WEBVTT - Live from BNY Mellon Pershing Insite 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.000 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.040 --> 0:00:22.920 All right, Well, when financial advisors need help, that's why 0:00:22.960 --> 0:00:26.640 they come to Orlando and the Bnymeil Impurshing Insight Conference. 0:00:26.640 --> 0:00:30.320 We are live from the World Center Marriott in Orlando 0:00:30.360 --> 0:00:32.120 at the event, and I'm so delighted to have back 0:00:32.120 --> 0:00:34.920 with us. Is Stephanie Pierce, chief executive officer of Dreyfus, 0:00:34.960 --> 0:00:37.680 Melon and ETFs at bn Y mail in Management here 0:00:37.760 --> 0:00:39.840 on site and joining me and Matt on BusinessWeek. 0:00:39.880 --> 0:00:41.360 It is so great to see you again. 0:00:41.560 --> 0:00:42.480 Great to be back. 0:00:43.159 --> 0:00:44.920 I want to talk about because you guys have some news, 0:00:44.920 --> 0:00:46.479 but I promised I was going to start there, But 0:00:46.520 --> 0:00:48.199 actually I want to say, what do you make of 0:00:48.440 --> 0:00:50.600 the environment this year versus last year? 0:00:50.880 --> 0:00:53.640 It's a very different environment, it is, right, I mean, 0:00:53.680 --> 0:00:56.040 I think this year we're looking at a situation where 0:00:56.320 --> 0:00:59.560 clients have been burned. Right, last year, nothing worked so hard, 0:00:59.640 --> 0:01:02.920 right sixty and forty both sides of the trade didn't work, 0:01:03.360 --> 0:01:05.840 and even though markets are up this year, people are 0:01:05.880 --> 0:01:09.520 still reeling from what happened. What could I have done differently? 0:01:09.760 --> 0:01:11.400 It's actually interesting is the topic of one of the 0:01:11.440 --> 0:01:14.120 panels I'll beyond later today, which is solutions for on 0:01:14.200 --> 0:01:16.360 certain markets and people are scratching their heads trying to 0:01:16.360 --> 0:01:16.800 figure out what. 0:01:16.840 --> 0:01:19.040 To do, which is a perfect conversation. We're going to 0:01:19.120 --> 0:01:21.560 dig into that, Matt and I with you in just 0:01:21.600 --> 0:01:23.000 a moment. Tell us about some of the news though 0:01:23.040 --> 0:01:25.240 that you guys, because you do use this platform to 0:01:25.319 --> 0:01:26.960 kind of talk about what you are doing to help 0:01:26.959 --> 0:01:27.960 financial advisors. 0:01:28.120 --> 0:01:31.040 Well, we're very excited today because we have a big announcement. 0:01:31.200 --> 0:01:34.520 So Bny Melan has just announced as part of our 0:01:34.560 --> 0:01:38.640 Pershing X initiative, the Pershing X Wove platform, and as 0:01:38.720 --> 0:01:40.679 part of that, which literally just happened in the next room, 0:01:40.680 --> 0:01:43.040 as you know, as part of that behind the curtain 0:01:43.120 --> 0:01:46.560 of Wove is B and Y Melan Precision Direct Indexing 0:01:46.680 --> 0:01:49.080 S and P five hundred, which is bringing the best 0:01:49.080 --> 0:01:52.440 of B and Y Melan's institutional indexing capability to financial 0:01:52.440 --> 0:01:53.880 advisors for the first time. 0:01:53.960 --> 0:01:55.160 So unpack that. What does that mean? 0:01:55.400 --> 0:01:58.320 So direct indexing is one of the fastest growing investment 0:01:58.320 --> 0:02:01.240 advisory products in the marketplace, to a kind of north 0:02:01.280 --> 0:02:03.400 of twelve percent a year, maybe more than that. There's 0:02:03.440 --> 0:02:05.360 predictions of how big this will get over the next 0:02:05.560 --> 0:02:08.160 number of years, rivaling things like ETFs and other things. 0:02:08.360 --> 0:02:12.120 But essentially what those strategies are are a customized index 0:02:12.200 --> 0:02:15.840 solution for investors that not only gives them kind of 0:02:15.880 --> 0:02:18.240 the tax you know, the the good tax treatment and 0:02:18.280 --> 0:02:20.520 all the great things that ETFs do, but it also 0:02:20.520 --> 0:02:22.560 gives them their own cost basis and the ability to 0:02:22.600 --> 0:02:26.600 customize for both tax kind of tax management, but also 0:02:26.639 --> 0:02:28.000 other preferences that they may have. 0:02:28.520 --> 0:02:31.040 And they're so active or passive. It's passive, but it 0:02:31.120 --> 0:02:31.600 is passive. 0:02:31.600 --> 0:02:33.560 But what's interesting is so you have all the kind 0:02:33.560 --> 0:02:36.280 of tax benefits that you would have in other tax 0:02:36.280 --> 0:02:39.480 efficient vehicles and good kind of you know, cost effective 0:02:39.680 --> 0:02:42.720 investment management, but for an advisor it allows them to 0:02:42.760 --> 0:02:44.760 sit on the same side of the table as their 0:02:44.760 --> 0:02:48.520 client and customize for them a solution that has kind 0:02:48.560 --> 0:02:52.000 of tax benefits but also the customization. So if a 0:02:52.040 --> 0:02:54.639 client says, gee, I want certain types of companies excluded, 0:02:54.840 --> 0:02:57.120 you can actually do that because they are the beneficial 0:02:57.120 --> 0:02:58.079 holder of the securities. 0:02:58.080 --> 0:02:59.360 It's a separately managed account. 0:02:59.400 --> 0:03:00.800 Matt come on in in the conversation. 0:03:01.240 --> 0:03:03.839 Well, it sounds like the perfect way to do your 0:03:03.880 --> 0:03:06.680 own I hate to use the term esg right because 0:03:06.720 --> 0:03:11.240 people it's been sort of politicized. But you can put 0:03:11.280 --> 0:03:15.000 your own money where your mouth is effectively, or you 0:03:15.040 --> 0:03:18.760 can do that in collaboration with your financial advisor and 0:03:18.800 --> 0:03:21.239 make investments that you feel comfortable with, Investments that you 0:03:21.280 --> 0:03:22.360 feel comfortable. 0:03:22.000 --> 0:03:23.880 With you can I mean, I think at the end 0:03:23.880 --> 0:03:25.920 of the day, what advisors are trying to do for 0:03:26.000 --> 0:03:27.880 clients again is sit on the same side of the 0:03:27.880 --> 0:03:30.160 table with them and figure out what's important to the client. 0:03:30.480 --> 0:03:34.200 And we know taxes are important, we know costs are important, 0:03:34.639 --> 0:03:38.120 and we know that clients and the different segments that 0:03:38.120 --> 0:03:41.120 they serve have different preferences. Taxes are part of that, 0:03:41.160 --> 0:03:43.840 but not the only part. And so these strategies allow 0:03:43.920 --> 0:03:46.000 you a level of flexibility and customization. 0:03:46.480 --> 0:03:47.600 Essentially, think of it this way. 0:03:48.200 --> 0:03:51.240 You're like last year, right where the markets did not 0:03:51.280 --> 0:03:53.720 only nothing, they did nothing good, right, but at the 0:03:53.800 --> 0:03:56.760 end of the year you could get this tax benefit 0:03:56.800 --> 0:03:59.080 of tax lost harvesting along the way. Then in a 0:03:59.160 --> 0:04:01.560 year like this, year where the NADAC is up you know, 0:04:01.680 --> 0:04:04.600 double digits, right, and there may be some gains that 0:04:04.640 --> 0:04:05.480 are associated with that. 0:04:05.520 --> 0:04:06.960 With some of your actively managed. 0:04:06.800 --> 0:04:09.880 Muta funds, you can use those losses booked in your 0:04:10.000 --> 0:04:13.240 direct indexing account to offset gains and other parts of 0:04:13.240 --> 0:04:16.600 the portfolio. So where an advisor can really add value 0:04:17.120 --> 0:04:20.680 is to not only do asset allocation, but asset location 0:04:20.920 --> 0:04:21.679 with their clients. 0:04:21.760 --> 0:04:23.160 Right. So these are. 0:04:23.120 --> 0:04:25.279 Less efficient strategies over here, and these are more tax 0:04:25.279 --> 0:04:28.480 efficient strategies to put them together and you can wipe away. 0:04:28.240 --> 0:04:29.760 A lot of tax bill at the end of the year. 0:04:30.000 --> 0:04:33.000 So that's where these have become credibly valuable tools for 0:04:33.120 --> 0:04:35.160 advisors to deliver value to clients. 0:04:35.320 --> 0:04:39.360 So is this for you a better solution than having 0:04:39.920 --> 0:04:42.680 an in house fund manager or create an active ETF 0:04:43.120 --> 0:04:47.400 for you or one that could be actively traded traded. 0:04:47.440 --> 0:04:49.839 Well, two very different things, right. This is solving for 0:04:49.880 --> 0:04:52.320 something different. This is providing for clients if you will 0:04:52.360 --> 0:04:55.359 beta exposure in core parts of the portfolio at a 0:04:55.520 --> 0:04:59.560 very cost effective you know price, and then they can 0:04:59.560 --> 0:05:02.360 supplement that with active solutions. In a way they work 0:05:02.360 --> 0:05:05.120 perfectly together because some of the active solutions may deliver 0:05:05.480 --> 0:05:08.880 more capital gains over time, and then you can remove 0:05:09.040 --> 0:05:12.080 the tax build impact of those by utilizing a direct 0:05:12.120 --> 0:05:14.760 indexing strategy to harvest losses along the way while still 0:05:14.760 --> 0:05:16.160 getting an index return. 0:05:16.279 --> 0:05:20.440 Stephanie, could you could you build an ETF that has 0:05:20.560 --> 0:05:22.160 active ETFs inside it? 0:05:24.200 --> 0:05:26.720 Could you build a direct indexing portfolio with active etms? 0:05:26.800 --> 0:05:29.800 Is that what you meant, met Yep, Yes you could, Yes, 0:05:30.000 --> 0:05:33.359 So you can put any security inside these things. Of course, 0:05:33.400 --> 0:05:34.760 you know, we don't want to get too fancy and 0:05:34.800 --> 0:05:37.160 too complicated because then it becomes very difficult to explain. 0:05:37.200 --> 0:05:39.240 So we want to keep it simple for clients. But 0:05:39.320 --> 0:05:41.359 what we're really really excited about is, you know, B 0:05:41.440 --> 0:05:43.520 and Y Melon has all these things under the roof 0:05:43.520 --> 0:05:45.560 of the firm, right, so, Melon, which is going to 0:05:45.600 --> 0:05:49.480 manage these portfolios, is in its fortieth year of index management. 0:05:49.720 --> 0:05:52.200 We've been doing tax management for thirty out of those 0:05:52.240 --> 0:05:54.200 forty years, and we've been doing it for some of 0:05:54.200 --> 0:05:56.719 the world's most sophisticated investors. So now we get to 0:05:56.720 --> 0:05:59.560 bring that to financial advisors and their clients at a 0:05:59.680 --> 0:06:03.640 very cost effective means through the Wolve platform where it's. 0:06:03.520 --> 0:06:05.320 All wrapped up in one bundle. For the client. 0:06:05.560 --> 0:06:08.119 So we think that's really delivering unique value from our company. 0:06:08.200 --> 0:06:10.479 We call it one bny melon in terms of how 0:06:10.520 --> 0:06:12.560 we're delivering to clients. So, Matt, you could do all 0:06:12.600 --> 0:06:14.080 those things, but again we want to keep it simple 0:06:14.120 --> 0:06:16.080 and elegant for clients. The way I think about it 0:06:16.120 --> 0:06:18.360 is the active solutions and the passive solutions can work 0:06:18.400 --> 0:06:21.760 together in a portfolio to create both alpha at a 0:06:21.800 --> 0:06:25.479 cost cost effective manner, but also a tax efficient solution. 0:06:25.640 --> 0:06:28.520 Stephanie, what's the constructive conversation around active right now? 0:06:28.600 --> 0:06:28.760 Right? 0:06:28.839 --> 0:06:29.640 For so long? 0:06:29.880 --> 0:06:32.719 Passive just work so long that we all question whether 0:06:32.800 --> 0:06:35.120 or not active was even a strategy for the future. 0:06:35.440 --> 0:06:37.960 We know that that is, certainly we think about it 0:06:38.000 --> 0:06:40.680 differently now, So how do you guys think about it? 0:06:40.720 --> 0:06:43.200 Because I was listening to you with a Paula. 0:06:43.880 --> 0:06:46.680 That's still the case because the cues have outperformed every 0:06:46.720 --> 0:06:49.080 growth fund manager over the last five years, ten years, 0:06:49.160 --> 0:06:51.320 or fifteen years, and that's pretty passive. 0:06:51.640 --> 0:06:52.359 That's a good point. 0:06:52.640 --> 0:06:53.000 It does. 0:06:53.520 --> 0:06:56.280 So now what Carol, referring to earlier, We're still fundamentally 0:06:56.320 --> 0:07:00.000 big believers in active management, and in certain areas. 0:07:00.000 --> 0:07:02.560 Our funds are active, right, Yes, So for our ETFs. 0:07:02.560 --> 0:07:05.360 We have seventeen ETFs, the two most recent ones are active, 0:07:05.800 --> 0:07:07.880 about half were active, half are passive, and the two 0:07:07.880 --> 0:07:10.239 most recent ones are a classic example of where active 0:07:10.240 --> 0:07:13.400 works really well, which is thematic investing. About of the 0:07:13.440 --> 0:07:16.760 one hundred and twelve billion or so of thematic ETFs, 0:07:16.960 --> 0:07:18.960 about seventy seven percent of them are passive. 0:07:19.000 --> 0:07:20.120 So we think we're bringing. 0:07:19.960 --> 0:07:22.440 Something really different and unique and Carol, as we were 0:07:22.480 --> 0:07:25.760 talking earlier, one of these is BKIV, which is bny 0:07:25.800 --> 0:07:27.040 melan innovator as ETF. 0:07:27.240 --> 0:07:28.200 So think of it this way. 0:07:28.440 --> 0:07:30.400 If you look at the last fifteen years of the 0:07:30.440 --> 0:07:34.040 S and P five hundred, about about fifty two percent 0:07:34.440 --> 0:07:36.480 of the securities that we know as S and five 0:07:36.520 --> 0:07:38.560 hundred stocks have actually disappeared from you, not just from 0:07:38.600 --> 0:07:41.280 the benchmark, would have disappeared as companies. So what this 0:07:41.400 --> 0:07:44.240 product is trying to do, the Innovator's Fund, is to 0:07:44.320 --> 0:07:46.280 think forward in terms of who are those companies that 0:07:46.320 --> 0:07:48.280 are disrupting the way we live, the way we work, 0:07:48.320 --> 0:07:49.960 the way we play, the way we do things. 0:07:50.120 --> 0:07:53.000 Is this the Kathy, I'm afraid to introduce this because 0:07:53.040 --> 0:07:55.280 Matt's going to go crazy on me, But is this 0:07:55.400 --> 0:07:58.240 kind of the Kathy would effect to some extent, right, 0:07:58.400 --> 0:08:01.640 making us think about, Okay, what are the companies, the futures, 0:08:01.680 --> 0:08:04.320 the trends you know for the future, the trends, the technologies. 0:08:04.400 --> 0:08:06.160 Well, I'm not going to comment on anyone else out there, 0:08:06.160 --> 0:08:07.880 but I will say that this is an area that 0:08:07.920 --> 0:08:10.600 we've been focused on for many, many years, never in 0:08:10.600 --> 0:08:12.520 an ETF before, so we're very excited to bring it. 0:08:12.960 --> 0:08:15.120 But this is an area where we want. 0:08:14.960 --> 0:08:17.200 Investors to have the ability to think forward and have 0:08:17.280 --> 0:08:19.520 access to companies that are going to disrupt the companies 0:08:19.560 --> 0:08:22.160 that are in these spaces today. And statistically, like I said, 0:08:22.400 --> 0:08:24.480 we know that if half of those companies disappear, that 0:08:24.480 --> 0:08:26.440 are the companies we know today. You want to be 0:08:26.720 --> 0:08:29.320 thinking forward and having a part of your portfolio invested 0:08:29.360 --> 0:08:31.200 in that. So, Carol, the other one just while I'm 0:08:31.240 --> 0:08:33.480 while I have the mic here yep, well, jo. 0:08:33.679 --> 0:08:36.920 Just how do you hedge against I mean, being early 0:08:37.200 --> 0:08:39.400 is the same as being wrong, right, So how do 0:08:39.480 --> 0:08:43.480 you hedge against that you don't want your product and 0:08:43.720 --> 0:08:46.760 end up looking like Kathy Woods Mathew Woods. 0:08:47.160 --> 0:08:49.480 So, Matt, this is why we think about having a portfolio. 0:08:49.559 --> 0:08:49.640 Right. 0:08:49.640 --> 0:08:51.440 We talked about direct to next thing we talked about 0:08:51.440 --> 0:08:53.880 thematic ETFs. You don't put all your eggs in one basket, 0:08:54.200 --> 0:08:56.040 you know, it's kind of like biotech investing, right. You 0:08:56.040 --> 0:08:58.240 want to do it in a portfolio construct because you 0:08:58.240 --> 0:09:00.319 don't know how it's all going to work. So the 0:09:00.320 --> 0:09:02.719 thematic ETF is a component of an overall portfolio. 0:09:02.840 --> 0:09:03.040 Right. 0:09:03.600 --> 0:09:05.880 The other ETF that I wanted to just quickly mention 0:09:05.920 --> 0:09:08.200 that we also launched a couple of weeks ago, which 0:09:08.240 --> 0:09:10.520 I have to say makes all fifty two thousand people 0:09:10.559 --> 0:09:11.920 at my company, particularly the women. 0:09:11.880 --> 0:09:12.959 Incredibly proud to work. 0:09:13.000 --> 0:09:16.000 Here is a B and white Melon Women's Opportunities ETF. 0:09:16.240 --> 0:09:18.120 And the thesis here, of course, as we all know, 0:09:18.280 --> 0:09:20.160 is that companies to do the right things by women 0:09:20.160 --> 0:09:23.120 in terms of recruiting, retaining, promoting, and supporting them to 0:09:23.120 --> 0:09:25.480 be able to do it all actually perform better than 0:09:25.520 --> 0:09:26.760 companies who don't do those things. 0:09:27.120 --> 0:09:28.439 So here we actually have. 0:09:28.440 --> 0:09:31.360 A component of philanthropy to the product, where we're giving 0:09:31.400 --> 0:09:34.400 ten percent of net profits to Girls Inc. To support 0:09:34.480 --> 0:09:36.480 the empowerment of girls starting at age five all the 0:09:36.480 --> 0:09:39.200 way up through high school and college, and the rates 0:09:39.240 --> 0:09:42.000 of graduation and empowerment of those girls is pretty powerful. 0:09:42.040 --> 0:09:44.480 So it's a good cause that we're contributing to, and 0:09:44.480 --> 0:09:45.520 we're really excited about it. 0:09:45.600 --> 0:09:47.000 What have been the flows into these funds? 0:09:47.000 --> 0:09:49.400 I know they're new, they're brand new, so too early 0:09:49.440 --> 0:09:51.360 to come by care Okay, okay, we've just say to them. 0:09:51.360 --> 0:09:53.400 But I will say the interest is really high. And 0:09:53.480 --> 0:09:56.040 back to Matt's point, I think you know you were 0:09:56.040 --> 0:09:58.560 talking earlier about market levels. I think we're entering at a 0:09:58.600 --> 0:10:00.559 pretty good time, right, markets have been are all over 0:10:00.600 --> 0:10:01.480 the place, So. 0:10:01.520 --> 0:10:02.839 Why do you say that? What do you think? We 0:10:02.880 --> 0:10:04.520 only got about forty five seconds left. 0:10:04.720 --> 0:10:07.160 Look, I mean I think you know people are really uncertain. 0:10:07.200 --> 0:10:08.719 I mentioned, you know, people are trying to figure out 0:10:08.720 --> 0:10:11.000 what to do. Their sixty forty portfolios didn't work last year. 0:10:11.000 --> 0:10:12.280 And give me a hard time when I said we're 0:10:12.280 --> 0:10:14.360 trying to see if we find a are finding a bottom. 0:10:14.400 --> 0:10:16.120 He's like, look, the S and P's up twenty percent 0:10:16.160 --> 0:10:18.560 from that October low, and I'm like, well do we 0:10:18.600 --> 0:10:19.000 buy it? 0:10:19.080 --> 0:10:21.200 Well, look, I mean here's what we know, right, we know, 0:10:21.520 --> 0:10:23.719 you know interest rates, you know, short term rates, thirt 0:10:23.760 --> 0:10:24.240 five percent? 0:10:24.320 --> 0:10:25.400 Cash is sexy, as. 0:10:25.280 --> 0:10:28.000 We like to say, no, you know, giving everything all 0:10:28.080 --> 0:10:30.160 run for its money, everything else and run for its money. 0:10:30.280 --> 0:10:32.360 That being said, as we know, if we think we're 0:10:32.360 --> 0:10:35.840 into heading into potential slownown or even a shallow recession as. 0:10:36.040 --> 0:10:37.480 Vince reindhard or economist things. 0:10:37.559 --> 0:10:40.280 Yeah, you know, we know that equities tend to lag 0:10:40.440 --> 0:10:42.760 right in terms of fixed income fixingcome tends to do 0:10:42.880 --> 0:10:45.840 better kind of inter recession. Equities tend to do better 0:10:45.840 --> 0:10:47.800 as you're coming out, as you bought them and come out. 0:10:48.000 --> 0:10:50.480 So that's where I think that from evaluation perspective, we're 0:10:50.559 --> 0:10:53.160 an interesting place to enter with these ETFs right now 0:10:53.200 --> 0:10:54.320 because valuations are pretty. 0:10:54.400 --> 0:10:56.120 But interesting, good versus interesting. 0:10:57.040 --> 0:10:57.760 I agree with that. 0:10:58.200 --> 0:10:59.760 So great to check in with you. 0:11:00.320 --> 0:11:00.840 Thank you guys. 0:11:01.040 --> 0:11:01.360 Be well. 0:11:01.480 --> 0:11:04.520 Stephanie Pierres, chief executive Officer of Dreyfus, Mellen and ETFs 0:11:04.559 --> 0:11:07.040 at B and Y Mellon Investment Management on site with 0:11:07.120 --> 0:11:09.440 us at the B and Y Melan Purging Insight Conference. 0:11:09.559 --> 0:11:12.280 Lots more to come from me in Orlando, Matt back 0:11:12.400 --> 0:11:13.800 at our New York headquarters. 0:11:13.800 --> 0:11:16.600 Stick around, folks. You are listening and watching Bloomberg Business Week, 0:11:16.960 --> 0:11:18.319 and this is Bloomberg Radio. 0:11:18.720 --> 0:11:22.280 You're listening to the Bloomberg Business Week podcast. Catch US 0:11:22.280 --> 0:11:25.679 live weekday afternoons from three to six Eastern Listen on 0:11:25.720 --> 0:11:29.760 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, 0:11:30.040 --> 0:11:32.360 or watch us live on YouTube. 0:11:33.080 --> 0:11:35.400 We are live from the World Center married in Orlando. 0:11:35.320 --> 0:11:37.800 Are at the b and Y Melan Purging Insight Conference. 0:11:37.840 --> 0:11:40.720 I'm Carol Massler here in Orlando. Matt Miller back there 0:11:40.760 --> 0:11:43.800 at our Bloomberg Interactive Brokers studio in New York City, 0:11:44.120 --> 0:11:45.720 and our next guest. We're going to talk about a 0:11:45.720 --> 0:11:50.280 bunch of things, Matt, because we have M and A 0:11:50.280 --> 0:11:53.840 activity because she was on a panel a breakout involving 0:11:53.840 --> 0:11:55.240 what was going on with M and A, and she 0:11:55.280 --> 0:11:58.720 also talked about talent and the war in talent. So 0:11:58.720 --> 0:12:01.280 so delighted to have with us. Lisa Crawford. She's director 0:12:01.280 --> 0:12:05.280 and head of Business Consulting at BNY Melan Persian Persian Pershing. 0:12:05.760 --> 0:12:10.040 It's big out to day, It's Melon Pershing. Welcome. How 0:12:10.040 --> 0:12:12.440 are you great? Doing great? So let's start. 0:12:12.760 --> 0:12:14.800 You did do two breakouts. What's really cool about this 0:12:14.880 --> 0:12:17.800 event is it's finance professionals who have so many questions 0:12:17.840 --> 0:12:20.920 about different things and everything impacts them. And I always 0:12:20.960 --> 0:12:24.200 say that everything in our life has a business element 0:12:24.240 --> 0:12:26.800 to it, a market element to it. Whether it's public 0:12:26.880 --> 0:12:30.239 or private, it all comes together. So let's talk specifically. 0:12:30.320 --> 0:12:32.360 I think about M and A. First of all, it's 0:12:32.360 --> 0:12:34.800 good M and A. I was looking at some Bloomberg 0:12:35.120 --> 0:12:37.840 numbers down about thirty six percent year over year in 0:12:37.840 --> 0:12:41.000 North America, and then it's down forty one percent globally. 0:12:42.200 --> 0:12:43.720 But we do see deals happening. 0:12:43.920 --> 0:12:45.920 How do you think about the M and A environment 0:12:45.960 --> 0:12:49.120 and what did you want to convey to the groups here? 0:12:49.240 --> 0:12:53.440 So in our little world of arias and advisory film, 0:12:53.480 --> 0:12:55.640 so I was certainly seeing a shift in the types 0:12:55.640 --> 0:12:57.600 of M and A deals that are happening. It's nothing 0:12:57.800 --> 0:13:02.000 particularly new, but bigger deals, a lot more strategic deals, 0:13:02.080 --> 0:13:05.360 a lot more minority investments. Gone are the days of 0:13:05.400 --> 0:13:08.880 the small elderly advisor is selling because they have nothing 0:13:08.880 --> 0:13:12.160 else to do. Now it's really I'm selling because this 0:13:12.280 --> 0:13:15.400 is the right strategic decision for my firm now before 0:13:15.480 --> 0:13:18.240 I get too far gone in my career. And I 0:13:18.240 --> 0:13:20.160 want to develop my people. I want to give my 0:13:20.240 --> 0:13:22.960 clients a great client experience. And so we're seeing some 0:13:23.120 --> 0:13:27.679 really creative deals across a couple of big firms that 0:13:27.760 --> 0:13:30.319 you would think would just continue to be independent, but 0:13:30.360 --> 0:13:33.360 they realize that there's great synergy to be together. It's 0:13:33.400 --> 0:13:36.360 making for a really fun conversation out in the marketplace. 0:13:36.400 --> 0:13:38.600 Well you're talking about in the advisory firm, right among 0:13:38.640 --> 0:13:42.800 advisory firms, is does it get more complicated? You know 0:13:42.960 --> 0:13:45.240 in terms of I don't know some of the issues 0:13:45.240 --> 0:13:47.079 that are coming down. We talk a lot about AI, 0:13:47.200 --> 0:13:50.719 the role of technology, or does it make it easier 0:13:50.920 --> 0:13:52.520 to be a part of a group. 0:13:52.840 --> 0:13:53.960 I think it makes it easier. 0:13:54.360 --> 0:13:56.640 When we look at technology and the evolution of how 0:13:56.679 --> 0:13:59.520 technology is used. It used to be we bought technology 0:13:59.559 --> 0:14:02.480 to replace a person. Now we're hiring people to help 0:14:02.880 --> 0:14:07.559 enable that technology. And the technology has broadened, it's gotten 0:14:07.600 --> 0:14:11.560 more complicated, and we need more thoughtful technologists to run 0:14:11.600 --> 0:14:14.360 those You can't do that if you have fifteen people 0:14:14.720 --> 0:14:16.880 who need to be part of that fifty hundred two 0:14:16.960 --> 0:14:20.280 hundred person organization. And so M and A is really 0:14:20.360 --> 0:14:23.760 creating opportunities for people to do that. And so when 0:14:23.760 --> 0:14:27.360 we see these merges happen between two big firms, we're 0:14:27.400 --> 0:14:29.880 now seeing all these new and really cool career paths 0:14:29.880 --> 0:14:32.120 that are coming out of that that are enabling a 0:14:32.200 --> 0:14:35.440 really cool client experience, or some other new way that 0:14:35.480 --> 0:14:38.440 advisors can touch their clients and add value to their lives. 0:14:38.680 --> 0:14:39.720 Matt, you want to come on in. 0:14:40.000 --> 0:14:44.160 So, Lisa, are you saying that this market is there's 0:14:44.200 --> 0:14:48.000 no longer a place for independent advisors and smaller firms. 0:14:49.040 --> 0:14:51.120 Well, I didn't say there's no longer a place, but 0:14:51.240 --> 0:14:53.680 good try there. So no, I think there's always going 0:14:53.720 --> 0:14:56.120 to be a place for smaller independent firms. There's always 0:14:56.160 --> 0:14:56.360 going to. 0:14:56.320 --> 0:14:58.520 Because we have a guest coming up later that's going 0:14:58.560 --> 0:15:00.920 to talk, but it's independent. 0:15:01.000 --> 0:15:03.160 We have lots of great clients who are continuing to 0:15:03.200 --> 0:15:04.480 be independent, and that's great. 0:15:05.160 --> 0:15:06.280 There's a place for all of that. 0:15:06.360 --> 0:15:08.640 There are end clients that are always going to want 0:15:09.200 --> 0:15:11.280 that I know this person because I went to school 0:15:11.280 --> 0:15:13.320 with them, or they have been on my street or 0:15:13.640 --> 0:15:16.280 you know, my families use them for years. And then 0:15:16.280 --> 0:15:18.600 there are those that want the big brand and the 0:15:18.680 --> 0:15:22.120 flashy names and that, and that's okay. There's a market 0:15:22.160 --> 0:15:26.200 for everybody, and as our industry matures, we have to 0:15:26.240 --> 0:15:28.880 be able to provide a broader spectrum of services to 0:15:28.920 --> 0:15:32.240 a broader spectrum of clients. And this is allowing that 0:15:32.320 --> 0:15:32.760 to happen. 0:15:33.480 --> 0:15:35.720 I am curious when it comes to clients specific Oh 0:15:35.720 --> 0:15:36.600 go ahead, Matt, go ahead. 0:15:36.960 --> 0:15:38.640 I was just gonna ask, you know, if you if 0:15:38.720 --> 0:15:43.600 you want to provide those services, a broader array of 0:15:43.640 --> 0:15:47.040 services and serve a broader array of clients, how is 0:15:47.080 --> 0:15:49.320 it finding the talent to do that? I mean, is 0:15:49.360 --> 0:15:53.960 it is it difficult right now? Or is that difficulty 0:15:54.120 --> 0:15:57.120 only reserved for like, you know, giant hedge fund managers. 0:15:59.160 --> 0:16:01.520 No, I say, every firm that I've worked with in 0:16:01.560 --> 0:16:03.880 the last year has said I'm hiring, And whether they're 0:16:03.920 --> 0:16:06.920 advertising for those hires or not, they're all hiring. And 0:16:07.680 --> 0:16:12.440 we're no longer hiring for senior people. They want junior 0:16:12.480 --> 0:16:16.600 power planners, they want the three to five year experienced advisors, 0:16:16.640 --> 0:16:19.280 and they want the back office and the operations people. 0:16:19.960 --> 0:16:22.080 Every firm I'm working with is hiring. And so what 0:16:22.080 --> 0:16:24.120 we saw kind of come out of the M and 0:16:24.160 --> 0:16:26.680 A space was that the talent market was so tight 0:16:26.800 --> 0:16:30.040 for so long that they started buying firms because they 0:16:30.040 --> 0:16:33.480 had talent. They started buying firms because they realized that 0:16:33.560 --> 0:16:37.560 they could lift out those people and expand. 0:16:37.200 --> 0:16:39.240 The great strategy but kind of an expensive one. 0:16:39.360 --> 0:16:43.120 No, well, I mean not really because the cost of 0:16:43.240 --> 0:16:45.600 hiring someone and training them and bringing them on at 0:16:45.680 --> 0:16:48.280 least then you're bringing on revenue too, right, right? 0:16:48.800 --> 0:16:49.600 Is that continuing? 0:16:49.920 --> 0:16:50.200 Yes? 0:16:50.480 --> 0:16:54.160 Absolutely, It's interesting because then how do you juxtapose this 0:16:54.320 --> 0:16:57.200 against you know, we talk often about the labor market 0:16:57.240 --> 0:16:59.400 still is really tight. How do you kind of think 0:16:59.400 --> 0:17:02.600 about the more broader labor story versus what your guys 0:17:02.640 --> 0:17:03.640 are seeing in your industry. 0:17:03.720 --> 0:17:05.880 Yeah, So for those of you who are here at 0:17:05.880 --> 0:17:08.680 INSIGHT today, we have sixty five students here this part 0:17:08.680 --> 0:17:11.440 of our student experience program that we've been doing since 0:17:11.480 --> 0:17:14.600 twenty sixteen. We're trying to bring more and more students 0:17:14.640 --> 0:17:17.119 to the conference so that advisors can meet them and 0:17:17.200 --> 0:17:19.280