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Speaker 2: We are live in Orlando, Florida, Commonwealth National Conference for
Speaker 2: Financial Advisors. It's raining here, but apparently we have a
Speaker 2: hurricane on the way. It's out in the I guess
Speaker 2: the Gulf of Mexico, but making its way to the
Speaker 2: west coast of Florida. Supposed to hit here on the coast.
Speaker 2: I think that Wednesday morning is kind of what they're
Speaker 2: saying at some point. So, but both Alex and I
Speaker 2: were scheduled to flow out of here tomorrow afternoon, so
Speaker 2: we should be okay. And people here they are used
Speaker 2: to these hurricanes, but they've had a really tough couple
Speaker 2: of weeks here up at the Bend, up in northern Florida.
Speaker 2: Now here on the west coast, so let's kind of
Speaker 2: put some numbers around it. From an insurance perspective, at
Speaker 2: Matt Palazola, he does that or CC Insurance almost for
Speaker 2: Bltteberg Intelligence mat Can you just frame out what the
Speaker 2: last week or two for hurricanes and then this one
Speaker 2: coming up to hit the coast. What are the numbers
Speaker 2: around these things because they seem pretty big here.
Speaker 3: Yeah, So what we knew was going to happen was
Speaker 3: with Helene, the losses were mostly are going to be uninsured,
Speaker 3: so storm surge and flooding is not really a covered
Speaker 3: peril by homeowners insurance, so you're going to see a
Speaker 3: larger than normal diversions between insured and uninsured losses. With
Speaker 3: Hurricane Helene, we knew this was going to be a
Speaker 3: bad hurricane season, it wasn't actually living up to it
Speaker 3: until like the past week or so. So now we've
Speaker 3: got Hurricane Milton in the Gulf, category four, it will
Speaker 3: probably probably hear worse news before better, so it will
Speaker 3: probably strengthen to a category five. What's going to happen
Speaker 3: is going to hit a bunch of wind shear before
Speaker 3: it makes landfall, and that will actually lower the intensity
Speaker 3: of it. So right now National Hurricane Center is still
Speaker 3: saying major hurricane, which is category three or above, so
Speaker 3: it should be three when it makes the landfall, and
Speaker 3: I would just say one thing on the forecast. You
Speaker 3: look at the National Hurricane Center website and there's a
Speaker 3: cone on there and they call that the cone of uncertainty,
Speaker 3: and that cone goes across the whole Florida West Coast
Speaker 3: at this point, so it could be almost anywhere. The
Speaker 3: midpoint is that Tampa region, which is really a worst
Speaker 3: case for insurance companies, but that's where we're at now.
Speaker 3: So there's significant uncertainty over the next two days. And
Speaker 3: like you said, Paul, probably Wednesday morning where we have
Speaker 3: a landfall.
Speaker 4: Yeah, that was when my flight was supposed to take off,
Speaker 4: so we changed that. But to your point, Milton rapidly
Speaker 4: intensified into a Category four storm that happened around nine o'clock,
Speaker 4: and then now at about eleven o'clock, the National Hurricane
Speaker 4: continues to rapidly intensify, so worse. Before we get any
Speaker 4: kind of better news, I keep hearing that if the
Speaker 4: storm goes a little north versus a little south, little
Speaker 4: north is more catastrophic, little south would be better. What
Speaker 4: does that mean?
Speaker 3: So the main thing with hurricanes is the location. Right,
Speaker 3: a larger storm could hit the Big Bend region and
Speaker 3: you'd see the property values there are just not as
Speaker 3: high as somewhere in Tampa. So a stronger storm could
Speaker 3: hit a lower property value area and you're going to
Speaker 3: have lower insured and economic losses. The real main problem
Speaker 3: would be a direct hit on Tampa Bay. So if
Speaker 3: you go Hurricane Ian was a little further south a
Speaker 3: couple of years ago, that was sixty five billion dollars
Speaker 3: in insured losses. We're thinking this one just early, could
Speaker 3: be tens of billions, could be in that sixty five
Speaker 3: billion dollar range. It could be higher, frankly, if it
Speaker 3: hits as a stronger storm. So that's what happens there,
Speaker 3: and the path can shift pretty rapidly, So it's going
Speaker 3: to be down to the last minute before we actually
Speaker 3: know what will happen with insured losses.
Speaker 5: Him.
Speaker 2: If I'm and insurer, why do I even write business Florida.
Speaker 2: It's to say these four folks are getting hammered mold.
Speaker 4: Lot don't anymore, right, I guess, So.
Speaker 3: Good question, Paul, So a lot a lot don't. The
Speaker 3: large national carriers that we cover, a lot of them
Speaker 3: have avoided the region. All State is there, Progressive is there?
Speaker 3: So those are probably the two biggest public insurance state.
Speaker 3: Farm is one of the biggest there that's not public,
Speaker 3: it's a mutual company. The companies that really have will
Speaker 3: probably take the brunt of this are Florida specialty writers,
Speaker 3: so the Universal Insurance, Heritage Insurance, they focus mainly, if
Speaker 3: not exclusively, on that Florida market, and those stocks are
Speaker 3: down significantly, and the teams of twenty percent today.
Speaker 4: When we take a look at the insured losses, I
Speaker 4: mean maybe tens of billions, you said maybe the sixty
Speaker 4: five billion dollar range. What do we then extrapolate that
Speaker 4: the uninsured losses are because that was the part with
Speaker 4: Hurricane Helene that just sort of the numbers are staggering.
Speaker 3: Yeah, so the numbers are early, and I'm skeptical of
Speaker 3: some of the numbers out there for the economic losses.
Speaker 3: Typically the insured loss maybe you're looking at forty percent
Speaker 3: or half of the losses. But what has happened in
Speaker 3: these events with large surge and flooding is that the
Speaker 3: insured portion becomes a lot smaller. The Tampa Bay I
Speaker 3: believe it was a Chamber of Commerce or had put
Speaker 3: out a report in twenty twenty looking at what if
Speaker 3: a Category five hurricane hit the area and they it's
Speaker 3: a just residential property losses. We're somewhere in the range
Speaker 3: of three hundred billion dollars in that event. This probably
Speaker 3: won't be that bad. And you know, I don't know
Speaker 3: all the inputs that went into that, but you could
Speaker 3: see something like that which would maybe extrapolate a hundred
Speaker 3: billion dollar insured loss. But those were numbers that came
Speaker 3: out from Tampa Bay.
Speaker 2: All right, Matt, thanks so much for joining us. Always
Speaker 2: appreciate it. Matt Palozola. He is the insurance analyst for
Speaker 2: Bloomberg Intelligence Center. Bloomberg Arrector broke the studio back in
Speaker 2: New York. Yikes, we are here. We're in Orlando, and
Speaker 2: the folks here again, James to com, I was at
Speaker 2: the park yesterday. People were there, got every the ponchos on,
Speaker 2: the families were there. I mean, I guess you know,
Speaker 2: they're kind of hoping for the best here. But the
Speaker 2: hardy people.
Speaker 4: Those well, we were talking to trap earlier from Commonwealth.
Speaker 4: I was like, oh, we did a lot of people
Speaker 4: wind up canceling. It was just it was just a handful. Really,
Speaker 4: there was still two thousand people here, so maybe a
Speaker 4: few hundred maybe weren't able to come. But that just
Speaker 4: shows the commitment to financial advisers. I'm actually surprised we're
Speaker 4: not tasked with being outside with her hurricane storm. And
Speaker 4: I mean we're not offering, We're just saying we're surprised
Speaker 4: we haven't been asked there. All right, Oh my gosh,
Speaker 4: that's hardcore.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 2: We need to get back to what's happening in the
Speaker 2: Middle East. That does not seem to be any lessening
Speaker 2: of the efforts and operations in that part of the world.
Speaker 2: Mark Champion joins us, he's a Bloomberg opinion columnist. You've
Speaker 2: got to calumn out today. Middle East transformation must start
Speaker 2: with Israel. Mark, tell us what you mean by Israel
Speaker 2: really has to be leading any kind of change there.
Speaker 6: Well, I mean the point I really wanted to make
Speaker 6: was that, you know, Prime Minister Defension, I mean net
Speaker 6: Yahu has been criticized a lot for not putting out
Speaker 6: a strategy to you know, sort of make sense of
Speaker 6: all of the military action and create a sort of
Speaker 6: longer term pass so that we can see, you know,
Speaker 6: how to get out of the war and into some
Speaker 6: kind of security and peace. So, you know, he went
Speaker 6: to the UN and he said, I do have a strategy,
Speaker 6: and I do have a you know, a long term vision,
Speaker 6: and he called it the sort of the blessed scenario.
Speaker 6: But it's it's one in which, you know, Israel becomes
Speaker 6: a kind of catalyst for the region with its economy
Speaker 6: which is incredibly strong and sort of technologically advanced, and
Speaker 6: you know, there are connections, you know, through pipelines and railways,
Speaker 6: et cetera, all the way through Israel to Europe from
Speaker 6: Dowdi Arabia, et cetera. And you know, I'm just trying
Speaker 6: to make the point, really that for that to happen,
Speaker 6: he's right that there's no room for Hamatha the lah
Speaker 6: and for the whole acts of resistance that is committed
Speaker 6: and exists in order to get rid of the state
Speaker 6: of Israel. But he has a problem at home, and
Speaker 6: that problem is that there are extremists in his own
Speaker 6: cabinet whose language and you know, kind of ideas about
Speaker 6: you know, the future of Israel are very similar in
Speaker 6: the in the way that they don't allow for any
Speaker 6: kind of compromise, any room for the other side, in
Speaker 6: particular the Palestinians. So it's trying to sort of make
Speaker 6: that point and to say, you know, you really, if
Speaker 6: you want that sort of uh you know, secure, prosperous
Speaker 6: future where Israel is accepted and normalized within uh, you know,
Speaker 6: the the Middle East, then you really have to start
Speaker 6: at home, and you have to start you know, not
Speaker 6: just saying the Saudias are on our side, but you know,
Speaker 6: listening to the Saudiast when they say we want to
Speaker 6: be but there has to be some sort of vision
Speaker 6: for how we get out of it.
Speaker 4: Yeah, and Mark, you kind of make that distinction between
Speaker 4: strategy versus military force, right, And I'm just wondering where
Speaker 4: do you think Prime Minister Benjamin And YEAHO stands on
Speaker 4: that spectrum of military on one side and then strategy
Speaker 4: on the other.
Speaker 6: Well so forth, so far it's been all military. And
Speaker 6: you know, it's not that I'm saying that, you know,
Speaker 6: I'm not one of these people who sort of believes
Speaker 6: that Israel sort of you know, turned the other cheek
Speaker 6: after you know, the appalling events of exactly a year
Speaker 6: ago today they had to go in and deal with Hamma.
Speaker 6: They are dealing with Hamma. You know, there are always
Speaker 6: questions though about how you do that and how you
Speaker 6: you know, how you frame that in such a way
Speaker 6: that you can get people on your side. You know,
Speaker 6: whether it's you know, Palestinians you don't particularly like Hammas,
Speaker 6: and there's a lot of those in Gaza, more than
Speaker 6: in the West Bank, for example, where they don't actually
Speaker 6: live under Hammah. You know, you could say the same
Speaker 6: in Lebanon, where a majority of the population is not
Speaker 6: the It does not like Hisbella does not want its
Speaker 6: country to be used as a platform for Iran to
Speaker 6: you know, conduct its foreign policy with Israel. So you know,
Speaker 6: you can talk about the Iranians too, where a majority
Speaker 6: of the population doesn't like their regime or want their
Speaker 6: regime their scope here for a different kind of Middle East,
Speaker 6: it's just extremely difficult to get to and can't just
Speaker 6: be done with weapons alone. Weapons can you know, actually
Speaker 6: open a path, but they they can't get you to
Speaker 6: the other you know, to the other side, to a
Speaker 6: place of kind of peace and security.
Speaker 2: So mark to that point, does Prime minison that yahoo,
Speaker 2: Does he have the political capital, does he have the
Speaker 2: support of the people to play this long game that
Speaker 2: you're talking about.
Speaker 6: Well, I think he would if he wanted to sell it.
Speaker 6: It's very interesting when you know, opinion polls are done
Speaker 6: in Israel. There's a couple of institutes that have done
Speaker 6: Poles and when you ask the sort of bold question
Speaker 6: do you want to to state solution with a Palestinian state,
Speaker 6: there's a majority against. When you ask the question, do
Speaker 6: you want a to state solution as part of a
Speaker 6: deal with Saudi Arabia with you know, the US, and
Speaker 6: that would create this sort of secure environment and a
Speaker 6: multinational you know force in Gaza to create a transition there.
Speaker 6: When you when you put it as part of a
Speaker 6: package where people can understand how it might actually work,
Speaker 6: you know, for their benefit, then you know, the numbers
Speaker 6: change quite dramatically and you get a majority in favor.
Speaker 6: So I think that the you know, it's all as
Speaker 6: always it's a question of you know, what you sell,
Speaker 6: how you explain things, and I think you know that
Speaker 6: it's the choice on Netanyahu's pot part to to not
Speaker 6: go down that road, and there are you know, understandable
Speaker 6: reasons in terms of just pure power politics, because part
Speaker 6: of his cabinet has told him very clearly that if
Speaker 6: he does make any sort of you know, noises about
Speaker 6: a two state solution or a compromise, they will collapse
Speaker 6: the government.
Speaker 4: So if we look forward and if we wanted to
Speaker 4: see some kind of pivot from Netanyahu or some rhetoric
Speaker 4: that may indicate some kind of change or subtle shift,
Speaker 4: how would that be canmunicated?
Speaker 6: Well, I think you you know what you would start
Speaker 6: to see, you know, So the the main message I think,
Speaker 6: you know, people outside Israel may may not understand quite
Speaker 6: as well, but within Israel, what he's doing now in Lebanon,
Speaker 6: and you know, and in dealing with Iran directly, that
Speaker 6: is extremely popular Iranians. I mean, I'm so sorry Israelis
Speaker 6: are you know, convinced and with good reasons that Iran
Speaker 6: has been building up a kind of noose around their
Speaker 6: country and that this is all very calculated and extremely
Speaker 6: hostile and they have to do something about it. So
Speaker 6: the fact that they see Nephnia who now doing something
Speaker 6: about that, I think that is very popular. But you know,
Speaker 6: you could he certainly could sell that by you know,
Speaker 6: at the same time he's going after Iran, he could
Speaker 6: organize the ceasefire in in Garda that would get the
Speaker 6: hostages out that you know, would start to sort of
Speaker 6: create some kind of scope there, just to create you know,
Speaker 6: a more political path and to start building on that.
Speaker 6: So you know, it is imaginable. It's just a choice
Speaker 6: that Netnia, who at the moment does not want to make,
Speaker 6: and I can't see any sign of him making that
Speaker 6: change anytime soon, especially when he has people in his government,
Speaker 6: you know, who are absolutely opposed to it.
Speaker 2: Right all right, Mark, thank you very much. We really
Speaker 2: appreciate getting a few minutes your time. Mark Champion of
Speaker 2: Bloomberg Opinion. Calum is giving us the latest on the
Speaker 2: Middle East and maybe what might be some next steps there,
Speaker 2: but a very difficult situation in fluid situation.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 1: weekdays at ten am Eastern on Affle car Playing and
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Speaker 4: Paul Sweeden and I we are live from the Commonwealth
Speaker 4: National Conference for financial Advisors right here in Orlando, Florida.
Speaker 4: We will be back and taken off before the hurricane
Speaker 4: hits though, So there is that. The theme for this
Speaker 4: year is the Future is Now, and that mission is
Speaker 4: to help advisors build a blueprint for their future and
Speaker 4: empower advisors to navigate business transitions. And this is the
Speaker 4: tenth year that Bloomberg Radio has broadcast live from Commonwealth's
Speaker 4: national conference, so that's pretty cool. Joining us now is
Speaker 4: Trap Plowman, President and COO of Commonwealth. First of all,
Speaker 4: thanks for having us ten years Spielzic milestone.
Speaker 2: It's terrific.
Speaker 4: Did you get us anything for that?
Speaker 5: Yes, I have some, but no, thank you for all
Speaker 5: your support and coming.
Speaker 4: So walk us through the Future is now? What does
Speaker 4: that mean this year at the conference?
Speaker 7: Yeah.
Speaker 5: One of the things as we were, Commonwealth works to
Speaker 5: support so many advisors who are really small business owners.
Speaker 5: One of the things you have to do, absolutely is
Speaker 5: be thinking forward and constantly navigating an increasingly complex industry
Speaker 5: with regulation, with technology, and if you're just focused on
Speaker 5: the next quarter the next year, you're going to fall behind.
Speaker 2: So the future is now.
Speaker 5: You really need to be looking forward, and it's our
Speaker 5: responsibility and it's one of the things that we enjoy
Speaker 5: doing is helping advisors think forward and start preparing now
Speaker 5: for the future.
Speaker 2: Trap Let's say I'm an advisor at a wirehouse of
Speaker 2: Smith Barney and Merrill Lynch. What's my thought process when
Speaker 2: I think about leaving the mothership and kind of going
Speaker 2: on my own and being a registered independent advisor. What's
Speaker 2: the thought process there?
Speaker 5: Yeah, I think there's a lot of different reasons, but
Speaker 5: I think three that stand out and we commonly hear
Speaker 5: is one, as you get to build your own brand,
Speaker 5: you building your community, and you're known for what you
Speaker 5: want to stand for. Two is just the greater independence
Speaker 5: to make your own decisions and not necessarily have to
Speaker 5: follow the lead of a larger employer has many different
Speaker 5: conflicts and objectives and priorities. And the third and probably
Speaker 5: most importantly is you're now building value in your own
Speaker 5: business that you can monetize. And so as an employee,
Speaker 5: oftentimes you know you're leaving to get the gold watch. Here,
Speaker 5: you're building an incredible value that you can leave to
Speaker 5: the next generation or sell. And we're seeing the values
Speaker 5: of these independent businesses increase dramatically over the last couple
Speaker 5: of years, and I think that's here to stay.
Speaker 4: Why so, why is this increasing so much intoch a
Speaker 4: small amount of time and how do you see that
Speaker 4: playing out?
Speaker 2: Yeah?
Speaker 5: I actually think the businesses were chronically undervalued Historically. People
Speaker 5: didn't realize as there's been the transition from brokerage business,
Speaker 5: which obviously is commission based and it's sale to sale.
Speaker 5: Our advisors are over ninety percent pheebas, then many are
Speaker 5: one hundred percent phoebeas as an RIA or fee only.
Speaker 5: And when you have that recurring revenue stream and you're
Speaker 5: doing more than just investment management, you're doing financial planning
Speaker 5: and building relationships with clients that are deep and sticky
Speaker 5: that now then has value versus something that previously was
Speaker 5: trained actional. So as we've seen the growth in Phoebe's business,
Speaker 5: that has exponentially increased the value of those businesses and
Speaker 5: gives them something to transition.
Speaker 2: So when you meet with your financial advisors at event
Speaker 2: like this trap, what do you hear most from them?
Speaker 2: What do they need right now? Right now? It's weather advice?
Speaker 4: Yes, well there's that for those of you wondering. It
Speaker 4: is cloudy, rainy, not too much wind.
Speaker 5: Yet, no, not at all, I think we're in good shape,
Speaker 5: but it's it's an array of needs. And I think
Speaker 5: one of the strengths of a community like Commonwealth is
Speaker 5: we have fantastic advisors who are willing to share with
Speaker 5: each other, and so they're always you know, someone's already
Speaker 5: been there, done that, so no one needs to reinvent
Speaker 5: a wheel and Commonwealth we can play a great role
Speaker 5: in bringing, you know, the best practices together to unlock
Speaker 5: them for advisors. So for a wide variety, it's you know,
Speaker 5: how do you scale your business and get to the
Speaker 5: next level. How do you add and attract new advisors
Speaker 5: and train them, how do you take your technology, your
Speaker 5: internal infrastructure stack, adopt AI. It's an array of challenges.
Speaker 5: One of the most fascinating things that has impressed me
Speaker 5: is so many advisors are like, where can I find
Speaker 5: the next client? At Commonwealth, we never hear that they
Speaker 5: grow so incredibly fast through referrals, they're coming to us.
Speaker 5: How can I find the next advisor to keep up
Speaker 5: with the growth that we're seeing. And as you all know,
Speaker 5: as businesses are growing in scale and you have to
Speaker 5: change your processes, evolve and get more administrative support. So
Speaker 5: we really help them, not just as a BD or
Speaker 5: an RIA doing investment management. We're helping them run small businesses.
Speaker 5: And that's really the central theme we're seeing.
Speaker 4: How long do you think that growth can continue for?
Speaker 8: Right?
Speaker 4: Because in essence, people made more money the way does
Speaker 4: went up. We had the COVID stimulus, right, so they
Speaker 4: needed financial advisors, right. And you have a huge amount
Speaker 4: of equity within the stock market for regular individuals. At
Speaker 4: some point does that max out? And if we had
Speaker 4: like a huge drawdown or for some exogenous events, those
Speaker 4: small businesses get real small.
Speaker 9: Yeah.
Speaker 5: I actually, in looking all the different factors that can
Speaker 5: drive that activity, we're still continuing to see growth in
Speaker 5: the population, growth and savings overall, if you will. So
Speaker 5: I think the demand for financial advice is actually only
Speaker 5: going to improve. And there some concerns with the advancement
Speaker 5: of AI and what could the impact that be on
Speaker 5: many industries. But the reality is financial advice is not
Speaker 5: just again investment management. It's caring for people on a
Speaker 5: topic that can often be insecure and stressful. So you know,
Speaker 5: the most successful financial advisors are the ones who are
Speaker 5: really great at human relationships and caring for people through
Speaker 5: very challenging times, and so I feel what we have
Speaker 5: great tailwinds behind us and we'll continue to see growth
Speaker 5: in this industry, not just in commonwealth.
Speaker 2: Well, one of my offspring actually did follow me in
Speaker 2: my footsteps in financial services, works for a financial services firm,
Speaker 2: and you know, his firm says that their clients are
Speaker 2: really going to need them over the next twenty to
Speaker 2: thirty years because I have this massive wealth transfer from
Speaker 2: my generation to the next. How do you guys frame
Speaker 2: that topic for your advisors.
Speaker 5: Yeah, that's absolutely accurate, and we have hundreds of breakout
Speaker 5: sessions here and many are on that exact topic. And
Speaker 5: you know, the wealth transfer between insurance, trust and state
Speaker 5: and taxation is very complex and it's obviously there's a
Speaker 5: lot of emotion and people behind it, and so it
Speaker 5: is starting early in the planning process. And one of
Speaker 5: the things we have found and highly recommend and work
Speaker 5: with our advisors on is for whoever is managing the
Speaker 5: wealth or you know, controls the wealth, if you will,
Speaker 5: is to start engaging with the next generation now and
Speaker 5: really bring them into the planning and the reasons behind it.
Speaker 5: One of the most powerful things you can do. People
Speaker 5: always hear and understand, you know what, what is happening,
Speaker 5: but why is this happening? And so are we We
Speaker 5: have our financial advisors really engage in that wealth transfer
Speaker 5: early on to really explain that part of it and
Speaker 5: help all aspects of the family, not just represent one
Speaker 5: side and turn it into you know, two people on
Speaker 5: the other sides of the table. We want to bring
Speaker 5: everyone to the same side of the table.
Speaker 4: This is just curiosity. But how much is the conversation
Speaker 4: also revolving around retirement, not for say me and Paul,
Speaker 4: but for like our kids, Like who thinks that anyone's
Speaker 4: really going to have social security in forty years?
Speaker 8: Right?
Speaker 10: Like?
Speaker 4: How much is that conversation evolving as the fiscal depicit
Speaker 4: continues to balloon out?
Speaker 5: Yeah, I worry about that for myself, and I have
Speaker 5: three daughters who I don't even talk about social security
Speaker 5: because I don't think.
Speaker 4: They're necessarily think or like you don't want to rely
Speaker 4: on it, Yeah, you surely.
Speaker 5: Don't want to plan for it. I think of that
Speaker 5: as a bonus, not as the foundation. And so yeah,
Speaker 5: certainly one of the big things and think about retirement
Speaker 5: is if you quickly put the Social Security in that perspective.
Speaker 5: What actually becomes a much more exciting discussion we're seeing
Speaker 5: more in this day and age is people firmly want
Speaker 5: to keep working and extend their careers but doing something
Speaker 5: in their past about and that they love, and so
Speaker 5: often it's really about that second career. At what point
Speaker 5: can you make that transition from where you're building wealth
Speaker 5: and focused on that in your family to where you're
Speaker 5: focused on yourself and your spouse, for the people you
Speaker 5: care about, and doing something you're passionate about. And so
Speaker 5: it's less about retirement and it's more and more still
Speaker 5: a key part, but it's more and more too about
Speaker 5: what's that second career and that really changes the retirement portfolio.
Speaker 2: It's pretty cool.
Speaker 8: It's a radium.
Speaker 4: Yeah, I was gonna say, is are you apologizes at
Speaker 4: the moment?
Speaker 8: Exactly?
Speaker 2: Talent? How do you attract and retain talent and maybe
Speaker 2: even how do your advisors attract and retain talent?
Speaker 5: Yeah, it's an ongoing challenge and it's one of the
Speaker 5: things when you're running a small business, as the advisors are,
Speaker 5: they're not just financial advisors, they're entrepreneurs, and that's a
Speaker 5: talent and skill that they need and so certainly they
Speaker 5: can work with us to help them with that. But
Speaker 5: you know, we're in all fifty states and they're in
Speaker 5: their local communities. So one of the cool things we've
Speaker 5: done here is, you know history, no one's going to
Speaker 5: trust the twenty something to manage their portfolio. It was
Speaker 5: tough to break into the business. That's changed with financial
Speaker 5: planning and a lot of the technology that's come to
Speaker 5: the space, and so a lot of universities across the
Speaker 5: country have certified financial planning programs and they come out
Speaker 5: accredited and they can come join in office and do
Speaker 5: a lot of the investment planning and run the work
Speaker 5: and then join in the advisor meetings. And so as
Speaker 5: we think about attracting and retaining talent, there's a growing pipeline.
Speaker 5: So in the past, the employee models used to train
Speaker 5: people cold. Now they're coming out of college prepared and
Speaker 5: can make a difference.
Speaker 4: You have like about a minute left, But are the
Speaker 4: people who are going to the wealth advisors are they
Speaker 4: getting younger and younger or are they still older and older.
Speaker 5: We've seen that overall the HOLD study as we look
Speaker 5: at the average agent demographics, which overall we see is
Speaker 5: promising Certainly people are getting older, but that means there
Speaker 5: are more people are coming with wealth, and so yes,
Speaker 5: people are addicted to their phones and are comfortable with apps.
Speaker 5: But once your wealth gets to a certain level, you know,
Speaker 5: you become a little bit more risk averse in terms
Speaker 5: of owning that responsibility. And frankly, when you're in a
Speaker 5: relationship managing wealth together, you don't want to be the
Speaker 5: one solely responsible things go sideways. You know, you want
Speaker 5: to be with your partner, aligned on your interest and
Speaker 5: have some of the supporting both of you. So I
Speaker 5: think we're great with you know, the wealth transfer and
Speaker 5: next generation coming in and trusting financial advisors.
Speaker 7: Trap.
Speaker 2: Thanks so much for joining us. Really appreciate it. Thanks
Speaker 2: for hosting us again ten years running. We appreciate that.
Speaker 2: Trap Chlobman. He's a president chief operating officer of Commonwealth
Speaker 2: Financial Network. We're down here at their national conference here
Speaker 2: in our landowness place is massive.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 1: weekdays at ten am Eastern on applecar.
Speaker 9: Play and Android Auto with the Bloomberg Business app.
Speaker 1: You can also listen live on Amazon Alexa from our
Speaker 1: flagship New York station Just Say Alexa playing Bloomberg eleven.
Speaker 4: Thirty from Alex the alongside Sweeny Sweeney. We are live
Speaker 4: from Orlando, broadcasting from the Commonwealth National Conference for Financial Advisors.
Speaker 4: The topic is this future, The future is now and
Speaker 4: this is the tenth year the Bloomberg Radio has broadcasted
Speaker 4: live from this conference. Very much looking forward to all
Speaker 4: the conversations where we are going to have today. Let's
Speaker 4: kick it off now with Norman Grant, Managing director of
Speaker 4: Grant Capital. Norman, thanks for stopping.
Speaker 11: Get to chat with you, absolutely, thanks for having me.
Speaker 4: So the narrative in the broader market still after we
Speaker 4: get this job to report on Friday that was quite good,
Speaker 4: is that we still are in a US exceptionalism scenario
Speaker 4: where stocks can still be bonds. That this is kind
Speaker 4: of the narrative for the medium term. How do you
Speaker 4: guys look at it?
Speaker 11: Yeah, we think that it's oftentimes really difficult to tell
Speaker 11: where we are in a cycle, and it's it seems
Speaker 11: like the Fed is doing a remarkable job of, you know,
Speaker 11: creating this soft landing. You know, we came into this
Speaker 11: year thinking that things were going to be very tumultuous.
Speaker 11: There were a lot of you know, a lot of
Speaker 11: my clients were, you know, very concerned thinking that it
Speaker 11: was going to be a really challenging year, you know,
Speaker 11: but I think it shows that how resilient the United
Speaker 11: States economy is, and they've done a brilliant job of
Speaker 11: navigating I think the interest rates, it's been pretty challenging
Speaker 11: for still for some families. I think there's a dichotomy
Speaker 11: out there. I think if you're a family of modest means,
Speaker 11: it's been pretty tough for you. It's been pretty tough
Speaker 11: for you, not just this year, but for a few years.
Speaker 7: You know.
Speaker 11: I think if you're you know, you've you've got some means,
Speaker 11: then things have been pretty well for you, you know,
Speaker 11: if you've owned assets. So it's been quite interesting on
Speaker 11: that front. But jobs are hanging in there. You know,
Speaker 11: we're still at pretty low levels of unemployment and things
Speaker 11: appear to be holding.
Speaker 2: Up quite well.
Speaker 11: And the fifth seems to be navigating this pretty good.
Speaker 2: What's a typical client for granted capital and when what
Speaker 2: do they need from you? Mostly?
Speaker 11: Yeah, you know, so a typical client for us is,
Speaker 11: you know, our really big jam is is to really
Speaker 11: think about super high networth clients. Like Jeff Bezos, Mark Zuckerberg,
Speaker 11: and what we like to do is d those services
Speaker 11: that white glove service all the way down to clients
Speaker 11: you know, who are let's say somewhere around you know,
Speaker 11: five hundred thousand, you know, on the on the low end,
Speaker 11: and I would say maybe up to about two point
Speaker 11: five million. That's our sweet spot of where we normally
Speaker 11: like to engage clients. But we're very very big around
Speaker 11: holistic comprehensive planning. That's where Commonwealth, you know, our firm,
Speaker 11: really supports us well with a lot of great services
Speaker 11: that we can drive. We also run a very unique
Speaker 11: investment model as well that tends to be quantitative based
Speaker 11: to protect to the downside. And then lastly, the thing
Speaker 11: that we like to be known for is delivering exceptional
Speaker 11: client service. We feel that leading up to the pandemic,
Speaker 11: client service was lacking. During the pandemic, it became almost
Speaker 11: non existent. A lot of people gave up on client service,
Speaker 11: and so we we really try to rally around that
Speaker 11: and make that a big part of our practice of
Speaker 11: what we delivered for clients, so families and then also businesses.
Speaker 11: We help companies with helping them optimize and strategize their
Speaker 11: cash flow. We help them think differently about what they
Speaker 11: can do with their capital. You know, so we do
Speaker 11: a lot of really exciting things with businesses.
Speaker 1: Yeah.
Speaker 4: First of all, I love that you said that's our jam,
Speaker 4: because that's how I roll, so right, I appreciate that.
Speaker 4: So when you're talking your jam to small businesses, I'm
Speaker 4: curious as to what are their questions and how did
Speaker 4: they differ from say the guy making a million or
Speaker 4: the guy making five hundred thousand.
Speaker 11: You know, businesses are first and foremost it's about cash
Speaker 11: flow and cash flow.
Speaker 4: But UNI, because this guy loves me, go ahead on
Speaker 4: a high touch state.
Speaker 11: Yeah, obviously, you know muni's you know, definitely are very
Speaker 11: important to high network families, but also the businesses as well.
Speaker 11: But cash flow is a very critical component for them,
Speaker 11: and it's something that keeps you know a lot of
Speaker 11: the leadership teams of businesses up at night of how
Speaker 11: they're managing their capital. You know, are they really optimizing it?
Speaker 11: They're always thinking about their short term plans, intermediate plans,
Speaker 11: long term plans. How does how do they deploy this capital?
Speaker 11: How conservative should they be with it? And you know,
Speaker 11: and so that's where we can really you know, come
Speaker 11: along them, be with them every step of the way,
Speaker 11: helping them understand how they can optimize both their short,
Speaker 11: intermediate and long term you know capital.
Speaker 2: You know, I first started coming to these events, I
Speaker 2: was surprised that I thought most areas were pretty vanilla
Speaker 2: in the sense that stocks bonds. I was surprised that
Speaker 2: a lot of these ras, because of their clients want it.
Speaker 2: They want alternative investments, and they're more fully. I was
Speaker 2: surprised that the not only do they think about alternatives,
Speaker 2: but maybe the allocation to alternatives. How do you guys
Speaker 2: think about alternatis, whether it's private equity and private credit,
Speaker 2: hedge funds, that kind of thing.
Speaker 11: Yeah, you got to have it, Yep, you gotta have.
Speaker 4: How much of it do you have to have?
Speaker 7: You know?
Speaker 11: I think that you know, for especially you know, a
Speaker 11: lot of our clients, I think it definitely deserves, if
Speaker 11: nothing else, a conversation with clients to let them know
Speaker 11: that we do have a broad breadth of alternatives available
Speaker 11: to them, whether it's private equity, credit, lending solutions. There's
Speaker 11: so many things in the alternative space, and it's a
Speaker 11: pretty hot topic nowadays as well, and so I love
Speaker 11: that about Commonwealth is that we continue to offer a
Speaker 11: pretty robust offering in the alternative space. It's definitely something
Speaker 11: that a lot of high network clients talk about, It's
Speaker 11: something that businesses talk about, and it's definitely something that
Speaker 11: I think deserves a place in the portfolio, you know
Speaker 11: how much five ten, fifteen, I definitely don't think. I've
Speaker 11: heard that some family offices are as high as fifty
Speaker 11: percent alternatives, So it's definitely garnering a lot of attention
Speaker 11: and a lot of adoption.
Speaker 4: Is it more private credit? Is it private equity? Is
Speaker 4: it just like a lump thing?
Speaker 11: Well, private credit has certainly been extremely hot lately.
Speaker 4: A lot of the products available to you.
Speaker 11: Absolutely, absolutely, absolutely. We have quite a few of the
Speaker 11: major players in the space that are on our platform
Speaker 11: that we can offer clients, and it's growing and growing
Speaker 11: every day every day. In fact, we actually have a
Speaker 11: pretty big partner, I Capital, who is on our platform
Speaker 11: and they tend to be a central hub for a
Speaker 11: lot of our alternatives. But yeah, you got to be
Speaker 11: in the space, you got to be educated up on it,
Speaker 11: up on it. It's an exciting space with a lot
Speaker 11: of really great offerings and I like to say there's
Speaker 11: a democratizing of it where it used to be just
Speaker 11: for that really high networth client. But Commonwealth is doing
Speaker 11: some pretty interesting things where they're really getting those the
Speaker 11: entry points down to make it a lot more accessible by.
Speaker 2: A lot more of the clients. Norman, thanks so much
Speaker 2: for joining us. Really appreciate it. Folks on radio, you
Speaker 2: can't see it, but Norman is sporting his west Point
Speaker 2: sweater class of ninety three. I served five years active
Speaker 2: duty after graduating from west Point, so we thank him
Speaker 2: for his service. Norman Grant, he's a managing director a
Speaker 2: Grant Capital, given us his thoughts on these markets and
Speaker 2: on serving investors here. Coming up, we're gonna have Matt Palizola.
Speaker 2: He's the insurance analyst at Bloomberg Intelligence. Yes, we only
Speaker 2: talked to him, it seems like when there's a hurricane coming,
Speaker 2: but where he's going to join us here and give
Speaker 2: us some thoughts about this new hurricane coming in towards Florida,
Speaker 2: what it means for uh, the insurance industry, and how
Speaker 2: the coverage will be and maybe what the insured losses
Speaker 2: will be, and kind of what we've learned I think
Speaker 2: from all these hurricanes. Is there are insured losses, but
Speaker 2: then there are a lot of uninsured losses, and that's
Speaker 2: really where the pain gets a lot of folks. So
Speaker 2: we're gonna talk to Matt Palasola on that, get his
Speaker 2: thoughts on that, and of course we could provide in
Speaker 2: some on the ground reporting.
Speaker 4: We got on the ground reporting, although currently in Orlando
Speaker 4: we got nothing. If we were in Tampa, maybe that
Speaker 4: would be different. Could see the largest evacuation there and.
Speaker 2: People are still at the parks. I was there yesterday.
Speaker 2: People were there, you know, Hurricane be damn with her
Speaker 2: out there, going to see Mickey Melson.
Speaker 4: Maybeg oh later, maybego later? I think you lad, Yeah,
Speaker 4: got it to go.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 1: week days at ten am Eastern on Apple car.
Speaker 9: Play and and royd Otto with the bloom Business App.
Speaker 1: You can also listen live on Amazon Alexa from our
Speaker 1: flagship New York station, Just say Alexa play Bloomberg eleven thirty.
Speaker 2: Let's check with our next guest here right here Interlando
Speaker 2: at the conference. Virgil Kal, President CEO investment advisor at
Speaker 2: spring Ridge Financial Group, of the firm's global wealth advisors. Virgil,
Speaker 2: thanks so much for joining us here.
Speaker 8: Happy to be Here's what's.
Speaker 2: The conversation you're having with your clients these days? The
Speaker 2: SMP's up twenty percent, you know, I don't know, we
Speaker 2: got an election coming up.
Speaker 10: What's the conversation like, Well, I think I could speak
Speaker 10: for myself and many other financial advisors that since July
Speaker 10: were happy that the market's broadening out because for the
Speaker 10: last year and a half, we just had a concentrated
Speaker 10: market and everybody was so laser focused on how am
Speaker 10: I doing compared to the S and P, and it
Speaker 10: got to a point where the SMP was no longer
Speaker 10: as diversified as we'd like it to be. And so
Speaker 10: I kind of start with, Okay, most of my clients
Speaker 10: are in retirement or heading into retirement, and we've been
Speaker 10: blessed because of the extreme increases in interest rates to
Speaker 10: have better yield than we've had in more than a decade.
Speaker 10: And so when you know that you can make some
Speaker 10: money without taking a lot of risk, and you have
Speaker 10: many parts of the bond market that are trading below
Speaker 10: par and yields to worse that are six seven eight percent,
Speaker 10: and you compare that to the higher evaluations of the
Speaker 10: S and P. You start to think, okay, well, remember diversification,
Speaker 10: Remember that things don't go up forever, and income is
Speaker 10: a part of your return. And you know, before price
Speaker 10: conscious and we increase, the SMP became more tech focused,
Speaker 10: and it was price up, priced down.
Speaker 8: Income was a big.
Speaker 10: Part of a person's return prior to the zero interest
Speaker 10: rate environment. So to me in this environment, looking to
Speaker 10: add income and to diversify, and thank.
Speaker 8: God, we've seen, we've seen that.
Speaker 10: We now we kind of have a situation short term
Speaker 10: just as of Friday, that we might have stocks and
Speaker 10: bonds going down together right like we did last fall August, September, October.
Speaker 10: But in August when we had the scary cell off,
Speaker 10: it was like, okay, bonds were doing their job.
Speaker 8: They were going up with this.
Speaker 10: So we like to think that right now, I think
Speaker 10: the market's trying to digest. Okay, So we thought the
Speaker 10: economy was slowing down, but soft landing. We were saying,
Speaker 10: it's normalizing, and that's nice, that's a nice, nice word normalizing.
Speaker 10: It's you know, we're way past the pandemic now, but
Speaker 10: it's kind of like, Okay, a couple months ago, we
Speaker 10: got the data point that there was an eight hundred
Speaker 10: and eighteen thousand job revision, right, and then Friday we
Speaker 10: get a surprise over one hundred thousand more jobs. And
Speaker 10: it's like, okay, which data point is correct? You know?
Speaker 10: And granted the economy and the stock market, you know,
Speaker 10: the market's a leading indicator, right, so the market wants
Speaker 10: to get happy, but not too happy to cause interest
Speaker 10: to go up, because then we'll have this volatility that
Speaker 10: shakes everything up.
Speaker 4: So you're basically describing, you know, that soft landing, that goldilocks.
Speaker 4: And to your point about the jobs number, City had
Speaker 4: a note oubt that said, look, they are skeptical about
Speaker 4: that soft landing and say we could see revisions later
Speaker 4: and then that's going to affect how we view the
Speaker 4: overall economy. So if you're looking at a sixty forty,
Speaker 4: is still sixty forty.
Speaker 8: The right way to go?
Speaker 4: Like?
Speaker 8: Which needs not for everybody?
Speaker 2: Right?
Speaker 4: Okay, so not for everybody, but you know, I think
Speaker 4: a lot of.
Speaker 10: People would be happy to make I can figure there's
Speaker 10: a chart that if interest rates of all by one percent,
Speaker 10: we already got a half a percent cut, that the
Speaker 10: upside to many parts of the bond market excluding the
Speaker 10: thirty year treasury, because I think that has too much
Speaker 10: volatility for most people, is like five and a half
Speaker 10: to twelve percent returns on the upside and maybe two
Speaker 10: to four percent on the downside in the bond market.
Speaker 8: And I'm thinking a lot of people that.
Speaker 10: Are heading into retirement or are in retirement would be
Speaker 10: happy with the five to twelve with very low downside
Speaker 10: versus a market that's kind of riding high. I'm only
Speaker 10: saying that from the standpoint of the growth part of
Speaker 10: the market that I kind of think that you know,
Speaker 10: decide how much volatility do you want to take to
Speaker 10: get that extra couple percent If you don't need it,
Speaker 10: are you willing to take the ten percent downside the
Speaker 10: fifteen percent downside? So I just love that income can buffer,
Speaker 10: can buffer volatility. Now, I think there's great dividends in
Speaker 10: many of the value side of the market, the value
Speaker 10: side of the market and the international markets. And everybody's like, oh,
Speaker 10: the market's overvalue, the market's overvalued, but.
Speaker 8: The equal weight SMP isn't overvalued.
Speaker 10: The small and mid caps are as attractive to the
Speaker 10: large caps as they've been since the year two thousand,
Speaker 10: So there's just like a lot of dislocations that I
Speaker 10: see where wow, like, why is everybody chasing this when
Speaker 10: there's all these other things that are not expensive that
Speaker 10: if interest rates do in fact continue to come down,
Speaker 10: you have to kind of look at your portfolio and say, Okay,
Speaker 10: now it's a different environment. We're not in a rate
Speaker 10: hiking environment where rate cutting environment. What parts of the
Speaker 10: market are gonna do well when rates are coming down
Speaker 10: and it's the companies that have a lot of debt
Speaker 10: that get helped, you know, And and wages are holding
Speaker 10: up okay, and people are still spending, So you know,
Speaker 10: I think there's there's something to be said for opportunities.
Speaker 2: If many of your clients are either in retirement or
Speaker 2: approaching retirement, how about alternatives? Is that not something for them?
Speaker 2: Because I hear a lot of ras that are they
Speaker 2: do talk about alternatives?
Speaker 10: Yeah, And I do think alternative alternatives have their space
Speaker 10: in a portfolio.
Speaker 8: A lot of people don't understand them.
Speaker 10: I think it's interesting, you know, the media in general,
Speaker 10: we focus so much on the stock market, and then
Speaker 10: I'll have a person say, explain the bond marketing, and
Speaker 10: then Okay, we're gonna explain the bond market. Then we're
Speaker 10: gonna explain alternatives, and then how can a person track
Speaker 10: what that alternative is supposed to do. Because I think
Speaker 10: a client is comfortable when they understand their portfolio and
Speaker 10: why it's structured the way it is, and does that
Speaker 10: resonate with their thoughts on the economy and the world
Speaker 10: and geopolitical risk and all these things that we have
Speaker 10: to deal with. And days like today when we see
Speaker 10: and even last week with the Middle East conflict, that
Speaker 10: when you have energy kind of being the sector that's
Speaker 10: going well, I'm thinking that's.
Speaker 8: Not a healthy market.
Speaker 10: You know, remember twenty twenty two energy did well, nothing
Speaker 10: else did, so it's kind of worry about that.
Speaker 4: So when you take a look we were just talking about,
Speaker 4: you know, fonds and and where to take risk there?
Speaker 4: Do you think that the money are you telling your
Speaker 4: clients that have money and money market fund more high
Speaker 4: I'll save his account? Do they stay there or do
Speaker 4: they need to put that money to work elsewhere? And
Speaker 4: I guess when did they do that?
Speaker 10: So reinvest a big risk because people got kind of
Speaker 10: happy with their five plus percent cash rates. And we've
Speaker 10: been talking to almost every client, you know, if you
Speaker 10: don't need this money for the next year. You know,
Speaker 10: if you need it, then keep it in a money
Speaker 10: market because you're going to use it anyway.
Speaker 8: But this is the time.
Speaker 10: And actually I would say the best time would have
Speaker 10: probably been last October when the ten year yield was five, right.
Speaker 8: And the belts rang and it was like, oh my god.
Speaker 6: Five.
Speaker 8: We haven't seen five on a ten year in a
Speaker 8: long time.
Speaker 10: So I kind of think even now, okay, the tenures
Speaker 10: above four, and the market doesn't like that, and everything's
Speaker 10: kind of repricing short term. But I think that if
Speaker 10: you consistently invest in, you're diversified across all areas of
Speaker 10: the income market, knowing that ninety plus percent of your
Speaker 10: return is going to come from your starting yield. I
Speaker 10: think it's a nice little setup.
Speaker 2: So here we are at the Commonwealth National Commerce two
Speaker 2: thousand plus. Fellow ris here, Why do you come here?
Speaker 2: What do you hope to learn?
Speaker 10: I just think Comal Financial Network has done a fantastic
Speaker 10: job of attracting like minded professionals. There's a lot of
Speaker 10: people that are serious professionals. We like to exchange ideas,
Speaker 10: we learn from each other. There's no like jealousy.
Speaker 4: Aren't you all competitors too?
Speaker 8: I don't think so.
Speaker 10: I think we compete with ourselves, you know, and we
Speaker 10: try to make ourselves better. So I've gotten a lot
Speaker 10: of good ideas from my fellow advisors and to exchange
Speaker 10: them things that I thought were useful, and we all
Speaker 10: become better. In the industry becomes better because we share ideas.
Speaker 4: And how are you growing your business?
Speaker 8: Right now? It's mostly referrals.
Speaker 10: If we do a really good job for our clients
Speaker 10: and we stay in touch with them, and we do
Speaker 10: a lot of you know, a lot of people are
Speaker 10: doing virtual meetings, but we're doing a lot of in
Speaker 10: person meetings.
Speaker 8: That's kind of the nature of our of our business.
Speaker 10: And I have a fantastic team, so you know, I
Speaker 10: can't be everywhere at all times, but we just have
Speaker 10: a wonderful team, and we keep our clients.
Speaker 8: Very close to us.
Speaker 10: We know exactly what's going on in their lives, and
Speaker 10: we know how to adapt their portfolio and their planning
Speaker 10: to the changes that their lives are.
Speaker 2: Bait. Where are you based?
Speaker 10: We're based in Reading, Pennsylvania. Okay, it's why I'm missing,
Speaker 10: But most people don't know where why I'm missing is
Speaker 10: a suburb of reading.
Speaker 2: Right, So what's a typical client for you?
Speaker 10: For you guys, you know what, people have a little
Speaker 10: bit more money than they used to have, Like have
Speaker 10: been the business for over twenty years. So I would say,
Speaker 10: you know, the average net worth of a person if
Speaker 10: they if you include their realists state is probably like
Speaker 10: one to two million. But you know there are people
Speaker 10: we service the the parents of uh, you know, baby boomers.
Speaker 10: We service the children of the baby boomers, and sometimes
Speaker 10: the grandchildren. So when you say what's the average client,
Speaker 10: there's a lot of a client base that is the
Speaker 10: family members, which we want to know, the family members
Speaker 10: we want to know, We want to be a part.
Speaker 4: Of their lives and so and it's like a pass
Speaker 4: down wealth effect, right, I guess, yeah, how's that going?
Speaker 10: I just I and I love when when a client
Speaker 10: will bring in Okay, so my son or daughter is
Speaker 10: going to college and she's considering this this industry.
Speaker 8: Can you talk to them?
Speaker 4: Okay? That's love that okay.
Speaker 8: And I love to see like.
Speaker 10: Their eyes light up, like they're really interested in it,
Speaker 10: you know. And then sometimes they become interns and set
Speaker 10: them out to the universe. To do good things for
Speaker 10: good people.
Speaker 4: First time my friend about when Ra was and her
Speaker 4: guys just went, I'm glad you get that from you.
Speaker 10: So, I mean, we're all blessed to be in this
Speaker 10: and just you know, to gather knowledge, share knowledge, and
Speaker 10: improve people's lives. It's just a wonderful industry.
Speaker 2: Virgil, thank you so much for joining us. We appreciate
Speaker 2: you for having me. It user your time, Virgil Kal.
Speaker 2: She's a president CEO investment advisor at spring Reach Financial Group,
Speaker 2: giving us her thoughts on these markets.
Speaker 1: Here, you're listening to the Bloomberg Intelligence Podcast. Catch us
Speaker 1: live weekdays at ten am Eastern on applecar.
Speaker 9: Play and Android Auto with the Bloomberg Business app.
Speaker 1: You can also listen live on Amazon Alexa from our
Speaker 1: flagship New York station, Just Say Alexa, playing Bloomberg eleven thirty.
Speaker 4: From alex c alongside Paul Sweeney. We're broadcasting to you
Speaker 4: live from Orlando from Commonwealth's National Conference for Financial Advisors.
Speaker 4: This year's theme is the Future is Now, and the
Speaker 4: mission is to help advisors build a blueprint for their
Speaker 4: future and empower advisors to navigate business transitions. And this
Speaker 4: is the tenth year that Bloomberg Radio has broadcasted live
Speaker 4: from the commonwealths National Conference. Joining us rare here right
Speaker 4: now in in studio, in our makeshift studio, I should say,
Speaker 4: is Chris Maximovitch. He's president of Louisville headquarters Global Wealth Advisors.
Speaker 4: He's based in Dallas, and he joins us right here
Speaker 4: in Orlando. Chris, good to see you.
Speaker 7: Good to see you.
Speaker 4: First off, just talk to us about the clients that
Speaker 4: you serve. Who are they, what their net worth is,
Speaker 4: and what they're kind of planning for in their questions.
Speaker 7: Yeah, we're a holistic wealth management company.
Speaker 4: Cloes holistic mean meaning we.
Speaker 7: Really cover every facet of their financial life, ranging from
Speaker 7: asset management to their estate planning, retirement income planning, to
Speaker 7: business exit planning for our business owners, and you know,
Speaker 7: really try to step into their financial shoes the best
Speaker 7: we can to understand what they're trying to accomplish and
Speaker 7: help them get there.
Speaker 2: Yeah. You know, I live down at the Jersey Shore
Speaker 2: and you drive down the coast and it's like any
Speaker 2: part of any coast, thousands and thousands and thousands of
Speaker 2: homes on the water, a couple million dollar house, half
Speaker 2: a million dollar boat in the back, I'm like, who
Speaker 2: are these people? And because there aren't that many Wall
Speaker 2: Street in New York law jobs for all these people.
Speaker 2: These are real people with real businesses, that's my conclusion,
Speaker 2: and they're creating real wealth. How do you talk to
Speaker 2: those people when they maybe sell a business and they
Speaker 2: got to think about what to do with it all.
Speaker 2: I've already got my house at the down on the water,
Speaker 2: I've got my boats for families, I got my vespa.
Speaker 2: Family's all educated. But what do I do with this stuff? Now?
Speaker 9: Yeah?
Speaker 7: You know, the conversation goes from God, I built this
Speaker 7: monstrosity of a business all my life, worked hard to
Speaker 7: get there, accomplished all the things I wanted to accomplish.
Speaker 7: But now what right? And it becomes for a lot
Speaker 7: of our clients about legacy, you know, passing it on
Speaker 7: to the next generation and in some cases multiple generations,
Speaker 7: and not having it become a disruptive force that tears
Speaker 7: the family apart. I think that commonly that's the biggest
Speaker 7: issue our our business owner's face as they exit their business.
Speaker 4: If they don't exit and they're staying in and I'm
Speaker 4: assuming cash super important, So what do they come to
Speaker 4: you for to be able to have sort of cash
Speaker 4: on hand, et cetera.
Speaker 7: I mean it starts with basic financial planning principles, having
Speaker 7: your cash reserve intact and having liquidity, you know, available
Speaker 7: for all of the you know, unforeseen expenses we can
Speaker 7: possibly think up hurricanes, you know, for for our Florida homeowners.
Speaker 7: Then from there, you know, continuing to build upon, you know,
Speaker 7: a framework that, hey, if these are the big ticket
Speaker 7: items I have in front of me the next three
Speaker 7: five plus years, I need to have liquidity at those
Speaker 7: stages as well. Right, And I think too often we're
Speaker 7: we're chasing ill liquid promising you know, potential investments, not
Speaker 7: taking that into account.
Speaker 2: So what are the types of questions you're getting from
Speaker 2: your clients these days? I mean, I'll just leave it
Speaker 2: at that. What are they really need for me today? Maybe?
Speaker 2: How's that changed over the last ten to fifteen, twenty years.
Speaker 7: You know, over the last twenty years. I've been doing
Speaker 7: this twenty four years now. The fast pace of news
Speaker 7: drives a lot of emotion, right, So just last week
Speaker 7: I had multiple calls on you know, the port strikes.
Speaker 7: Oh my gosh, what is this going to do to
Speaker 7: the markets? My response was We've been through this before, right,
Speaker 7: We've had strikes before, and more often than not, it's
Speaker 7: not even a news item in a few days because
Speaker 7: they probably kicked the can down the road and it
Speaker 7: wasn't minutes later. You know, they pushed it to January fifteenth,
Speaker 7: I think, right, we don't make decisions on short term
Speaker 7: news items.
Speaker 4: One thing though, that isn't short term is what the
Speaker 4: Fed is doing. Like, yes, it it is like what
Speaker 4: the bets are, what they're going to do versus the
Speaker 4: longer term, what the Fed funds rate. It looks like.
Speaker 4: But what it does mean is lower yields. Even if
Speaker 4: they're stickier, they're still going to be lower than they
Speaker 4: are SA today. That feels like a done deal. So
Speaker 4: when and where do you tell your clients to take
Speaker 4: their money out of money market funds are high healed
Speaker 4: savings account and where do you tell them to put it?
Speaker 4: And when do they do that?
Speaker 7: Yeah, great question. We've we've had gosh numerous discussions over
Speaker 7: the last two months about positioning, you know, preparing for
Speaker 7: that and in some cases, you know I mentioned ill liquidity, Well,
Speaker 7: in some cases it makes sense to take some of
Speaker 7: those liquid funds and move into short term ill liquid
Speaker 7: you know, positions such as money market move to CDs
Speaker 7: to lock in a you know, a longer term rate.
Speaker 7: It's you know, it's a it's a dilemma because obviously
Speaker 7: rates are coming down and you do have the opportunity
Speaker 7: to lock in certain bond instruments or other fixed income
Speaker 7: instruments right now, but then you take on ill liquidity
Speaker 7: and you've got to go back to that balance.
Speaker 2: You're down in the Dallas Fort Worth area, one of
Speaker 2: the best economic stories in this country for the last
Speaker 2: I don't know, fifty years, it seems like, at least
Speaker 2: since I've been in the business. And I know that JP, Morgan, Goldman, Sachs, Morgan, Stanley,
Speaker 2: they put their best people down there, the wealths men.
Speaker 2: They're opening up wealth management office, messing around how do
Speaker 2: you compete with those guys.
Speaker 7: I don't necessarily think we compete with them. I like
Speaker 7: to pull some people from them, but you know, I
Speaker 7: think at the end of the day, there's, like you said,
Speaker 7: it's booming down there, and there's enough people to go around, okay, right,
Speaker 7: But we also bring different things to the table, you know,
Speaker 7: where where they might specialize in certain banking instruments that
Speaker 7: we can't get our hands on. That's really not our
Speaker 7: focus anyway. You know, wealth management, there's there's a hundred
Speaker 7: different ways to do it, and ultimately, our clients have
Speaker 7: faith and trust in us that we're doing the right thing, and.
Speaker 4: That's it always boils down to its relationships. So we
Speaker 4: keep hearing over and over on that front. I know
Speaker 4: you mentioned that you want to kind of stay away
Speaker 4: from short termism, but we do have a US election.
Speaker 4: You do have the idea that a budget deficit, fiscal
Speaker 4: deficit is just going to keep growing no matter who's
Speaker 4: in the White House, and that becomes a real issue
Speaker 4: when do your clients care about it? Because you could
Speaker 4: have said this exact sentence like twenty five years ago.
Speaker 7: Yeah, yeah, I mean, you know they cared about it
Speaker 7: when I got in this age. Yeah, it's I mean,
Speaker 7: it's it's it's an issue that continues to build and
Speaker 7: build and build, and eventually we're going to have to
Speaker 7: deal with it, and it's going to be I would
Speaker 7: think a pretty negative uh or have a negative impact
Speaker 7: on the economy and markets and and a lot of wealth.
Speaker 7: But you know, we have one vote, right, every one
Speaker 7: of us has an opportunity to get out and and
Speaker 7: vote for who we think can make a difference there,
Speaker 7: and I think that's where it starts. I don't have
Speaker 7: the answer to it, though, yep.
Speaker 2: I don't think a lot of people do. The candee, Chris,
Speaker 2: thanks so much for joining us. Christian Mexicovic, President Louisville
Speaker 2: at Louisville Headquarters at Global Wealth Advisors, located down there
Speaker 2: in the Greater Dallas Fort Worth Metroplex Center, which just
Speaker 2: keeps getting bigger and bigger and bigger.
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