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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on fo card Playing and Broun Auto with the

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Speaker 1: Bloomberg Business app. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: We are live in Orlando, Florida, Commonwealth National Conference for

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Speaker 2: Financial Advisors. It's raining here, but apparently we have a

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Speaker 2: hurricane on the way. It's out in the I guess

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Speaker 2: the Gulf of Mexico, but making its way to the

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Speaker 2: west coast of Florida. Supposed to hit here on the coast.

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Speaker 2: I think that Wednesday morning is kind of what they're

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Speaker 2: saying at some point. So, but both Alex and I

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Speaker 2: were scheduled to flow out of here tomorrow afternoon, so

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Speaker 2: we should be okay. And people here they are used

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Speaker 2: to these hurricanes, but they've had a really tough couple

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Speaker 2: of weeks here up at the Bend, up in northern Florida.

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Speaker 2: Now here on the west coast, so let's kind of

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Speaker 2: put some numbers around it. From an insurance perspective, at

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Speaker 2: Matt Palazola, he does that or CC Insurance almost for

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Speaker 2: Bltteberg Intelligence mat Can you just frame out what the

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Speaker 2: last week or two for hurricanes and then this one

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Speaker 2: coming up to hit the coast. What are the numbers

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Speaker 2: around these things because they seem pretty big here.

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Speaker 3: Yeah, So what we knew was going to happen was

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Speaker 3: with Helene, the losses were mostly are going to be uninsured,

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Speaker 3: so storm surge and flooding is not really a covered

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Speaker 3: peril by homeowners insurance, so you're going to see a

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Speaker 3: larger than normal diversions between insured and uninsured losses. With

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Speaker 3: Hurricane Helene, we knew this was going to be a

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Speaker 3: bad hurricane season, it wasn't actually living up to it

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Speaker 3: until like the past week or so. So now we've

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Speaker 3: got Hurricane Milton in the Gulf, category four, it will

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Speaker 3: probably probably hear worse news before better, so it will

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Speaker 3: probably strengthen to a category five. What's going to happen

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Speaker 3: is going to hit a bunch of wind shear before

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Speaker 3: it makes landfall, and that will actually lower the intensity

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Speaker 3: of it. So right now National Hurricane Center is still

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Speaker 3: saying major hurricane, which is category three or above, so

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Speaker 3: it should be three when it makes the landfall, and

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Speaker 3: I would just say one thing on the forecast. You

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Speaker 3: look at the National Hurricane Center website and there's a

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Speaker 3: cone on there and they call that the cone of uncertainty,

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Speaker 3: and that cone goes across the whole Florida West Coast

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Speaker 3: at this point, so it could be almost anywhere. The

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Speaker 3: midpoint is that Tampa region, which is really a worst

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Speaker 3: case for insurance companies, but that's where we're at now.

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Speaker 3: So there's significant uncertainty over the next two days. And

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Speaker 3: like you said, Paul, probably Wednesday morning where we have

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Speaker 3: a landfall.

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Speaker 4: Yeah, that was when my flight was supposed to take off,

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Speaker 4: so we changed that. But to your point, Milton rapidly

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Speaker 4: intensified into a Category four storm that happened around nine o'clock,

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Speaker 4: and then now at about eleven o'clock, the National Hurricane

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Speaker 4: continues to rapidly intensify, so worse. Before we get any

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Speaker 4: kind of better news, I keep hearing that if the

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Speaker 4: storm goes a little north versus a little south, little

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Speaker 4: north is more catastrophic, little south would be better. What

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Speaker 4: does that mean?

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Speaker 3: So the main thing with hurricanes is the location. Right,

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Speaker 3: a larger storm could hit the Big Bend region and

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Speaker 3: you'd see the property values there are just not as

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Speaker 3: high as somewhere in Tampa. So a stronger storm could

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Speaker 3: hit a lower property value area and you're going to

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Speaker 3: have lower insured and economic losses. The real main problem

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Speaker 3: would be a direct hit on Tampa Bay. So if

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Speaker 3: you go Hurricane Ian was a little further south a

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Speaker 3: couple of years ago, that was sixty five billion dollars

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Speaker 3: in insured losses. We're thinking this one just early, could

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Speaker 3: be tens of billions, could be in that sixty five

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Speaker 3: billion dollar range. It could be higher, frankly, if it

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Speaker 3: hits as a stronger storm. So that's what happens there,

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Speaker 3: and the path can shift pretty rapidly, So it's going

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Speaker 3: to be down to the last minute before we actually

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Speaker 3: know what will happen with insured losses.

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Speaker 5: Him.

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Speaker 2: If I'm and insurer, why do I even write business Florida.

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Speaker 2: It's to say these four folks are getting hammered mold.

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Speaker 4: Lot don't anymore, right, I guess, So.

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Speaker 3: Good question, Paul, So a lot a lot don't. The

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Speaker 3: large national carriers that we cover, a lot of them

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Speaker 3: have avoided the region. All State is there, Progressive is there?

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Speaker 3: So those are probably the two biggest public insurance state.

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Speaker 3: Farm is one of the biggest there that's not public,

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Speaker 3: it's a mutual company. The companies that really have will

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Speaker 3: probably take the brunt of this are Florida specialty writers,

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Speaker 3: so the Universal Insurance, Heritage Insurance, they focus mainly, if

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Speaker 3: not exclusively, on that Florida market, and those stocks are

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Speaker 3: down significantly, and the teams of twenty percent today.

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Speaker 4: When we take a look at the insured losses, I

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Speaker 4: mean maybe tens of billions, you said maybe the sixty

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Speaker 4: five billion dollar range. What do we then extrapolate that

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Speaker 4: the uninsured losses are because that was the part with

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Speaker 4: Hurricane Helene that just sort of the numbers are staggering.

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Speaker 3: Yeah, so the numbers are early, and I'm skeptical of

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Speaker 3: some of the numbers out there for the economic losses.

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Speaker 3: Typically the insured loss maybe you're looking at forty percent

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Speaker 3: or half of the losses. But what has happened in

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Speaker 3: these events with large surge and flooding is that the

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Speaker 3: insured portion becomes a lot smaller. The Tampa Bay I

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Speaker 3: believe it was a Chamber of Commerce or had put

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Speaker 3: out a report in twenty twenty looking at what if

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Speaker 3: a Category five hurricane hit the area and they it's

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Speaker 3: a just residential property losses. We're somewhere in the range

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Speaker 3: of three hundred billion dollars in that event. This probably

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Speaker 3: won't be that bad. And you know, I don't know

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Speaker 3: all the inputs that went into that, but you could

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Speaker 3: see something like that which would maybe extrapolate a hundred

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Speaker 3: billion dollar insured loss. But those were numbers that came

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Speaker 3: out from Tampa Bay.

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Speaker 2: All right, Matt, thanks so much for joining us. Always

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Speaker 2: appreciate it. Matt Palozola. He is the insurance analyst for

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Speaker 2: Bloomberg Intelligence Center. Bloomberg Arrector broke the studio back in

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Speaker 2: New York. Yikes, we are here. We're in Orlando, and

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Speaker 2: the folks here again, James to com, I was at

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Speaker 2: the park yesterday. People were there, got every the ponchos on,

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Speaker 2: the families were there. I mean, I guess you know,

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Speaker 2: they're kind of hoping for the best here. But the

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Speaker 2: hardy people.

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Speaker 4: Those well, we were talking to trap earlier from Commonwealth.

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Speaker 4: I was like, oh, we did a lot of people

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Speaker 4: wind up canceling. It was just it was just a handful. Really,

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Speaker 4: there was still two thousand people here, so maybe a

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Speaker 4: few hundred maybe weren't able to come. But that just

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Speaker 4: shows the commitment to financial advisers. I'm actually surprised we're

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Speaker 4: not tasked with being outside with her hurricane storm. And

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Speaker 4: I mean we're not offering, We're just saying we're surprised

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Speaker 4: we haven't been asked there. All right, Oh my gosh,

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Speaker 4: that's hardcore.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple card Play and

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Speaker 1: androyd Outo with the Bloomberg Business App. You can also

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Speaker 1: listen live on Amazon Alexa from our flagship New York

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Speaker 1: station Just Alexa playing Bloomberg eleven.

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Speaker 2: We need to get back to what's happening in the

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Speaker 2: Middle East. That does not seem to be any lessening

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Speaker 2: of the efforts and operations in that part of the world.

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Speaker 2: Mark Champion joins us, he's a Bloomberg opinion columnist. You've

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Speaker 2: got to calumn out today. Middle East transformation must start

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Speaker 2: with Israel. Mark, tell us what you mean by Israel

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Speaker 2: really has to be leading any kind of change there.

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Speaker 6: Well, I mean the point I really wanted to make

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Speaker 6: was that, you know, Prime Minister Defension, I mean net

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Speaker 6: Yahu has been criticized a lot for not putting out

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Speaker 6: a strategy to you know, sort of make sense of

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Speaker 6: all of the military action and create a sort of

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Speaker 6: longer term pass so that we can see, you know,

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Speaker 6: how to get out of the war and into some

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Speaker 6: kind of security and peace. So, you know, he went

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Speaker 6: to the UN and he said, I do have a strategy,

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Speaker 6: and I do have a you know, a long term vision,

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Speaker 6: and he called it the sort of the blessed scenario.

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Speaker 6: But it's it's one in which, you know, Israel becomes

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Speaker 6: a kind of catalyst for the region with its economy

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Speaker 6: which is incredibly strong and sort of technologically advanced, and

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Speaker 6: you know, there are connections, you know, through pipelines and railways,

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Speaker 6: et cetera, all the way through Israel to Europe from

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Speaker 6: Dowdi Arabia, et cetera. And you know, I'm just trying

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Speaker 6: to make the point, really that for that to happen,

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Speaker 6: he's right that there's no room for Hamatha the lah

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Speaker 6: and for the whole acts of resistance that is committed

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Speaker 6: and exists in order to get rid of the state

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Speaker 6: of Israel. But he has a problem at home, and

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Speaker 6: that problem is that there are extremists in his own

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Speaker 6: cabinet whose language and you know, kind of ideas about

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Speaker 6: you know, the future of Israel are very similar in

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Speaker 6: the in the way that they don't allow for any

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Speaker 6: kind of compromise, any room for the other side, in

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Speaker 6: particular the Palestinians. So it's trying to sort of make

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Speaker 6: that point and to say, you know, you really, if

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Speaker 6: you want that sort of uh you know, secure, prosperous

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Speaker 6: future where Israel is accepted and normalized within uh, you know,

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Speaker 6: the the Middle East, then you really have to start

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Speaker 6: at home, and you have to start you know, not

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Speaker 6: just saying the Saudias are on our side, but you know,

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Speaker 6: listening to the Saudiast when they say we want to

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Speaker 6: be but there has to be some sort of vision

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Speaker 6: for how we get out of it.

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Speaker 4: Yeah, and Mark, you kind of make that distinction between

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Speaker 4: strategy versus military force, right, And I'm just wondering where

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Speaker 4: do you think Prime Minister Benjamin And YEAHO stands on

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Speaker 4: that spectrum of military on one side and then strategy

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Speaker 4: on the other.

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Speaker 6: Well so forth, so far it's been all military. And

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Speaker 6: you know, it's not that I'm saying that, you know,

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Speaker 6: I'm not one of these people who sort of believes

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Speaker 6: that Israel sort of you know, turned the other cheek

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Speaker 6: after you know, the appalling events of exactly a year

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Speaker 6: ago today they had to go in and deal with Hamma.

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Speaker 6: They are dealing with Hamma. You know, there are always

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Speaker 6: questions though about how you do that and how you

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Speaker 6: you know, how you frame that in such a way

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Speaker 6: that you can get people on your side. You know,

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Speaker 6: whether it's you know, Palestinians you don't particularly like Hammas,

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Speaker 6: and there's a lot of those in Gaza, more than

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Speaker 6: in the West Bank, for example, where they don't actually

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Speaker 6: live under Hammah. You know, you could say the same

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Speaker 6: in Lebanon, where a majority of the population is not

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Speaker 6: the It does not like Hisbella does not want its

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Speaker 6: country to be used as a platform for Iran to

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Speaker 6: you know, conduct its foreign policy with Israel. So you know,

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Speaker 6: you can talk about the Iranians too, where a majority

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Speaker 6: of the population doesn't like their regime or want their

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Speaker 6: regime their scope here for a different kind of Middle East,

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Speaker 6: it's just extremely difficult to get to and can't just

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Speaker 6: be done with weapons alone. Weapons can you know, actually

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Speaker 6: open a path, but they they can't get you to

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Speaker 6: the other you know, to the other side, to a

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Speaker 6: place of kind of peace and security.

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Speaker 2: So mark to that point, does Prime minison that yahoo,

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Speaker 2: Does he have the political capital, does he have the

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Speaker 2: support of the people to play this long game that

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Speaker 2: you're talking about.

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Speaker 6: Well, I think he would if he wanted to sell it.

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Speaker 6: It's very interesting when you know, opinion polls are done

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Speaker 6: in Israel. There's a couple of institutes that have done

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Speaker 6: Poles and when you ask the sort of bold question

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Speaker 6: do you want to to state solution with a Palestinian state,

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Speaker 6: there's a majority against. When you ask the question, do

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Speaker 6: you want a to state solution as part of a

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Speaker 6: deal with Saudi Arabia with you know, the US, and

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Speaker 6: that would create this sort of secure environment and a

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Speaker 6: multinational you know force in Gaza to create a transition there.

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Speaker 6: When you when you put it as part of a

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Speaker 6: package where people can understand how it might actually work,

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Speaker 6: you know, for their benefit, then you know, the numbers

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Speaker 6: change quite dramatically and you get a majority in favor.

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Speaker 6: So I think that the you know, it's all as

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Speaker 6: always it's a question of you know, what you sell,

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Speaker 6: how you explain things, and I think you know that

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Speaker 6: it's the choice on Netanyahu's pot part to to not

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Speaker 6: go down that road, and there are you know, understandable

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Speaker 6: reasons in terms of just pure power politics, because part

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Speaker 6: of his cabinet has told him very clearly that if

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Speaker 6: he does make any sort of you know, noises about

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Speaker 6: a two state solution or a compromise, they will collapse

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Speaker 6: the government.

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Speaker 4: So if we look forward and if we wanted to

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Speaker 4: see some kind of pivot from Netanyahu or some rhetoric

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Speaker 4: that may indicate some kind of change or subtle shift,

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Speaker 4: how would that be canmunicated?

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Speaker 6: Well, I think you you know what you would start

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Speaker 6: to see, you know, So the the main message I think,

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Speaker 6: you know, people outside Israel may may not understand quite

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Speaker 6: as well, but within Israel, what he's doing now in Lebanon,

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Speaker 6: and you know, and in dealing with Iran directly, that

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Speaker 6: is extremely popular Iranians. I mean, I'm so sorry Israelis

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Speaker 6: are you know, convinced and with good reasons that Iran

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Speaker 6: has been building up a kind of noose around their

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Speaker 6: country and that this is all very calculated and extremely

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Speaker 6: hostile and they have to do something about it. So

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Speaker 6: the fact that they see Nephnia who now doing something

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Speaker 6: about that, I think that is very popular. But you know,

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Speaker 6: you could he certainly could sell that by you know,

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Speaker 6: at the same time he's going after Iran, he could

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Speaker 6: organize the ceasefire in in Garda that would get the

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Speaker 6: hostages out that you know, would start to sort of

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Speaker 6: create some kind of scope there, just to create you know,

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Speaker 6: a more political path and to start building on that.

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Speaker 6: So you know, it is imaginable. It's just a choice

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Speaker 6: that Netnia, who at the moment does not want to make,

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Speaker 6: and I can't see any sign of him making that

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Speaker 6: change anytime soon, especially when he has people in his government,

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Speaker 6: you know, who are absolutely opposed to it.

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Speaker 2: Right all right, Mark, thank you very much. We really

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Speaker 2: appreciate getting a few minutes your time. Mark Champion of

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Speaker 2: Bloomberg Opinion. Calum is giving us the latest on the

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Speaker 2: Middle East and maybe what might be some next steps there,

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Speaker 2: but a very difficult situation in fluid situation.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Affle car Playing and

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Speaker 1: Broudoo with the Bloomberg Business app. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 4: Paul Sweeden and I we are live from the Commonwealth

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Speaker 4: National Conference for financial Advisors right here in Orlando, Florida.

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Speaker 4: We will be back and taken off before the hurricane

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Speaker 4: hits though, So there is that. The theme for this

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Speaker 4: year is the Future is Now, and that mission is

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Speaker 4: to help advisors build a blueprint for their future and

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Speaker 4: empower advisors to navigate business transitions. And this is the

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Speaker 4: tenth year that Bloomberg Radio has broadcast live from Commonwealth's

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Speaker 4: national conference, so that's pretty cool. Joining us now is

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Speaker 4: Trap Plowman, President and COO of Commonwealth. First of all,

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Speaker 4: thanks for having us ten years Spielzic milestone.

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Speaker 2: It's terrific.

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Speaker 4: Did you get us anything for that?

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Speaker 5: Yes, I have some, but no, thank you for all

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Speaker 5: your support and coming.

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Speaker 4: So walk us through the Future is now? What does

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Speaker 4: that mean this year at the conference?

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Speaker 7: Yeah.

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Speaker 5: One of the things as we were, Commonwealth works to

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Speaker 5: support so many advisors who are really small business owners.

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Speaker 5: One of the things you have to do, absolutely is

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Speaker 5: be thinking forward and constantly navigating an increasingly complex industry

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Speaker 5: with regulation, with technology, and if you're just focused on

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Speaker 5: the next quarter the next year, you're going to fall behind.

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Speaker 2: So the future is now.

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Speaker 5: You really need to be looking forward, and it's our

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Speaker 5: responsibility and it's one of the things that we enjoy

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Speaker 5: doing is helping advisors think forward and start preparing now

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Speaker 5: for the future.

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Speaker 2: Trap Let's say I'm an advisor at a wirehouse of

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Speaker 2: Smith Barney and Merrill Lynch. What's my thought process when

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Speaker 2: I think about leaving the mothership and kind of going

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Speaker 2: on my own and being a registered independent advisor. What's

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Speaker 2: the thought process there?

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Speaker 5: Yeah, I think there's a lot of different reasons, but

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Speaker 5: I think three that stand out and we commonly hear

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Speaker 5: is one, as you get to build your own brand,

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Speaker 5: you building your community, and you're known for what you

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Speaker 5: want to stand for. Two is just the greater independence

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Speaker 5: to make your own decisions and not necessarily have to

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Speaker 5: follow the lead of a larger employer has many different

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Speaker 5: conflicts and objectives and priorities. And the third and probably

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Speaker 5: most importantly is you're now building value in your own

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Speaker 5: business that you can monetize. And so as an employee,

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Speaker 5: oftentimes you know you're leaving to get the gold watch. Here,

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Speaker 5: you're building an incredible value that you can leave to

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Speaker 5: the next generation or sell. And we're seeing the values

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Speaker 5: of these independent businesses increase dramatically over the last couple

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Speaker 5: of years, and I think that's here to stay.

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Speaker 4: Why so, why is this increasing so much intoch a

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Speaker 4: small amount of time and how do you see that

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Speaker 4: playing out?

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Speaker 2: Yeah?

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Speaker 5: I actually think the businesses were chronically undervalued Historically. People

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Speaker 5: didn't realize as there's been the transition from brokerage business,

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Speaker 5: which obviously is commission based and it's sale to sale.

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Speaker 5: Our advisors are over ninety percent pheebas, then many are

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Speaker 5: one hundred percent phoebeas as an RIA or fee only.

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Speaker 5: And when you have that recurring revenue stream and you're

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Speaker 5: doing more than just investment management, you're doing financial planning

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Speaker 5: and building relationships with clients that are deep and sticky

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Speaker 5: that now then has value versus something that previously was

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Speaker 5: trained actional. So as we've seen the growth in Phoebe's business,

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Speaker 5: that has exponentially increased the value of those businesses and

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Speaker 5: gives them something to transition.

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Speaker 2: So when you meet with your financial advisors at event

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Speaker 2: like this trap, what do you hear most from them?

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Speaker 2: What do they need right now? Right now? It's weather advice?

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Speaker 4: Yes, well there's that for those of you wondering. It

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Speaker 4: is cloudy, rainy, not too much wind.

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Speaker 5: Yet, no, not at all, I think we're in good shape,

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Speaker 5: but it's it's an array of needs. And I think

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Speaker 5: one of the strengths of a community like Commonwealth is

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Speaker 5: we have fantastic advisors who are willing to share with

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Speaker 5: each other, and so they're always you know, someone's already

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Speaker 5: been there, done that, so no one needs to reinvent

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Speaker 5: a wheel and Commonwealth we can play a great role

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Speaker 5: in bringing, you know, the best practices together to unlock

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Speaker 5: them for advisors. So for a wide variety, it's you know,

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Speaker 5: how do you scale your business and get to the

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Speaker 5: next level. How do you add and attract new advisors

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Speaker 5: and train them, how do you take your technology, your

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Speaker 5: internal infrastructure stack, adopt AI. It's an array of challenges.

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Speaker 5: One of the most fascinating things that has impressed me

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Speaker 5: is so many advisors are like, where can I find

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Speaker 5: the next client? At Commonwealth, we never hear that they

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Speaker 5: grow so incredibly fast through referrals, they're coming to us.

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Speaker 5: How can I find the next advisor to keep up

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Speaker 5: with the growth that we're seeing. And as you all know,

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Speaker 5: as businesses are growing in scale and you have to

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Speaker 5: change your processes, evolve and get more administrative support. So

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Speaker 5: we really help them, not just as a BD or

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Speaker 5: an RIA doing investment management. We're helping them run small businesses.

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Speaker 5: And that's really the central theme we're seeing.

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Speaker 4: How long do you think that growth can continue for?

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Speaker 8: Right?

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Speaker 4: Because in essence, people made more money the way does

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Speaker 4: went up. We had the COVID stimulus, right, so they

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Speaker 4: needed financial advisors, right. And you have a huge amount

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Speaker 4: of equity within the stock market for regular individuals. At

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Speaker 4: some point does that max out? And if we had

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Speaker 4: like a huge drawdown or for some exogenous events, those

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Speaker 4: small businesses get real small.

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Speaker 9: Yeah.

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Speaker 5: I actually, in looking all the different factors that can

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Speaker 5: drive that activity, we're still continuing to see growth in

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Speaker 5: the population, growth and savings overall, if you will. So

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Speaker 5: I think the demand for financial advice is actually only

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Speaker 5: going to improve. And there some concerns with the advancement

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Speaker 5: of AI and what could the impact that be on

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Speaker 5: many industries. But the reality is financial advice is not

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Speaker 5: just again investment management. It's caring for people on a

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Speaker 5: topic that can often be insecure and stressful. So you know,

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Speaker 5: the most successful financial advisors are the ones who are

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Speaker 5: really great at human relationships and caring for people through

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Speaker 5: very challenging times, and so I feel what we have

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Speaker 5: great tailwinds behind us and we'll continue to see growth

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Speaker 5: in this industry, not just in commonwealth.

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Speaker 2: Well, one of my offspring actually did follow me in

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Speaker 2: my footsteps in financial services, works for a financial services firm,

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Speaker 2: and you know, his firm says that their clients are

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Speaker 2: really going to need them over the next twenty to

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Speaker 2: thirty years because I have this massive wealth transfer from

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Speaker 2: my generation to the next. How do you guys frame

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Speaker 2: that topic for your advisors.

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Speaker 5: Yeah, that's absolutely accurate, and we have hundreds of breakout

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Speaker 5: sessions here and many are on that exact topic. And

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Speaker 5: you know, the wealth transfer between insurance, trust and state

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Speaker 5: and taxation is very complex and it's obviously there's a

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Speaker 5: lot of emotion and people behind it, and so it

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Speaker 5: is starting early in the planning process. And one of

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Speaker 5: the things we have found and highly recommend and work

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Speaker 5: with our advisors on is for whoever is managing the

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Speaker 5: wealth or you know, controls the wealth, if you will,

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Speaker 5: is to start engaging with the next generation now and

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Speaker 5: really bring them into the planning and the reasons behind it.

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Speaker 5: One of the most powerful things you can do. People

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Speaker 5: always hear and understand, you know what, what is happening,

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Speaker 5: but why is this happening? And so are we We

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Speaker 5: have our financial advisors really engage in that wealth transfer

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Speaker 5: early on to really explain that part of it and

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Speaker 5: help all aspects of the family, not just represent one

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Speaker 5: side and turn it into you know, two people on

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Speaker 5: the other sides of the table. We want to bring

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Speaker 5: everyone to the same side of the table.

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Speaker 4: This is just curiosity. But how much is the conversation

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Speaker 4: also revolving around retirement, not for say me and Paul,

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Speaker 4: but for like our kids, Like who thinks that anyone's

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Speaker 4: really going to have social security in forty years?

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Speaker 8: Right?

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Speaker 10: Like?

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Speaker 4: How much is that conversation evolving as the fiscal depicit

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Speaker 4: continues to balloon out?

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Speaker 5: Yeah, I worry about that for myself, and I have

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Speaker 5: three daughters who I don't even talk about social security

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Speaker 5: because I don't think.

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Speaker 4: They're necessarily think or like you don't want to rely

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Speaker 4: on it, Yeah, you surely.

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Speaker 5: Don't want to plan for it. I think of that

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Speaker 5: as a bonus, not as the foundation. And so yeah,

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Speaker 5: certainly one of the big things and think about retirement

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Speaker 5: is if you quickly put the Social Security in that perspective.

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Speaker 5: What actually becomes a much more exciting discussion we're seeing

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Speaker 5: more in this day and age is people firmly want

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Speaker 5: to keep working and extend their careers but doing something

438
00:22:59,480 --> 00:23:02,080
Speaker 5: in their past about and that they love, and so

439
00:23:02,240 --> 00:23:05,000
Speaker 5: often it's really about that second career. At what point

440
00:23:05,040 --> 00:23:07,920
Speaker 5: can you make that transition from where you're building wealth

441
00:23:08,080 --> 00:23:10,400
Speaker 5: and focused on that in your family to where you're

442
00:23:10,400 --> 00:23:13,359
Speaker 5: focused on yourself and your spouse, for the people you

443
00:23:13,440 --> 00:23:16,040
Speaker 5: care about, and doing something you're passionate about. And so

444
00:23:16,520 --> 00:23:19,920
Speaker 5: it's less about retirement and it's more and more still

445
00:23:19,920 --> 00:23:21,600
Speaker 5: a key part, but it's more and more too about

446
00:23:21,800 --> 00:23:25,560
Speaker 5: what's that second career and that really changes the retirement portfolio.

447
00:23:25,640 --> 00:23:26,240
Speaker 2: It's pretty cool.

448
00:23:26,480 --> 00:23:27,200
Speaker 8: It's a radium.

449
00:23:27,680 --> 00:23:30,159
Speaker 4: Yeah, I was gonna say, is are you apologizes at

450
00:23:30,200 --> 00:23:30,520
Speaker 4: the moment?

451
00:23:30,680 --> 00:23:31,120
Speaker 8: Exactly?

452
00:23:32,680 --> 00:23:35,080
Speaker 2: Talent? How do you attract and retain talent and maybe

453
00:23:35,119 --> 00:23:37,640
Speaker 2: even how do your advisors attract and retain talent?

454
00:23:38,040 --> 00:23:41,359
Speaker 5: Yeah, it's an ongoing challenge and it's one of the

455
00:23:41,440 --> 00:23:45,239
Speaker 5: things when you're running a small business, as the advisors are,

456
00:23:45,960 --> 00:23:48,920
Speaker 5: they're not just financial advisors, they're entrepreneurs, and that's a

457
00:23:49,000 --> 00:23:51,520
Speaker 5: talent and skill that they need and so certainly they

458
00:23:51,560 --> 00:23:53,600
Speaker 5: can work with us to help them with that. But

459
00:23:53,800 --> 00:23:55,480
Speaker 5: you know, we're in all fifty states and they're in

460
00:23:55,480 --> 00:23:58,360
Speaker 5: their local communities. So one of the cool things we've

461
00:23:58,400 --> 00:24:00,800
Speaker 5: done here is, you know history, no one's going to

462
00:24:00,840 --> 00:24:04,560
Speaker 5: trust the twenty something to manage their portfolio. It was

463
00:24:04,640 --> 00:24:08,160
Speaker 5: tough to break into the business. That's changed with financial

464
00:24:08,240 --> 00:24:10,159
Speaker 5: planning and a lot of the technology that's come to

465
00:24:10,240 --> 00:24:12,879
Speaker 5: the space, and so a lot of universities across the

466
00:24:12,920 --> 00:24:16,600
Speaker 5: country have certified financial planning programs and they come out

467
00:24:16,600 --> 00:24:19,399
Speaker 5: accredited and they can come join in office and do

468
00:24:19,560 --> 00:24:22,480
Speaker 5: a lot of the investment planning and run the work

469
00:24:22,520 --> 00:24:26,159
Speaker 5: and then join in the advisor meetings. And so as

470
00:24:26,240 --> 00:24:30,960
Speaker 5: we think about attracting and retaining talent, there's a growing pipeline.

471
00:24:31,119 --> 00:24:33,240
Speaker 5: So in the past, the employee models used to train

472
00:24:33,359 --> 00:24:36,560
Speaker 5: people cold. Now they're coming out of college prepared and

473
00:24:36,640 --> 00:24:37,359
Speaker 5: can make a difference.

474
00:24:37,400 --> 00:24:39,520
Speaker 4: You have like about a minute left, But are the

475
00:24:39,680 --> 00:24:42,080
Speaker 4: people who are going to the wealth advisors are they

476
00:24:42,119 --> 00:24:45,120
Speaker 4: getting younger and younger or are they still older and older.

477
00:24:46,440 --> 00:24:48,720
Speaker 5: We've seen that overall the HOLD study as we look

478
00:24:48,720 --> 00:24:52,200
Speaker 5: at the average agent demographics, which overall we see is

479
00:24:52,240 --> 00:24:54,840
Speaker 5: promising Certainly people are getting older, but that means there

480
00:24:54,840 --> 00:24:57,040
Speaker 5: are more people are coming with wealth, and so yes,

481
00:24:57,080 --> 00:24:59,800
Speaker 5: people are addicted to their phones and are comfortable with apps.

482
00:25:00,160 --> 00:25:03,440
Speaker 5: But once your wealth gets to a certain level, you know,

483
00:25:03,680 --> 00:25:05,760
Speaker 5: you become a little bit more risk averse in terms

484
00:25:05,760 --> 00:25:08,119
Speaker 5: of owning that responsibility. And frankly, when you're in a

485
00:25:08,200 --> 00:25:11,119
Speaker 5: relationship managing wealth together, you don't want to be the

486
00:25:11,160 --> 00:25:14,000
Speaker 5: one solely responsible things go sideways. You know, you want

487
00:25:14,040 --> 00:25:16,800
Speaker 5: to be with your partner, aligned on your interest and

488
00:25:17,280 --> 00:25:19,840
Speaker 5: have some of the supporting both of you. So I

489
00:25:20,280 --> 00:25:22,720
Speaker 5: think we're great with you know, the wealth transfer and

490
00:25:22,800 --> 00:25:25,480
Speaker 5: next generation coming in and trusting financial advisors.

491
00:25:25,680 --> 00:25:25,840
Speaker 7: Trap.

492
00:25:25,960 --> 00:25:27,800
Speaker 2: Thanks so much for joining us. Really appreciate it. Thanks

493
00:25:27,840 --> 00:25:30,639
Speaker 2: for hosting us again ten years running. We appreciate that.

494
00:25:30,760 --> 00:25:33,720
Speaker 2: Trap Chlobman. He's a president chief operating officer of Commonwealth

495
00:25:33,760 --> 00:25:36,600
Speaker 2: Financial Network. We're down here at their national conference here

496
00:25:36,640 --> 00:25:38,880
Speaker 2: in our landowness place is massive.

497
00:25:40,560 --> 00:25:44,400
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

498
00:25:44,520 --> 00:25:47,440
Speaker 1: weekdays at ten am Eastern on applecar.

499
00:25:47,080 --> 00:25:49,800
Speaker 9: Play and Android Auto with the Bloomberg Business app.

500
00:25:49,960 --> 00:25:52,760
Speaker 1: You can also listen live on Amazon Alexa from our

501
00:25:52,800 --> 00:25:57,120
Speaker 1: flagship New York station Just Say Alexa playing Bloomberg eleven.

502
00:25:56,920 --> 00:26:01,399
Speaker 4: Thirty from Alex the alongside Sweeny Sweeney. We are live

503
00:26:01,440 --> 00:26:05,399
Speaker 4: from Orlando, broadcasting from the Commonwealth National Conference for Financial Advisors.

504
00:26:05,480 --> 00:26:08,320
Speaker 4: The topic is this future, The future is now and

505
00:26:08,400 --> 00:26:11,120
Speaker 4: this is the tenth year the Bloomberg Radio has broadcasted

506
00:26:11,240 --> 00:26:14,119
Speaker 4: live from this conference. Very much looking forward to all

507
00:26:14,160 --> 00:26:16,080
Speaker 4: the conversations where we are going to have today. Let's

508
00:26:16,160 --> 00:26:18,639
Speaker 4: kick it off now with Norman Grant, Managing director of

509
00:26:18,840 --> 00:26:21,520
Speaker 4: Grant Capital. Norman, thanks for stopping.

510
00:26:21,400 --> 00:26:23,280
Speaker 11: Get to chat with you, absolutely, thanks for having me.

511
00:26:23,400 --> 00:26:26,200
Speaker 4: So the narrative in the broader market still after we

512
00:26:26,240 --> 00:26:28,360
Speaker 4: get this job to report on Friday that was quite good,

513
00:26:29,000 --> 00:26:32,320
Speaker 4: is that we still are in a US exceptionalism scenario

514
00:26:32,400 --> 00:26:35,360
Speaker 4: where stocks can still be bonds. That this is kind

515
00:26:35,359 --> 00:26:37,240
Speaker 4: of the narrative for the medium term. How do you

516
00:26:37,280 --> 00:26:37,920
Speaker 4: guys look at it?

517
00:26:38,600 --> 00:26:42,480
Speaker 11: Yeah, we think that it's oftentimes really difficult to tell

518
00:26:42,520 --> 00:26:44,439
Speaker 11: where we are in a cycle, and it's it seems

519
00:26:44,520 --> 00:26:47,680
Speaker 11: like the Fed is doing a remarkable job of, you know,

520
00:26:47,800 --> 00:26:51,200
Speaker 11: creating this soft landing. You know, we came into this

521
00:26:51,359 --> 00:26:54,119
Speaker 11: year thinking that things were going to be very tumultuous.

522
00:26:54,200 --> 00:26:55,240
Speaker 11: There were a lot of you know, a lot of

523
00:26:55,280 --> 00:26:57,920
Speaker 11: my clients were, you know, very concerned thinking that it

524
00:26:58,000 --> 00:27:00,399
Speaker 11: was going to be a really challenging year, you know,

525
00:27:00,520 --> 00:27:03,800
Speaker 11: but I think it shows that how resilient the United

526
00:27:03,840 --> 00:27:07,040
Speaker 11: States economy is, and they've done a brilliant job of

527
00:27:07,240 --> 00:27:10,920
Speaker 11: navigating I think the interest rates, it's been pretty challenging

528
00:27:11,040 --> 00:27:13,760
Speaker 11: for still for some families. I think there's a dichotomy

529
00:27:13,800 --> 00:27:17,560
Speaker 11: out there. I think if you're a family of modest means,

530
00:27:17,840 --> 00:27:20,040
Speaker 11: it's been pretty tough for you. It's been pretty tough

531
00:27:20,040 --> 00:27:21,880
Speaker 11: for you, not just this year, but for a few years.

532
00:27:22,440 --> 00:27:22,600
Speaker 7: You know.

533
00:27:22,760 --> 00:27:25,439
Speaker 11: I think if you're you know, you've you've got some means,

534
00:27:25,680 --> 00:27:28,000
Speaker 11: then things have been pretty well for you, you know,

535
00:27:28,040 --> 00:27:30,840
Speaker 11: if you've owned assets. So it's been quite interesting on

536
00:27:30,920 --> 00:27:35,000
Speaker 11: that front. But jobs are hanging in there. You know,

537
00:27:35,080 --> 00:27:39,120
Speaker 11: we're still at pretty low levels of unemployment and things

538
00:27:39,280 --> 00:27:40,520
Speaker 11: appear to be holding.

539
00:27:40,280 --> 00:27:40,880
Speaker 2: Up quite well.

540
00:27:40,960 --> 00:27:43,120
Speaker 11: And the fifth seems to be navigating this pretty good.

541
00:27:43,200 --> 00:27:45,760
Speaker 2: What's a typical client for granted capital and when what

542
00:27:45,880 --> 00:27:47,240
Speaker 2: do they need from you? Mostly?

543
00:27:47,560 --> 00:27:50,080
Speaker 11: Yeah, you know, so a typical client for us is,

544
00:27:50,560 --> 00:27:52,960
Speaker 11: you know, our really big jam is is to really

545
00:27:53,280 --> 00:27:57,320
Speaker 11: think about super high networth clients. Like Jeff Bezos, Mark Zuckerberg,

546
00:27:57,960 --> 00:28:01,480
Speaker 11: and what we like to do is d those services

547
00:28:01,600 --> 00:28:05,440
Speaker 11: that white glove service all the way down to clients

548
00:28:05,720 --> 00:28:07,840
Speaker 11: you know, who are let's say somewhere around you know,

549
00:28:07,960 --> 00:28:10,840
Speaker 11: five hundred thousand, you know, on the on the low end,

550
00:28:10,840 --> 00:28:12,560
Speaker 11: and I would say maybe up to about two point

551
00:28:12,640 --> 00:28:14,720
Speaker 11: five million. That's our sweet spot of where we normally

552
00:28:14,840 --> 00:28:18,399
Speaker 11: like to engage clients. But we're very very big around

553
00:28:18,480 --> 00:28:23,600
Speaker 11: holistic comprehensive planning. That's where Commonwealth, you know, our firm,

554
00:28:23,680 --> 00:28:25,680
Speaker 11: really supports us well with a lot of great services

555
00:28:25,720 --> 00:28:27,919
Speaker 11: that we can drive. We also run a very unique

556
00:28:28,200 --> 00:28:32,000
Speaker 11: investment model as well that tends to be quantitative based

557
00:28:32,600 --> 00:28:36,119
Speaker 11: to protect to the downside. And then lastly, the thing

558
00:28:36,200 --> 00:28:38,560
Speaker 11: that we like to be known for is delivering exceptional

559
00:28:38,640 --> 00:28:41,960
Speaker 11: client service. We feel that leading up to the pandemic,

560
00:28:42,120 --> 00:28:47,320
Speaker 11: client service was lacking. During the pandemic, it became almost

561
00:28:47,400 --> 00:28:50,320
Speaker 11: non existent. A lot of people gave up on client service,

562
00:28:50,720 --> 00:28:53,040
Speaker 11: and so we we really try to rally around that

563
00:28:53,200 --> 00:28:56,320
Speaker 11: and make that a big part of our practice of

564
00:28:56,400 --> 00:28:59,560
Speaker 11: what we delivered for clients, so families and then also businesses.

565
00:29:00,200 --> 00:29:04,720
Speaker 11: We help companies with helping them optimize and strategize their

566
00:29:04,800 --> 00:29:08,480
Speaker 11: cash flow. We help them think differently about what they

567
00:29:08,520 --> 00:29:12,000
Speaker 11: can do with their capital. You know, so we do

568
00:29:12,040 --> 00:29:13,680
Speaker 11: a lot of really exciting things with businesses.

569
00:29:13,800 --> 00:29:13,960
Speaker 1: Yeah.

570
00:29:14,080 --> 00:29:15,480
Speaker 4: First of all, I love that you said that's our jam,

571
00:29:15,520 --> 00:29:18,160
Speaker 4: because that's how I roll, so right, I appreciate that.

572
00:29:19,080 --> 00:29:21,720
Speaker 4: So when you're talking your jam to small businesses, I'm

573
00:29:21,800 --> 00:29:24,239
Speaker 4: curious as to what are their questions and how did

574
00:29:24,240 --> 00:29:27,360
Speaker 4: they differ from say the guy making a million or

575
00:29:27,400 --> 00:29:28,680
Speaker 4: the guy making five hundred thousand.

576
00:29:29,240 --> 00:29:32,760
Speaker 11: You know, businesses are first and foremost it's about cash

577
00:29:32,800 --> 00:29:34,520
Speaker 11: flow and cash flow.

578
00:29:34,680 --> 00:29:38,400
Speaker 4: But UNI, because this guy loves me, go ahead on

579
00:29:38,520 --> 00:29:39,280
Speaker 4: a high touch state.

580
00:29:40,840 --> 00:29:44,160
Speaker 11: Yeah, obviously, you know muni's you know, definitely are very

581
00:29:44,200 --> 00:29:47,880
Speaker 11: important to high network families, but also the businesses as well.

582
00:29:48,400 --> 00:29:51,520
Speaker 11: But cash flow is a very critical component for them,

583
00:29:52,000 --> 00:29:54,440
Speaker 11: and it's something that keeps you know a lot of

584
00:29:54,480 --> 00:29:57,920
Speaker 11: the leadership teams of businesses up at night of how

585
00:29:57,960 --> 00:30:00,960
Speaker 11: they're managing their capital. You know, are they really optimizing it?

586
00:30:01,800 --> 00:30:04,800
Speaker 11: They're always thinking about their short term plans, intermediate plans,

587
00:30:04,880 --> 00:30:07,960
Speaker 11: long term plans. How does how do they deploy this capital?

588
00:30:08,280 --> 00:30:10,640
Speaker 11: How conservative should they be with it? And you know,

589
00:30:10,720 --> 00:30:12,880
Speaker 11: and so that's where we can really you know, come

590
00:30:12,920 --> 00:30:14,760
Speaker 11: along them, be with them every step of the way,

591
00:30:15,400 --> 00:30:18,680
Speaker 11: helping them understand how they can optimize both their short,

592
00:30:18,920 --> 00:30:21,320
Speaker 11: intermediate and long term you know capital.

593
00:30:21,720 --> 00:30:24,080
Speaker 2: You know, I first started coming to these events, I

594
00:30:24,200 --> 00:30:27,719
Speaker 2: was surprised that I thought most areas were pretty vanilla

595
00:30:27,800 --> 00:30:31,440
Speaker 2: in the sense that stocks bonds. I was surprised that

596
00:30:32,160 --> 00:30:34,800
Speaker 2: a lot of these ras, because of their clients want it.

597
00:30:34,840 --> 00:30:37,080
Speaker 2: They want alternative investments, and they're more fully. I was

598
00:30:37,120 --> 00:30:39,680
Speaker 2: surprised that the not only do they think about alternatives,

599
00:30:39,680 --> 00:30:41,960
Speaker 2: but maybe the allocation to alternatives. How do you guys

600
00:30:41,960 --> 00:30:44,400
Speaker 2: think about alternatis, whether it's private equity and private credit,

601
00:30:44,560 --> 00:30:45,520
Speaker 2: hedge funds, that kind of thing.

602
00:30:45,760 --> 00:30:47,360
Speaker 11: Yeah, you got to have it, Yep, you gotta have.

603
00:30:47,480 --> 00:30:48,400
Speaker 4: How much of it do you have to have?

604
00:30:48,920 --> 00:30:49,080
Speaker 7: You know?

605
00:30:49,360 --> 00:30:52,080
Speaker 11: I think that you know, for especially you know, a

606
00:30:52,160 --> 00:30:54,719
Speaker 11: lot of our clients, I think it definitely deserves, if

607
00:30:54,800 --> 00:30:58,040
Speaker 11: nothing else, a conversation with clients to let them know

608
00:30:58,120 --> 00:31:02,440
Speaker 11: that we do have a broad breadth of alternatives available

609
00:31:02,480 --> 00:31:08,240
Speaker 11: to them, whether it's private equity, credit, lending solutions. There's

610
00:31:08,320 --> 00:31:10,160
Speaker 11: so many things in the alternative space, and it's a

611
00:31:10,200 --> 00:31:13,080
Speaker 11: pretty hot topic nowadays as well, and so I love

612
00:31:13,160 --> 00:31:16,720
Speaker 11: that about Commonwealth is that we continue to offer a

613
00:31:16,840 --> 00:31:21,760
Speaker 11: pretty robust offering in the alternative space. It's definitely something

614
00:31:21,840 --> 00:31:24,680
Speaker 11: that a lot of high network clients talk about, It's

615
00:31:24,720 --> 00:31:27,680
Speaker 11: something that businesses talk about, and it's definitely something that

616
00:31:27,800 --> 00:31:30,640
Speaker 11: I think deserves a place in the portfolio, you know

617
00:31:31,160 --> 00:31:35,880
Speaker 11: how much five ten, fifteen, I definitely don't think. I've

618
00:31:35,960 --> 00:31:38,840
Speaker 11: heard that some family offices are as high as fifty

619
00:31:39,000 --> 00:31:43,360
Speaker 11: percent alternatives, So it's definitely garnering a lot of attention

620
00:31:43,720 --> 00:31:44,680
Speaker 11: and a lot of adoption.

621
00:31:45,200 --> 00:31:47,920
Speaker 4: Is it more private credit? Is it private equity? Is

622
00:31:48,000 --> 00:31:48,840
Speaker 4: it just like a lump thing?

623
00:31:49,080 --> 00:31:52,960
Speaker 11: Well, private credit has certainly been extremely hot lately.

624
00:31:53,280 --> 00:31:54,600
Speaker 4: A lot of the products available to you.

625
00:31:55,640 --> 00:31:59,440
Speaker 11: Absolutely, absolutely, absolutely. We have quite a few of the

626
00:31:59,720 --> 00:32:02,200
Speaker 11: major players in the space that are on our platform

627
00:32:02,320 --> 00:32:06,680
Speaker 11: that we can offer clients, and it's growing and growing

628
00:32:07,480 --> 00:32:09,640
Speaker 11: every day every day. In fact, we actually have a

629
00:32:09,800 --> 00:32:13,800
Speaker 11: pretty big partner, I Capital, who is on our platform

630
00:32:13,960 --> 00:32:16,400
Speaker 11: and they tend to be a central hub for a

631
00:32:16,480 --> 00:32:19,320
Speaker 11: lot of our alternatives. But yeah, you got to be

632
00:32:19,400 --> 00:32:21,320
Speaker 11: in the space, you got to be educated up on it,

633
00:32:21,760 --> 00:32:24,160
Speaker 11: up on it. It's an exciting space with a lot

634
00:32:24,240 --> 00:32:26,800
Speaker 11: of really great offerings and I like to say there's

635
00:32:26,800 --> 00:32:29,680
Speaker 11: a democratizing of it where it used to be just

636
00:32:29,760 --> 00:32:33,360
Speaker 11: for that really high networth client. But Commonwealth is doing

637
00:32:33,400 --> 00:32:37,480
Speaker 11: some pretty interesting things where they're really getting those the

638
00:32:37,760 --> 00:32:41,160
Speaker 11: entry points down to make it a lot more accessible by.

639
00:32:41,080 --> 00:32:43,080
Speaker 2: A lot more of the clients. Norman, thanks so much

640
00:32:43,120 --> 00:32:45,360
Speaker 2: for joining us. Really appreciate it. Folks on radio, you

641
00:32:45,480 --> 00:32:48,640
Speaker 2: can't see it, but Norman is sporting his west Point

642
00:32:48,720 --> 00:32:51,840
Speaker 2: sweater class of ninety three. I served five years active

643
00:32:51,880 --> 00:32:54,479
Speaker 2: duty after graduating from west Point, so we thank him

644
00:32:54,560 --> 00:32:57,400
Speaker 2: for his service. Norman Grant, he's a managing director a

645
00:32:57,480 --> 00:33:00,080
Speaker 2: Grant Capital, given us his thoughts on these markets and

646
00:33:00,240 --> 00:33:04,120
Speaker 2: on serving investors here. Coming up, we're gonna have Matt Palizola.

647
00:33:04,160 --> 00:33:07,640
Speaker 2: He's the insurance analyst at Bloomberg Intelligence. Yes, we only

648
00:33:07,720 --> 00:33:09,800
Speaker 2: talked to him, it seems like when there's a hurricane coming,

649
00:33:10,240 --> 00:33:11,640
Speaker 2: but where he's going to join us here and give

650
00:33:11,720 --> 00:33:15,440
Speaker 2: us some thoughts about this new hurricane coming in towards Florida,

651
00:33:15,520 --> 00:33:18,560
Speaker 2: what it means for uh, the insurance industry, and how

652
00:33:18,600 --> 00:33:20,800
Speaker 2: the coverage will be and maybe what the insured losses

653
00:33:20,800 --> 00:33:22,320
Speaker 2: will be, and kind of what we've learned I think

654
00:33:22,400 --> 00:33:25,760
Speaker 2: from all these hurricanes. Is there are insured losses, but

655
00:33:25,840 --> 00:33:28,320
Speaker 2: then there are a lot of uninsured losses, and that's

656
00:33:28,400 --> 00:33:30,200
Speaker 2: really where the pain gets a lot of folks. So

657
00:33:30,240 --> 00:33:32,080
Speaker 2: we're gonna talk to Matt Palasola on that, get his

658
00:33:32,200 --> 00:33:34,240
Speaker 2: thoughts on that, and of course we could provide in

659
00:33:34,320 --> 00:33:35,280
Speaker 2: some on the ground reporting.

660
00:33:35,320 --> 00:33:38,040
Speaker 4: We got on the ground reporting, although currently in Orlando

661
00:33:38,080 --> 00:33:39,680
Speaker 4: we got nothing. If we were in Tampa, maybe that

662
00:33:39,720 --> 00:33:41,800
Speaker 4: would be different. Could see the largest evacuation there and.

663
00:33:41,840 --> 00:33:43,680
Speaker 2: People are still at the parks. I was there yesterday.

664
00:33:43,680 --> 00:33:45,520
Speaker 2: People were there, you know, Hurricane be damn with her

665
00:33:45,560 --> 00:33:47,120
Speaker 2: out there, going to see Mickey Melson.

666
00:33:46,960 --> 00:33:49,040
Speaker 4: Maybeg oh later, maybego later? I think you lad, Yeah,

667
00:33:49,160 --> 00:33:49,800
Speaker 4: got it to go.

668
00:33:51,560 --> 00:33:55,400
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

669
00:33:55,520 --> 00:33:58,040
Speaker 1: week days at ten am Eastern on Apple car.

670
00:33:58,080 --> 00:34:00,800
Speaker 9: Play and and royd Otto with the bloom Business App.

671
00:34:00,960 --> 00:34:03,760
Speaker 1: You can also listen live on Amazon Alexa from our

672
00:34:03,800 --> 00:34:08,160
Speaker 1: flagship New York station, Just say Alexa play Bloomberg eleven thirty.

673
00:34:10,040 --> 00:34:12,600
Speaker 2: Let's check with our next guest here right here Interlando

674
00:34:12,760 --> 00:34:16,960
Speaker 2: at the conference. Virgil Kal, President CEO investment advisor at

675
00:34:17,000 --> 00:34:21,479
Speaker 2: spring Ridge Financial Group, of the firm's global wealth advisors. Virgil,

676
00:34:21,520 --> 00:34:22,759
Speaker 2: thanks so much for joining us here.

677
00:34:22,920 --> 00:34:25,080
Speaker 8: Happy to be Here's what's.

678
00:34:24,960 --> 00:34:27,800
Speaker 2: The conversation you're having with your clients these days? The

679
00:34:27,920 --> 00:34:30,320
Speaker 2: SMP's up twenty percent, you know, I don't know, we

680
00:34:30,400 --> 00:34:31,480
Speaker 2: got an election coming up.

681
00:34:31,680 --> 00:34:34,760
Speaker 10: What's the conversation like, Well, I think I could speak

682
00:34:34,760 --> 00:34:37,879
Speaker 10: for myself and many other financial advisors that since July

683
00:34:38,080 --> 00:34:40,719
Speaker 10: were happy that the market's broadening out because for the

684
00:34:40,800 --> 00:34:42,879
Speaker 10: last year and a half, we just had a concentrated

685
00:34:42,920 --> 00:34:45,839
Speaker 10: market and everybody was so laser focused on how am

686
00:34:45,880 --> 00:34:47,759
Speaker 10: I doing compared to the S and P, and it

687
00:34:47,800 --> 00:34:49,399
Speaker 10: got to a point where the SMP was no longer

688
00:34:49,440 --> 00:34:53,480
Speaker 10: as diversified as we'd like it to be. And so

689
00:34:54,120 --> 00:34:57,240
Speaker 10: I kind of start with, Okay, most of my clients

690
00:34:57,360 --> 00:35:01,040
Speaker 10: are in retirement or heading into retirement, and we've been

691
00:35:01,200 --> 00:35:06,480
Speaker 10: blessed because of the extreme increases in interest rates to

692
00:35:06,600 --> 00:35:09,080
Speaker 10: have better yield than we've had in more than a decade.

693
00:35:09,719 --> 00:35:12,000
Speaker 10: And so when you know that you can make some

694
00:35:12,239 --> 00:35:15,320
Speaker 10: money without taking a lot of risk, and you have

695
00:35:15,560 --> 00:35:18,359
Speaker 10: many parts of the bond market that are trading below

696
00:35:18,480 --> 00:35:23,240
Speaker 10: par and yields to worse that are six seven eight percent,

697
00:35:23,960 --> 00:35:27,239
Speaker 10: and you compare that to the higher evaluations of the

698
00:35:27,440 --> 00:35:31,359
Speaker 10: S and P. You start to think, okay, well, remember diversification,

699
00:35:31,920 --> 00:35:35,239
Speaker 10: Remember that things don't go up forever, and income is

700
00:35:35,239 --> 00:35:39,280
Speaker 10: a part of your return. And you know, before price

701
00:35:39,360 --> 00:35:44,120
Speaker 10: conscious and we increase, the SMP became more tech focused,

702
00:35:44,120 --> 00:35:45,640
Speaker 10: and it was price up, priced down.

703
00:35:46,239 --> 00:35:47,760
Speaker 8: Income was a big.

704
00:35:47,680 --> 00:35:50,680
Speaker 10: Part of a person's return prior to the zero interest

705
00:35:50,760 --> 00:35:55,880
Speaker 10: rate environment. So to me in this environment, looking to

706
00:35:56,160 --> 00:35:59,080
Speaker 10: add income and to diversify, and thank.

707
00:35:59,000 --> 00:36:00,840
Speaker 8: God, we've seen, we've seen that.

708
00:36:01,200 --> 00:36:03,759
Speaker 10: We now we kind of have a situation short term

709
00:36:03,920 --> 00:36:06,320
Speaker 10: just as of Friday, that we might have stocks and

710
00:36:06,400 --> 00:36:11,320
Speaker 10: bonds going down together right like we did last fall August, September, October.

711
00:36:12,560 --> 00:36:16,359
Speaker 10: But in August when we had the scary cell off,

712
00:36:16,440 --> 00:36:18,160
Speaker 10: it was like, okay, bonds were doing their job.

713
00:36:18,200 --> 00:36:18,960
Speaker 8: They were going up with this.

714
00:36:19,080 --> 00:36:22,160
Speaker 10: So we like to think that right now, I think

715
00:36:22,239 --> 00:36:25,120
Speaker 10: the market's trying to digest. Okay, So we thought the

716
00:36:25,239 --> 00:36:29,120
Speaker 10: economy was slowing down, but soft landing. We were saying,

717
00:36:29,160 --> 00:36:33,200
Speaker 10: it's normalizing, and that's nice, that's a nice, nice word normalizing.

718
00:36:33,280 --> 00:36:35,759
Speaker 10: It's you know, we're way past the pandemic now, but

719
00:36:35,920 --> 00:36:38,360
Speaker 10: it's kind of like, Okay, a couple months ago, we

720
00:36:38,480 --> 00:36:41,160
Speaker 10: got the data point that there was an eight hundred

721
00:36:41,160 --> 00:36:44,680
Speaker 10: and eighteen thousand job revision, right, and then Friday we

722
00:36:44,760 --> 00:36:47,279
Speaker 10: get a surprise over one hundred thousand more jobs. And

723
00:36:47,360 --> 00:36:49,719
Speaker 10: it's like, okay, which data point is correct? You know?

724
00:36:50,239 --> 00:36:52,880
Speaker 10: And granted the economy and the stock market, you know,

725
00:36:53,080 --> 00:36:56,560
Speaker 10: the market's a leading indicator, right, so the market wants

726
00:36:56,600 --> 00:36:59,839
Speaker 10: to get happy, but not too happy to cause interest

727
00:37:00,280 --> 00:37:02,200
Speaker 10: to go up, because then we'll have this volatility that

728
00:37:02,280 --> 00:37:03,040
Speaker 10: shakes everything up.

729
00:37:03,080 --> 00:37:05,920
Speaker 4: So you're basically describing, you know, that soft landing, that goldilocks.

730
00:37:05,960 --> 00:37:07,640
Speaker 4: And to your point about the jobs number, City had

731
00:37:07,640 --> 00:37:09,759
Speaker 4: a note oubt that said, look, they are skeptical about

732
00:37:09,760 --> 00:37:12,120
Speaker 4: that soft landing and say we could see revisions later

733
00:37:12,280 --> 00:37:14,640
Speaker 4: and then that's going to affect how we view the

734
00:37:14,719 --> 00:37:17,760
Speaker 4: overall economy. So if you're looking at a sixty forty,

735
00:37:17,960 --> 00:37:19,400
Speaker 4: is still sixty forty.

736
00:37:19,280 --> 00:37:20,120
Speaker 8: The right way to go?

737
00:37:21,040 --> 00:37:21,080
Speaker 4: Like?

738
00:37:21,200 --> 00:37:22,520
Speaker 8: Which needs not for everybody?

739
00:37:23,160 --> 00:37:23,319
Speaker 2: Right?

740
00:37:23,360 --> 00:37:26,399
Speaker 4: Okay, so not for everybody, but you know, I think

741
00:37:26,400 --> 00:37:26,759
Speaker 4: a lot of.

742
00:37:26,760 --> 00:37:30,160
Speaker 10: People would be happy to make I can figure there's

743
00:37:30,320 --> 00:37:32,439
Speaker 10: a chart that if interest rates of all by one percent,

744
00:37:32,520 --> 00:37:35,239
Speaker 10: we already got a half a percent cut, that the

745
00:37:35,480 --> 00:37:37,960
Speaker 10: upside to many parts of the bond market excluding the

746
00:37:37,960 --> 00:37:39,640
Speaker 10: thirty year treasury, because I think that has too much

747
00:37:39,680 --> 00:37:42,799
Speaker 10: volatility for most people, is like five and a half

748
00:37:42,880 --> 00:37:45,480
Speaker 10: to twelve percent returns on the upside and maybe two

749
00:37:45,520 --> 00:37:47,920
Speaker 10: to four percent on the downside in the bond market.

750
00:37:48,320 --> 00:37:49,880
Speaker 8: And I'm thinking a lot of people that.

751
00:37:49,920 --> 00:37:52,800
Speaker 10: Are heading into retirement or are in retirement would be

752
00:37:52,840 --> 00:37:56,120
Speaker 10: happy with the five to twelve with very low downside

753
00:37:56,560 --> 00:38:00,560
Speaker 10: versus a market that's kind of riding high. I'm only

754
00:38:00,640 --> 00:38:03,440
Speaker 10: saying that from the standpoint of the growth part of

755
00:38:03,520 --> 00:38:06,440
Speaker 10: the market that I kind of think that you know,

756
00:38:06,680 --> 00:38:08,960
Speaker 10: decide how much volatility do you want to take to

757
00:38:09,000 --> 00:38:11,440
Speaker 10: get that extra couple percent If you don't need it,

758
00:38:11,600 --> 00:38:13,880
Speaker 10: are you willing to take the ten percent downside the

759
00:38:13,920 --> 00:38:17,560
Speaker 10: fifteen percent downside? So I just love that income can buffer,

760
00:38:18,040 --> 00:38:23,239
Speaker 10: can buffer volatility. Now, I think there's great dividends in

761
00:38:23,400 --> 00:38:26,680
Speaker 10: many of the value side of the market, the value

762
00:38:26,680 --> 00:38:30,560
Speaker 10: side of the market and the international markets. And everybody's like, oh,

763
00:38:30,600 --> 00:38:32,319
Speaker 10: the market's overvalue, the market's overvalued, but.

764
00:38:32,320 --> 00:38:34,239
Speaker 8: The equal weight SMP isn't overvalued.

765
00:38:34,480 --> 00:38:37,960
Speaker 10: The small and mid caps are as attractive to the

766
00:38:38,840 --> 00:38:41,120
Speaker 10: large caps as they've been since the year two thousand,

767
00:38:42,040 --> 00:38:44,759
Speaker 10: So there's just like a lot of dislocations that I

768
00:38:44,880 --> 00:38:48,200
Speaker 10: see where wow, like, why is everybody chasing this when

769
00:38:48,280 --> 00:38:51,759
Speaker 10: there's all these other things that are not expensive that

770
00:38:52,000 --> 00:38:54,319
Speaker 10: if interest rates do in fact continue to come down,

771
00:38:55,000 --> 00:38:57,000
Speaker 10: you have to kind of look at your portfolio and say, Okay,

772
00:38:57,080 --> 00:38:59,000
Speaker 10: now it's a different environment. We're not in a rate

773
00:38:59,080 --> 00:39:01,560
Speaker 10: hiking environment where rate cutting environment. What parts of the

774
00:39:01,640 --> 00:39:04,719
Speaker 10: market are gonna do well when rates are coming down

775
00:39:05,200 --> 00:39:07,000
Speaker 10: and it's the companies that have a lot of debt

776
00:39:07,040 --> 00:39:10,400
Speaker 10: that get helped, you know, And and wages are holding

777
00:39:10,480 --> 00:39:13,920
Speaker 10: up okay, and people are still spending, So you know,

778
00:39:14,000 --> 00:39:16,759
Speaker 10: I think there's there's something to be said for opportunities.

779
00:39:16,960 --> 00:39:19,560
Speaker 2: If many of your clients are either in retirement or

780
00:39:19,600 --> 00:39:23,560
Speaker 2: approaching retirement, how about alternatives? Is that not something for them?

781
00:39:23,600 --> 00:39:25,279
Speaker 2: Because I hear a lot of ras that are they

782
00:39:25,360 --> 00:39:26,560
Speaker 2: do talk about alternatives?

783
00:39:26,640 --> 00:39:31,080
Speaker 10: Yeah, And I do think alternative alternatives have their space

784
00:39:31,560 --> 00:39:32,759
Speaker 10: in a portfolio.

785
00:39:33,280 --> 00:39:34,719
Speaker 8: A lot of people don't understand them.

786
00:39:35,320 --> 00:39:38,320
Speaker 10: I think it's interesting, you know, the media in general,

787
00:39:38,400 --> 00:39:40,239
Speaker 10: we focus so much on the stock market, and then

788
00:39:40,280 --> 00:39:43,120
Speaker 10: I'll have a person say, explain the bond marketing, and

789
00:39:43,160 --> 00:39:45,000
Speaker 10: then Okay, we're gonna explain the bond market. Then we're

790
00:39:45,000 --> 00:39:48,920
Speaker 10: gonna explain alternatives, and then how can a person track

791
00:39:49,160 --> 00:39:52,080
Speaker 10: what that alternative is supposed to do. Because I think

792
00:39:53,000 --> 00:39:55,800
Speaker 10: a client is comfortable when they understand their portfolio and

793
00:39:55,960 --> 00:39:58,600
Speaker 10: why it's structured the way it is, and does that

794
00:39:58,719 --> 00:40:03,480
Speaker 10: resonate with their thoughts on the economy and the world

795
00:40:03,600 --> 00:40:05,719
Speaker 10: and geopolitical risk and all these things that we have

796
00:40:05,800 --> 00:40:08,640
Speaker 10: to deal with. And days like today when we see

797
00:40:08,680 --> 00:40:11,360
Speaker 10: and even last week with the Middle East conflict, that

798
00:40:11,560 --> 00:40:14,200
Speaker 10: when you have energy kind of being the sector that's

799
00:40:14,360 --> 00:40:15,880
Speaker 10: going well, I'm thinking that's.

800
00:40:15,800 --> 00:40:16,840
Speaker 8: Not a healthy market.

801
00:40:16,960 --> 00:40:19,959
Speaker 10: You know, remember twenty twenty two energy did well, nothing

802
00:40:20,000 --> 00:40:22,360
Speaker 10: else did, so it's kind of worry about that.

803
00:40:22,760 --> 00:40:24,839
Speaker 4: So when you take a look we were just talking about,

804
00:40:24,920 --> 00:40:26,640
Speaker 4: you know, fonds and and where to take risk there?

805
00:40:27,000 --> 00:40:29,239
Speaker 4: Do you think that the money are you telling your

806
00:40:29,280 --> 00:40:31,560
Speaker 4: clients that have money and money market fund more high

807
00:40:31,560 --> 00:40:33,960
Speaker 4: I'll save his account? Do they stay there or do

808
00:40:34,080 --> 00:40:35,759
Speaker 4: they need to put that money to work elsewhere? And

809
00:40:35,840 --> 00:40:37,279
Speaker 4: I guess when did they do that?

810
00:40:37,480 --> 00:40:41,320
Speaker 10: So reinvest a big risk because people got kind of

811
00:40:41,480 --> 00:40:44,440
Speaker 10: happy with their five plus percent cash rates. And we've

812
00:40:44,480 --> 00:40:46,560
Speaker 10: been talking to almost every client, you know, if you

813
00:40:46,640 --> 00:40:48,880
Speaker 10: don't need this money for the next year. You know,

814
00:40:48,920 --> 00:40:50,480
Speaker 10: if you need it, then keep it in a money

815
00:40:50,520 --> 00:40:51,920
Speaker 10: market because you're going to use it anyway.

816
00:40:52,360 --> 00:40:53,439
Speaker 8: But this is the time.

817
00:40:53,760 --> 00:40:55,360
Speaker 10: And actually I would say the best time would have

818
00:40:55,400 --> 00:40:58,319
Speaker 10: probably been last October when the ten year yield was five, right.

819
00:40:58,280 --> 00:41:00,919
Speaker 8: And the belts rang and it was like, oh my god.

820
00:41:01,040 --> 00:41:01,239
Speaker 6: Five.

821
00:41:01,320 --> 00:41:02,719
Speaker 8: We haven't seen five on a ten year in a

822
00:41:02,800 --> 00:41:03,200
Speaker 8: long time.

823
00:41:03,640 --> 00:41:06,400
Speaker 10: So I kind of think even now, okay, the tenures

824
00:41:06,680 --> 00:41:09,800
Speaker 10: above four, and the market doesn't like that, and everything's

825
00:41:09,840 --> 00:41:12,239
Speaker 10: kind of repricing short term. But I think that if

826
00:41:12,280 --> 00:41:16,680
Speaker 10: you consistently invest in, you're diversified across all areas of

827
00:41:16,840 --> 00:41:20,520
Speaker 10: the income market, knowing that ninety plus percent of your

828
00:41:20,560 --> 00:41:23,400
Speaker 10: return is going to come from your starting yield. I

829
00:41:23,480 --> 00:41:24,800
Speaker 10: think it's a nice little setup.

830
00:41:25,520 --> 00:41:28,319
Speaker 2: So here we are at the Commonwealth National Commerce two

831
00:41:28,360 --> 00:41:31,640
Speaker 2: thousand plus. Fellow ris here, Why do you come here?

832
00:41:31,880 --> 00:41:33,279
Speaker 2: What do you hope to learn?

833
00:41:34,280 --> 00:41:38,520
Speaker 10: I just think Comal Financial Network has done a fantastic

834
00:41:38,640 --> 00:41:42,719
Speaker 10: job of attracting like minded professionals. There's a lot of

835
00:41:42,800 --> 00:41:46,160
Speaker 10: people that are serious professionals. We like to exchange ideas,

836
00:41:46,200 --> 00:41:49,240
Speaker 10: we learn from each other. There's no like jealousy.

837
00:41:49,520 --> 00:41:50,759
Speaker 4: Aren't you all competitors too?

838
00:41:51,560 --> 00:41:52,160
Speaker 8: I don't think so.

839
00:41:52,560 --> 00:41:54,480
Speaker 10: I think we compete with ourselves, you know, and we

840
00:41:54,600 --> 00:41:57,520
Speaker 10: try to make ourselves better. So I've gotten a lot

841
00:41:57,560 --> 00:42:00,560
Speaker 10: of good ideas from my fellow advisors and to exchange

842
00:42:00,600 --> 00:42:03,160
Speaker 10: them things that I thought were useful, and we all

843
00:42:03,200 --> 00:42:05,920
Speaker 10: become better. In the industry becomes better because we share ideas.

844
00:42:06,239 --> 00:42:08,280
Speaker 4: And how are you growing your business?

845
00:42:08,360 --> 00:42:09,800
Speaker 8: Right now? It's mostly referrals.

846
00:42:09,960 --> 00:42:12,320
Speaker 10: If we do a really good job for our clients

847
00:42:12,360 --> 00:42:13,759
Speaker 10: and we stay in touch with them, and we do

848
00:42:13,840 --> 00:42:15,080
Speaker 10: a lot of you know, a lot of people are

849
00:42:15,120 --> 00:42:17,279
Speaker 10: doing virtual meetings, but we're doing a lot of in

850
00:42:17,440 --> 00:42:18,120
Speaker 10: person meetings.

851
00:42:18,160 --> 00:42:20,240
Speaker 8: That's kind of the nature of our of our business.

852
00:42:21,040 --> 00:42:23,200
Speaker 10: And I have a fantastic team, so you know, I

853
00:42:23,280 --> 00:42:26,400
Speaker 10: can't be everywhere at all times, but we just have

854
00:42:26,480 --> 00:42:30,480
Speaker 10: a wonderful team, and we keep our clients.

855
00:42:30,280 --> 00:42:30,880
Speaker 8: Very close to us.

856
00:42:30,960 --> 00:42:33,279
Speaker 10: We know exactly what's going on in their lives, and

857
00:42:33,480 --> 00:42:35,760
Speaker 10: we know how to adapt their portfolio and their planning

858
00:42:35,840 --> 00:42:37,400
Speaker 10: to the changes that their lives are.

859
00:42:38,080 --> 00:42:38,919
Speaker 2: Bait. Where are you based?

860
00:42:39,120 --> 00:42:42,240
Speaker 10: We're based in Reading, Pennsylvania. Okay, it's why I'm missing,

861
00:42:42,320 --> 00:42:43,960
Speaker 10: But most people don't know where why I'm missing is

862
00:42:44,400 --> 00:42:45,719
Speaker 10: a suburb of reading.

863
00:42:45,640 --> 00:42:47,640
Speaker 2: Right, So what's a typical client for you?

864
00:42:47,800 --> 00:42:50,640
Speaker 10: For you guys, you know what, people have a little

865
00:42:50,680 --> 00:42:53,279
Speaker 10: bit more money than they used to have, Like have

866
00:42:53,360 --> 00:42:56,319
Speaker 10: been the business for over twenty years. So I would say,

867
00:42:56,400 --> 00:42:58,680
Speaker 10: you know, the average net worth of a person if

868
00:42:58,719 --> 00:43:00,719
Speaker 10: they if you include their realists state is probably like

869
00:43:00,800 --> 00:43:03,760
Speaker 10: one to two million. But you know there are people

870
00:43:03,840 --> 00:43:09,360
Speaker 10: we service the the parents of uh, you know, baby boomers.

871
00:43:09,400 --> 00:43:12,760
Speaker 10: We service the children of the baby boomers, and sometimes

872
00:43:12,840 --> 00:43:15,840
Speaker 10: the grandchildren. So when you say what's the average client,

873
00:43:16,080 --> 00:43:18,600
Speaker 10: there's a lot of a client base that is the

874
00:43:18,719 --> 00:43:21,360
Speaker 10: family members, which we want to know, the family members

875
00:43:21,480 --> 00:43:22,839
Speaker 10: we want to know, We want to be a part.

876
00:43:22,760 --> 00:43:25,680
Speaker 4: Of their lives and so and it's like a pass

877
00:43:25,760 --> 00:43:28,640
Speaker 4: down wealth effect, right, I guess, yeah, how's that going?

878
00:43:28,880 --> 00:43:32,520
Speaker 10: I just I and I love when when a client

879
00:43:32,560 --> 00:43:35,600
Speaker 10: will bring in Okay, so my son or daughter is

880
00:43:35,680 --> 00:43:38,760
Speaker 10: going to college and she's considering this this industry.

881
00:43:39,080 --> 00:43:40,000
Speaker 8: Can you talk to them?

882
00:43:40,560 --> 00:43:42,239
Speaker 4: Okay? That's love that okay.

883
00:43:42,440 --> 00:43:43,640
Speaker 8: And I love to see like.

884
00:43:43,680 --> 00:43:45,800
Speaker 10: Their eyes light up, like they're really interested in it,

885
00:43:45,920 --> 00:43:48,799
Speaker 10: you know. And then sometimes they become interns and set

886
00:43:48,800 --> 00:43:50,440
Speaker 10: them out to the universe. To do good things for

887
00:43:50,480 --> 00:43:50,879
Speaker 10: good people.

888
00:43:51,080 --> 00:43:53,400
Speaker 4: First time my friend about when Ra was and her

889
00:43:53,480 --> 00:43:56,920
Speaker 4: guys just went, I'm glad you get that from you.

890
00:43:57,239 --> 00:43:59,600
Speaker 10: So, I mean, we're all blessed to be in this

891
00:43:59,719 --> 00:44:03,080
Speaker 10: and just you know, to gather knowledge, share knowledge, and

892
00:44:03,080 --> 00:44:05,160
Speaker 10: improve people's lives. It's just a wonderful industry.

893
00:44:05,480 --> 00:44:07,200
Speaker 2: Virgil, thank you so much for joining us. We appreciate

894
00:44:07,239 --> 00:44:08,759
Speaker 2: you for having me. It user your time, Virgil Kal.

895
00:44:09,120 --> 00:44:13,200
Speaker 2: She's a president CEO investment advisor at spring Reach Financial Group,

896
00:44:13,280 --> 00:44:16,040
Speaker 2: giving us her thoughts on these markets.

897
00:44:16,080 --> 00:44:21,480
Speaker 1: Here, you're listening to the Bloomberg Intelligence Podcast. Catch us

898
00:44:21,560 --> 00:44:24,840
Speaker 1: live weekdays at ten am Eastern on applecar.

899
00:44:24,440 --> 00:44:27,160
Speaker 9: Play and Android Auto with the Bloomberg Business app.

900
00:44:27,320 --> 00:44:30,160
Speaker 1: You can also listen live on Amazon Alexa from our

901
00:44:30,200 --> 00:44:34,840
Speaker 1: flagship New York station, Just Say Alexa, playing Bloomberg eleven thirty.

902
00:44:36,080 --> 00:44:38,680
Speaker 4: From alex c alongside Paul Sweeney. We're broadcasting to you

903
00:44:38,840 --> 00:44:42,719
Speaker 4: live from Orlando from Commonwealth's National Conference for Financial Advisors.

904
00:44:42,800 --> 00:44:44,960
Speaker 4: This year's theme is the Future is Now, and the

905
00:44:45,040 --> 00:44:47,600
Speaker 4: mission is to help advisors build a blueprint for their

906
00:44:47,680 --> 00:44:51,160
Speaker 4: future and empower advisors to navigate business transitions. And this

907
00:44:51,320 --> 00:44:54,040
Speaker 4: is the tenth year that Bloomberg Radio has broadcasted live

908
00:44:54,120 --> 00:44:57,600
Speaker 4: from the commonwealths National Conference. Joining us rare here right

909
00:44:57,680 --> 00:45:00,560
Speaker 4: now in in studio, in our makeshift studio, I should say,

910
00:45:01,040 --> 00:45:06,080
Speaker 4: is Chris Maximovitch. He's president of Louisville headquarters Global Wealth Advisors.

911
00:45:06,120 --> 00:45:08,040
Speaker 4: He's based in Dallas, and he joins us right here

912
00:45:08,120 --> 00:45:09,520
Speaker 4: in Orlando. Chris, good to see you.

913
00:45:09,680 --> 00:45:10,120
Speaker 7: Good to see you.

914
00:45:10,640 --> 00:45:12,279
Speaker 4: First off, just talk to us about the clients that

915
00:45:12,320 --> 00:45:15,120
Speaker 4: you serve. Who are they, what their net worth is,

916
00:45:15,200 --> 00:45:16,920
Speaker 4: and what they're kind of planning for in their questions.

917
00:45:17,080 --> 00:45:19,480
Speaker 7: Yeah, we're a holistic wealth management company.

918
00:45:20,239 --> 00:45:22,920
Speaker 4: Cloes holistic mean meaning we.

919
00:45:23,080 --> 00:45:26,520
Speaker 7: Really cover every facet of their financial life, ranging from

920
00:45:26,760 --> 00:45:30,160
Speaker 7: asset management to their estate planning, retirement income planning, to

921
00:45:30,520 --> 00:45:34,719
Speaker 7: business exit planning for our business owners, and you know,

922
00:45:34,800 --> 00:45:37,759
Speaker 7: really try to step into their financial shoes the best

923
00:45:37,800 --> 00:45:40,320
Speaker 7: we can to understand what they're trying to accomplish and

924
00:45:40,520 --> 00:45:41,200
Speaker 7: help them get there.

925
00:45:42,440 --> 00:45:44,279
Speaker 2: Yeah. You know, I live down at the Jersey Shore

926
00:45:44,640 --> 00:45:47,399
Speaker 2: and you drive down the coast and it's like any

927
00:45:47,440 --> 00:45:50,719
Speaker 2: part of any coast, thousands and thousands and thousands of

928
00:45:50,760 --> 00:45:54,520
Speaker 2: homes on the water, a couple million dollar house, half

929
00:45:54,520 --> 00:45:56,120
Speaker 2: a million dollar boat in the back, I'm like, who

930
00:45:56,239 --> 00:45:59,160
Speaker 2: are these people? And because there aren't that many Wall

931
00:45:59,200 --> 00:46:01,719
Speaker 2: Street in New York law jobs for all these people.

932
00:46:02,120 --> 00:46:05,120
Speaker 2: These are real people with real businesses, that's my conclusion,

933
00:46:05,719 --> 00:46:08,960
Speaker 2: and they're creating real wealth. How do you talk to

934
00:46:09,040 --> 00:46:12,440
Speaker 2: those people when they maybe sell a business and they

935
00:46:12,520 --> 00:46:13,839
Speaker 2: got to think about what to do with it all.

936
00:46:13,840 --> 00:46:16,879
Speaker 2: I've already got my house at the down on the water,

937
00:46:16,920 --> 00:46:19,720
Speaker 2: I've got my boats for families, I got my vespa.

938
00:46:20,800 --> 00:46:23,640
Speaker 2: Family's all educated. But what do I do with this stuff? Now?

939
00:46:24,160 --> 00:46:24,359
Speaker 9: Yeah?

940
00:46:24,480 --> 00:46:27,640
Speaker 7: You know, the conversation goes from God, I built this

941
00:46:28,239 --> 00:46:30,719
Speaker 7: monstrosity of a business all my life, worked hard to

942
00:46:30,800 --> 00:46:34,200
Speaker 7: get there, accomplished all the things I wanted to accomplish.

943
00:46:34,320 --> 00:46:37,799
Speaker 7: But now what right? And it becomes for a lot

944
00:46:37,840 --> 00:46:40,560
Speaker 7: of our clients about legacy, you know, passing it on

945
00:46:40,680 --> 00:46:43,839
Speaker 7: to the next generation and in some cases multiple generations,

946
00:46:44,520 --> 00:46:47,520
Speaker 7: and not having it become a disruptive force that tears

947
00:46:47,560 --> 00:46:54,040
Speaker 7: the family apart. I think that commonly that's the biggest

948
00:46:54,080 --> 00:46:57,640
Speaker 7: issue our our business owner's face as they exit their business.

949
00:46:57,840 --> 00:46:59,279
Speaker 4: If they don't exit and they're staying in and I'm

950
00:46:59,280 --> 00:47:01,719
Speaker 4: assuming cash super important, So what do they come to

951
00:47:01,760 --> 00:47:03,439
Speaker 4: you for to be able to have sort of cash

952
00:47:03,480 --> 00:47:04,280
Speaker 4: on hand, et cetera.

953
00:47:05,040 --> 00:47:08,160
Speaker 7: I mean it starts with basic financial planning principles, having

954
00:47:08,200 --> 00:47:11,759
Speaker 7: your cash reserve intact and having liquidity, you know, available

955
00:47:11,840 --> 00:47:15,319
Speaker 7: for all of the you know, unforeseen expenses we can

956
00:47:15,400 --> 00:47:20,560
Speaker 7: possibly think up hurricanes, you know, for for our Florida homeowners.

957
00:47:22,360 --> 00:47:26,120
Speaker 7: Then from there, you know, continuing to build upon, you know,

958
00:47:26,200 --> 00:47:28,720
Speaker 7: a framework that, hey, if these are the big ticket

959
00:47:28,760 --> 00:47:30,359
Speaker 7: items I have in front of me the next three

960
00:47:30,520 --> 00:47:33,759
Speaker 7: five plus years, I need to have liquidity at those

961
00:47:33,800 --> 00:47:37,279
Speaker 7: stages as well. Right, And I think too often we're

962
00:47:37,560 --> 00:47:43,400
Speaker 7: we're chasing ill liquid promising you know, potential investments, not

963
00:47:43,600 --> 00:47:44,720
Speaker 7: taking that into account.

964
00:47:45,400 --> 00:47:47,960
Speaker 2: So what are the types of questions you're getting from

965
00:47:48,000 --> 00:47:51,920
Speaker 2: your clients these days? I mean, I'll just leave it

966
00:47:51,920 --> 00:47:54,120
Speaker 2: at that. What are they really need for me today? Maybe?

967
00:47:54,160 --> 00:47:56,520
Speaker 2: How's that changed over the last ten to fifteen, twenty years.

968
00:47:58,040 --> 00:48:00,640
Speaker 7: You know, over the last twenty years. I've been doing

969
00:48:00,680 --> 00:48:06,120
Speaker 7: this twenty four years now. The fast pace of news

970
00:48:06,880 --> 00:48:10,799
Speaker 7: drives a lot of emotion, right, So just last week

971
00:48:10,880 --> 00:48:13,800
Speaker 7: I had multiple calls on you know, the port strikes.

972
00:48:13,960 --> 00:48:15,440
Speaker 7: Oh my gosh, what is this going to do to

973
00:48:15,520 --> 00:48:20,440
Speaker 7: the markets? My response was We've been through this before, right,

974
00:48:20,760 --> 00:48:24,160
Speaker 7: We've had strikes before, and more often than not, it's

975
00:48:24,239 --> 00:48:26,200
Speaker 7: not even a news item in a few days because

976
00:48:26,200 --> 00:48:28,040
Speaker 7: they probably kicked the can down the road and it

977
00:48:28,160 --> 00:48:32,360
Speaker 7: wasn't minutes later. You know, they pushed it to January fifteenth,

978
00:48:32,440 --> 00:48:36,960
Speaker 7: I think, right, we don't make decisions on short term

979
00:48:37,080 --> 00:48:37,600
Speaker 7: news items.

980
00:48:38,320 --> 00:48:41,759
Speaker 4: One thing though, that isn't short term is what the

981
00:48:41,880 --> 00:48:43,560
Speaker 4: Fed is doing. Like, yes, it it is like what

982
00:48:43,640 --> 00:48:45,400
Speaker 4: the bets are, what they're going to do versus the

983
00:48:45,480 --> 00:48:47,279
Speaker 4: longer term, what the Fed funds rate. It looks like.

984
00:48:47,600 --> 00:48:50,279
Speaker 4: But what it does mean is lower yields. Even if

985
00:48:50,280 --> 00:48:52,680
Speaker 4: they're stickier, they're still going to be lower than they

986
00:48:52,719 --> 00:48:55,200
Speaker 4: are SA today. That feels like a done deal. So

987
00:48:55,400 --> 00:48:57,680
Speaker 4: when and where do you tell your clients to take

988
00:48:57,680 --> 00:48:59,399
Speaker 4: their money out of money market funds are high healed

989
00:48:59,400 --> 00:49:01,440
Speaker 4: savings account and where do you tell them to put it?

990
00:49:01,600 --> 00:49:02,520
Speaker 4: And when do they do that?

991
00:49:02,680 --> 00:49:06,080
Speaker 7: Yeah, great question. We've we've had gosh numerous discussions over

992
00:49:06,120 --> 00:49:09,160
Speaker 7: the last two months about positioning, you know, preparing for

993
00:49:09,400 --> 00:49:14,400
Speaker 7: that and in some cases, you know I mentioned ill liquidity, Well,

994
00:49:14,440 --> 00:49:16,279
Speaker 7: in some cases it makes sense to take some of

995
00:49:16,280 --> 00:49:20,040
Speaker 7: those liquid funds and move into short term ill liquid

996
00:49:20,520 --> 00:49:23,760
Speaker 7: you know, positions such as money market move to CDs

997
00:49:23,840 --> 00:49:26,120
Speaker 7: to lock in a you know, a longer term rate.

998
00:49:28,200 --> 00:49:32,200
Speaker 7: It's you know, it's a it's a dilemma because obviously

999
00:49:32,360 --> 00:49:36,280
Speaker 7: rates are coming down and you do have the opportunity

1000
00:49:36,320 --> 00:49:39,320
Speaker 7: to lock in certain bond instruments or other fixed income

1001
00:49:39,400 --> 00:49:41,840
Speaker 7: instruments right now, but then you take on ill liquidity

1002
00:49:41,880 --> 00:49:43,240
Speaker 7: and you've got to go back to that balance.

1003
00:49:44,160 --> 00:49:46,239
Speaker 2: You're down in the Dallas Fort Worth area, one of

1004
00:49:46,320 --> 00:49:49,640
Speaker 2: the best economic stories in this country for the last

1005
00:49:49,760 --> 00:49:52,000
Speaker 2: I don't know, fifty years, it seems like, at least

1006
00:49:52,000 --> 00:49:58,120
Speaker 2: since I've been in the business. And I know that JP, Morgan, Goldman, Sachs, Morgan, Stanley,

1007
00:49:58,160 --> 00:50:00,759
Speaker 2: they put their best people down there, the wealths men.

1008
00:50:00,920 --> 00:50:04,320
Speaker 2: They're opening up wealth management office, messing around how do

1009
00:50:04,400 --> 00:50:05,319
Speaker 2: you compete with those guys.

1010
00:50:07,200 --> 00:50:10,000
Speaker 7: I don't necessarily think we compete with them. I like

1011
00:50:10,120 --> 00:50:13,840
Speaker 7: to pull some people from them, but you know, I

1012
00:50:13,920 --> 00:50:16,719
Speaker 7: think at the end of the day, there's, like you said,

1013
00:50:16,760 --> 00:50:19,759
Speaker 7: it's booming down there, and there's enough people to go around, okay, right,

1014
00:50:20,320 --> 00:50:23,360
Speaker 7: But we also bring different things to the table, you know,

1015
00:50:23,520 --> 00:50:26,960
Speaker 7: where where they might specialize in certain banking instruments that

1016
00:50:27,080 --> 00:50:28,799
Speaker 7: we can't get our hands on. That's really not our

1017
00:50:28,840 --> 00:50:33,919
Speaker 7: focus anyway. You know, wealth management, there's there's a hundred

1018
00:50:33,960 --> 00:50:37,000
Speaker 7: different ways to do it, and ultimately, our clients have

1019
00:50:37,280 --> 00:50:39,319
Speaker 7: faith and trust in us that we're doing the right thing, and.

1020
00:50:39,280 --> 00:50:41,279
Speaker 4: That's it always boils down to its relationships. So we

1021
00:50:41,440 --> 00:50:44,560
Speaker 4: keep hearing over and over on that front. I know

1022
00:50:44,680 --> 00:50:47,399
Speaker 4: you mentioned that you want to kind of stay away

1023
00:50:47,440 --> 00:50:49,600
Speaker 4: from short termism, but we do have a US election.

1024
00:50:50,520 --> 00:50:52,960
Speaker 4: You do have the idea that a budget deficit, fiscal

1025
00:50:53,000 --> 00:50:54,759
Speaker 4: deficit is just going to keep growing no matter who's

1026
00:50:54,760 --> 00:50:56,320
Speaker 4: in the White House, and that becomes a real issue

1027
00:50:56,880 --> 00:50:59,319
Speaker 4: when do your clients care about it? Because you could

1028
00:50:59,320 --> 00:51:02,000
Speaker 4: have said this exact sentence like twenty five years ago.

1029
00:51:02,160 --> 00:51:04,160
Speaker 7: Yeah, yeah, I mean, you know they cared about it

1030
00:51:04,480 --> 00:51:08,680
Speaker 7: when I got in this age. Yeah, it's I mean,

1031
00:51:08,719 --> 00:51:10,920
Speaker 7: it's it's it's an issue that continues to build and

1032
00:51:10,960 --> 00:51:13,040
Speaker 7: build and build, and eventually we're going to have to

1033
00:51:13,120 --> 00:51:15,719
Speaker 7: deal with it, and it's going to be I would

1034
00:51:15,760 --> 00:51:19,760
Speaker 7: think a pretty negative uh or have a negative impact

1035
00:51:19,840 --> 00:51:23,240
Speaker 7: on the economy and markets and and a lot of wealth.

1036
00:51:25,239 --> 00:51:29,520
Speaker 7: But you know, we have one vote, right, every one

1037
00:51:29,600 --> 00:51:32,000
Speaker 7: of us has an opportunity to get out and and

1038
00:51:32,520 --> 00:51:35,000
Speaker 7: vote for who we think can make a difference there,

1039
00:51:35,080 --> 00:51:38,160
Speaker 7: and I think that's where it starts. I don't have

1040
00:51:38,280 --> 00:51:39,520
Speaker 7: the answer to it, though, yep.

1041
00:51:39,600 --> 00:51:42,200
Speaker 2: I don't think a lot of people do. The candee, Chris,

1042
00:51:42,239 --> 00:51:45,400
Speaker 2: thanks so much for joining us. Christian Mexicovic, President Louisville

1043
00:51:45,440 --> 00:51:48,680
Speaker 2: at Louisville Headquarters at Global Wealth Advisors, located down there

1044
00:51:49,400 --> 00:51:53,279
Speaker 2: in the Greater Dallas Fort Worth Metroplex Center, which just

1045
00:51:53,360 --> 00:51:55,240
Speaker 2: keeps getting bigger and bigger and bigger.

1046
00:51:55,440 --> 00:52:00,239
Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, and.

1047
00:52:00,400 --> 00:52:02,120
Speaker 9: Anywhere else you get your podcasts.

1048
00:52:02,400 --> 00:52:05,400
Speaker 1: Listen live each weekday ten am to noon Eastern on

1049
00:52:05,560 --> 00:52:09,040
Speaker 1: Bloomberg dot com, the iHeartRadio app, tune In, and the

1050
00:52:09,040 --> 00:52:12,239
Speaker 1: Bloomberg Business app. You can also watch us live every

1051
00:52:12,320 --> 00:52:15,400
Speaker 1: weekday on YouTube and always on the Bloomberg terminal.