is very

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<v Speaker 3>US centric, and whereas that might be true in the US,

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<v Speaker 3>our book is for a global audience and that has

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<v Speaker 3>not died down in Europe and Asia. Impact investing and

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<v Speaker 3>sustainability is really hot and is something very important.

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<v Speaker 1>I love that you went there. We're just coming off

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<v Speaker 1>the U in General Assembly and we did a big

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<v Speaker 1>broadcast last Wednesday from the Plaza. Bloomberg does a big event,

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<v Speaker 1>a global forum, and I felt like most of who

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<v Speaker 1>we talked to, a lot of European officials and yes,

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<v Speaker 1>talking about alternative energy, renewables, how it financially makes sense,

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<v Speaker 1>that nothing's changing, and that really struck me in those discussions.

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<v Speaker 2>Well it struck us because here in the US we

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<v Speaker 2>are the changing administration has really changed the tone when

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<v Speaker 2>it comes to renewables and also when it comes to

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<v Speaker 2>foreign aid, and pretty much every guest we spoke to

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<v Speaker 2>Carol at that event was talking about how to maximize

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<v Speaker 2>the impact of foreign ad and how to maximize the

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<v Speaker 2>return from renewables.

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<v Speaker 1>Yeah, I think it's kind of fascinating.

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<v Speaker 3>So that's one of the reasons why we went global

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<v Speaker 3>on this book, and we spoke to eighty senior leaders

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<v Speaker 3>across the world, because more and more firms are global

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<v Speaker 3>in nature, and more and more people are mobile in nature,

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<v Speaker 3>and so having a better understanding of what our world

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<v Speaker 3>is and technology connecting us is truly important. Even visiting

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<v Speaker 3>some of the headquarters of some of the firms and

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<v Speaker 3>you can see a huge difference where some firms are

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<v Speaker 3>very traditional in the way that they look. Other firms

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<v Speaker 3>have a more sustainable approach. As Nick was saying, you

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<v Speaker 3>see firms that have more green, more exposed brick. You know,

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<v Speaker 3>they in London, They've purchased a building and have redone.

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<v Speaker 3>It's something we don't really see here in the US,

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<v Speaker 3>where we're just going to, you know, knock the building

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<v Speaker 3>down and build something back up again. But there's an

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<v Speaker 3>effort to create sustainability and demonstrate it through their brand.

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<v Speaker 1>What does this mean in terms of money flows? So

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<v Speaker 1>we are Bloomberg and that is something whether it's a

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<v Speaker 1>fun advisor or whatever. You know, Tim and I constantly

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<v Speaker 1>talk about, so where the money goes? So where does

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<v Speaker 1>the money go? Potentially as we see this money, this

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<v Speaker 1>wealth transition, where does it go? Is it green or

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<v Speaker 1>sustainable efforts? Is it more global efforts? Like how do

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<v Speaker 1>you see it playing out?

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<v Speaker 4>I think alternatives are a big piece of this. We're

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<v Speaker 4>seeing increasing capital flow towards alternative investments, specifically right credit

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<v Speaker 4>and things like predvate markets, but also digital assets, right,

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<v Speaker 4>And we've seen the rise in vehicles that will enable that, right,

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<v Speaker 4>be those through new types of vehicles that wealth management

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<v Speaker 4>clients can more easy access, or also increasingly through retirement plans.

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<v Speaker 2>Right.

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<v Speaker 4>We saw the executive orders the other week. That's an

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<v Speaker 4>important part of it. Also, international is a very important

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<v Speaker 4>part of it. I think people thought with the globalization

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<v Speaker 4>that it would just make people more domestic. In reality,

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<v Speaker 4>it makes your international footprint more complicated, and we're seeing

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<v Speaker 4>a lot of wealth managers retool in order to account

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<v Speaker 4>for that greater international footprint.

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<v Speaker 1>Hey, I want to.

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<v Speaker 2>Finish where we started with you, and you said that

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<v Speaker 2>there's been no greater time to be in wealth management.

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<v Speaker 2>If you would have told me ten fifteen years ago

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<v Speaker 2>that that would be the case for twenty twenty five,

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<v Speaker 2>I wouldn't have believed you. Because we saw the rise

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<v Speaker 2>of robo advisors, passive investing, the idea of setting it

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<v Speaker 2>and forgetting it, which I thought millennials would be doing,

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<v Speaker 2>make the argument and make the case that people are

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<v Speaker 2>paying that higher fee to get that personalized advice.

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<v Speaker 3>So it's really the confluence of all these different things happening.

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<v Speaker 3>It's more and more advisors retiring, it's volatile markets. As

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<v Speaker 3>the mother of two gen Z kids, I'll tell you

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<v Speaker 3>that they're more conservative than what people think, and I

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<v Speaker 3>think they want to have bigger brands that they rely on,

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<v Speaker 3>so I think there's an opportunity there. I think that

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<v Speaker 3>there is a general need for more financial literacy and

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<v Speaker 3>amen around that, because even for financial advisors. I was

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<v Speaker 3>just going to add one more thing which Nick and

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<v Speaker 3>I always talk about. There's been a real shift in

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<v Speaker 3>who is a financial advisor and how to recruit people

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<v Speaker 3>into it. Only fifteen percent of the workforce is women,

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<v Speaker 3>and traditionally finance majors have been recruited and now not

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<v Speaker 3>so much.

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<v Speaker 1>We have to leave it there. I hope we can

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<v Speaker 1>continue in the future. April Ruden of course of the

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<v Speaker 1>Rudent Group, Nick Rice of Brunswick and check out their

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<v Speaker 1>book Wealth Management with a Difference. And also we have

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<v Speaker 1>a special event in London women Money and Power. Be

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<v Speaker 1>sure to check it out.