Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to Bloomberg
Speaker 1: Business Week with Carol Masser and Tim Stenovek on Bloomberg Radio.
Speaker 2: All right, everybody, Carol Masser along with Matthew Miller Matt
Speaker 2: of course in for Tim here in our Bloomberg Interactive
Speaker 2: Broker Studio.
Speaker 1: What nothing, Okay, I'm excited with that we finally got
Speaker 1: the correction. You know, Adam Johnson used to always say
Speaker 1: the pause that refreshes and oh yeah, correction on the
Speaker 1: S and P five hundred. Listen.
Speaker 2: Markets don't just go up, up, up right like you
Speaker 2: know that, And I would still argue, I'm not an expert,
Speaker 2: but just watching markets and market cycles that markets go up,
Speaker 2: markets go down, and there is a point where you
Speaker 2: want to see some of the fluff taken out of
Speaker 2: especially after.
Speaker 1: A tremendous though. Yeah, stocks always go up.
Speaker 2: I mean, yeah, go back right, five years, ten years,
Speaker 2: I mean it's yeah.
Speaker 1: Twenty years, fifty years.
Speaker 2: Exactly, exactly. All right, folk, let's talk about about what's
Speaker 2: going on in the market, because we have seen retail
Speaker 2: investors pour about seven point three billion into equities in
Speaker 2: the week through Wednesday.
Speaker 1: I was thinking about that as well. See we you've
Speaker 1: got all these on Wall Street, although I will say
Speaker 1: they still have the strategists. If you type in SPX
Speaker 1: index A n R you can see Lou Wang's survey
Speaker 1: of the biggest Wall sreat strategists. It's fantastic work. And
Speaker 1: we're still looking at an average year end price target
Speaker 1: of sixty four seventy nine.
Speaker 2: We're at fifty five twenty one on the SMP.
Speaker 3: Yeah.
Speaker 1: That's a move up, all right, fourteen percent move up?
Speaker 2: Yeah, And I will say these retail investors, they were
Speaker 2: boosting exposure to Tesla. This is coming from mlo A
Speaker 2: Global Quantity, Quantitative and Derivative Strategies over JP Morgan. Let's
Speaker 2: see if that's the case with the clients of our
Speaker 2: next guest with us as Tina Hurley, head of Planning
Speaker 2: an ultra high net worth solutions over at Citizens Wealth,
Speaker 2: joining us from Johnston, Rhode Island. Tina, good to have
Speaker 2: you here with Matt and myself. So I am curious
Speaker 2: what's your client's mood right now and sentiment. Are they
Speaker 2: looking to put more money to work or are they
Speaker 2: in kind of a risk off type of mood?
Speaker 4: Yeah?
Speaker 3: Well, hey, thanks for having me appreciate the time today.
Speaker 3: You know, I think you know, in general, when we're
Speaker 3: working with our clients, we're really focused on their unique
Speaker 3: goals and so some are and some are not right,
Speaker 3: So it depends on what's going on with that particular client,
Speaker 3: what's going on with their families, and our advisors are
Speaker 3: really taking the lead from the client in terms of
Speaker 3: their goals and creating a well strategy that's appropriate for them.
Speaker 1: All right, So I guess there's you don't have an overview,
Speaker 1: like an average what your clients are doing.
Speaker 2: But you don't do you don't tell people like, hey, listen,
Speaker 2: if you really like this name, which you have liked
Speaker 2: for a year or two, this is an opportunity to
Speaker 2: get it, you know, Like I am curious if you
Speaker 2: know that in this environment, is is it opportunistic? I mean,
Speaker 2: is it investible? Is it an investable market? In your view?
Speaker 3: Well, here's what I would say. In our business, we're
Speaker 3: investing for the long haul. So as I was listening
Speaker 3: to you guys, you were talking about the market always
Speaker 3: goes up, whether it's ten years, twenty years, one hundred years,
Speaker 3: and so that's what we're looking at is really making
Speaker 3: sure that we're doing what's best for our clients in
Speaker 3: the long term.
Speaker 1: Yeah, I mean that's exactly what I was thinking. If
Speaker 1: you're in for another ten years, I probably won't retire
Speaker 1: for twenty, right, So I guess it can't be a
Speaker 1: bad point to buy when the market is dropped ten percent. Now,
Speaker 1: if you have a shorter window, if you're looking at
Speaker 1: a few years, or if you're retiring soon, what do
Speaker 1: you think about rates at this level?
Speaker 3: Well, you know, I think that's a variable. You know,
Speaker 3: all of our advisors are really trying to balance. Again,
Speaker 3: when we're leading with planning, we're thinking about the long
Speaker 3: term goals and balancing rates of across the industry, whether
Speaker 3: that's in the market or it's in a cash position.
Speaker 3: So it's important for us, I think, to take a
Speaker 3: step back and really spend the time necessary to understand
Speaker 3: what those clients' long term goals are, whether it's you know,
Speaker 3: an interest rate, interest that the client has, or it's
Speaker 3: really just achieving that goal.
Speaker 1: Let me ask it. Let me ask though about you know,
Speaker 1: I get that everyone has different investment horizons, and everybody
Speaker 1: has different risk aversion, and that you deal with really
Speaker 1: a diverse clientele, but in general, right, if you look
Speaker 1: at expectations going into this year, you know post November,
Speaker 1: the rocket launch that we had when Trump won, and
Speaker 1: what we're seeing develop now, how do you think that
Speaker 1: turned out and where do you think it's going.
Speaker 3: Well, Listen, I'm not going to predict markets, That's not
Speaker 3: what I do. But I will tell you we're going
Speaker 3: to stay in it for the long haul with our
Speaker 3: clients over a period of time, make sure that they
Speaker 3: are invested appropriately to achieve their goals.
Speaker 2: So one thing I did want to ask you, because
Speaker 2: I know you guys have done some research about women
Speaker 2: in particular and the Great Wealth Transfer. But before I
Speaker 2: ask you that, is there anything that you've noticed with
Speaker 2: your clients when it comes to men versus women, how
Speaker 2: they deal with volatility, how they deal with risk or
Speaker 2: risk off in this kind of environment. I'm just curious
Speaker 2: if there's any trends that you've noticed.
Speaker 3: Yeah, you know, actually, yeah, thanks Carol for asking that,
Speaker 3: because you know generally what we're seeing from women and
Speaker 3: this is really you know, embedded within the survey that
Speaker 3: we did, the risk aware and so they are thinking
Speaker 3: about stability, They do think about prioritizing caring for their children,
Speaker 3: and so as we're working with them and developing a
Speaker 3: financial plan or an estate plan, we're really thinking about
Speaker 3: the investments that match that priority for that unique individual.
Speaker 3: But in general, women do lean more towards stability.
Speaker 1: What kind of you know? I was talking about this
Speaker 1: wealth transfer is Sally crawlcheck a couple months ago. I
Speaker 1: thought it was fascinating because, I mean, how much money
Speaker 1: are we talking about here? I've heard ed Yard Denny
Speaker 1: estimate that the baby boomers have like seventy five trillion
Speaker 1: dollars in assets. So how big is this, Tina, And
Speaker 1: how much do you expect to end up? This is
Speaker 1: something I thought was interesting from Sally's perspective. How much
Speaker 1: do you think is going to end up in the
Speaker 1: hands of women as opposed to men?
Speaker 3: Yeah, great question, Matt. You know, overall, I think we're
Speaker 3: seeing that one hundred and twenty four trillion dollars transitioning
Speaker 3: now through twenty forty eight.
Speaker 1: One hundred and twenty four trillion dollars.
Speaker 3: Brillion trillion, Yeah, thirty four trillion is really transitioning to women.
Speaker 3: And it's transitioning to women because you think about, first
Speaker 3: of all, women outlive men. Right, So you've got this
Speaker 3: this sort of predeceased situation where you've got a widow
Speaker 3: that will receeve thirty four trillion dollars, and it's very
Speaker 3: significant and it's a huge opportunity. You know, the way
Speaker 3: we look at it is, this is our opportunity to
Speaker 3: really dig deep. You know, when we lead with planning,
Speaker 3: we're doing really deep discovery. We better educate those women
Speaker 3: because they're not quite confident yet. We've really got to
Speaker 3: work on making sure that we're empowering them. These are
Speaker 3: going to be the recipients of thirty four trillion dollars,
Speaker 3: by the way, in the next five years. So of
Speaker 3: that one, twenty four, thirty four trillion is moving to
Speaker 3: women in by twenty thirty. It's huge, and it's a
Speaker 3: huge opportunity for us to empower these women to be
Speaker 3: able to take control of their financial futures.
Speaker 2: Tina, who are these women? Because I feel like this
Speaker 2: is a conversation I had I think years ago. I
Speaker 2: remember actually Don Strassheim, if you remember from I think
Speaker 2: it was Meryl and he used to talk used to
Speaker 2: talk about that he actually took his wife to an
Speaker 2: investment advisor that she felt comfortable with. But this is
Speaker 2: I'm going to date myself like thirty years ago. So
Speaker 2: who are these women that you know.
Speaker 1: Well, a lot of times they're picking new investment advisors.
Speaker 1: This they are this is an issue, right, So you're
Speaker 1: going to see a lot of that money, those huge numbers,
Speaker 1: Tina that you're talking about, move right.
Speaker 3: That's right, that's right, which is which is frankly, why
Speaker 3: the advisor's role in this is so critical.
Speaker 1: They have to be.
Speaker 3: Engaged with both parties now, now more than ever. They
Speaker 3: need to be making sure that these women are comfortable
Speaker 3: and gain confidence. So it might mean that these advisors
Speaker 3: really need to spart start spending time educating women on
Speaker 3: basic financials or you know, when they are still married
Speaker 3: and the husband hasn't passed yet, make sure both are
Speaker 3: at the meeting so they're talking to both people and
Speaker 3: they really understand the depth of that relationship, so that Matt,
Speaker 3: they don't move when that husband deceases. You know, at
Speaker 3: the end of the day, this is about making sure
Speaker 3: that a woman feels confident at the table and comfortable
Speaker 3: talk about our finances. You know, when we did that survey,
Speaker 3: eighty four percent of the women who responded, are still
Speaker 3: not confident about money matters, and so we really have
Speaker 3: to embrace this moment and dig in and really make
Speaker 3: sure that we are spending time not only with the
Speaker 3: women but with their children, because that ends up being
Speaker 3: one of the top three priorities of women when they're
Speaker 3: thinking about financial future.
Speaker 2: All right, well, good to spend some time with you,
Speaker 2: Tina Hurley. She's head of planning an ultra high networth
Speaker 2: solutions over at Citizen Wealth, joining us from Rhode.
Speaker 1: I hope also that this younger generation of women, and
Speaker 1: I think for sure is going to be much more confident,
Speaker 1: you know, than previous generations.
Speaker 2: I think so. I think women are in some way.
Speaker 1: I'm more comfort than in my future because my wife
Speaker 1: has taken over our finances.
Speaker 4: She's going to take care of you.
Speaker 2: I wanted to get to a story out from the
Speaker 2: Business Week team. Donald Trump's promise to eliminate taxes on
Speaker 2: tips and overtime pay has raised concerns among tax experts,
Speaker 2: who warned that such a policy could have unint tended
Speaker 2: consequences and create complexity in the tax code. With more
Speaker 2: on what some say are the possibly crazy things that
Speaker 2: could happen is Bloomberg News Wealth reporter Ben Steverman. He
Speaker 2: joins us now in New York.
Speaker 1: His Business Week story.
Speaker 2: By the way, it's on the Bloomberg terminal, and you
Speaker 2: can find it also at Bloomberg dot com slash BusinessWeek.
Speaker 2: Ben bring this up, and I got to say, you
Speaker 2: get a pretty good debate on this issue. Remind us
Speaker 2: about the president's pledge and how this could ultimately work,
Speaker 2: especially something like tips, which seemed to be kind of
Speaker 2: a tough thing to track.
Speaker 4: Yeah, so these promises came out of Donald Trump's stuff
Speaker 4: speech last year, and he says the origin of the
Speaker 4: no tax on tips was just a waitress at his
Speaker 4: hotel in Las Vegas walked up to him and said,
Speaker 4: you shouldn't have taxes on tips. And he liked the
Speaker 4: way that sounded. And the pole suggests voters like it too.
Speaker 4: But when I talked to experts about this, I really
Speaker 4: hate the idea of exact emptying one kind of income,
Speaker 4: whether that's tips or over time, from everything else because
Speaker 4: it just kind of just opens up a ball of
Speaker 4: big can of worms. It's because it just it incentivizes
Speaker 4: people to shift their money income from one category to another,
Speaker 4: and so it's then it just becomes really important how
Speaker 4: you write the rules, how you draw those lines. And
Speaker 4: then that drawing of the lines makes everything more complicated
Speaker 4: for taxpayers, especially the ones who want to access the benefit.
Speaker 1: I mean, on the one hand, I understand that because
Speaker 1: then I guess the idea is I could go over
Speaker 1: to my boss and say, listen, instead of paying me
Speaker 1: a salary and a bonus, can you just give me
Speaker 1: like a small penance and then it tip me at
Speaker 1: the end of the year. It's not really going to happen, though,
Speaker 1: is it. And let's be honest, those of us who
Speaker 1: have worked in jobs for tips in the past, Carol,
Speaker 1: do you ever wait tables?
Speaker 2: No?
Speaker 1: All right, well I waited take and I never paid
Speaker 1: tax on those tips, like nobody did. Just what I mean,
Speaker 1: how does do people pay taxes on tips? They do?
Speaker 4: Now? I think this is one of the reasons this
Speaker 4: is coming up is that credit because of credit cards
Speaker 4: and debit cards, this has gotten a lot easier to track,
Speaker 4: so far more of tip income. Back in the sixties,
Speaker 4: the IRS estimated that only twenty percent of tips were
Speaker 4: being reported. And I just looked at a study actually
Speaker 4: several years old now, but it suggested more than two
Speaker 4: thirds of restaurant tips are now being reported. One of
Speaker 4: the issues with this is that the proposals that Republicans
Speaker 4: and Trump would be talking about are exempting tips in
Speaker 4: overtime from income taxes. But really the important tax that
Speaker 4: tip people pay is payroll taxes. Two thirds of tip
Speaker 4: workers pay never never pay income taxes, and most workers
Speaker 4: pay more in payroll taxes and income taxes. So one
Speaker 4: issue here is that they're going to be they could
Speaker 4: be exempting this kind of income, but really it doesn't
Speaker 4: really end up benefiting very many of the people who
Speaker 4: are actually waiting tables or working at coffee shops or
Speaker 4: all the other things that get tipped.
Speaker 1: How did you avoid waiting tables, Carol, I had other jobs.
Speaker 1: I love the you know, obviously people are going to
Speaker 1: try and game the system, Ben, and I love the
Speaker 1: example you bring up. I was thinking about this recently.
Speaker 1: I don't know where I was looking at a building
Speaker 1: with bricked windows and trying to remember I thought, I knew,
Speaker 1: why did they do that? And you remind us that
Speaker 1: some king in the sixteen hundreds in Britain started taxing
Speaker 1: buildings based on the number of windows and of course
Speaker 1: what happens is then all the landlords brick up as
Speaker 1: many windows as they possibly can.
Speaker 4: Yeah, And somehow that tax was on the books for
Speaker 4: like one hundred and fifty years, and so you ended
Speaker 4: up with all these tenements poor people were living in
Speaker 4: that didn't have enough light, didn't have enough ventilation. And
Speaker 4: it's just an example of these unintended consequences that tax
Speaker 4: changes can have. It's often things you might not even
Speaker 4: think about when you pass the bill.
Speaker 1: You know.
Speaker 4: Another example I bring up is the luxury tax that
Speaker 4: was passed in nineteen ninety that was just seemed like
Speaker 4: a good way to close the budget deficit poor people,
Speaker 4: which wealthy people will pay, this tax will ended up
Speaker 4: like devastating the yacht industry and in the United States,
Speaker 4: and all these working class people lost their jobs and
Speaker 4: it really didn't bring in much revenue, and it was
Speaker 4: repealed in a couple of years in that case. So
Speaker 4: what we were trying to do in the piece is
Speaker 4: just kind of like, imagine how people are going to
Speaker 4: use these because it really sometimes it can take a
Speaker 4: few years before the effects can be really felt.
Speaker 2: I mean, do people also think that, I don't know,
Speaker 2: there's part of me. I feel bad because I feel
Speaker 2: like people who get tips they often have a lower wage, right,
Speaker 2: and so the whole idea is that they make it
Speaker 2: up in their tips. But at the same time, I
Speaker 2: pay taxes on everything I make, and so why, like
Speaker 2: to how you started, like why should should you become.
Speaker 1: Super rich people? You know, Well, that's much lower percentage
Speaker 1: than because it's investment income.
Speaker 2: It's like a whole right, there's a whole other thing.
Speaker 2: But will people then maybe stop tipping because they're ticked
Speaker 2: off and they're saying I pay taxes, but you don't
Speaker 2: have to on your tips, Like could there be I
Speaker 2: don't know what are you hearing?
Speaker 4: Yeah, I mean only about two and a half percent
Speaker 4: of people work of the workforce gets tips, and there
Speaker 4: are a lot of working class people. So we think
Speaker 4: about the cook in the kitchen isn't necessarily getting the tips.
Speaker 4: Sometimes they sometimes restaurants pool tips. And you might know
Speaker 4: Matt better than me, but yeah, like a convenience store
Speaker 4: clerk making thirty thousand dollars a year and and a
Speaker 4: waiter making thirty thousand dollars a year, one of them
Speaker 4: would be getting a tax break under this plan. Then
Speaker 4: the other would still be paying the normal amount. So
Speaker 4: does that end up creating resent me when people get
Speaker 4: around ask for those tips. We're being asked now everywhere
Speaker 4: we go on those screens that they toward us, you
Speaker 4: know twenty five thirty percent. Do people start saying no
Speaker 4: more often that this could this could backfire in that
Speaker 4: way as well?
Speaker 1: Hang on a second, did you also never work as
Speaker 1: a waiter? Ben?
Speaker 4: So, I actually worked as a lifeguard. And we were
Speaker 4: looking at some data on what occupations get tipped, and
Speaker 4: some people said that they actually tipped lifeguard that I've
Speaker 4: never I never got a tip doing lifeguarding.
Speaker 1: I was a short ordered cook. I was a dishwasher.
Speaker 1: I was a stick out a boy. I was a busboy.
Speaker 2: I did clean houses or a house at once.
Speaker 1: You cleaned the house once, Carol, No.
Speaker 2: No, no, I don't mean just once, but I mean
Speaker 2: I had a job that regularly I cleaned a house.
Speaker 2: It was a gorgeous house, by the way.
Speaker 1: All right, I think it's a great story, Ben, and
Speaker 1: I recommend everyone. Obviously we didn't get to the other
Speaker 1: things right. Over time, you could game the system with
Speaker 1: that no tax on social Security. I was frankly surprised
Speaker 1: when I learned that people have to pay taxes on
Speaker 1: sales security.
Speaker 2: Now I know, I know.
Speaker 1: I'm against taxes in general.
Speaker 2: So check out ben story. I also did inventory and
Speaker 2: a factory. I've done that, all right.
Speaker 1: So you you did a little bit it wor ARC.
Speaker 2: Yeah, I just did different jobs.
Speaker 1: That's good, all right. It's important teaches a little responsibility.