WEBVTT - HighTower's Weissbluth on Need For Solid Financial Plan (Audio)

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<v Speaker 1>Global business news twenty four hours a day. If Bloomberg

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<v Speaker 1>This is a Bloomberg Business Flash from Bloomberg World Handquarters.

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<v Speaker 1>I'm Charlie. Pelett's stocks are slipping from near record levels

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<v Speaker 1>after European Central Bank President Mario Draggy downplayed the need

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<v Speaker 1>for more stimulus measures to bolster growth. Apple weighing on

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<v Speaker 1>stocks falling the most in two months, a day after

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<v Speaker 1>the introduction of its latest iPhone. Apple is down now

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<v Speaker 1>by two point seven percent. The SMP five hundred index

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<v Speaker 1>down four one to drop there of two tents of

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<v Speaker 1>one percent down, Industrials down forty six, a decline of

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<v Speaker 1>three tents of one percent, and nastank is down twenty

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<v Speaker 1>three points, a drop of five tents of one percent.

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<v Speaker 1>The ten ure down twenty thirty seconds, with the yield

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<v Speaker 1>of one point six one percent. Gold down seven ninety

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<v Speaker 1>renounced the thirteen thirty seven, a drop there of six

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<v Speaker 1>tents of one percent. Crude oil surging four point three

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<v Speaker 1>percent that after the inventories report up a dollar ninety

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<v Speaker 1>four a barrel forty forty four right now on West

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<v Speaker 1>Texas enemy the a crude I'm Charlie Tellerton. That's a

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<v Speaker 1>Bloomberg business flash. You're listening to taking Stock with Bim

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<v Speaker 1>Box and Jatholeen Hayes on Bloomberg Radio. What would you

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<v Speaker 1>do if you fired yourself? Would you rehire yourself? Well,

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<v Speaker 1>let's find out a little bit more from Elliott Wis Blooth.

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<v Speaker 1>He is the founder and the chief executive High Tower Advisors,

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<v Speaker 1>helping to manage over thirty billion dollars in assets for clients.

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<v Speaker 1>He's based in Chicago, but he joins us here at

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<v Speaker 1>Bloomberg World Headquarters in New York. Elliott, thanks for being here.

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<v Speaker 1>Good to see you. I mentioned this idea of hiring

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<v Speaker 1>and firing yourself because I know that is something that

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<v Speaker 1>you do every year. Explain what it is this means.

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<v Speaker 1>So I have to give full credit to the inspiration.

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<v Speaker 1>Andy Grove at Intel is famous for this technique that

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<v Speaker 1>he did with his management team, and I've adopted it

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<v Speaker 1>and made it pretty personal and adopted it on the team.

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<v Speaker 1>And the general idea is that you can't get to

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<v Speaker 1>a state of mind where you can forgive yourself for

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<v Speaker 1>all the things you did wrong the year before unless

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<v Speaker 1>you actually fire yourself. Have a candid conversation about all

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<v Speaker 1>the things that you you didn't do exactly the way

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<v Speaker 1>you would hope that they would turn out, or the

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<v Speaker 1>judgments you made that in hindsight, maybe you would have

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<v Speaker 1>made them a little bit differently. And it's a bit

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<v Speaker 1>of a tongue in cheek exercise, right, because there's something

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<v Speaker 1>funny about firing, and you fire yourself. But then, of course,

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<v Speaker 1>after you've smarted the wounds of being fired, you have

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<v Speaker 1>the good sense to hire yourself back. And it's the

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<v Speaker 1>hiring yourself back, I think where there's a lot of

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<v Speaker 1>magic that can happen inside of a way of a

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<v Speaker 1>person thinks about decision making, because if you're the new guy,

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<v Speaker 1>then you don't have any obligation to all those crazy

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<v Speaker 1>decisions the old guy did, right because after all the guy.

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<v Speaker 1>So you go through that process and what it allows

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<v Speaker 1>you to do is say, well, if I was the

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<v Speaker 1>new guy showing up here for the first time, what

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<v Speaker 1>are some of the things I would change today? And

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<v Speaker 1>that frees your mind to say, Okay, here are a

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<v Speaker 1>couple of decisions that I'm gonna make today, or judgments

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<v Speaker 1>I'm gonna make today, and they may not be massive profound,

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<v Speaker 1>monumental shifts, but they might be very important changes that

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<v Speaker 1>you're going to make to begin a process, or to

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<v Speaker 1>begin a conversation, or to accelerate or decelerate part of

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<v Speaker 1>the world around you. And that freedom is is pretty

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<v Speaker 1>powerful and pretty liberating. So I guess every year you've

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<v Speaker 1>rehired yourself so far, I think you'll probably rehiring yourself,

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<v Speaker 1>maybe tough for some years another. So sure with us

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<v Speaker 1>last year, what was the number one thing that you

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<v Speaker 1>didn't do correctly? You said, oh boy, you believe blew it, Elliott,

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<v Speaker 1>And then the new Elliott got to say, okay, here,

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<v Speaker 1>so I'm doing So we a couple of years ago,

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<v Speaker 1>we had a strategic plan to optimized part of our business.

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<v Speaker 1>We knew we had built a platform that a lot

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<v Speaker 1>of advisors used, and we had a strategic vision to

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<v Speaker 1>take it and apply it to a different part of

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<v Speaker 1>the marketplace. And we knew intellectually that it would make

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<v Speaker 1>sense because it was a good idea. But what we

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<v Speaker 1>hadn't done, and what I hadn't done, has taken the

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<v Speaker 1>time to properly fully evangelize all of the people that

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<v Speaker 1>had to make it happen. And it's not just the

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<v Speaker 1>CEO and a couple of leaders in the business. You

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<v Speaker 1>need to have a consensus if you're going to really

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<v Speaker 1>take on a strategic shift, and so I had moved

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<v Speaker 1>too quickly ahead of the people that had to make

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<v Speaker 1>it happen. And I recognized that. But in the process

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<v Speaker 1>of firing myself and rehiring myself, I realized how important

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<v Speaker 1>it was to go back and re evangelize some of

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<v Speaker 1>those people and really get them on board in a

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<v Speaker 1>way that when we renewed our energies in the first

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<v Speaker 1>part of the year, they would be much more engaged

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<v Speaker 1>and much more involved in making the that that sort

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<v Speaker 1>of activity a success. As a result of that, this year,

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<v Speaker 1>we're on track to have the greatest growth year we've

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<v Speaker 1>had since we launched the business, and a lot of

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<v Speaker 1>that was because many of the people that didn't really

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<v Speaker 1>feel included in the conversation were properly brought into the conversation.

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<v Speaker 1>They hit the ground running with a different level of energy,

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<v Speaker 1>and it was largely because I had failed to properly

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<v Speaker 1>evangelize them and bring them to where they needed to

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<v Speaker 1>be to make the initiative as success. I'm not going

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<v Speaker 1>to ask about the biggest concern that registered investment advisors have,

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<v Speaker 1>which is your force of employees so to secure. But

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<v Speaker 1>what are some of the things that they're coming to

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<v Speaker 1>you with that they're getting from their customers. What kinds

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<v Speaker 1>of questions are they coming to you with. Well, I'll

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<v Speaker 1>tell you. I was in Minneapolis Saint Paul last night

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<v Speaker 1>and I welcomed the new team UM into Higower and

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<v Speaker 1>a fantastic financial advisor, a veteran of the industry, and

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<v Speaker 1>a great group of his clients joined to welcome him

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<v Speaker 1>into his new office, and we went to welcome him

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<v Speaker 1>to High Tower. And what I heard at that room,

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<v Speaker 1>and I heard as I was was reading the clients

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<v Speaker 1>and over the cocktail hour, is what I'm hearing a

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<v Speaker 1>lot of, which is that there's a significant amount of

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<v Speaker 1>um uneasiness about the markets and there's a difficulty today

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<v Speaker 1>with with opportunities that will create yield for clients. And

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<v Speaker 1>so there's a strong sentiment in the community to not

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<v Speaker 1>reach for yield, to not to not do things differently

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<v Speaker 1>because the markets today are are difficult for a lot

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<v Speaker 1>of advisors to find opportunities. So it's a combination of

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<v Speaker 1>market environment coupled with a sense of an easiness. And

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<v Speaker 1>I think that uneasiness is fueled not just by maybe

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<v Speaker 1>the political landscape in this country, what's happening, what's happening

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<v Speaker 1>around the world, things like Zeka. There's a whole variety

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<v Speaker 1>of things that are playing into it. But the levels

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<v Speaker 1>of uneasiness we're we're hearing, you know, literally from around

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<v Speaker 1>the country are are pretty high well. And we do

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<v Speaker 1>talk to advisors. We understand it's it's very difficult to

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<v Speaker 1>keep the risk low for your for your client and

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<v Speaker 1>also get them the kind of returns that they would

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<v Speaker 1>like to have. Uh more broadly than especially at a

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<v Speaker 1>time like this, they've got negative rates and you know,

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<v Speaker 1>bond yields negative around the world are so very low,

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<v Speaker 1>or fixed income isn't helping that much. Dividend pain stocks

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<v Speaker 1>maybe a little bit played out, that's a possibility. But

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<v Speaker 1>what can and should a person expect from their advisors

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<v Speaker 1>It first and foremost, making sure I don't lose money.

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<v Speaker 1>What is the number one thing I should be expecting

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<v Speaker 1>them to do? So, I think the most important thing

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<v Speaker 1>for an individual to think about is do they feel

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<v Speaker 1>that their financial advisor has built a comprehensive plan for

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<v Speaker 1>them and their family, and it may not just be

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<v Speaker 1>limited to the technical financial plan which maps out various

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<v Speaker 1>needs that a family may have. It's is the financial

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<v Speaker 1>advisor looking at today's market in context of the person's

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<v Speaker 1>total wellness, how they think about where the family is going,

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<v Speaker 1>where the needs are going to be. Because we focus

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<v Speaker 1>much more on the total picture, if you will, then

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<v Speaker 1>what might be happening is different for a wealthy customer

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<v Speaker 1>that you you probably have a lot of those versus

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<v Speaker 1>somebody who's just hoping will have enough money to live

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<v Speaker 1>in retirement. Obviously there are differences in those needs. But

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<v Speaker 1>I think that if you're thinking about a person's well

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<v Speaker 1>being and how they think about their relationship to money,

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<v Speaker 1>everything is contextual in terms of the quality of their life,

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<v Speaker 1>the quality of their health, educational needs, retirement needs, and

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<v Speaker 1>everybody has those needs. They may just have different quantities

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<v Speaker 1>and different complexities with that with those stages of life.

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<v Speaker 1>But a person who's thinking about retiring at one income

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<v Speaker 1>level is going to have similar life stage issues even

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<v Speaker 1>if they have many more dollars, so the complexity may change.

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<v Speaker 1>And obviously a person with a lot of money has

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<v Speaker 1>a different set of problems than a person who has

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<v Speaker 1>has more modest income, but emotionally and from the way

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<v Speaker 1>they are going through their lives, they're having similar experiences Elliott.

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<v Speaker 1>According to the Council for Economic Education, they do a

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<v Speaker 1>survey of the States. The study found that seventy parents

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<v Speaker 1>experience at least some reluctance to talk to their children

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<v Speaker 1>about financial matters. So how do you become a financial

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<v Speaker 1>grown up? It's a great question in some ways that

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<v Speaker 1>that makes the case obviously for a thoughtful financial advisor,

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<v Speaker 1>because if the mom and dad are having some difficult

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<v Speaker 1>times having these conversations, this is where a good professional

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<v Speaker 1>can engage. You know, one of the things that we

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<v Speaker 1>have to start talking about is the relationship between money

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<v Speaker 1>and and total wellness. And if you look at the data,

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<v Speaker 1>a lot of the stress that comes from divorce, a

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<v Speaker 1>lot of the stress that leads to people calling into hotlines, UM,

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<v Speaker 1>a lot of the reasons that people feel uneasy about

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<v Speaker 1>life can in many ways be tied to their money. Yet,

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<v Speaker 1>people don't tend to think of their financial advisor the

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<v Speaker 1>same way they do as a doctor or a lawyer.

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<v Speaker 1>They think of the financial advisor more as a tactician

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<v Speaker 1>or a strategist to deliver a certain routine a certain return.

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<v Speaker 1>I think if if the good financial advisors that are

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<v Speaker 1>out there have figured out that the way they can

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<v Speaker 1>add a lot of value is actually by broadening the

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<v Speaker 1>way they interact with the families and the people, and

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<v Speaker 1>the opportunity to do that, I think it's fantastic when

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<v Speaker 1>you have parents that need a third party to talk

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<v Speaker 1>to their children about about how to think about money.

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<v Speaker 1>Fifteen seconds left. How do I know when to fire

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<v Speaker 1>my advisor and move on? It's a very difficult question

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<v Speaker 1>to answer in but I would say that the first

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<v Speaker 1>the first indication that you have the wrong person is

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<v Speaker 1>when you get the sense that they're they're trying to

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<v Speaker 1>constantly sell you something and they have a new thing

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<v Speaker 1>to sell you rather than trying to build you a

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<v Speaker 1>long range financial plan for your future. Well, short answer,

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<v Speaker 1>but long on wisdom. Thank you so much. Elliott Wisbloo

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<v Speaker 1>founder and CEO of CEO of High Tower. He is

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<v Speaker 1>talking to us about financial advisors, talking about what you

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<v Speaker 1>should look for in them and more, and we'll hope

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<v Speaker 1>you'll come back soon, Elliott. I'm Caffeine Hay's along with

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<v Speaker 1>pim Fox, and this is Bloomberg