WEBVTT - Broadcasting Live from the Future Proof Festival 0:00:02.920 --> 0:00:10.719 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business 0:00:10.720 --> 0:00:13.960 Wait inside from the reporters and editors who bring you 0:00:14.000 --> 0:00:18.360 America's most trusted business magazine, plus global business, finance and 0:00:18.400 --> 0:00:22.880 tech news. The Bloomberg Business Week Podcast with Carol Messer 0:00:23.040 --> 0:00:25.800 and Tim Stenebeck from Bloomberg Radio. 0:00:26.960 --> 0:00:29.680 I'm Carol Masser, and I'm live here in Huntington Beach 0:00:29.720 --> 0:00:31.720 at future Proof. Barry Ridtholtz, by the way, is going 0:00:31.720 --> 0:00:33.960 to join us in such in just a few minutes. 0:00:34.000 --> 0:00:35.960 He's my co host over the next couple of days, 0:00:36.040 --> 0:00:38.280 very involved in future Proof, so he's going to join 0:00:38.440 --> 0:00:40.960 our discussion in just a moment. Right now, though, I 0:00:40.960 --> 0:00:44.159 want to get to the individual who's responsible for creating 0:00:44.200 --> 0:00:46.280 this just a couple of years ago and responsible for 0:00:46.320 --> 0:00:46.800 putting it on. 0:00:46.800 --> 0:00:48.159 We're talking about Matt Middleton. 0:00:48.200 --> 0:00:50.720 He's a former growth strategy director at the media publisher 0:00:50.720 --> 0:00:54.640 informa co creator of the financial advisor conference wealth Stack. 0:00:54.720 --> 0:00:57.520 He's the founder and CEO of future Proof and joins 0:00:57.560 --> 0:01:00.240 us here. And I should say welcome, but thank you for. 0:01:00.400 --> 0:01:01.640 Environment Oh, thank you for being here. 0:01:01.680 --> 0:01:05.080 It's amazing tell us about this event, in particular because 0:01:05.760 --> 0:01:08.200 I've been to a lot of investment conferences. Everyone has 0:01:08.240 --> 0:01:10.280 its certain feel, but this is something different. And I 0:01:10.319 --> 0:01:12.000 don't know, is it just that it's outside and at 0:01:12.040 --> 0:01:13.200 the beach or something else. 0:01:13.440 --> 0:01:14.440 It's a little bit of everything. 0:01:14.520 --> 0:01:17.399 So if we created this in twenty twenty two, with 0:01:17.480 --> 0:01:20.640 the original thought being in twenty twenty, if we recall COVID, 0:01:20.720 --> 0:01:23.319 the events in industry came to a screeching halt, right, 0:01:23.400 --> 0:01:26.319 And so at that time most in the event space 0:01:26.400 --> 0:01:28.440 looked at it and said, well, we're going to go 0:01:28.480 --> 0:01:32.039 digital because content digital makes sense. People aren't going to travel, 0:01:32.120 --> 0:01:35.000 risk their health, leave their family, and as an industry, 0:01:35.400 --> 0:01:38.840 we're a relationship business, right, and so FaceTime is really important. 0:01:38.880 --> 0:01:42.520 So we had this idea very early on that content 0:01:42.600 --> 0:01:45.400 is important, but more importantly is the networking and the experience. 0:01:45.480 --> 0:01:47.640 And so how do you create that in a live 0:01:47.680 --> 0:01:52.160 event setting? And unfortunately, most events that are positioned inside 0:01:52.280 --> 0:01:56.040 a ballroom or a captive space, right don't afford you 0:01:56.120 --> 0:01:58.760 the freedom, the casual nature and tone. Right. This is 0:01:58.800 --> 0:02:00.600 the first event that I've ever worked T shirt at 0:02:00.600 --> 0:02:03.000 in our industry, and it's fitting right, I fit right in, 0:02:03.680 --> 0:02:07.560 And so the elements are you know, it's outdoor, it's casual. 0:02:07.640 --> 0:02:10.760 You have really interesting senior level people here. They're open 0:02:10.840 --> 0:02:13.120 to sharing, right. And then we use network, we use 0:02:13.160 --> 0:02:15.920 technology to better connect the industry. So, while this event 0:02:15.960 --> 0:02:18.560 has gotten bigger, if you come as an individual with 0:02:18.639 --> 0:02:21.679 a key objective, it's likely that that objective will be 0:02:21.760 --> 0:02:23.639 meant either by the people you meet or the content 0:02:23.680 --> 0:02:25.200 you could attend through the five stages. 0:02:25.400 --> 0:02:27.720 Yeah, I have to say there is something about things 0:02:27.760 --> 0:02:30.680 being more casual. I definitely overdressed, and tomorrow it'll be different. 0:02:30.720 --> 0:02:33.080 I did where flip flops over. But having said that, 0:02:33.120 --> 0:02:36.040 there is something about putting in a casual setting. And 0:02:36.080 --> 0:02:39.119 while I always do see meetings that investment conferences, it's 0:02:39.200 --> 0:02:42.960 just everywhere I look, it's people stopping, there's tables, everybody's 0:02:43.000 --> 0:02:45.920 sitting down talking. I mean there's a lot of activity 0:02:45.960 --> 0:02:49.400 and interest when you thought about the subjects that you 0:02:49.440 --> 0:02:53.880 wanted to cover. Also, I was asked by my co 0:02:54.000 --> 0:02:55.960 ancher who's back in New York, he said, what about 0:02:56.000 --> 0:02:56.320 the FED? 0:02:56.760 --> 0:02:59.600 Is that something? I mean, you're covering the important topics 0:02:59.639 --> 0:03:00.560 that are out there as well. 0:03:00.720 --> 0:03:00.919 Yeah. 0:03:01.040 --> 0:03:04.120 So the majority of this audience is RIA, right, and 0:03:04.200 --> 0:03:06.640 the RAA is the fastest growing channel within the investment 0:03:06.680 --> 0:03:09.440 management ecosystem. And so these folks are here to look, 0:03:09.760 --> 0:03:12.000 how do they develop their business, how do they recruit 0:03:12.040 --> 0:03:15.560 retain right? They want to grow access to investment content. Yes, 0:03:15.560 --> 0:03:18.720 it's plentiful here, but it's far ranging here because there's 0:03:18.720 --> 0:03:20.919 more than just the investment content that they come for. 0:03:21.000 --> 0:03:23.520 They want to come for practice management, they want to 0:03:23.520 --> 0:03:27.560 come for what's happening with technology and so bas on 0:03:28.600 --> 0:03:32.520 a very wide swath of content and therefore bring across generational, 0:03:32.600 --> 0:03:36.760 cross functional ecosystem versus just the standard investment conference or 0:03:36.840 --> 0:03:39.520 just the standard you know, technology conference. Yeah. 0:03:39.920 --> 0:03:41.560 I mean, these guys are running businesses, right, I mean 0:03:41.600 --> 0:03:43.520 one of the guests that we're going to talk about 0:03:43.600 --> 0:03:46.280 is you know, legacy, like the involvement. You have got 0:03:46.320 --> 0:03:48.400 this entrenched firm, and then they've got to think about 0:03:48.400 --> 0:03:51.520 what happens after either a founder, right or co founder 0:03:51.760 --> 0:03:53.400 you know, either leaves the firm, seals the firm. 0:03:53.440 --> 0:03:54.840 You have to think about some of those issues. 0:03:54.880 --> 0:03:56.920 I mean, they're predominantly small businesses, right, So when you 0:03:56.920 --> 0:03:59.440 think about this, you know, many years ago when this 0:03:59.560 --> 0:04:03.200 channels arted, these folks were building firms locally and then 0:04:03.440 --> 0:04:06.560 it grew and then they maybe acquired someone and became national, 0:04:06.800 --> 0:04:08.400 and now they're looking at it. Well, you know, I'm 0:04:08.440 --> 0:04:12.160 in my mid fifties and early sixties. What's my secession planned? 0:04:12.200 --> 0:04:12.320 Right? 0:04:12.360 --> 0:04:15.080 I want to leave a legacy, I have a team, right, 0:04:15.120 --> 0:04:17.120 But I also want to retire and relax and enjoy 0:04:17.160 --> 0:04:19.080 my life as well. And you know it's a culmination 0:04:19.160 --> 0:04:20.920 of all of this. So you'll see at the content here. 0:04:20.960 --> 0:04:24.120 We'll have plentiful investment focused content, but we also have 0:04:24.120 --> 0:04:27.159 a state planning. We also have you know, technology focused right, 0:04:27.240 --> 0:04:30.200 how to build your tech stack as an entrepreneur. You know, 0:04:30.200 --> 0:04:33.360 there's over two hundred and seventy five you know vendors here. 0:04:33.720 --> 0:04:35.440 And they're not just here, you know, handing out fact 0:04:35.440 --> 0:04:37.440 sheets like the old days, right, they're there, they're demoing, 0:04:37.480 --> 0:04:40.360 they're talking to folks. They're basically getting feedback to how 0:04:40.360 --> 0:04:41.960 to better serve this ecosystem. 0:04:42.000 --> 0:04:43.440 How did you know that there was room for another 0:04:43.480 --> 0:04:44.360 investment conference? 0:04:44.920 --> 0:04:45.400 I didn't. 0:04:45.400 --> 0:04:47.159 No, No, that's fair. 0:04:47.279 --> 0:04:50.680 Honestly, it's a very crowded marketplace, you know. The you know, 0:04:50.680 --> 0:04:53.159 I've been doing this for fifteen years. My view was 0:04:54.320 --> 0:04:57.479 as of someone who attended all these events during COVID, 0:04:57.520 --> 0:04:59.960 I kind of said, do I really want to, you know, 0:05:00.200 --> 0:05:02.240 go do this again? Right where you go to these 0:05:02.279 --> 0:05:06.440 events and you're trapped, right and you're consuming content twelve 0:05:06.480 --> 0:05:08.600 hours a day. The only time you break away from 0:05:08.640 --> 0:05:11.200 this beautiful resort is to go get a steak dinner. 0:05:11.600 --> 0:05:14.480 And to me, that felt not organic. And so the 0:05:14.480 --> 0:05:15.880 thesis really here and most. 0:05:15.720 --> 0:05:17.200 People look at it. We call it a festival. 0:05:17.240 --> 0:05:20.159 It's bright colors, it's everything that is not traditional to 0:05:20.240 --> 0:05:20.960 our industry. 0:05:21.360 --> 0:05:23.120 But the real it almost has a Barbie feel. 0:05:23.200 --> 0:05:25.840 Hence yeah, pay yes and my skin tone right now 0:05:25.839 --> 0:05:30.120 at the sunburns. But really, when you think about it 0:05:30.120 --> 0:05:33.520 at an essence, right, the outdoor element is just a 0:05:33.560 --> 0:05:35.920 way to bring this out, which is we're all humans 0:05:35.920 --> 0:05:37.200 at the end of the day, and we want to 0:05:37.240 --> 0:05:41.080 connect people financial professionals in our industry at the human level, 0:05:41.120 --> 0:05:43.279 which means what right we want to connect people based 0:05:43.320 --> 0:05:45.719 on their hobbies, their interests, their lifestyle. We believe that 0:05:45.760 --> 0:05:48.839 as an industry, if we could find those connection points 0:05:48.880 --> 0:05:52.080 where you could make new connections or further your existing 0:05:52.120 --> 0:05:55.080 relationships in a very organic way, well then maybe we 0:05:55.080 --> 0:05:58.839 could actually do better at getting business done naturally. In 0:05:58.880 --> 0:06:02.080 our industry and further the growth of all different sectors here. 0:06:02.160 --> 0:06:04.400 And so that's why you'll see we have a music 0:06:04.440 --> 0:06:07.120 conference tomorrow, we have culinary demonstrations. 0:06:07.200 --> 0:06:07.320 Right. 0:06:07.360 --> 0:06:08.599 You use a lot of food around. 0:06:08.640 --> 0:06:10.760 Of course, there's no shortage of food here. 0:06:11.080 --> 0:06:11.719 It's a good thing. 0:06:12.080 --> 0:06:14.000 Having said that, you know what's interesting too, is I 0:06:14.040 --> 0:06:15.720 think we're going to talk with the CEO of Betterment 0:06:16.120 --> 0:06:18.880 and thinking about the next generation of investing and I 0:06:18.960 --> 0:06:21.520 just even think about the next generation of how we 0:06:21.600 --> 0:06:25.719 as financial professionals are we as media cover it that 0:06:25.839 --> 0:06:28.480 things are changing, right, And like I said, this has 0:06:28.520 --> 0:06:30.480 got a very different feel and the approach to what 0:06:30.520 --> 0:06:32.880 you guys is doing is very different from I feel 0:06:32.920 --> 0:06:35.360 like what's out there. Yeah, not to not to pooh 0:06:35.360 --> 0:06:37.599 pooh or criticize anything that's out there, but you do 0:06:37.680 --> 0:06:38.440 see an evolution. 0:06:39.000 --> 0:06:41.159 Well, I mean what's important here is that we have 0:06:41.200 --> 0:06:42.600 a multi generational audience. 0:06:42.640 --> 0:06:42.839 Right. 0:06:42.880 --> 0:06:44.680 You have folks that are here that we were talking 0:06:44.680 --> 0:06:47.400 about secession planning. They're thinking about, all, right, what's where's 0:06:47.400 --> 0:06:50.000 my firm going? Right, how do I keep my employees 0:06:50.279 --> 0:06:52.560 engaged and involved? Or maybe hey, I'm looking to sell 0:06:52.560 --> 0:06:55.000 my business? Right, And then you have the opposite spectrum. Right, 0:06:55.000 --> 0:06:57.120 you have folks that are sitting here and saying I'm 0:06:57.160 --> 0:06:59.640 just getting started, right, I want to meet folks like Barry, Right, 0:06:59.640 --> 0:07:03.320 I need to understand Ary Bhill Crah. 0:07:04.360 --> 0:07:07.279 So let me ask Matt introducing people up. 0:07:07.520 --> 0:07:11.280 That's right, I just introduced the strategists talking about what 0:07:11.320 --> 0:07:15.960 they see coming in the coming years. But Matt, your innovation, 0:07:16.440 --> 0:07:20.040 your creativity, your genius really is what led to us 0:07:20.080 --> 0:07:23.800 doing this big outdoor event. How far can we press 0:07:23.880 --> 0:07:24.520 this concept? 0:07:24.560 --> 0:07:25.360 Where you going to go with this? 0:07:25.640 --> 0:07:25.840 Yeah? 0:07:25.880 --> 0:07:28.480 So I think this event could scale to ten thousand. 0:07:28.600 --> 0:07:28.800 Right. 0:07:28.880 --> 0:07:32.600 The RIA space is rapidly growing, and there's no shortage 0:07:32.600 --> 0:07:34.760 of people coming each and every year, and there's certainly 0:07:34.760 --> 0:07:37.360 no shortage of people supporting these types of events. 0:07:37.440 --> 0:07:37.600 Right. 0:07:37.640 --> 0:07:40.280 So you know our thesis is to have an outdoor 0:07:40.640 --> 0:07:44.520 festival type, very modern approach to conferences and therefore serve 0:07:44.720 --> 0:07:45.600 the next generation. 0:07:45.720 --> 0:07:45.840 Right. 0:07:45.880 --> 0:07:47.960 We want these events to last for the next ten 0:07:47.960 --> 0:07:50.240 to twenty years, and therefore you need to think about 0:07:50.240 --> 0:07:53.160 who you're attracting to it. Right. So the generations that 0:07:53.200 --> 0:07:56.080 we attract are at every stage, right, It's not just 0:07:56.280 --> 0:07:56.960 we want. 0:07:56.720 --> 0:07:58.720 The CEOs at this stage that you know. 0:07:58.640 --> 0:07:59.920 In twenty years, they're not going to be in the bus, 0:08:00.320 --> 0:08:02.520 and so we think about it like that. So, going 0:08:02.520 --> 0:08:05.440 from this event, we announced future Proof citywide in March 0:08:05.560 --> 0:08:08.880 of next year, and that's gonna be in Miami Beach. 0:08:09.120 --> 0:08:11.840 We have several different retreats. We're really taking this future 0:08:11.840 --> 0:08:15.840 Proof concept into an enterprise business serving the entire wealth 0:08:15.880 --> 0:08:17.080 and asset management ecosystem. 0:08:17.120 --> 0:08:19.080 How about the French Riviera? Where else would we like 0:08:19.120 --> 0:08:21.360 to go? In Greek islands and real Greek islands? 0:08:21.400 --> 0:08:22.160 How about Bahamas? 0:08:22.160 --> 0:08:23.800 Back We're going to be in the Bahamas next October. 0:08:23.840 --> 0:08:26.200 I'm just saying, right October, Bahamas. 0:08:25.880 --> 0:08:31.280 Warren Cup, I'm just like planning it now. Good luck. 0:08:31.360 --> 0:08:32.839 Thank you so much, so much. I appreciate it. 0:08:32.920 --> 0:08:34.360 Yeah, thank you so much for inviting us. 0:08:34.360 --> 0:08:37.000 The founder and CEO of future Proof, Matt Middleton, all right, 0:08:37.000 --> 0:08:39.120 you are listening and watching Blueberg Business Week. We're gonna 0:08:39.120 --> 0:08:41.160 get David Kelly up there in just a moment, but 0:08:41.200 --> 0:08:42.560 I want to turn to you. 0:08:42.600 --> 0:08:45.040 Tell me a little bit about how things are going. 0:08:45.040 --> 0:08:46.679 So far, so far, so great. 0:08:46.720 --> 0:08:48.520 I mean, this is this is your event. 0:08:49.840 --> 0:08:50.560 Yeah. 0:08:50.120 --> 0:08:53.079 So the funny story with Matt was we were talking 0:08:53.120 --> 0:08:56.320 we had done events previously in before the pandemic. Yeah, 0:08:56.360 --> 0:08:59.040 and twenty one things were starting to open up again 0:08:59.080 --> 0:09:02.000 and at least take year to plan an event. Hey, 0:09:02.040 --> 0:09:04.280 we'd love to do an event again. How do we 0:09:04.360 --> 0:09:06.600 not make it a super spreader event? He's like, I know, 0:09:06.679 --> 0:09:09.080 We'll do the whole thing outdoors in California, which is 0:09:09.120 --> 0:09:14.000 brilliant and it's worked out fantastically. It's so much more 0:09:14.120 --> 0:09:17.080 enjoyable and so much so refreshing compared. 0:09:16.800 --> 0:09:18.800 To Are you surprised at how well it has done? 0:09:19.040 --> 0:09:21.720 I always there was a lot of skepticism when we 0:09:21.760 --> 0:09:25.080 first announced this, but we'd work with Matt and his 0:09:25.160 --> 0:09:27.920 team for years. I have a great deal confidence in him, 0:09:28.360 --> 0:09:31.760 and I figured, worse comes to worse, we'll land on 0:09:31.760 --> 0:09:33.880 our face and we'll spend a week in California. 0:09:33.960 --> 0:09:35.079 That's not the if. 0:09:35.120 --> 0:09:39.560 That's your downside, right, But it worked out great. That 0:09:39.679 --> 0:09:41.959 was four years ago. This is our third one, right, 0:09:42.000 --> 0:09:43.000 and we're thrilled with it. 0:09:43.040 --> 0:09:44.640 All right, Well, we want to We're also thrilled to 0:09:44.640 --> 0:09:45.440 have next US right now. 0:09:45.480 --> 0:09:48.160 David Kelly, who's joining us, he's the chief Global market 0:09:48.160 --> 0:09:50.400 strategis over at JP Morgan Asset Management with us on 0:09:50.400 --> 0:09:51.440 site at future Proof. 0:09:52.080 --> 0:09:54.160 Nice to have you here. You're very involved in this event. 0:09:54.360 --> 0:09:56.120 Yeah, really excited to be here. 0:09:56.200 --> 0:09:58.760 Well, tell me about the mood and the mood you 0:09:58.840 --> 0:10:01.080 are having right now. Thinking, you know, we've got a 0:10:01.080 --> 0:10:05.000 FED meeting. You know, we expect the FED to do something, 0:10:05.000 --> 0:10:08.200 But what's the mood. It feels like everybody's feeling pretty 0:10:08.240 --> 0:10:08.840 good right now. 0:10:08.880 --> 0:10:10.240 Well, I think that's right. I mean, it's been a 0:10:10.320 --> 0:10:12.480 very good year for markets, you know, the S and 0:10:12.480 --> 0:10:14.240 p FO. I've found that it's up eighteen percent a 0:10:14.280 --> 0:10:17.720 year to date. Bond eels are down. The economy is 0:10:17.760 --> 0:10:20.319 doing fine. I mean it's slowing down, but it was 0:10:20.320 --> 0:10:24.079 supposed to slow down, you know, but unemployment slow, inflations 0:10:24.120 --> 0:10:27.560 come down, so the backdrop is good. I think the 0:10:27.600 --> 0:10:31.160 financial industry is doing very well right now. And I 0:10:31.240 --> 0:10:33.800 just think that there's a little nervousness that that that 0:10:33.600 --> 0:10:37.400 the FED might somehow, you know, panic on Wednesday and 0:10:37.920 --> 0:10:38.480 scare people. 0:10:38.600 --> 0:10:41.240 Bill Dudley, former head of the New York Fed, you know, 0:10:41.600 --> 0:10:43.520 thinks the Fed should be more aggressive. 0:10:43.960 --> 0:10:45.600 I think that he should have done that. They should 0:10:45.600 --> 0:10:46.679 have done it probably already. 0:10:46.960 --> 0:10:50.280 Well, I agree that they should have started cutting earlier, Yes, 0:10:50.640 --> 0:10:53.040 but bringing interest rates down. It's like lowering a piano 0:10:53.120 --> 0:10:55.720 down from the fourth floor of a building. You need 0:10:55.760 --> 0:10:59.200 to do it slowly and carefully. And what I think 0:10:59.240 --> 0:11:03.040 the FED is the fact that initially you cut rates, 0:11:03.040 --> 0:11:07.439 you hurt the economy. Why is that? Because you know 0:11:07.520 --> 0:11:09.320 you talk about long and variable ags. What happened. There 0:11:09.320 --> 0:11:11.240 are three very bad things that happened with the FED cuts, 0:11:11.280 --> 0:11:12.679 and this is particularly going to be the case that 0:11:12.720 --> 0:11:15.160 they're cut by fifty. First of all, you squeeze the 0:11:15.200 --> 0:11:19.240 interest income of all those American consumers have got money 0:11:19.280 --> 0:11:22.920 in money market funds, particularly older Americans. Second of all, 0:11:23.200 --> 0:11:25.640 if a FED cuts fifty, then the thing that's going 0:11:25.679 --> 0:11:28.280 to immediately happen is on programs like this and all 0:11:28.320 --> 0:11:30.280 over all over American people can say, what are they 0:11:30.320 --> 0:11:32.440 so scared about it? They must see a Recessiony're gonna 0:11:32.480 --> 0:11:34.480 at all these numbers. So if I'm going to hire somebody, 0:11:34.520 --> 0:11:35.880 maybe I wait a while. I was going to buy 0:11:35.880 --> 0:11:37.559 a car, maybe I should put that off. That's what 0:11:37.600 --> 0:11:40.800 people want to wait and see. The third thing that happens, 0:11:40.800 --> 0:11:43.160 which is terrible, is that you know you're thinking about 0:11:43.160 --> 0:11:44.560 taking out a mortgage, You're gonna take it a more 0:11:44.559 --> 0:11:45.760 each day, you want to wait a while. I think 0:11:45.800 --> 0:11:47.080 I'll wait a while, right, I mean, if they're cut 0:11:47.120 --> 0:11:49.120 in fifty, are going to cut some more. The problem 0:11:49.200 --> 0:11:50.960 is they don't get this. I wish I could get 0:11:50.960 --> 0:11:52.960 people to understand this. There is a J curve effect. 0:11:53.080 --> 0:11:55.160 You actually hurt the economy before you help. But now 0:11:55.160 --> 0:12:01.320 when rates get very low're actually stimidating the economy. But 0:12:01.480 --> 0:12:03.440 it waits. You have to wait to get to that point. 0:12:03.920 --> 0:12:06.920 And that's what frankly, Bill Dudley doesn't get. That's what 0:12:07.000 --> 0:12:10.280 all the people are calling for aggressive cutting. Don't get 0:12:10.480 --> 0:12:14.640 this economy is fine, don't mess with it. So gradually 0:12:14.640 --> 0:12:16.600 take rates down, slowly the nothing going on over here. 0:12:16.640 --> 0:12:17.920 Don't take great adjustment. 0:12:18.120 --> 0:12:19.720 Just take it down. It's a fine economy. 0:12:19.800 --> 0:12:21.800 When you're working on somebody's back, right, you don't just 0:12:22.040 --> 0:12:22.360 it's you. 0:12:22.400 --> 0:12:26.160 Know, they're like, you know, it's like medieval medicine. I mean, 0:12:26.280 --> 0:12:27.920 you know, the most dangerous thing is when you're told 0:12:27.960 --> 0:12:30.360 the doctor's going to come to cry you because they'll 0:12:30.360 --> 0:12:32.199 probably kill you. I mean, just just amputation. 0:12:34.160 --> 0:12:37.400 So let's let's take this down a couple of months, 0:12:37.679 --> 0:12:40.040 quarter point, a half, a point, It really doesn't matter. 0:12:40.120 --> 0:12:42.120 It feels like they're way behind the curve. 0:12:42.720 --> 0:12:46.120 Where did they end up If not fifty, it's certainly 0:12:46.120 --> 0:12:47.880 not going to be fifty to fifty to fifty. Where 0:12:47.880 --> 0:12:50.720 do you see this going by the first quarter of 0:12:50.760 --> 0:12:51.160 next year? 0:12:51.240 --> 0:12:53.320 Well, there is I mean, I don't think they're way 0:12:53.400 --> 0:12:55.240 behind the curve. I don't think they should have pushed 0:12:55.280 --> 0:12:57.400 rights up high as high as they did. I think 0:12:57.440 --> 0:13:00.520 they should have started earlier. But let's not over estimate 0:13:00.559 --> 0:13:03.280 the importance of all this for the economy. The rates 0:13:03.280 --> 0:13:05.760 are too high because the economy is basically a good place, 0:13:06.080 --> 0:13:08.160 and you need to gradually bring rates down to a 0:13:08.160 --> 0:13:10.040 normal level. I think normal is probably three and a 0:13:10.080 --> 0:13:11.679 half to four percent of the federal funds, So you 0:13:11.760 --> 0:13:14.679 need to gradually do that. My preference would be if 0:13:14.679 --> 0:13:17.080 they and I think they use a Dolt plot, and 0:13:17.080 --> 0:13:18.640 I think this is the way that they can express this. 0:13:19.240 --> 0:13:21.720 What I would love to see on Wednesday is two 0:13:21.800 --> 0:13:25.480 dots in twenty twenty four and four dots next year. 0:13:25.520 --> 0:13:27.920 So you're going to take fifty basis points this year 0:13:28.160 --> 0:13:30.599 and then another one hundred basis points next year. I 0:13:30.600 --> 0:13:31.920 don't know if we'll see that or not, but I 0:13:31.920 --> 0:13:35.320 hope that that's what we see. But they don't need 0:13:35.360 --> 0:13:38.760 to do this aggressively. The damage they did by pushing 0:13:38.800 --> 0:13:41.520 rates up too high is already been done, but bringing 0:13:41.520 --> 0:13:44.280 it down too fast will actually make the problem worse. 0:13:44.360 --> 0:13:46.079 Recession off the table at this point, David. 0:13:46.280 --> 0:13:48.400 Recession is never off the table. What I say is 0:13:48.400 --> 0:13:53.559 we're not going to get an indulgenous recession. In other words, 0:13:53.600 --> 0:13:55.600 it's not something that's built in the system right now. 0:13:55.800 --> 0:13:56.440 External shock. 0:13:56.640 --> 0:13:58.079 It's got to be an external shock. I mean, I'm 0:13:58.080 --> 0:13:58.520 looking at. 0:13:58.600 --> 0:14:00.000 So do you roll at external shocks? 0:14:00.280 --> 0:14:02.040 No, of course we're going to know. The history of 0:14:02.040 --> 0:14:04.600 the twenty first century is nothing but external shocks. I mean, 0:14:04.679 --> 0:14:08.320 that's what happens, and eventually that'll get us. But it 0:14:08.400 --> 0:14:11.880 is important to realize that the traditional business cycle, that 0:14:12.040 --> 0:14:14.960 stress is already behind us. The point of twich high 0:14:15.000 --> 0:14:17.280 interest rates calls a collapse in investments, There has been 0:14:17.320 --> 0:14:19.800 no collapse in investments spending. There's been no colaps in 0:14:19.840 --> 0:14:22.200 GDP growth either. By the way, you know, GDP is 0:14:22.240 --> 0:14:23.680 up three point one percent a year of the year. 0:14:23.760 --> 0:14:25.440 We've in the second quarter. We think we got about 0:14:25.440 --> 0:14:27.280 two percent of the third quarter, So there's really no 0:14:27.480 --> 0:14:28.840 no particular problem there. 0:14:29.520 --> 0:14:33.000 So last question, why has so many economists got this wrong? 0:14:33.040 --> 0:14:35.560 Why are so many people expecting a recession that never 0:14:35.600 --> 0:14:36.280 seems to come? 0:14:36.320 --> 0:14:37.840 And just got about ten fifteen seconds? 0:14:37.920 --> 0:14:40.520 Well, I think because they I think they listen to 0:14:40.520 --> 0:14:42.280 the mood rather than read all the numbers. You've got 0:14:42.720 --> 0:14:44.440 all the numbers, imperfect, but you've got to look at 0:14:44.480 --> 0:14:46.160 all of them in order to get the right mosaic. 0:14:46.200 --> 0:14:47.640 And the mosaic looks pretty good. 0:14:47.720 --> 0:14:50.000 All right, Gonna leave it there. Great stuff, David Kelly, 0:14:50.040 --> 0:14:51.880 Thank you so much, David Kelly. Of course if JP 0:14:51.960 --> 0:14:54.160 Morgan Asset Management. Folks, this is BusinessWeek. 0:14:54.200 --> 0:14:57.400 We're at future Proof in California. Carol Masser, Barry Ridhilts. 0:14:57.400 --> 0:14:58.119 This is Bluebird. 0:14:59.360 --> 0:15:02.920 You're listening to the Bloomberg Business Week podcast. Catch us 0:15:02.960 --> 0:15:06.200 live weekday afternoons from two to five pm Eastern Listen 0:15:06.240 --> 0:15:08.400 on Apple car Play and then Broyt Auto with a 0:15:08.400 --> 0:15:14.200 Bloomberg Business act or watch us live on YouTube. 0:15:12.880 --> 0:15:15.600 Tarl Master along with Barry Ridholts reading in. You're a 0:15:15.680 --> 0:15:16.880 busy man at these events. 0:15:16.960 --> 0:15:18.600 I run around, I do a lot of things to wear, 0:15:18.600 --> 0:15:19.160 a lot of hats. 0:15:19.200 --> 0:15:20.040 He wears a lot of hats. 0:15:20.080 --> 0:15:22.160 You know he also does of course Masters in Business 0:15:22.640 --> 0:15:26.040 at the money you run Rid Holt's. 0:15:25.840 --> 0:15:29.160 Management, Ridhults Wealts Management, I forget what you titled Farverstow 0:15:29.200 --> 0:15:32.240 billion dollars right, and then real money. 0:15:32.480 --> 0:15:34.480 Real money, which is why he's a great co host 0:15:34.480 --> 0:15:36.800 to have during this event because we are talking about 0:15:36.800 --> 0:15:38.840 the management of real money a lot of it. Want 0:15:38.880 --> 0:15:40.560 to get to our next guest because we're delighted to 0:15:40.800 --> 0:15:42.600 have with the Scott Danner. He's head of the Legacy 0:15:42.600 --> 0:15:46.320 division at the employee owned independent wealth advisory firm Stewart Partners, 0:15:47.280 --> 0:15:49.640 responsible for over thirty seven billion in client as it 0:15:49.760 --> 0:15:52.000 has that says of I think August twenty twenty four. 0:15:52.000 --> 0:15:53.480 Some real money thirty seve real money. 0:15:54.040 --> 0:15:58.440 Yeah, firm founded about ten years ago by former Morgan 0:15:58.520 --> 0:16:00.800 Stanley Barney managers. 0:16:01.680 --> 0:16:04.360 So you have to explain it, but like like who 0:16:04.400 --> 0:16:05.120 are these firms? 0:16:05.280 --> 0:16:06.360 Yeah, real firms. 0:16:06.400 --> 0:16:11.480 Smith Barney was a giant, So so legacy division. First question, 0:16:11.560 --> 0:16:12.280 what does that mean? 0:16:12.560 --> 0:16:15.560 So legacy is that next generation? You know, if you 0:16:15.600 --> 0:16:18.440 think about it, the succession epidemic in our industry is 0:16:18.480 --> 0:16:22.000 that the average age of advisors successful advisors is fifty 0:16:22.000 --> 0:16:24.560 eight to sixty two and there's a challenge. What do 0:16:24.640 --> 0:16:26.520 they do when they're ready to step down and there's 0:16:26.560 --> 0:16:29.160 a major gap. There are more you know, eighty year 0:16:29.200 --> 0:16:31.640 olds than thirty year olds in our industry and that's changing. 0:16:31.680 --> 0:16:34.600 You could see it here. But Legacy division is we 0:16:34.680 --> 0:16:37.960 had Freedom Street Partners our company. We were acquired by 0:16:37.960 --> 0:16:40.760 Stewart Partners last year, so I went to market brought 0:16:40.760 --> 0:16:43.760 our company. We had three and a half billion approximately, 0:16:44.000 --> 0:16:47.280 you know, a good sized real money firm as well, 0:16:47.560 --> 0:16:49.960 but we needed that next level and Stewart had not 0:16:50.000 --> 0:16:53.360