Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're here every day bringing you the latest
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Speaker 1: pm Eastern only on Bloomberg Radio. A little bb king here.
Speaker 1: I'm gonna say it's been an interesting week Jason so far.
Speaker 1: One of the things that we kind of kicked off
Speaker 1: the week was the zero fee band aid was kind
Speaker 1: of ripped off in terms of online trading. Charles Schwab
Speaker 1: t d amor trade eliminating commissions on trade. The investment
Speaker 1: world continues to evolve and get up ended. So here
Speaker 1: were some thoughts on what's going on in the field.
Speaker 1: Only advisory business is Greg Gore. He's senior vice president
Speaker 1: of Wealth Management, a Commonwealth financial network on site with us.
Speaker 1: I come about financial networks twenty nineteen National Conference. The
Speaker 1: world continues to change and change very quickly. What are
Speaker 1: some of the major themes that you guys are hoping
Speaker 1: to really get into at the conference this year. Yeah,
Speaker 1: I think the continued evolution UM to feel only away
Speaker 1: from commission business. I mean, that's sort of you know,
Speaker 1: old news at this point, but it continues to accelerate. UM.
Speaker 1: It's amazing that there's even I feel like that everybody
Speaker 1: isn't feel only at this point considering the environment. Yeah,
Speaker 1: and it's you know, it's not something that we necessarily
Speaker 1: want to push advisors to move to UM. It's something
Speaker 1: that I think, you know, advisors need to move with
Speaker 1: their own pace. And while everybody i think recognizes that
Speaker 1: ultimately that's where most of the industry is going to
Speaker 1: end up UM, it takes time to get there. You know,
Speaker 1: you have a very entrenched UM product manufacturing and distribution
Speaker 1: system that people have you know, used over decades, and
Speaker 1: you don't just restructure that, you know, overnight or even
Speaker 1: over the space of a couple of years. So, you know,
Speaker 1: one of the one of the approaches we take is
Speaker 1: working with advisors to lay out a timeline and a
Speaker 1: path basically to get them there in a very structured
Speaker 1: and measured way that sort of minimizes the disruption to
Speaker 1: their business and their clients. Yeah. Well, and as you
Speaker 1: walk around and talk to people here, you know, a
Speaker 1: couple of thousand people here, as we noted at the
Speaker 1: at the top of the show, what's top of mind?
Speaker 1: And you know, to sort of go down the level
Speaker 1: what's top of mind that they're saying to you, sort
Speaker 1: of filtering up from there from their clients and customers. Yeah,
Speaker 1: I think, you know, in two days into this conference,
Speaker 1: if there was one theme that's that's really obvious to me,
Speaker 1: as I think advisors are really um gravitating towards the
Speaker 1: planning and starting to sort of de emphasize a little
Speaker 1: bit the investment management interesting side of their business. And
Speaker 1: you know, I think Common Wilson is a firm has
Speaker 1: always been very planning centric. But you know, Carol, you
Speaker 1: mentioned um sort of the price wars that are going
Speaker 1: on all around investment costs, and I think, um, you know,
Speaker 1: the extent to which advisors are able to really pin
Speaker 1: their value to the planning and not the cost of
Speaker 1: investments becomes a real differentiator as this whole thing plays
Speaker 1: out going forward, you know, as long as clients look
Speaker 1: at their advisor UM and really recognize the value they're
Speaker 1: bringing apart from just investment management. UM. I think that's
Speaker 1: a very strong tide advince. I gotta think, I gotta
Speaker 1: say in terms of planning, and I know one of
Speaker 1: our guests is going to talk about this little bit
Speaker 1: later on in terms of financial education, but I do
Speaker 1: think are we getting closer to, you know, having people
Speaker 1: out of college really start with a financial plan because
Speaker 1: I think the earlier you start, the better you're going
Speaker 1: to be, especially since you're not going to have a
Speaker 1: lot of you know, retirement pensions from companies that just
Speaker 1: is going away. So I'm just curious are we getting
Speaker 1: better about that, because I think it's important. I think
Speaker 1: there's a number, um, a number of developments there. You know,
Speaker 1: there there's a lot of firms that are trying to
Speaker 1: figure out, I think, how to cater and scale millennial planning. UM.
Speaker 1: You know, the student debt that's a huge story and
Speaker 1: and helping recent grads deal with that. UM. Obviously it's
Speaker 1: an area that you know, sort of traditional financial services
Speaker 1: hasn't paid a lot of attention to. It's very much
Speaker 1: better an asset based model. UM. But but I think
Speaker 1: is this continues to play out in the shift from
Speaker 1: investment management to a more planning centric You're gonna see
Speaker 1: a lot more flat fee arrangements, You're gonna see subscription
Speaker 1: based services. Um. And I think even you know, established
Speaker 1: successful financial advisors are going to look to that market. Um.
Speaker 1: You know, is their business matures, and they've got to
Speaker 1: do a generational shift, right they have to, Right, they
Speaker 1: have to. And the subscription based element is so interesting
Speaker 1: too because you think about how, especially like our kids,
Speaker 1: you know, how they sort of consume content, how they
Speaker 1: consume information, the way that they expect to engage. I
Speaker 1: feel like if you had said to me twenty years ago,
Speaker 1: this is going to be subscription basically, like what, that
Speaker 1: doesn't make any sense. Whereas for the it's incredibly natural.
Speaker 1: And if they can roll that into the way they
Speaker 1: live the rest of their lives, it does field more
Speaker 1: not just holistic, but comfortable in a lot of ways. Yeah,
Speaker 1: I think it's just very consistent with you know, you've
Speaker 1: got a whole generation of folks now or grown up
Speaker 1: with Netflix and grown up with Amazon Prime, and you know,
Speaker 1: everything functions the sharing economy, right, you're doing everything on
Speaker 1: a monthly basis. Yeah, so it's a great entry point. Um.
Speaker 1: And then I think is, you know, these folks progress
Speaker 1: in their careers and they have more income, and their
Speaker 1: their situations get more complex. You know, maybe they migrate
Speaker 1: to a more traditional model over time. UM, but there's
Speaker 1: no shortage of participants that are going to figure out, um,
Speaker 1: how to participate in that market right in in a scalable,
Speaker 1: profitable way. How much do you guys also talk about
Speaker 1: the disruptors, whether it's Facebook, whether it's Google. You know,
Speaker 1: was it Jamie Diamond at the Bloomberg Global Business form
Speaker 1: they were asked. He was asked about like who do
Speaker 1: you keep an eye on? Are you worried about Facebook
Speaker 1: and liber and all that Stuffitely goes, Oh yeah, I
Speaker 1: watch all these guys. How about your community? UM, I
Speaker 1: think you gotta watch every every everyone and everything. Right, UM,
Speaker 1: you know you never really see the one that's going
Speaker 1: to get you, um, no matter how much you watch. UM,
Speaker 1: you know it really UM, fintech all the efforts in
Speaker 1: those spaces, and I think right now, what fintech is
Speaker 1: really focused on is trying to figure out can you
Speaker 1: really scale the financial planning, the investment management. I think
Speaker 1: that's sort of done deal that has a human element.
Speaker 1: It has a human element, and I don't know what
Speaker 1: well you can scale certain aspects of that. Um I
Speaker 1: think ultimately the human interface is always going to have
Speaker 1: a value that people are willing to pay up for.
Speaker 1: And I think especially when it comes to figure out
Speaker 1: the kind of risk somebody can deal with, and I
Speaker 1: think the nuances of that. Thank you, my pleasure. Great.
Speaker 1: Greg Gore is senior vice president of Wealth Management at
Speaker 1: Commonwealth Financial Network. What are our hosts here in Aurora, Colorado.
Speaker 1: It's common Wealth Financial Network the nineteen National Conference. Much
Speaker 1: more to come from here. We're gonna talk about all
Speaker 1: aspects of the financial world, rocking that. It was only
Speaker 1: a matter of time before we heard that. So let's
Speaker 1: get into the business of skiing. As we said, I
Speaker 1: was very excited to just think about skiing when we
Speaker 1: landed here. Rob Katz as CEO and chairman of Veil Resorts.
Speaker 1: He joins us on the phone from not too far
Speaker 1: from here, uh Boulder, Colorado, where it's certainly getting underway
Speaker 1: in terms of getting ready for the ski season. Rob,
Speaker 1: great to have you with Carolin myself. Great to be here.
Speaker 1: Thanks for coming out to Colorado and enjoining us here.
Speaker 1: I know we're excited to be here. So give us
Speaker 1: a sense of what we're going to expect, what we
Speaker 1: should expect from Veil Resorts as we get into this
Speaker 1: season in a meaningful way. What's new and different? You
Speaker 1: just did a big deal. How has the business changed? Yeah,
Speaker 1: I think, um, you know, in a couple of ways. One,
Speaker 1: I think the most thing we're most excited about right
Speaker 1: now is just that, Uh you know, we're starting to
Speaker 1: turn on the snow guns at Keystone right up the
Speaker 1: road here on I seventy in Colorado, and everybody's getting
Speaker 1: excited for another great season. Uh, So we can't wait
Speaker 1: to get that underway. From the company's perspective, yeah, big
Speaker 1: news on a couple of fronts this year. One is
Speaker 1: the Peak Resorts acquisitions, where we added seventeen new resorts
Speaker 1: to our company, which really gives skiers and riders a
Speaker 1: ton of more choices when they buy one of our
Speaker 1: pass products. The other thing that's big news for us
Speaker 1: this year is the Epic Day Path. Historically, we sold
Speaker 1: a season path that really required somebody to ski kind
Speaker 1: of four or more days and got a fifty percent
Speaker 1: off type discount. This year, we actually have introduced a one, two,
Speaker 1: and three day product so that people can get those
Speaker 1: same discounts even if they're only going to ski a
Speaker 1: couple of days for the season. So that's what's got
Speaker 1: us jazz and and help us understand the economics of
Speaker 1: that decision. Is that sort of owing to this scale
Speaker 1: that you have and sort of the volume of people
Speaker 1: you have coming through, how are you able to make
Speaker 1: that work? Um? Well, one of the things is we
Speaker 1: do tell people that to get this great discount like off,
Speaker 1: we want them to make that purchase by around Thanksgiving.
Speaker 1: Uh And and because of that, that gives us right
Speaker 1: much more certainty, allows us to plan make the right
Speaker 1: investments for the season, ensure that we keep right the
Speaker 1: quality at the absolute highest level, and it gives our
Speaker 1: guests the best discount. Yeah, I do want to rob
Speaker 1: you know how many of those season past sales? How many?
Speaker 1: How much of it do you get to really lock
Speaker 1: up early so that you do have that clear visibility
Speaker 1: in terms of spending and what the season is going
Speaker 1: to be like. Uh, in terms of overall sales, is
Speaker 1: it is it. Yeah, it's it's around uh in terms
Speaker 1: of our lip ticket revenue, a little bit under and
Speaker 1: a little bit more in terms of visits. Uh. And
Speaker 1: obviously along with that, right, a big chunk of a
Speaker 1: ski school and retail and rental lodging, right, A while
Speaker 1: of people then, because they've made that commitment, they follow
Speaker 1: through on those plans. And in particular it's because there's
Speaker 1: so much to do with our resorts, right, It's one
Speaker 1: of the things we really pride ourselves on. The skiing,
Speaker 1: of course, is why people come, but it's all those
Speaker 1: other activities that really round out the vacation. How much
Speaker 1: our repeat visitors too as well? And I'm curious, you know,
Speaker 1: if you're able to kind of hold on to somebody
Speaker 1: who comes to one of your resorts and a time
Speaker 1: again year after year, are coming back. Yeah, it's a
Speaker 1: it's a big percentage of our business. Um. And and
Speaker 1: we really look at it two ways, right, there are
Speaker 1: those resorts loyalists, um, and we're very focused on them
Speaker 1: getting them coming back to the same resort year after year.
Speaker 1: Then we have folks though, who what we we kind
Speaker 1: of call samplers, right, no matter how great of an
Speaker 1: experience they have at one of our resorts, they want
Speaker 1: to try something new the next year. And I'm sure
Speaker 1: you guys know of folks that vacation like that, some
Speaker 1: people that go back to the same place, some people
Speaker 1: that always like to try something new. And now with
Speaker 1: thirty seven resorts and sixty resorts on our path, including
Speaker 1: our partners, we really have the opportunity to serve both
Speaker 1: of those clientele right well. And Rob, one of the
Speaker 1: things that's notable I think about this latest acquisition of
Speaker 1: Peak is we're not just talking about sort of the
Speaker 1: high high end that you know the Veils and and
Speaker 1: even Keystone, I know is is not quite as fancy
Speaker 1: as Veil. I've skiped them all, um. But you know,
Speaker 1: back East, especially, you've got some you know, some names
Speaker 1: like Hunter uh and some of the names in Pennsylvania
Speaker 1: as well. So it feels like you're trying to appeal
Speaker 1: to a wider variety of consumers who maybe can't afford
Speaker 1: to hop on a plane and get out to Veil. Yeah. Absolutely,
Speaker 1: I think it's part partly that. I think it's also
Speaker 1: partly that even some of the folks who ultimately might
Speaker 1: take a vacation out west start their skiing experience on
Speaker 1: some of these smaller resorts. We now the name of
Speaker 1: our season path, the Epic Path, and we actually talk
Speaker 1: about a lot of these smaller resorts are where epics begin.
Speaker 1: I had my first experience at Hunter Mountain uh, and
Speaker 1: so we want to make sure that that first key
Speaker 1: experience that people have is a positive one, make it
Speaker 1: accessible UH, and then absolutely start getting them to try
Speaker 1: some of the other resorts. I feel like so many
Speaker 1: people I said, you know, growing up in the East
Speaker 1: Coast or on the East Coast, had their first experience
Speaker 1: at Hunter. Oh totally, yeah, absolutely. I mean I remember
Speaker 1: skiing as at Hunter as a kid, and it was
Speaker 1: lucky enough to come out to Keystone and Veil as well.
Speaker 1: Rob Cats, thank you so much, CEO and Chairman's Board.
Speaker 1: Come see us in New York for sure. Maybe we'll
Speaker 1: come see you at one of your resorts. That they
Speaker 1: are beautiful, I can attest to that. I do want
Speaker 1: to mention SunTrust, by the way, raising its price target
Speaker 1: on Veil resorts today to eight from two forty seven
Speaker 1: to reflect the company's acquisition of Peak Resources. That deal,
Speaker 1: of course closing this week. I got ma months months,
Speaker 1: all right, Well, as we delve deeper into the world
Speaker 1: of investing and really taking care of your money. We're
Speaker 1: delighted to have Sharbri More with us. She is president
Speaker 1: of more Wealth based on the other side of the
Speaker 1: country in Frederick, Maryland, back closer to our home, but
Speaker 1: she's here with us on site at Commonwealth the Nancial
Speaker 1: Network twenty nineteen National Conference. Should very great to have
Speaker 1: you with us. Thank you glad to be here. One
Speaker 1: of the reasons I think Carolin and I were both
Speaker 1: so excited to talk with you is that we spend
Speaker 1: a lot of time on this show and in other
Speaker 1: parts of our lives sort of trying to think holistically
Speaker 1: about our lives. And I think we're at this interesting
Speaker 1: moment even societally culturally, where people are taking a beat
Speaker 1: and saying, Okay, where do I want to be? What
Speaker 1: do I want to do? You know, we're sitting here
Speaker 1: in beautiful Aurora, Colorado, where it's a lot easier to
Speaker 1: have some of those big thoughts, and yet when it
Speaker 1: comes to money, people tend to be very parochial and
Speaker 1: tend to be very um limited maybe in their thinking.
Speaker 1: How do you break people out of that mindset? Yeah,
Speaker 1: that's a great question. So you know, usually when people
Speaker 1: come to speak with us, they think we're going to
Speaker 1: talk about numbers and analysis and research, and certainly we do.
Speaker 1: But a big part of our conversation is about what
Speaker 1: do you want to do, who do you want to be?
Speaker 1: What is important to you? And we like to call
Speaker 1: that research based with a heart, and that heart petis
Speaker 1: is so critical. Right, Like I remember talking to my
Speaker 1: own brother and his wife, and they have their own
Speaker 1: little whiteboard of their financial goals. And sometimes it's a
Speaker 1: new car, sometimes it's a beach house, or sometimes it's
Speaker 1: of course getting the kids to school. It's good to
Speaker 1: kind of have an idea of what someone's priorities are,
Speaker 1: take that into account, and then shape it, help them
Speaker 1: shape what they need to do. Yes, absolutely so it's
Speaker 1: having those tough conversations sometimes during their working years and
Speaker 1: also is their approaching retirement. One of the things we
Speaker 1: found is people don't know how to put their emotions
Speaker 1: in words. Uh. They may say this is what I want,
Speaker 1: but we don't know how important that is until we
Speaker 1: dig deeper. What's the toughest conversation or what are the
Speaker 1: toughest issues that you have to deal with? With some
Speaker 1: of your clients, it's usually when they're approaching retirement. So
Speaker 1: we want them to think about not just the money.
Speaker 1: We've got the money figured out. What we want to
Speaker 1: think about is who do you want to be in retirement?
Speaker 1: What is retirement? What's important? Who's important? What are you
Speaker 1: going to do? But don't you have to do that earlier?
Speaker 1: But I was just saying that to make sure that
Speaker 1: if what they want to be in retirement, they've done
Speaker 1: the planning ten twenty years before, well then that's the
Speaker 1: money part. The emotional pieces more of five to seven
Speaker 1: years before retirement, because that's when they start thinking about it.
Speaker 1: In fact, they haven't thought about it, or they're so
Speaker 1: terrified about it that they put it on the back burner.
Speaker 1: You know. We had a workshop a few years ago.
Speaker 1: Joni Youngworth, one of the managing principles from Commonwealth, came out,
Speaker 1: spoke about forty five of our clients and she ran
Speaker 1: this whole workshop by asking them those tough questions and
Speaker 1: running them through exercises individually and then also as couples
Speaker 1: to help them define what that is. And so the
Speaker 1: response was phenomenal and we still use a lot of
Speaker 1: the questions and exercises that she put them through with
Speaker 1: our clients on an individual basis, and it's been wonderful.
Speaker 1: We learned so much about that. What comes out, aren't
Speaker 1: you I'm like curious, like, what's the kind of conversation
Speaker 1: is it? Like? Uh, like, what does it come down to?
Speaker 1: Boiled out too? So it's again, they can't talk about
Speaker 1: the emotions. So we rephrase this question and we'll ask them, Okay,
Speaker 1: draw a picture for me and show me what life
Speaker 1: looks like five years into retirement, what does life look like?
Speaker 1: Ten years? What does life look like? You're not here,
Speaker 1: And so it's interesting themes come through. They draw pictures,
Speaker 1: they write words, and here's what's common. They care about
Speaker 1: the family, they care about certain causes. I never hear
Speaker 1: about possessions. It's all about time and experiences with the
Speaker 1: people they love. So you have brought your sons into
Speaker 1: your business, I believe, And it's interesting from a personal perspective. Um,
Speaker 1: the gentleman who has helped my wife and me sort
Speaker 1: of manage our money over the years has recently brought
Speaker 1: his son into the business over the past couple of years.
Speaker 1: And it's amazing to me how the perspective changes in
Speaker 1: a lot of ways. How our conversations change tell us
Speaker 1: about sort of bringing your sons in and the perspective
Speaker 1: that that that has brought because obviously, by their nature
Speaker 1: they are younger, and then they're coming at it from
Speaker 1: a slightly different perspective. What have you learned from them? Yeah,
Speaker 1: so it's really interesting. So my sons are Eric and
Speaker 1: Sean and their twenty six and thirty one respectively. They
Speaker 1: come in and they bring an energy to the practice
Speaker 1: that I think is wonderful. But they also bring fresher
Speaker 1: ideas in different ways of looking at things. So sometimes
Speaker 1: if we're stuck and saying where are we going from here?
Speaker 1: Well why not here? And just because we'll think about it,
Speaker 1: baby boomers, we've redefined everything, right, we don't follow the rules,
Speaker 1: We've changed them. I'm a baby boomer. I don't look
Speaker 1: at retirement the same way my parents did. My sons
Speaker 1: don't look at that retirement the same way we do.
Speaker 1: How are they looking at it? What have you learned
Speaker 1: from them in that perspective? Yeah, they're so young, it's
Speaker 1: kind of tough, and they think they're going to work forever.
Speaker 1: Course they've got fourty year careers ahead of them. So
Speaker 1: that's a tough picture for them. But it's interesting that
Speaker 1: you say that this idea of working forever, because I
Speaker 1: do think for baby boomers in general, there was this
Speaker 1: idea of like, I will work until age X, you know,
Speaker 1: and usually it's sixty or sixty five or whatever it's
Speaker 1: going to be, and then there's like something that happens
Speaker 1: and then I am retired, and it's a very strong
Speaker 1: move from A to B. I feel like even for
Speaker 1: folks at our age, like that's changed in terms of
Speaker 1: certainly how we think about what retirement broadly defined looks like.
Speaker 1: It feels like, yeah, absolutely, so instead of defining it
Speaker 1: is I'm retiring at sixty two or sixty five or
Speaker 1: whatever that magic number is, it's more about reinventing yourself.
Speaker 1: What am I going to do next? And it may
Speaker 1: be a career that pays money, it may just be
Speaker 1: something that you really enjoy doing. Um, it may just
Speaker 1: be volunteering. So it's changed. There isn't a defined retirement.
Speaker 1: Retirement is just that's another part of life. This is
Speaker 1: the next stage. Yeah, because I think about, you know,
Speaker 1: going back to school, you could in your retirement because
Speaker 1: you do see education changing where you can come in
Speaker 1: and pop in and maybe take a course. Well, we
Speaker 1: were talking about this with the president of Penn State.
Speaker 1: Once you go to school there, you now essentially have
Speaker 1: an idea college I d for life, and you can
Speaker 1: just pick up a course whenever you want, right, and
Speaker 1: I think you appreciate it more later. So what's your
Speaker 1: advice to somebody? So client comes to you, and you know,
Speaker 1: in terms of planning for their retirement, thinking about it holistically,
Speaker 1: what's your advice. Wow, that's going to be so dependent
Speaker 1: upon them. So really it's more not so much advice,
Speaker 1: but it's more about asking questions. So what are the
Speaker 1: questions somebody should ask themselves and kind of thinking about
Speaker 1: what they need for retirement. So sometimes it's just about
Speaker 1: writing down what your goals are and writing down I
Speaker 1: enjoy doing this, I enjoy traveling, I enjoy volunteering with
Speaker 1: this organization. I enjoy spending time with my family. I
Speaker 1: enjoy spending time with my kids. So start writing those
Speaker 1: things down and thinking about all right, this is important.
Speaker 1: Now let's prioritize it and figure out when you're going
Speaker 1: to do that, because let's be realistic. At some point
Speaker 1: in your life you're physically not capable of doing some
Speaker 1: things that you are when you're younger, So maybe we'll
Speaker 1: prioritize them and help you figure out I'm going to
Speaker 1: do this when I'm younger. I'll go climb much a
Speaker 1: peach you now, and I'll go on a cruise when
Speaker 1: I made so exactly. Yeah, So it's getting to the
Speaker 1: core of what's important. Yeah, I love it, and I
Speaker 1: love the idea of this continued move towards more experiences
Speaker 1: and things that really matter versus stuff. Right, we have
Speaker 1: this conversation about too much stuff out there already great stuff.
Speaker 1: She be More is president of More Well. She's based
Speaker 1: back in Frederick, Maryland. Here with us in Aurora, Colorado
Speaker 1: at the Commonwealth Financial Networks twenty nineteen National Conference. We're
Speaker 1: gonna have more conversations ahead about money, private and public.
Speaker 1: I was gonna say, I love that you brought her sons,
Speaker 1: and because we keep talking about the importance of a company,
Speaker 1: you know, bringing in different voices, diversity of thought. Um,
Speaker 1: those are the companies that are going to be positioning
Speaker 1: themselves for a longer future. Are you going to throw
Speaker 1: me aside so that you have Aggie as your co
Speaker 1: host going forward, were ready to do that with the teenager,
Speaker 1: that would be quite a different show, would be quite
Speaker 1: a different show. Well, it's a lot less private than
Speaker 1: it used to be, and nothing private about the cover
Speaker 1: story of Bloomberg business Week this week a tour diforce.
Speaker 1: I believe it's what they call it. Joel Webber conceived it.
Speaker 1: He's the editor of Business Week, and Heather Pearlberg was
Speaker 1: one of the key people pulling it off. They're both
Speaker 1: back in our Bloomberg Interactive Broker's studio. So Joel set
Speaker 1: this up. I did not conceive this. It was a
Speaker 1: team effort. It was incepted. Uh. They they had. They
Speaker 1: got me though, because they said, uh, something that you
Speaker 1: and I have talked about a lot, which is, do
Speaker 1: you just understand exactly how much private equity is touching
Speaker 1: you Torolheber or you know, average American or not average.
Speaker 1: But and that's sort of like really resonated with me
Speaker 1: because the more that we started thinking about it, it
Speaker 1: was like, Wow, this is an industry that historically has
Speaker 1: meant leveraged buyouts, but in the ten years since the
Speaker 1: financial crisis has no one, no one won the last
Speaker 1: decade quite as much as private equity. So we really
Speaker 1: wanted to kind of like dive into what that meant
Speaker 1: and what's changed. And one of the things that really
Speaker 1: stuck out was a story that Heather Proberb brought to
Speaker 1: us about the influence in Washington. So, Heather, what what
Speaker 1: did you find? Well, these guys are definitely winning in Washington.
Speaker 1: Wouldn't make anyone happy really right now, Elizabeth Warren's ready
Speaker 1: to clip their wings. Uh, she is increasingly getting louder
Speaker 1: and louder. And in the past decade, they've built up
Speaker 1: their lobbying groups, They've they've really mobilized. They've become sort
Speaker 1: of a mature industry, and they have all the key
Speaker 1: people in the right places, Beltway insiders who know how
Speaker 1: to play, and they're doing everything they need to do
Speaker 1: to get their way. And I think one of the
Speaker 1: things that really stuck out with me on this was
Speaker 1: carried interest is one of the places that the private equity,
Speaker 1: private equity industry it makes its money. Right, it's an
Speaker 1: incredibly lucrative loophole effectively, and it's one that's totally legal,
Speaker 1: and uh, it's it's whenever it comes up in d
Speaker 1: c it seems like everyone, even Trump will well you know,
Speaker 1: for a while, was like, yeah, let's let's do away
Speaker 1: with this, and yet that quietly, you know, seems to
Speaker 1: dissipate all the time exactly. So what what did you
Speaker 1: find out on that front? Well, there's such a lot
Speaker 1: of backdoor efforts negotiating private equity on both sides of
Speaker 1: the carried interest on both sides of the aisle, and
Speaker 1: in this case, it was a lot of people, a
Speaker 1: lot of figures who were becoming increasingly more powerful people
Speaker 1: in Trump's orbit. You have Blackstone heads meeting with important people.
Speaker 1: John Gray number two orchestrated the whole Hilton hotel deal,
Speaker 1: meeting with the nuition, all kinds of top economic advisors
Speaker 1: and talking about what this means to private equity, which
Speaker 1: is a lot of money. So Jason, you know, you
Speaker 1: you you know about private equity as much as anything,
Speaker 1: and you were involved in this package. What what did
Speaker 1: you learn from working on it? You know, I thought
Speaker 1: the Washington piece was was really an eye opener for
Speaker 1: me for all the reasons that you guys have just discussed.
Speaker 1: And you know, I do think one of the things,
Speaker 1: as we dug into a hma Parmer and I spent
Speaker 1: some time looking at the returns equation, and you know,
Speaker 1: I think one of the most important things that came
Speaker 1: out to me was this notion that returns may not
Speaker 1: be what they historically have been A and b uh,
Speaker 1: that not all private equity firms are created equal, and
Speaker 1: there are some who have done extraordinarily well. That's why
Speaker 1: the money keeps coming in. You know, that top quartile
Speaker 1: that we hear so much about. They've done extraordinarily well
Speaker 1: and done right by their customers, their clients, big pensions
Speaker 1: and endowments. I also was reminded how much more pressure
Speaker 1: those ultimate investors are putting on these firms as well. Carroll,
Speaker 1: and I have to say one of the things I
Speaker 1: find really interesting in this coverage and I love it,
Speaker 1: and I also just want to put kudos out to
Speaker 1: the whole team who was involved exactly. And Jason has
Speaker 1: written two books on this. So we we love to
Speaker 1: talk about private equity, but I am fascinated by the
Speaker 1: number of billionaires We're not talking about millionaires, billionaires that
Speaker 1: have been minted in this space. And perhaps how private equity,
Speaker 1: you know, for better for worse, has contributed to the
Speaker 1: inequalities that we talk about number because you put this
Speaker 1: on a t from the story, there are more private
Speaker 1: equity managers who make at least a hundred million annually
Speaker 1: than investment bankers, top financial executives, and professional athletes combined. Yeah,
Speaker 1: that's a lot of money. That's a lot of money. Yeah,
Speaker 1: And I think that is one thing that that really
Speaker 1: cemented this for me as well, and how they did
Speaker 1: a great job sort of outlining all of it because
Speaker 1: she's looking at this day to day, and I do
Speaker 1: think ultimately it was one of the driving forces of
Speaker 1: this entire packages. This is why we care. The influence,
Speaker 1: I think is especially notable. And while this certainly isn't
Speaker 1: a valentine to the industry, I think it's a very
Speaker 1: clear eyed look at how in terms of ownership and
Speaker 1: in terms of influence, you cannot ignore this industry, right
Speaker 1: and especially as we move increasingly it feels like to
Speaker 1: to private markets versus public markets. So well, that's that's
Speaker 1: why the industry has really thrived in this in this
Speaker 1: back decade. You know, everyone's searching for yield, and this
Speaker 1: industry is outperforms, you know, like that that is the allure,
Speaker 1: But it comes with some costs sometimes too, and that's
Speaker 1: ultimately what we tried to talk about. Yeah, it was
Speaker 1: a lot of fun to work on. Really appreciate both
Speaker 1: of you joining us today. Joe Webber, editor of Bloomberg
Speaker 1: Business Weekend, Heather Proburg, private Equity reporter extraordinaire, both back
Speaker 1: in our Bloomberg Interactive Broker's studio. You have to take
Speaker 1: over the finance section of magazine. It's a must read
Speaker 1: if you want to understand what private equity is all about,
Speaker 1: how it works. And I'm gonna do a shameless plug
Speaker 1: because my co host has written two books on it,
Speaker 1: so check them out, all right. So, one of the
Speaker 1: things that I've really loved about the conversations we've been
Speaker 1: having today is we're talking to a group of people
Speaker 1: who are really truly taking a holistic view of their finances.
Speaker 1: And I feel like for so long it was such
Speaker 1: a parochial system in a lot of ways that you know,
Speaker 1: you would go in and see somebody and they sort
Speaker 1: of run you through the numbers, be like okay, and
Speaker 1: you'll get a statement, uh next quarter. Katherine Loola is here.
Speaker 1: She's the founder and chief executive offer of Concentric Private
Speaker 1: Wealth even the name sort of gives you that sense
Speaker 1: that there's something new and different. She's here with us
Speaker 1: in Aurora, Colorado at Commonwealth Financial Networks twenty nineteen National
Speaker 1: Comments based back east in Virginia. So give us a
Speaker 1: sense of your approach here, because it does feel a
Speaker 1: little bit different. We have a very unique approach. So, yes,
Speaker 1: we are comprehensive wealth management firm, but our focus is
Speaker 1: one the lens of behavioral advice. So what's really important
Speaker 1: for us is to help walk the client through the
Speaker 1: process of why are they doing what they're doing, ultimately
Speaker 1: what's important to that and helping them get to the
Speaker 1: place where they're understanding what's important to them and then
Speaker 1: aligning their decisions and they're planning and investment strategy with that.
Speaker 1: I love and I tease this that the one question,
Speaker 1: simple question and that people should ask and you say,
Speaker 1: can change the course of their financial future is why yes,
Speaker 1: So give us an idea. So you're sitting down with
Speaker 1: some folks and so what are you specifically kind of
Speaker 1: what's the conversation? Well, when we first sit down with
Speaker 1: anyone coming in, it's really important for us to meet
Speaker 1: the client where they're at because it might be something
Speaker 1: that they're going through a period of transition. It kid
Speaker 1: going after college, maybe a job change. We need to
Speaker 1: make sure that we're first hackiing, not so that the
Speaker 1: client feels safe. Once the client can start feeling safe,
Speaker 1: then we can really help them start exploring. You know,
Speaker 1: all of us when we were at some point or
Speaker 1: another for many of us, when we graduated from school,
Speaker 1: whether it was college or getting our masters, and something
Speaker 1: that was often when our education and who we were stopped.
Speaker 1: There wasn't a coach or a parent or multiple other
Speaker 1: types of leaders saying consider this, consider that I see
Speaker 1: that opportunity in you. What we did do is often
Speaker 1: sign up for a job, and then that job turned
Speaker 1: into some type of promotion, and then we began having
Speaker 1: responsibilities and obligations, and all of a sudden, we're on
Speaker 1: this back and we're subconsciously following this track forward. But
Speaker 1: often it has nothing to do with what that fire
Speaker 1: is inside of us. From a financial perspective, why this
Speaker 1: is really important is because our decisions are all based
Speaker 1: on this lifestyle that we've built up. But if that
Speaker 1: lifestyle isn't about like who we are as a person,
Speaker 1: then how are we possibly going to have financial independence.
Speaker 1: And one of the other questions you asked, which I
Speaker 1: love and you have young kids, is what would your
Speaker 1: kids do? Exactly tell us what that looks like and
Speaker 1: how people react. Because I read that and I thought,
Speaker 1: oh wow, that's a totally different mindset. Where did that
Speaker 1: come from and what does it lead to? Well, I'm
Speaker 1: the mom of three little kids. I have a six
Speaker 1: year old and almost five year old boy and a
Speaker 1: daughter who just turned three, and my goodness, those kids
Speaker 1: have really helped me see myself more clearly. But also
Speaker 1: to simplify you know, kids often have the answers to everything,
Speaker 1: and we adult them so quickly in life. And if
Speaker 1: you just watch a kid, they go out and play,
Speaker 1: or they explore, or they want to read or study,
Speaker 1: because that's what's the side of them. They have that
Speaker 1: curiosity and we try to get them to fit in
Speaker 1: this box, but that creativity is slowly taken away and
Speaker 1: we then don't necessarily to see who we are. So
Speaker 1: when we're looking at kids, it's really about helping them
Speaker 1: explore who they are, having fun, enjoying what they're doing.
Speaker 1: I'm a big believer that if we can follow what
Speaker 1: our strengths are if we can follow what's important to us,
Speaker 1: then the finances come with that, because often we are
Speaker 1: going to be simplifying the things that we have in
Speaker 1: our life. Now, we still might want to have that
Speaker 1: big house, but if we want that big house, great
Speaker 1: that's where we should be spending our money. Or if
Speaker 1: we really want to travel, then great, let's go spend
Speaker 1: a ton of money there, or a ton of money
Speaker 1: on travel. But what we don't want to be doing
Speaker 1: is spending money and investing money and purposes that have
Speaker 1: nothing to do with actually what's fulfilling us, because at
Speaker 1: the end of the day, happiness comes from fulfillment. It's
Speaker 1: something that's more fleeting. We can't just search for financial independence.
Speaker 1: We can't just search for happiness because at the end
Speaker 1: of the day doesn't have any type of foundation. So
Speaker 1: we really need to build on that foundation, and the
Speaker 1: finance has come with that. It sounds so obvious and
Speaker 1: I love it, but I bet there's so many people
Speaker 1: you sit down with and you've got to kind of
Speaker 1: get them to that position, right like, Okay, this is
Speaker 1: what makes you happy, so then this is where you
Speaker 1: should focus on or what you should focus on. It's
Speaker 1: super hard, and honestly, being a mom now has helped
Speaker 1: me become much more empathetic to how long this process takes.
Speaker 1: This is not something that we can just Okay, turn
Speaker 1: on the switch and everything is going to be perfect.
Speaker 1: It's really about taking step after step after step. So
Speaker 1: it might be first in terms of how you're blocking
Speaker 1: out your schedule. It might not have anything to do
Speaker 1: with your finances, but beginning to find places in your
Speaker 1: day to day that are more you. Maybe it's a
Speaker 1: place to journal, maybe it's trying a new activity, and
Speaker 1: then slowly but surely, it might be taking that bigger
Speaker 1: step of saying, all right, maybe we're going to actually
Speaker 1: take this type of vacation, or maybe I'm going to
Speaker 1: actually consider something like a career pivot, or maybe move
Speaker 1: out of the neighborhood that I thought was so important
Speaker 1: to me. But at the end of the day, that
Speaker 1: was just what I thought I was supposed to be doing,
Speaker 1: because I'm making a certain amount of money where I
Speaker 1: have a certain type of position and I've made it
Speaker 1: and that's where I'm supposed to be. So it's a
Speaker 1: long process, but at the end of the day, really
Speaker 1: focusing on taking each small step and recognizing the same
Speaker 1: thing happens with kids. Well, and I love the fact
Speaker 1: that you sort of try to get to people sort
Speaker 1: of where they are, because we all show up. I
Speaker 1: would imagine when we speak to someone like you with
Speaker 1: these sort of hang ups about money or these sort
Speaker 1: of conceptions about money that we grew up with, you know,
Speaker 1: either based on our parents, the way we grew up
Speaker 1: our financial situation, or as you say, like maybe things
Speaker 1: you even learned in college must be hard though to
Speaker 1: sort of we only have about thirty seconds left, but
Speaker 1: to break people maybe and to get them to think
Speaker 1: in a different way. So yes, we think of it
Speaker 1: more is about pulling someone out, building the fire inside
Speaker 1: of them, rekindling. Interesting, so it's not about so much
Speaker 1: breaking someone down as it's about lighting that fire. And
Speaker 1: when you start lighting fire, we've all seen a fire
Speaker 1: making smores or whatever. It builds if you give it attention.
Speaker 1: And what we're trying to do is give people the
Speaker 1: opportunity to give themselves attention, and then the finances will
Speaker 1: align with that. It's like a yoga financial likely that
Speaker 1: I mean that time totally. Um, thank you so much,
Speaker 1: what a pleasure Kathine Leola. She's founder and chief executive
Speaker 1: officer of Concentric Cost Concentric excuse me, Private Wealth, based
Speaker 1: in Virginia. On site at Combe Financial Networks twenty nine
Speaker 1: National Conference in Colmar bad You are listening to Bloomberg Radio.
Speaker 1: So financial literacy, financial inclusion. It is a topic we've
Speaker 1: been talking about a lot here on Bloomberg Radio. At
Speaker 1: Bloomberg Global Business Forum, that was one of the topics
Speaker 1: that got highlighted. Chuck Olsen has been working with companies
Speaker 1: and others to provide financial education for employees. I love
Speaker 1: this topic. I think it should be everywhere. Chuck is
Speaker 1: CEO and wealth advisor at Calm Water Financial Group based
Speaker 1: in Norfolk, Nebraska. Right, that's Nebraska. I know, I know,
Speaker 1: I know, I know. I haven't written down. I'm like,
Speaker 1: wait a minute, he's outside with us at Commonweal Financial
Speaker 1: Networks twenty nineteen National Conference. I have to say this
Speaker 1: is near and dear to me because I think we
Speaker 1: really dropped the ball in t teaching people about what
Speaker 1: they need to know in terms of kind of financially
Speaker 1: getting themselves set. I think we really have a big gap.
Speaker 1: Tell us about specifically what your company is up to
Speaker 1: we've got a lot of different things. Obviously we have
Speaker 1: just personal wealth management with personal clients and things. But
Speaker 1: you know, we did the four oh one case. We
Speaker 1: were the advisors on four one ks for many, many years,
Speaker 1: and and over time we just felt that there was
Speaker 1: this literacy need that was out there, and so we
Speaker 1: would go out and we would what was missing specifically,
Speaker 1: you know, specifically it was um just connecting basic information.
Speaker 1: At first, it was basic information about how to invest,
Speaker 1: how to have your money invested in a four oh
Speaker 1: one K, the idea of having an emergency fund, you know,
Speaker 1: not relying on the credit card. And there's a lot
Speaker 1: of people who are really good at sales who think
Speaker 1: that if you can afford a five a month car payment,
Speaker 1: you should buy the five all month car, And just
Speaker 1: the whole idea of staying away from debt, saving for
Speaker 1: the rainy day with an emergency fund, and understanding short
Speaker 1: term savings versus long term savings. And for many of
Speaker 1: us it seems very natural and and fairly simple, but
Speaker 1: for many many people it was just very difficult from
Speaker 1: them put all of that stuff together. And so the
Speaker 1: literal the literacy that we saw went from literacy needs
Speaker 1: went from just educating that, hey, you should be putting
Speaker 1: money to your four oh one K, to hey, you
Speaker 1: need to understand all of your company's benefits and you
Speaker 1: to have consultants in there that actually go back to
Speaker 1: the companies and say, hey, this is gonna cost you
Speaker 1: anymore to add this benefit, that benefit, or for a
Speaker 1: little bit more help your teammates or help your employees
Speaker 1: out by offering these types of benefits. Now, we don't
Speaker 1: want to be in there, our our company doesn't want
Speaker 1: to be in there and be the four oh n
Speaker 1: K provider, be the insurance representing insurance company, because I
Speaker 1: believe there's a conflict of interest. So we come in
Speaker 1: ask consultants, and then we have a lot of meetings
Speaker 1: that we make mandatory. We will we will not come
Speaker 1: on to some of these companies unless they make our
Speaker 1: meetings mandatory to introduce the program because we've all been
Speaker 1: there before. Hey, come to this financial planning seminar and
Speaker 1: learn about how to get into a budget. You know,
Speaker 1: may people show up to that deal zero. So companies
Speaker 1: have to buy into this deal and they have to
Speaker 1: come in and be willing to pay for our services.
Speaker 1: Uh and and and our advisors to come on site
Speaker 1: so our advisors are not trying to sell anything as
Speaker 1: a way of being compensated, the companies pay our advisors bills.
Speaker 1: We go in there um and we do what we
Speaker 1: call the six key areas of wealth management, and we
Speaker 1: teach everything from tax planning to saving for the rainy
Speaker 1: day and budgeting, and also providing attorneys on site to
Speaker 1: get everybody's legal documents done at discounted prices, and then
Speaker 1: the attorneys reach back out UH to HR with or
Speaker 1: they actually provide the the employee a list of how
Speaker 1: they should have their beneficiaries designated based on their wills
Speaker 1: and things. So a lot of this stemmed from just
Speaker 1: basic let's get into your four oh one K to
Speaker 1: all of a sudden, you need to understand all your
Speaker 1: benefits that everybody has available to you, and let's get
Speaker 1: out of this debt issue and living paycheck to paycheck
Speaker 1: and let's dream big. And I had tons of stories
Speaker 1: about how these people have living paycheck to paycheck, never
Speaker 1: ever thought they could be a millionaire yea, and that
Speaker 1: whole concept and showing them how to do it and
Speaker 1: showing the time value of money and being able to
Speaker 1: get them from living paycheck to paycheck and all of
Speaker 1: this and having arguments at home to having this dream
Speaker 1: together for a husband and wife, for partners out there
Speaker 1: to dream about how they can be independently wealthy. And
Speaker 1: so we've only got about a minute left. But our
Speaker 1: companies buying into this because I feel like we are
Speaker 1: huge beneficiaries of a company that is very forward thinking
Speaker 1: about all of this. But for a smaller company, you know,
Speaker 1: they may be thinking, look, I can't afford this. I
Speaker 1: I want to do this, but but I really can't.
Speaker 1: How do you get them over the hump? The companies themselves, Yeah,
Speaker 1: we we've always talked about the costs are going to
Speaker 1: be less than one halftime FDA and roughly that's kind
Speaker 1: of what it's so, so you bring on an entire
Speaker 1: team to help out and less than one half of
Speaker 1: a full time employee and you're not paying us you know,
Speaker 1: benefits and things like that. But our advertising is really
Speaker 1: word of mouth. Our company has boomed in the last
Speaker 1: eight years because one company talked to another and goes, you,
Speaker 1: guys aren't doing the calm water program, And they go,
Speaker 1: what's the calm water program? And they start looking up
Speaker 1: and then we get phone calls and that's how we've
Speaker 1: been we have You know, we're in northeast Nebraska. That's
Speaker 1: not New England as Nebraska for people. A second time
Speaker 1: I had to explain that to somebody today an he
Speaker 1: is not in New England, but she doesn't get out
Speaker 1: of New York. Right, that's unfair. But the whole idea
Speaker 1: of we've boomed to work with fifty different companies outside
Speaker 1: of Nebraska in the last eight years, and some of
Speaker 1: them Fortune five companies, and we bring on other commonwealth
Speaker 1: advisors around the area to help us out in those areas.
Speaker 1: Come back in the future because I would let to
Speaker 1: continue this conversation. I love to do that. Yeah, thanks
Speaker 1: for having really really interesting chuckles and CEO and wealth
Speaker 1: advisor for Calm Water Financial Group. The even just love
Speaker 1: the name calm Water. I'm a sailor. We like Calm
Speaker 1: Water a journal. Yeah, but you me drive Oh no, no, no,
Speaker 1: no home all night please, I'll do the right rivel.
Speaker 1: Excuse me, I want to drive. Just drive. The questions
Speaker 1: get drying. This is the drive to the globe community. Thanks.
Speaker 1: We'll try us down on Bluebird Radio. All right, everybody,
Speaker 1: time for the drive to the clothes, the name familiar
Speaker 1: to our audience and nice to be on his home
Speaker 1: away ter Brad McMillan is with US Chief Investment Officer,
Speaker 1: Managing Principal at Commonwealth Financial Network one point excuse me,
Speaker 1: hundred sixty one billion in assets under management based in Waltham, Massachusetts,
Speaker 1: on site with us at Commonwealth Financial So we're like
Speaker 1: national conference. It's like we just walked into your living room.
Speaker 1: We're expecting like a cheese plate or something. One point
Speaker 1: six billion in assets? Wait, what happened? What happen here?
Speaker 1: Bad day in the market. Actually it's a pretty good
Speaker 1: day of the markets. But what a week, What a
Speaker 1: couple of weeks it's been, uh in terms of volatility,
Speaker 1: concerns about macroeconomic growth. What's a smart conversation we should
Speaker 1: be having right now with investors? I think the real
Speaker 1: conversation is this is kind of a wake up call.
Speaker 1: You know, maybe we're getting to the end of the cycle.
Speaker 1: I still think we've got a little ways to go,
Speaker 1: but now as a wake up call to look at
Speaker 1: this risk and say does this upset you? And if
Speaker 1: it does, we should talk about your portfolio because we
Speaker 1: might have some more stormy weather coming on. And so
Speaker 1: as you sort of talked to the couple of thousand
Speaker 1: folks that are here, is their mood optimistic, cautious? They're
Speaker 1: obviously hearing from their clients, uh every day. How did
Speaker 1: they arrive here in Colorado? What what was their state
Speaker 1: of mind? I think everybody still feels good for the
Speaker 1: most part. Everybody still sees growth, everybody still sees good
Speaker 1: things ahead. But at the same time, there's no doubt
Speaker 1: that there are more and more clouds. And that's what
Speaker 1: I think we're talking about, is what are these clouds mean?
Speaker 1: Is it just a squall that's gonna blow over or
Speaker 1: is it going to get into something worse? And that's
Speaker 1: really the question I always wondered too, Brad. Here we are,
Speaker 1: what ten years out, longest economic expansion on record. We
Speaker 1: still continue to see financial markets, certainly on the equity side,
Speaker 1: move higher, other asset classes as well, bond market, you know,
Speaker 1: rates still very very low. How do the clouds of
Speaker 1: today compare with what we've seen post financial crisis, because
Speaker 1: we've had kind of mini crises along the way, and
Speaker 1: that's a that's a great, great way to phrase the question, Carol,
Speaker 1: I mean, the question you're asking when you will could
Speaker 1: say is it going to get bad? The lurking question
Speaker 1: is do we have another two thousand and eight coming?
Speaker 1: And I don't think we do because we simply don't
Speaker 1: have the kind of imbalances that we had then. That
Speaker 1: wasn't just a market downturn, It wasn't just a recession.
Speaker 1: It was a crisis. It was a potential collapse of
Speaker 1: the financial system, and that's not in the cards right now.
Speaker 1: So if you're looking for a comparison, it might be
Speaker 1: more like two thousand. We'll have a recession, a medium recession,
Speaker 1: maybe a mild recession, and markets will react, But even there,
Speaker 1: I don't think we're going to see the same kind
Speaker 1: of pullback we did then. With interest rates where we
Speaker 1: are right now, there's a lot of support for valuation levels,
Speaker 1: so it doesn't Yes, it won't be fun, but we're
Speaker 1: not looking at away unless you're an uber or we
Speaker 1: work or exactly right. Well, I want to take you
Speaker 1: a step further on that, because I do wonder with
Speaker 1: the financial crisis, you know, still relatively freshened people's memories
Speaker 1: and and having a lot of wealth that just evaporated,
Speaker 1: you know, back in uh oh eight and oh nine,
Speaker 1: do you feel like your colleagues here are having different
Speaker 1: sorts of conversations about sort of battening down the hatches
Speaker 1: to sort of make it through even if it's milder
Speaker 1: on a relative basis. Are they making different decisions given
Speaker 1: that that's still in the back of their minds, even
Speaker 1: knowing what you just said about the the lack of severity,
Speaker 1: Maybe this time around they are making different decisions because,
Speaker 1: first of all, you know it can be worse, even
Speaker 1: if you don't think it will be, you know that
Speaker 1: possibility can happen. Second of all, clients are ten years older,
Speaker 1: you know, so somebody who was thirty five or forty
Speaker 1: five ten years ago, now they're forty five to fifty five,
Speaker 1: and that's a very different place to be looking at
Speaker 1: these kind of draw downs. You know, maybe you could
Speaker 1: legitimately say I don't care ten years on, it's harder
Speaker 1: to say that. I mean, in general, I think there's
Speaker 1: a greater appreciation for risk and avoiding the downturn, right So,
Speaker 1: I think, you know, acid preservation is a conversation and
Speaker 1: topic we don't talk enough about. Totally agree. In fact,
Speaker 1: I wrote a book on just that, because I think
Speaker 1: that's the thing we really need to be talking about
Speaker 1: right now. People are getting older boomers. They don't have
Speaker 1: the time right they don't have the time right. Well,
Speaker 1: and I do what what what? I also want to
Speaker 1: ask you, because you know you come to this it
Speaker 1: really is a scientist in a lot of ways, Like
Speaker 1: you understand the numbers underneath it, a lot of where
Speaker 1: we're going from a tech Yeah. I mean you've got
Speaker 1: an M. I. T. Background here among your your several degrees.
Speaker 1: And I do wonder how you look at the world
Speaker 1: of advice right now with that sort of scientists hat on,
Speaker 1: because I feel like we're having this discussion. We've been
Speaker 1: having it all day today, we have it seemingly every day,
Speaker 1: that balance between using technology to your advantage but also
Speaker 1: not forgetting the human How do you balance that as
Speaker 1: you look across the Commonwealth universe. I think technology is
Speaker 1: a tool, and I think to the extent that we
Speaker 1: treated is more than that, we're doing ourselves a disservice.
Speaker 1: I mean, this this business is all about people. It
Speaker 1: doesn't the investing is there to serve somebody's ability to retire,
Speaker 1: to pay with their grandchildren and but likewise with markets,
Speaker 1: I look at markets as a human endeavor. There's a
Speaker 1: want to talk about how things are different this time.
Speaker 1: It's still people buying and selling. Yes, there may be
Speaker 1: automated tools, but it's still people programming those tools. I
Speaker 1: don't think things change for everybody. Things people saying it's
Speaker 1: different this time, I don't think it is. Yeah. One
Speaker 1: of the things I want to ask you because in
Speaker 1: the magazine this week we have a deep dive into
Speaker 1: the world of private equity, and the private equity world
Speaker 1: is looking to kind of open up its investment world
Speaker 1: to more retail investors. I think you know down the road, Brad,
Speaker 1: what do you think are the asset classes that some
Speaker 1: of the investment advisors would like to open up more
Speaker 1: freely to some of their clients, and you think would
Speaker 1: be a good thing. Well, I think there is a
Speaker 1: lot of There is a lot of advisor interest in
Speaker 1: private equity, and I think the argument there is you're
Speaker 1: going to get healthy returns. People. People aren't saying, oh,
Speaker 1: we're gonna get returns. They figure we'll be able to
Speaker 1: match public market returns with less volatility. And I think
Speaker 1: that's a very attractive idea. And that's actually what's behind
Speaker 1: a lot of products coming out. You know, it's very
Speaker 1: much the risk aversion that you were talking about, Carol.
Speaker 1: We're gonna give you the returns you need, but we're
Speaker 1: going to do it with less risk. The problem is this,
Speaker 1: if you look at some of the assets, and I'm
Speaker 1: going to pick on private equity because you mentioned it,
Speaker 1: it's very hard to value those assets to the lack
Speaker 1: of volatility if you you can't look behind the curt
Speaker 1: to what extent is that an illusion and if you
Speaker 1: assume everything is going to come back right? But I
Speaker 1: do wonder about investors, you know, individual investors missing out
Speaker 1: on the opportunities in those more private markets, you know,
Speaker 1: versus what we're seeing in the public markets. Just got
Speaker 1: about forty seconds left, and I think that's a legitimate concern.
Speaker 1: But when you look at well, just to take a
Speaker 1: step back, where the private markets the valued. We work
Speaker 1: to go back to your earlier thing at whatever it
Speaker 1: was valued at. Now it's valued at a third of
Speaker 1: that or West or those private markets. So smart correct.
Speaker 1: Ditto with Luber. I don't think you can assume private
Speaker 1: markets are more efficient. I think we're seeing a lot
Speaker 1: of the efficiency of the public markets right now as
Speaker 1: these uh as these names come public peloton. I think
Speaker 1: you're really interesting and think about whether it was Steve
Speaker 1: Schwartzman and some others right in terms of the private
Speaker 1: equity world saying that the capital markets the public market.
Speaker 1: James Gorman made that point to us from Morgan Stanley
Speaker 1: as well. What a treat to catch up with you,
Speaker 1: Brad McMillan, Chief Investment Officer, Managing Principle of Commonwealth Financial Network.
Speaker 1: This is his party, cozy and a sweater out here.
Speaker 1: I don't know, very comfortable. It's like he's going to
Speaker 1: go on a hike and then come back and maybe
Speaker 1: sit by the fire, you know, you know, pour out
Speaker 1: some bromides for people about the about the market. All right, great,
Speaker 1: catch up with the exactly. I hope you'll hope you'll
Speaker 1: join me for whiskey and bromides. Absolutely, This is Bloomberg.
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