WEBVTT - Commonwealth's Birke: Millenials Miss the Human Touch (Audio) 0:00:03.160 --> 0:00:07.760 Broadcasting live to New York, Bloomberg to Washington, d C, 0:00:07.960 --> 0:00:13.520 Bloomberg to Boston, Bloomberg twelve to San Francisco, Bloomberg nine 0:00:14.080 --> 0:00:17.720 to the Country shoes A Channel one nine and around 0:00:17.760 --> 0:00:20.960 the globe the Bloomberg Radio, PLAUSAP and Bloomberg dot Com. 0:00:21.400 --> 0:00:25.680 This is Taking Stock. Coming up on taking stock making 0:00:25.720 --> 0:00:29.600 decisions about your money. We'll talk about motivation that healthy 0:00:29.680 --> 0:00:35.200 financial relationship, behavioral economics, coaching, as well as therapy techniques 0:00:35.280 --> 0:00:38.120 and how to do real good research called Barks for Me. 0:00:38.200 --> 0:00:41.159 Joining us from Boston based actually well, the mass based 0:00:41.280 --> 0:00:45.320 Commonwealth Financial Network. As we continue our special live broadcast 0:00:45.360 --> 0:00:48.720 today here at Smith and Williski Restaurant right down on 0:00:48.880 --> 0:00:52.040 the Boston Harbor, Let's get back to the newsroom in 0:00:52.200 --> 0:00:55.080 the World headquarters. Charlie Pellett's got a Bloomberg business flash 0:00:55.200 --> 0:00:56.920 and I thank you very much. Kathleen, thank you him. 0:00:56.920 --> 0:00:59.360 The Dow just turning negative, down a point right now, 0:00:59.680 --> 0:01:02.680 as P five hundred index a little change, giving up 0:01:02.680 --> 0:01:06.200 earlier gains. The SMP five hundred index is higher. It 0:01:06.400 --> 0:01:09.679 is on track to snap a two day losing streak 0:01:10.000 --> 0:01:13.959 as rebounding crude prices spurs rally and energy producers, while 0:01:14.040 --> 0:01:18.279 corporate earnings help whose financial companies. West Texas Intermediate crude 0:01:18.360 --> 0:01:21.240 up three point two percent of advancing a dollar seven 0:01:22.480 --> 0:01:24.960 eight right now on w t I. Brent crude up 0:01:25.000 --> 0:01:29.360 two point nine percent to affarel, the tenure up four 0:01:29.480 --> 0:01:33.480 thirty seconds, the yield there one point five four. Michael 0:01:33.520 --> 0:01:36.800 Purvis is chief global strategist at Weedman Company. He was 0:01:36.840 --> 0:01:40.640 interviewed this morning on Bloomberg Surveillance. The real focal point 0:01:40.680 --> 0:01:43.800 here is is that the role of central banking, the 0:01:43.920 --> 0:01:47.040 role of the tenure, treasury yield in the equity equation 0:01:47.040 --> 0:01:49.920 has become more and more dominant. And if there's a 0:01:50.000 --> 0:01:52.640 reversal in that, right, if that, if that, if that, 0:01:53.040 --> 0:01:56.000 uh cork explodes the other way and we have a 0:01:56.040 --> 0:01:59.000 massive sell off and sovereign paper that is going to 0:01:59.640 --> 0:02:04.160 um the you know, very disruptive to the equity framework 0:02:04.200 --> 0:02:07.320 that is supporting a lot of these things. American International 0:02:07.360 --> 0:02:09.840 Group is on track for its biggest jump in four 0:02:09.919 --> 0:02:13.799 years after its profit beat estimates. Oil surging more than 0:02:13.840 --> 0:02:16.800 three percent today. We've got a i G up seven 0:02:16.880 --> 0:02:20.840 point two percent, up three seven to fifty eight O 0:02:21.120 --> 0:02:25.079 two right now on a I G healthcare shares falling 0:02:25.120 --> 0:02:27.760 for a second day, Biogen down more than four percent 0:02:27.760 --> 0:02:31.400 of it doubts it could be a takeover target. SMP 0:02:31.600 --> 0:02:34.600 five hundred index off a point to fifty seven. Again 0:02:34.639 --> 0:02:38.280 there of point one percent. Goal down eighty beounced thirteen 0:02:38.360 --> 0:02:41.320 fifty nine, a drop of point six percent. And now 0:02:41.400 --> 0:02:43.720 let's take a look at the other stories making news. 0:02:44.919 --> 0:02:47.040 Thank you Charlie from the Bloomberg news room. I'm rainey 0:02:47.120 --> 0:02:49.960 in a cent cio. There's a report that senior Republican 0:02:50.000 --> 0:02:54.640 officials are exploring options if Donald Trump quits the presidential race. 0:02:54.960 --> 0:02:57.359 AC News says those officials believe that Trump is so 0:02:57.480 --> 0:03:00.920 unpredictable he might withdraw. A new candidate would have to 0:03:00.919 --> 0:03:03.639 be selected by one sixty eight members of the Republican 0:03:03.760 --> 0:03:07.280 National Committee. White House Press Secretary Josh Ernest was asked 0:03:07.320 --> 0:03:11.520 today about Trump's suggestion that November's presidential election could be rigged. 0:03:11.600 --> 0:03:13.760 I would just note that it is often acclaim made 0:03:13.800 --> 0:03:16.560 by people who don't end up winning elections. President Obama 0:03:16.680 --> 0:03:20.119 is shortening the sentences for two hundred fourteen federal prisoners, 0:03:20.320 --> 0:03:24.639 including sixties seven serving life sentences. It's the most commutations 0:03:24.639 --> 0:03:27.320 in a single day in more than a century. Almost 0:03:27.360 --> 0:03:30.640 all the prisoners were serving time for non violent drug offenses. 0:03:30.919 --> 0:03:35.040 Most will be released December one. Dr Anthony Fauci, director 0:03:35.040 --> 0:03:38.200 of the National Institute of Allergy and Infectious Diseases, says 0:03:38.320 --> 0:03:41.760 the Zeke virus is unlikely to become a national epidemic 0:03:41.800 --> 0:03:44.440 here in the US. It's unlikely that we are going 0:03:44.480 --> 0:03:48.160 to have a broad, widely disseminated outbreak of ZEKEA in 0:03:48.200 --> 0:03:51.320 the continental the United States, similar to what's happened in 0:03:51.360 --> 0:03:54.560 Brazil and what is happening in Puerto Rico. At least 0:03:54.560 --> 0:03:57.800 fifteen cases of zeke infections have been confirmed in an 0:03:57.840 --> 0:04:00.640 area of Miami. They're believed to have been transmitted locally, 0:04:00.880 --> 0:04:03.320 and New Jersey has received a half million dollars from 0:04:03.360 --> 0:04:06.560 the CDC to help treat any ZEKEA infections and pregnant women. 0:04:06.720 --> 0:04:09.760 The latest statewide count shows seventies six infected with ZEKA 0:04:10.000 --> 0:04:13.120 after returning from travel overseas. Half of them are in 0:04:13.200 --> 0:04:16.080 Bergen and Passaic Counties. Officials say there are no cases 0:04:16.120 --> 0:04:18.640 of the infection being transmitted by mosquitoes and that the 0:04:18.640 --> 0:04:21.320 species that carry the virus has not been found in 0:04:21.360 --> 0:04:23.679 the state. Global News twenty four hours a day, powered 0:04:23.680 --> 0:04:26.479 by more than journalists and analysts in more than one 0:04:26.560 --> 0:04:30.240 hundred twenty countries. I'm Rainy and Essensio. This is Bloomberg, Charlie, 0:04:30.360 --> 0:04:33.000 and we thank you. And again we've got stocks higher. 0:04:33.080 --> 0:04:35.719 Tesla reporting after the closing bell up now by eight 0:04:35.720 --> 0:04:39.159 tenths of one percent, SMP five Index up a point 0:04:39.160 --> 0:04:42.719 again there of one tenth of one percent. I'm Charlie Palaton. 0:04:42.880 --> 0:04:46.919 That's a Bloomberg business flash. This is taking stock with 0:04:47.080 --> 0:04:51.880 them Fox and Kathleen Hayes on Bloomberg Radio for broadcasting 0:04:51.920 --> 0:04:54.920 Life Today from Smith M. Lensky's near the Boston Harbor 0:04:54.960 --> 0:04:57.279 in Boston Seaport District. So we can talk to people 0:04:57.360 --> 0:04:59.680 like our next guest, So, how do you feel about 0:04:59.680 --> 0:05:01.920 the market right now? How do you feel about your investments? 0:05:02.320 --> 0:05:04.920 Do robo advisors make you feel better or worse? Well, 0:05:04.920 --> 0:05:07.520 here to talk about what makes us think that way 0:05:07.640 --> 0:05:10.760 and ways we can do with our own thinking. Caulbert 0:05:11.040 --> 0:05:15.000 He is senior vice president, Technology Strategy and financial behavior 0:05:15.080 --> 0:05:18.680 Specialist at the Commonwealth Financial Network. He's here in the 0:05:18.680 --> 0:05:21.800 Boston area. H You may recall hearing him on the 0:05:21.800 --> 0:05:25.000 show when we've gone to the Commonwealth Financial Annual Meeting. 0:05:25.080 --> 0:05:28.119 Always a treat for us on taking stock cold Welcome 0:05:28.120 --> 0:05:29.680 back to the show, Thanks so much for having me. 0:05:30.160 --> 0:05:34.080 So your degree and uh, you're actually it's a master's 0:05:34.120 --> 0:05:38.520 have applied positive psychology from the University of Pennsylvania. Uh, 0:05:38.560 --> 0:05:40.960 A lot of people don't feel that positive right now, 0:05:41.000 --> 0:05:43.359 and I honestly think robo advisors is one of the reason, 0:05:43.520 --> 0:05:46.560 because maybe millennials feel better because I like to just 0:05:46.640 --> 0:05:48.680 do things on their phones. But I think a lot 0:05:48.680 --> 0:05:52.119 of people miss the human touch absolutely, and I actually 0:05:52.160 --> 0:05:54.400 think millennials missed the human touch too. One of the 0:05:54.520 --> 0:05:57.240 things that I think is missed in working with millennials 0:05:57.360 --> 0:06:00.280 is the fact that they do want wise advice. They 0:06:00.320 --> 0:06:03.520 may want it through an instant message or a text 0:06:03.680 --> 0:06:06.000 or you know, a video chat or something else where. 0:06:06.000 --> 0:06:08.120 It's they're not having to actually go to your office, 0:06:08.520 --> 0:06:10.600 but they do want someone that they can rely on. 0:06:11.800 --> 0:06:16.440 How do you how do you identify fear based attitudes 0:06:16.839 --> 0:06:21.440 and behaviors? Well, I think that there are ways that 0:06:21.480 --> 0:06:24.159 you can identify it, certainly in person when you see 0:06:24.440 --> 0:06:27.560 different facial expressions and when you see different body postures, 0:06:27.960 --> 0:06:30.760 and there are incredible techniques that are just so easy 0:06:30.800 --> 0:06:34.240 to use. Like whether it's a doctor or financial advised 0:06:34.320 --> 0:06:36.560 or any professional when they see this type of behavior, 0:06:36.600 --> 0:06:38.880 One thing that they should know is that there are 0:06:38.880 --> 0:06:42.640 actually two nervous systems in the body. One system is 0:06:42.680 --> 0:06:45.160 that fight and flight nervous system. And when I'm in 0:06:45.200 --> 0:06:47.240 that state, that's called the sympathetic. When I'm in the 0:06:47.279 --> 0:06:51.119 sympathetic nervous system, I actually can't think rationally. It's only 0:06:51.120 --> 0:06:55.000 in the parasympathetic with psychologists nicknamed the rest and digest 0:06:55.120 --> 0:06:58.839 system that I can think rationally and make wise decisions. 0:06:59.040 --> 0:07:00.840 And so when an advised or or a doctor or 0:07:00.880 --> 0:07:04.120 anyone else who's trying to counsel someone is working with 0:07:04.160 --> 0:07:06.480 someone that they see is stressed or anxious or fearful 0:07:06.600 --> 0:07:10.160 or angry, the first step is really moving them from 0:07:10.240 --> 0:07:13.000 that sympathetic to the parasympathetic. Well, you better have a 0:07:13.000 --> 0:07:14.960 degree in pasitive psychology to do that, or you better 0:07:14.960 --> 0:07:16.720 have watched Lie to me that series that ran for 0:07:16.760 --> 0:07:18.560 a couple of years, which must have been one of 0:07:18.600 --> 0:07:22.400 your favorites. Absolutely, and that's based on actual research that 0:07:22.520 --> 0:07:26.280 was done worldwide to recognize different emotions that actually they 0:07:26.320 --> 0:07:30.200 have these things called micro expressions where when you practice this, 0:07:30.360 --> 0:07:33.200 you can actually see these things that the person themselves 0:07:33.280 --> 0:07:37.320 might not even realize they're experiencing. Absolutely, it's a great show, 0:07:37.520 --> 0:07:41.040 all right. Now, let's tie that into how people address 0:07:41.160 --> 0:07:45.040 their investments, because if you're a robo advisor, if you're 0:07:45.040 --> 0:07:47.600 doing something where it's just a human to a piece 0:07:47.640 --> 0:07:52.080 of technology, you can answer questions rather dispassionately and think 0:07:52.120 --> 0:07:55.119 that you're giving the correct answer. But when the stock 0:07:55.200 --> 0:07:58.920 market goes the way you didn't expect, that rationality can 0:07:58.960 --> 0:08:02.480 go out the window. Such a great point, So psychologists 0:08:02.520 --> 0:08:05.560 also talk about this notion of hot states and cold states, 0:08:05.560 --> 0:08:08.320 and hot states are when you're emotional and cold states 0:08:08.400 --> 0:08:10.760 or when you're rational, and a lot of times when 0:08:10.760 --> 0:08:13.559 you're filling out paperwork or going through an online wizard, 0:08:13.560 --> 0:08:15.400 you're in one of those cold states, and so you're 0:08:15.640 --> 0:08:18.400 rationally thinking about how much risk I can comfortably take. 0:08:18.960 --> 0:08:21.040 But then of course the market starts going down and 0:08:21.040 --> 0:08:24.040 you see your savings dwindling and retirements out the window. 0:08:24.120 --> 0:08:25.920 You might have to defer for a few years and 0:08:25.960 --> 0:08:28.040 you hate your job. All of a sudden, that hot 0:08:28.080 --> 0:08:31.240 state has kicked on, right, and so it pushes you 0:08:31.320 --> 0:08:33.679 to make act to take action, and a lot of 0:08:33.679 --> 0:08:36.320 times that action isn't in your best interest. And that's 0:08:36.320 --> 0:08:41.080 where whether it's a wise friend or a wise financial advisor, 0:08:41.160 --> 0:08:42.840 that's where they really come in handy in or and 0:08:42.840 --> 0:08:44.840 they're going to keep How do I know if I'm 0:08:45.440 --> 0:08:49.600 got the right financial advisor? I might if I feel 0:08:49.600 --> 0:08:52.360 good talking to you? Is that a good sign? Or 0:08:52.480 --> 0:08:54.199 does it show that I'm kind of gullible? And if 0:08:54.200 --> 0:08:56.880 someone's nice to me it says what I want to hear, 0:08:56.920 --> 0:08:58.680 You know that I'm not going to get the best advice. 0:08:58.800 --> 0:09:01.040 Is there a way to to deal with your feelings 0:09:01.040 --> 0:09:03.000 which drive a lot of the thought, but which we 0:09:03.000 --> 0:09:05.319 think is objective, but it's very subjective when it comes 0:09:05.360 --> 0:09:07.760 to making an important decision like that. That's a great question. 0:09:08.320 --> 0:09:11.520 There's actually some interesting research out there about doctors and 0:09:11.600 --> 0:09:14.439 that the doctors that they're that patients like the best 0:09:15.000 --> 0:09:17.720 actually give some of the worst advice. And so I 0:09:17.720 --> 0:09:21.000 think you're spot on that it's not just about feeling 0:09:21.040 --> 0:09:24.240 good about your financial advisor. It's also that they help 0:09:24.240 --> 0:09:26.520 you plan for the future. I think there are really 0:09:26.559 --> 0:09:29.120 three things that a financial advisor can spend their time 0:09:29.120 --> 0:09:31.640 on trying to predict the future, what's going to happen 0:09:31.640 --> 0:09:34.040 in the markets, what tax laws are going to change, etcetera. 0:09:34.320 --> 0:09:36.640 And personally, I think that's impossible. So if you have 0:09:36.679 --> 0:09:39.439 an advisor that's telling you they're doing that, they're likely 0:09:39.520 --> 0:09:42.080 not actually able to do that. They can plan for 0:09:42.120 --> 0:09:45.240 the future right techniques that already exist, whether it's putting 0:09:45.240 --> 0:09:47.400 money into a row for the right reasons or whatever 0:09:47.400 --> 0:09:50.319 else might be, and then they can wisely react with 0:09:50.400 --> 0:09:53.880 you to the current events. And I think those last 0:09:53.920 --> 0:09:55.880 two are the things that advisors should focus on. And 0:09:55.880 --> 0:09:58.240 so if you have an advisor that's doing those last two, 0:09:58.320 --> 0:10:01.120 well then you're in the right place. I want to 0:10:01.120 --> 0:10:04.120 just get your thoughts on the combination of having a 0:10:04.160 --> 0:10:08.080 live human being assist you or guide you with your 0:10:08.080 --> 0:10:12.160 financial future, but also employing some of these new robo 0:10:12.280 --> 0:10:15.880 advising technologies. Give me about ten seconds, All right, great point. 0:10:15.920 --> 0:10:19.360 I think it's robo versus RoboCop. And everybody wants RoboCop. 0:10:19.400 --> 0:10:21.160 You want somebody that you can look at in the eyes, 0:10:21.200 --> 0:10:23.720 but who's using all of the technology that the world's 0:10:23.720 --> 0:10:27.240 got available. And so similarly, if your advisor isn't using technology, 0:10:27.440 --> 0:10:30.080 they're not able to serve you well, thanks very much, 0:10:30.640 --> 0:10:33.520 good advice, good interesting alright. Cole Burke is the senior 0:10:33.600 --> 0:10:38.880 vice president Technology Strategy and a financial behavior specialist for 0:10:39.160 --> 0:10:44.320 Commonwealth Financial Network. They are based in Waltham, Massachusetts. If 0:10:44.360 --> 0:10:46.920 you're listening to Taking Stock, I'm pim Fox. My co 0:10:47.040 --> 0:10:51.360 host Kathleen haays. We are broadcasting from Atlantic Wharf in Boston, 0:10:52.280 --> 0:11:02.120 home to Smith and Lensky's. This is Bluebird. Donald Trump 0:11:02.200 --> 0:11:04.920 is against it, Present Obama is for it. Killer Clinton 0:11:04.960 --> 0:11:08.640 seems to be somewhere in the middle. Find out if 0:11:08.800 --> 0:11:12.840 the T P P trade deal is good politics and 0:11:12.840 --> 0:11:14.199 good economics. That's next.