WEBVTT - Expectations around the Fed have Waxed and Waned : Marvin Loh 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm Pim Fox. 0:00:08.760 --> 0:00:11.560 Along with my co host Lisa Abramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:33.040 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. And 0:00:33.120 --> 0:00:36.519 you know, we are broadcasting from Orlando at the Highatt 0:00:36.520 --> 0:00:40.839 Regency at the b n Y Melon Pershing's Insight eighteen 0:00:40.920 --> 0:00:42.640 and one of the insights who want to get a 0:00:42.680 --> 0:00:44.640 little bit more of has to do with the world's 0:00:44.680 --> 0:00:47.360 currency and fixed income markets, and here to help us 0:00:47.440 --> 0:00:50.920 is an Matthias Global rates and foreign currency strategist for 0:00:51.320 --> 0:00:53.800 Vanguard and so nice to have you with us. Thank 0:00:53.840 --> 0:00:55.880 you for being here. Um. You know, one of the 0:00:55.920 --> 0:00:58.000 things I was looking at was the value of the 0:00:58.000 --> 0:01:03.360 euro down six for sense since it's January. End of January, uh, 0:01:03.560 --> 0:01:08.640 strength of we're now one seventeen. With today's comments from 0:01:08.680 --> 0:01:13.720 the European Central Bank about going ahead with their less 0:01:13.760 --> 0:01:17.200 accommodative of posture, do you think that the dollar is 0:01:17.240 --> 0:01:20.679 going to remain strong? Well, it's interesting the currencies have 0:01:20.800 --> 0:01:24.480 not been behaving the way you would often have expected 0:01:24.520 --> 0:01:26.600 them to behave. They're kind of like the the pre 0:01:26.720 --> 0:01:29.520 teens of of the world at the moment. In terms 0:01:29.560 --> 0:01:32.759 of markets. Um, you know, there's a pretty giant interest 0:01:32.840 --> 0:01:37.040 rate differential between the US and Europe UM. And you 0:01:37.080 --> 0:01:40.040 would think that that would just strive, continued strengthen the dollar. 0:01:40.160 --> 0:01:42.560 That's the sort of traditional thing that you learn in school. 0:01:42.959 --> 0:01:45.520 But you had the euros strengthening pretty strongly at the 0:01:45.520 --> 0:01:48.920 beginning part of the year, mostly on economic expectations about 0:01:49.240 --> 0:01:52.840 economic growth, this global synchronized growth in Europe, and that 0:01:52.920 --> 0:01:56.880 really started to fade. Um. And now now the story 0:01:57.080 --> 0:01:59.320 is away from economic growth and back to interest rate 0:01:59.360 --> 0:02:02.000 differentials looking forward. Yeah, so we're going to try to 0:02:02.000 --> 0:02:03.920 figure them out, just as we try to figure out 0:02:04.440 --> 0:02:06.680 preteen children. I do want to get your sense though, 0:02:07.040 --> 0:02:09.239 today we did hear from the c B officials saying 0:02:09.320 --> 0:02:13.679 they might talk about talking about talking about reducing their 0:02:13.720 --> 0:02:16.880 bond purchasing at their June meeting. Um, And we were 0:02:16.919 --> 0:02:19.600 talking ahead of this segment. Is this basically just giving 0:02:19.600 --> 0:02:26.400 the finger to Italy? Well, Um, it definitely part of 0:02:26.400 --> 0:02:29.600 the vocal nature of the talking about the talking about 0:02:29.680 --> 0:02:31.560 you know, coming out with it right now probably has 0:02:31.560 --> 0:02:33.560 a little bit of something to do with Italy, especially 0:02:33.600 --> 0:02:37.079 as they've been pairing their purchases of Italian debt exactly exactly. 0:02:37.120 --> 0:02:39.320 I think what the c B is trying to say is, hey, 0:02:39.560 --> 0:02:42.360 you know, this is our party and you're welcome to it, 0:02:42.400 --> 0:02:43.840 but if you're gonna leave, it is not going to 0:02:43.919 --> 0:02:46.440 be easy for you. They're really trying to avoid the 0:02:46.520 --> 0:02:49.280 moral hazard situation with Italy and trying to kind of 0:02:49.480 --> 0:02:54.720 show them a future without the CBS backstop. So I 0:02:54.760 --> 0:02:57.280 do think there's part of it that is around that. 0:02:57.320 --> 0:02:59.560 But we've thought for a long time that, you know, 0:02:59.600 --> 0:03:03.760 in term of timing a fall more specific commentary, more 0:03:03.800 --> 0:03:06.440 specific plan in the fall of this year around around 0:03:06.440 --> 0:03:09.440 getting out of the KIWI or easing the qui um 0:03:09.480 --> 0:03:11.520 that they would have to start communicating in the summer. 0:03:11.919 --> 0:03:13.760 You know, I do want to just note that that 0:03:13.840 --> 0:03:17.040 indeed you did see Italian yields increase more than German 0:03:17.080 --> 0:03:19.920 boon yields in response to this ECB meeting. The idea 0:03:20.040 --> 0:03:23.840 here being but as ECB pairs its purchases the peripheral regions, 0:03:23.880 --> 0:03:26.320 particularly Italy, which seems to be at higher risk would 0:03:26.320 --> 0:03:29.240 suffer more as a result of the pull back. So 0:03:29.280 --> 0:03:31.800 I think that's interesting. Then, well, I just want to know, 0:03:32.080 --> 0:03:34.800 is this such a situation in which the ECB is 0:03:34.840 --> 0:03:37.760 cutting off its nose despite its face because you can 0:03:37.800 --> 0:03:40.440 stick to rules for the sake of sticking to rules, 0:03:40.800 --> 0:03:44.480 But when you have a potential crisis, why wait for 0:03:44.600 --> 0:03:48.080 it to be a real crisis such as Italy which 0:03:48.320 --> 0:03:51.680 the new government has pledged to spend a lot of 0:03:51.720 --> 0:03:55.960 money to lower taxes while they still have a huge 0:03:56.000 --> 0:03:58.800 government deficit. Why would the ECB do that? Sure? Well, 0:03:58.840 --> 0:04:01.680 I think the reality is we are economics team at 0:04:01.720 --> 0:04:05.400 Vanguard has done some work on the structure of Italian debt, 0:04:05.920 --> 0:04:09.400 and they have a very low interest rate on that debt. 0:04:09.440 --> 0:04:11.160 I mean they've issued most of it in these super 0:04:11.160 --> 0:04:14.360 low interest rate conditions, so so really their interest cost 0:04:14.400 --> 0:04:17.440 of quite low on their existing debt, Plus the maturity 0:04:17.520 --> 0:04:19.640 is really quite long, so they would have to blow 0:04:19.680 --> 0:04:23.719 their budget deficit really up in order to create a 0:04:23.720 --> 0:04:27.720 situation where the actual interest um payment on the debt 0:04:27.760 --> 0:04:31.279 becomes extremely punitive to them. So they're in a weird way. 0:04:31.279 --> 0:04:33.560 They're in a good situation to have this kind of 0:04:34.120 --> 0:04:37.279 populist environment going on in Italy right now, because the 0:04:37.440 --> 0:04:39.640 reality of it is it it's going to take a 0:04:39.680 --> 0:04:41.840 lot before it really starts to hurt. You know, I'm 0:04:41.880 --> 0:04:43.880 struck by the fact that we still have more than 0:04:43.920 --> 0:04:46.680 seven trillion dollars of negative yielding debt out there in 0:04:46.720 --> 0:04:49.680 the world, even as the FED continues to pull back 0:04:49.720 --> 0:04:52.520 from a stimulus and the ECB talks about talking about 0:04:52.560 --> 0:04:56.039 talking about withdrawing from its quantitative easing program. Do you 0:04:56.080 --> 0:04:58.719 think that we are going to see this volume of 0:04:58.800 --> 0:05:00.800 yielding debt persists or you think we're going to see 0:05:00.800 --> 0:05:04.040 it slowly whittled down as the tape ring goes on. 0:05:04.920 --> 0:05:08.000 You know that that is the need to move away 0:05:08.040 --> 0:05:11.640 from this massive bulk of negative yielding debt is something 0:05:11.680 --> 0:05:14.880 that is driving the more programmatic nature of the European 0:05:14.920 --> 0:05:17.719 Central Bank that they know, just like the FED new 0:05:17.800 --> 0:05:19.960 that they had to get away from the zero bound 0:05:20.400 --> 0:05:22.520 um you know, zero in the US, it's like negative 0:05:22.520 --> 0:05:26.640 in Euros, So it's the same understood thing. But um 0:05:26.839 --> 0:05:29.040 central banks feel like they have to get away from 0:05:29.040 --> 0:05:32.159 this sort of you know, magnet of super low rates, 0:05:32.200 --> 0:05:34.520 and they're gonna do it every chance they can until 0:05:34.560 --> 0:05:36.760 they get to some neutral level. But I'm struck by 0:05:36.800 --> 0:05:40.760 the idea of can the European economy withstand the shock 0:05:40.839 --> 0:05:44.200 of that? Well, that's a big question. Earlier in the 0:05:44.240 --> 0:05:46.680 year it looked like it definitely could you know, the 0:05:46.720 --> 0:05:50.560 economic numbers were looking good, growth was looking good. Um. 0:05:50.720 --> 0:05:53.159 We view this current situation a little bit more like 0:05:53.160 --> 0:05:56.839 a soft patch and not a complete derailment of the train. Um. 0:05:56.920 --> 0:05:59.719 But but that's a big question, which is why I 0:05:59.800 --> 0:06:02.239 do you find it interesting that the ECB has decided 0:06:02.279 --> 0:06:05.280 to make noise right now about talking about talking about 0:06:05.279 --> 0:06:08.960 talking guy. We have listened a minute left. I just 0:06:08.960 --> 0:06:11.080 want to get real quick tenure treasure yields. Do you 0:06:11.120 --> 0:06:14.760 think that they're going lower or higher? They definitely seem 0:06:14.839 --> 0:06:18.600 like they want to go lower. Um. You know, every 0:06:18.640 --> 0:06:21.919 opportunity we have, the market seems more sensitive to bad 0:06:21.920 --> 0:06:24.880 news and a and a rally or lower yields UM, 0:06:24.920 --> 0:06:28.200 and and less sensitive to a big sell off for 0:06:28.279 --> 0:06:31.479 higher yields. And Matthias, thank you so much for being 0:06:31.520 --> 0:06:34.359 with us. Come back. It's wonderful to be here with you. 0:06:34.400 --> 0:06:37.599 And Matthias Global rates and foreign currency strategies to for 0:06:38.160 --> 0:06:41.440 Vanguard talking about the world of interest rates, especially as 0:06:41.480 --> 0:06:44.080 the ECB talks about talks about talking about possibly talking 0:06:44.120 --> 0:06:47.120 about reducing it's bond purchase. It sounds so good when 0:06:47.160 --> 0:07:05.200 they do it in German, French and Italian. We're broadcasting 0:07:05.240 --> 0:07:09.960 live from b N Y Melon Pershing's Inside eighteen, Orlando, Florida. 0:07:10.040 --> 0:07:12.800 I'm Pim Fox along with Lisa Ramoitz. Our next guest 0:07:12.880 --> 0:07:15.000 is at the forefront of the digital revolution when it 0:07:15.040 --> 0:07:18.760 comes to the financial services industry. Ram Nagapon is the 0:07:18.840 --> 0:07:22.920 chief information officer at b N Y Melon Pershing and 0:07:22.960 --> 0:07:24.720 he joins us now, rom thank you very much for 0:07:24.760 --> 0:07:26.560 being with us, and thank you for having us here 0:07:26.560 --> 0:07:28.720 at the conference. Thank you for having me as well. 0:07:28.800 --> 0:07:30.560 One of the things I do when I come down 0:07:30.600 --> 0:07:32.320 in the morning here is I take a look at 0:07:32.400 --> 0:07:36.120 all of the different boots and all of the different presentations. 0:07:36.200 --> 0:07:42.120 And in addition to the hockey table and the foosball table, 0:07:42.240 --> 0:07:47.080 what I've noticed is an increase in the amount of 0:07:47.240 --> 0:07:50.720 digital offerings. Whether it is just flat panels that are 0:07:50.760 --> 0:07:55.120 being used, but more often it is about the technology 0:07:55.240 --> 0:07:59.800 that registered reps or people in the industry are being offered. 0:07:59.840 --> 0:08:03.040 And I'm wondering what is the biggest issue for you. 0:08:03.160 --> 0:08:05.880 Right now, we can go into things like softwares of services, 0:08:06.080 --> 0:08:08.440 but what is the biggest focus for you? The biggest 0:08:08.480 --> 0:08:14.960 focus is our customer wants the best experience in consuming 0:08:15.160 --> 0:08:19.680 our services. So this technology, the innovation and technology and 0:08:19.760 --> 0:08:24.200 all these new tools and other innovations is going to 0:08:24.320 --> 0:08:27.960 help us deliver that experiences. Right, That's the key and 0:08:28.000 --> 0:08:30.880 our challenges how do we get that best experience to you? 0:08:31.320 --> 0:08:34.400 Because we are financial services and we are getting compared 0:08:34.520 --> 0:08:37.920 not with our competition and finance services, but with companies 0:08:37.960 --> 0:08:41.520 like Apple, Google, Amazon and those So you know, we're 0:08:41.520 --> 0:08:44.920 all getting about taking these technology innovations that are coming 0:08:44.960 --> 0:08:49.440 out UM and applying it to wealth management and delivering 0:08:49.480 --> 0:08:52.079 the best experience. So how much is this just making 0:08:52.080 --> 0:08:56.120 the interface nicer? It's not just the interface, right, Interfaces 0:08:56.400 --> 0:09:00.160 that's a misconsumption. People think experiences of our interface know 0:09:00.520 --> 0:09:04.240 and experience is about UM. For example, you know, I 0:09:04.280 --> 0:09:07.640 want to tell your password is one of the biggest 0:09:07.679 --> 0:09:10.199 challenges of people, telling my god, it is so frustrating. 0:09:10.240 --> 0:09:13.240 You've got forty million passwords from every single difference. Look 0:09:13.320 --> 0:09:15.400 at it. I'm going to give you a biometric face 0:09:15.480 --> 0:09:19.080 idea and finger idea. You know fingerprint, that is an experience. 0:09:19.320 --> 0:09:22.000 It is an interface. It starts with an interface, but 0:09:22.080 --> 0:09:24.960 experience is more in depth. It starts from experience. You 0:09:25.000 --> 0:09:28.400 know how you interact to efficiency, you do things a 0:09:28.400 --> 0:09:32.200 lot faster than you know, just having a nice interface 0:09:32.240 --> 0:09:35.480 to end you don't look at one click purchase. Is 0:09:35.520 --> 0:09:40.320 that an interface or is an experience? The ability of 0:09:40.400 --> 0:09:46.440 the customer to now have access to all of their 0:09:46.480 --> 0:09:52.840 information is well known. But where that information lives. Does 0:09:52.880 --> 0:09:55.000 it live in the cloud, does it live at b 0:09:55.200 --> 0:09:58.240 n Y melon pershing? Where does it live? And what 0:09:58.280 --> 0:10:01.880 does the cloud movement mean for your business? Yet? So 0:10:01.920 --> 0:10:06.120 you are touching a very important topic about data, how 0:10:06.240 --> 0:10:08.840 you keep it and where you keep it and how 0:10:08.960 --> 0:10:14.400 secure you keep it. Right now, cloud it's getting more 0:10:14.440 --> 0:10:17.120 secure because people understand. You know, if you put in 0:10:17.120 --> 0:10:18.839 a cloud, somebody can come and take it. But no, 0:10:18.960 --> 0:10:21.760 it is getting secured. So I think it is all 0:10:21.800 --> 0:10:24.240 about who is the custodian that keeps the data more 0:10:24.240 --> 0:10:28.760 secure so that the privacy information get doesn't get easily tampered. 0:10:29.200 --> 0:10:32.079 So if you ask me, different people keep the data. 0:10:32.200 --> 0:10:34.520 But there are regulations and other things that you need 0:10:34.600 --> 0:10:38.360 to keep data safe that somebody else doesn't compromise it, 0:10:38.640 --> 0:10:41.760 take it and do something wrong. So data point of view, 0:10:41.800 --> 0:10:44.079 it's a very biggest challenge in this industry is to 0:10:44.200 --> 0:10:48.560 make sure that the data is secure and kept intact. Okay, 0:10:48.800 --> 0:10:52.199 data security is kind of a fuzzy concept because it's 0:10:52.200 --> 0:10:55.520 one thing for somebody to steal with malicious purposes. It's 0:10:55.520 --> 0:10:59.200 another for somebody to use somebody's financial data to better 0:10:59.240 --> 0:11:02.760 market things to them, which could be a huge financial bond. 0:11:02.800 --> 0:11:06.120 Whoever can sell such data, I'm wondering, you know what 0:11:06.280 --> 0:11:10.160 sort of the overall regulation on that front. Well, we 0:11:10.200 --> 0:11:12.480 need to get a client consent even to give it 0:11:12.520 --> 0:11:15.679 to someone. Even from marketing, you cannot just give your 0:11:15.720 --> 0:11:18.040 clients data that you're comment Well, but what about you know, 0:11:18.080 --> 0:11:20.560 overall data, maybe not on a specific person, but sort 0:11:20.559 --> 0:11:24.360 of trends in in in their financial information. There's a 0:11:24.360 --> 0:11:28.040 lot of regulations around data on how you need to keep, 0:11:28.160 --> 0:11:30.480 how do you need, how you keep store it, how 0:11:30.520 --> 0:11:33.360 do you share it? All of them do exist, but 0:11:33.520 --> 0:11:35.480 as you know, in the industry, there's a lot more 0:11:35.600 --> 0:11:37.679 happening around the data and the use. I don't want 0:11:37.679 --> 0:11:40.440 to name all the companies. Everybody knows that um so 0:11:40.480 --> 0:11:42.720 there's a lot more you're gonna if you're gonna see 0:11:42.920 --> 0:11:47.040 around this data. Um see my view as a technologist, 0:11:47.440 --> 0:11:50.720 you've got to desensitize the data, meaning value of the 0:11:50.840 --> 0:11:53.920 data when somebody takes it should not be too much. 0:11:54.400 --> 0:11:56.240 What I meant, if you have a credit card, you 0:11:56.240 --> 0:11:58.800 cannot just charge. You need something else on top of 0:11:58.800 --> 0:12:02.360 a curdit card that somebody doesn't misuse it. Things like that. 0:12:02.360 --> 0:12:05.839 That's where this biometrics and all other technology innovation is 0:12:05.840 --> 0:12:08.680 going to help us change. It's a slow change, but 0:12:08.800 --> 0:12:11.680 people are getting to it. Just imagine you come and 0:12:11.679 --> 0:12:13.640 go into a country and you stand in the turn 0:12:13.679 --> 0:12:16.760 style and it lets you go in. See that is 0:12:16.760 --> 0:12:20.640 a you know, biometrics, everything works and to make your 0:12:20.679 --> 0:12:23.679 experience better a lot of technology and your kid you 0:12:23.679 --> 0:12:26.520 don't have to worry about keeping the password really really 0:12:26.559 --> 0:12:29.480 tight because they need your biometrics along with the password 0:12:29.480 --> 0:12:33.319 to let you in. Tell us about robot advising companies 0:12:33.360 --> 0:12:38.840 like Betterment Wealth Front, all of them have some form 0:12:39.040 --> 0:12:44.680 of sig FIG. That's from schwab a Merritrade. What what's 0:12:44.720 --> 0:12:47.040 your view on robot advisors and how they have progressed 0:12:47.040 --> 0:12:49.360 in the years since we've spoken to you, meaning this 0:12:49.440 --> 0:12:52.480 is a topic that has been widely discussed orable but 0:12:52.520 --> 0:12:55.480 for the last two years. Right. It started as if 0:12:55.520 --> 0:12:58.720 the technology is going to replace the adviser. My view 0:12:58.840 --> 0:13:01.679 is it's not going to. So the technology is going 0:13:01.720 --> 0:13:05.480 to augment our healthy advisor to do a better job. 0:13:05.760 --> 0:13:08.679 Even the companies you mentioned. It started as if I'm 0:13:08.679 --> 0:13:11.559 just gonna ask your ten questions, give you a portfolio, 0:13:11.600 --> 0:13:14.480 and your job is over as an advisor. No. Now 0:13:14.520 --> 0:13:18.120 they are getting into hybrid models where they're going to 0:13:18.320 --> 0:13:20.240 kind of put in people at the right time to 0:13:20.320 --> 0:13:22.800 give you a technology and the hybrid so that which 0:13:22.880 --> 0:13:26.480 costs more, which costs more? Yes, Um, So the space 0:13:26.520 --> 0:13:30.360 of robot advice is actually moving from a technology only 0:13:30.480 --> 0:13:34.679 solution into a hybrid or a digitally enabled advisor type solution. 0:13:34.760 --> 0:13:37.720 It's so interesting because this is actually echoing what Bank 0:13:37.760 --> 0:13:41.720 of America's chief Operations and Technology officers said yesterday at 0:13:41.720 --> 0:13:44.040 a conference at Bloomberg headquarters, where she said, you know 0:13:44.080 --> 0:13:45.719 that there's been a lot of fear that your job 0:13:45.800 --> 0:13:47.679 is going to get replaced by automation, but it's really 0:13:47.760 --> 0:13:50.520 used to augment sort of those human qualities that are 0:13:50.559 --> 0:13:53.240 really prized. What are those human qualities that are most 0:13:53.280 --> 0:13:57.160 important now for an adviser, it's understanding the relationship and 0:13:57.280 --> 0:14:00.040 the entire not just the account or the car and 0:14:00.160 --> 0:14:03.320 whole the account holder, but do know a lot more 0:14:03.440 --> 0:14:06.400 your entire life events. It's not just to give you 0:14:06.440 --> 0:14:09.040 a portfolio and make sure that a tone is Thereay, 0:14:11.600 --> 0:14:14.800 do you know what color you like? Yes? Yes, There's 0:14:14.800 --> 0:14:17.000 a lot of things you got to know when you 0:14:17.040 --> 0:14:20.240 go through your life events. People getting mad with people 0:14:20.480 --> 0:14:23.359 having a child, people sending it to the college, retirement. 0:14:23.680 --> 0:14:27.520 You have to know. The holistic technology will help. It's 0:14:27.520 --> 0:14:29.720 not going to replace. Thank you so much for being 0:14:29.720 --> 0:14:32.520 with us. We really love having you on Roum knock 0:14:32.600 --> 0:14:34.800 up In. He is chief information Officer at B and 0:14:34.920 --> 0:14:39.440 Y Melon Perishing. Definitely. Fintech is transforming a lot of industries. 0:14:55.840 --> 0:15:00.320 Five years ago, Robert advisory firms were the hot thing. 0:15:00.800 --> 0:15:04.400 Now everyone is a robo advisor in the investment management 0:15:04.440 --> 0:15:07.040 space pretty much. Simon Roy joins is now President chief 0:15:07.040 --> 0:15:10.920 executive officer of gem step invest goos robo advisor. He 0:15:11.000 --> 0:15:14.160 joins us here at the B n Y Melan Inside 0:15:15.120 --> 0:15:19.000 conference in Orlando, Florida. Simon, it seems like everyone says 0:15:19.080 --> 0:15:22.800 they're using, uh, you know, whether it is streamlined data 0:15:23.240 --> 0:15:27.800 aggregators or other technology to help them be a better advisor. Uh. 0:15:27.960 --> 0:15:30.240 Doesn't this mean that almost everyone is sort of leading 0:15:30.280 --> 0:15:34.960 toward robo advisory? Yeah, Lisa, I think if everyone is 0:15:35.000 --> 0:15:38.640 a robot, part of the reason is we're all millennials now, 0:15:40.280 --> 0:15:42.960 all right, so give us a sense what what's what 0:15:43.200 --> 0:15:44.840 is it a robo advisory? And just sort of you know, 0:15:44.840 --> 0:15:47.080 how much competition is there in this space and how 0:15:47.120 --> 0:15:50.240 is it defined within a world of technology. The way 0:15:50.240 --> 0:15:52.560 I look at it is, given we're all millennials, we're 0:15:52.560 --> 0:15:56.640 all becoming very adept at using technology smartphones and and 0:15:56.640 --> 0:16:00.920 and other other such technology. Um, the key is how 0:16:00.960 --> 0:16:04.400 do we make advice more accessible to the massive Americans 0:16:04.440 --> 0:16:07.880 who don't currently have access? And so we welcome firms 0:16:08.280 --> 0:16:11.760 leaning into robo and digital advice as we call it, uh, 0:16:11.800 --> 0:16:15.480 And we think there's a long runway for advisory firms 0:16:15.520 --> 0:16:20.440 for banks, create a unions, insurance companies to make it 0:16:20.600 --> 0:16:25.080 easy for clients existing and prospects to sign up for advice. 0:16:25.240 --> 0:16:27.280 And so part of what Jim SIP does is make 0:16:27.320 --> 0:16:31.200 it a drop dead five ten minute process to go 0:16:31.360 --> 0:16:34.120 from an initial context to a client. All right, so 0:16:34.640 --> 0:16:36.640 as you say this, I have to wonder how many 0:16:36.720 --> 0:16:40.640 people are open to receiving financial advice and can understand it. 0:16:40.800 --> 0:16:42.920 I think about my nine year old son will sometimes 0:16:42.920 --> 0:16:45.200 say to me, Mom, I was listening to you on radio. 0:16:45.320 --> 0:16:48.040 Why can't you just speak English? You know, because it's 0:16:48.080 --> 0:16:52.000 it's hard to understand if you're not deeply in the world. Absolutely, so, 0:16:53.000 --> 0:16:55.680 at the end of the day, individuals invests to achieve 0:16:55.720 --> 0:17:00.280 their goals secure retirement, kids. You know, you're nine old 0:17:00.280 --> 0:17:04.680 son going to college. You saved for it for a goal. 0:17:04.720 --> 0:17:07.239 But but but you have to start Maybe we need 0:17:07.240 --> 0:17:10.240 to talk offline, but you should start saving now if 0:17:10.280 --> 0:17:14.159 you haven't, because it's just look crazy. God no, But 0:17:14.359 --> 0:17:16.880 but the key is at the end of the day, 0:17:16.920 --> 0:17:20.440 we're looking to help clients meet their financial and ultimately 0:17:20.520 --> 0:17:25.400 life goals, and so in simple terms, we provide technology 0:17:25.480 --> 0:17:29.320 to banks, created unions, and other financial institutions to help 0:17:29.400 --> 0:17:33.639 their clients identify the goals that are important to them. 0:17:33.680 --> 0:17:37.920 Your kids college and go through a simple questionnaire asking 0:17:37.920 --> 0:17:41.520 about how old is your son, when would you expect 0:17:41.520 --> 0:17:43.800 them to go to college? How much do you have 0:17:43.920 --> 0:17:48.479 saved to date? Sorry about that one and then and 0:17:48.520 --> 0:17:51.760 then what you can do in working with the firm 0:17:51.920 --> 0:17:54.480 to have a better chance of actually reaching that goal. 0:17:54.600 --> 0:17:58.399 And in simple terms, that is what digital or like 0:17:59.080 --> 0:18:01.159 as we like to say by OIC advice is about 0:18:01.480 --> 0:18:03.320 how do we help individual how do we help our 0:18:03.359 --> 0:18:08.720 clients help their investors meet their financial goals. Now, I 0:18:08.760 --> 0:18:11.399 just want to see if this is accurate that GEM 0:18:11.440 --> 0:18:15.880 step you don't automate the portfolio management. I mean that's 0:18:16.720 --> 0:18:19.639 a distinction, right, and because when you think of robot advisor, 0:18:19.680 --> 0:18:21.480 you think, okay, you plugged on a bunch of information 0:18:21.480 --> 0:18:23.320 and it gives you this model portfolio and then it 0:18:23.440 --> 0:18:26.520 just sort of adjust. But the idea is, I think 0:18:26.520 --> 0:18:28.919 what GEM step you tell us is that if you 0:18:28.920 --> 0:18:32.000 want to be if you're a registered rep of you're 0:18:32.000 --> 0:18:34.400 managing money or at a bank or pench whatever it is, 0:18:34.600 --> 0:18:37.360 and you want to be an active investor, passive investor, 0:18:37.400 --> 0:18:39.440 you want e t s, want mutual funds, you can 0:18:39.560 --> 0:18:44.240 do all of that using the GEM step platform. So 0:18:44.359 --> 0:18:47.919 the GYM step platform is an open investment platform, meaning 0:18:48.040 --> 0:18:52.040 we don't prescribe to our client firms what their strategy 0:18:52.119 --> 0:18:56.000 should be. We help them bring their value proposition to 0:18:56.160 --> 0:18:59.640 the full for their clients, so plane speak. If they 0:18:59.640 --> 0:19:02.040 want to have an all E T F set of portfolios, 0:19:02.520 --> 0:19:05.040 we can support that. If they want to have mutual 0:19:05.080 --> 0:19:08.520 funds or individual securities, we can support that as well. 0:19:08.880 --> 0:19:11.560 And so we we provide them with the choice to 0:19:11.600 --> 0:19:15.439 bring their value proposition to bear. The investment side is 0:19:15.640 --> 0:19:18.600 only one piece of the value proposition, right. The other 0:19:18.640 --> 0:19:22.600 side is I have a question, how do I raise 0:19:22.680 --> 0:19:25.840 my hand? How do I get help? And so our 0:19:25.880 --> 0:19:30.399 belief is that full you know, full Robo maybe serves 0:19:30.400 --> 0:19:32.159 a small portion of the market. At the end of 0:19:32.160 --> 0:19:35.080 the day, this is personal finance. You want to be 0:19:35.119 --> 0:19:37.520 able to reach out and get advice. And so the 0:19:37.600 --> 0:19:40.720 second part of the value proposition is often what form 0:19:40.760 --> 0:19:42.879 of access do I have and level of access do 0:19:42.920 --> 0:19:46.000 I have to an individual advisor or a call center 0:19:46.080 --> 0:19:49.400 or someone in the branch, so that if I have questions, 0:19:50.440 --> 0:19:52.800 I know there's someone to talk to. And I may 0:19:52.800 --> 0:19:55.040 not need it all the time, but when I do 0:19:55.200 --> 0:19:57.240 raise my hand, I want to know there's someone there. 0:19:57.640 --> 0:20:01.639 And so whether it's an open platform point Esmonds and 0:20:01.840 --> 0:20:05.399 supporting that bionic advice, you know, we provide that as 0:20:05.440 --> 0:20:07.479 a service. You know, we have less in a minute left. 0:20:07.520 --> 0:20:09.040 But I'm wondering, do you think that more people are 0:20:09.080 --> 0:20:15.480 financially literate today than they used to be. I think 0:20:15.520 --> 0:20:18.760 there's been an education process of you know, over the 0:20:18.840 --> 0:20:22.480 last two decades that have made them a little bit 0:20:22.520 --> 0:20:25.199 more a little bit more educated when it comes to 0:20:25.320 --> 0:20:28.680 certain aspects of investment. But I really think that literacy 0:20:28.800 --> 0:20:30.960 is going to be increasing over the next ten twenty 0:20:31.000 --> 0:20:36.840 years as this digital technology makes advice and planning goals 0:20:37.480 --> 0:20:40.720 more accessible to individuals. And I think what what what 0:20:40.760 --> 0:20:44.159 we'll see is by using services such as gemstep and 0:20:44.200 --> 0:20:47.119 being able to see the impact of saving more, they'll 0:20:47.200 --> 0:20:51.360 learn what it means to actually, you know, achieve their 0:20:51.400 --> 0:20:55.360 goals on the financial side. So I'm optimistic it will increase. 0:20:56.040 --> 0:20:57.840 And he's also going to make us all younger because 0:20:57.880 --> 0:21:00.359 we're all millennials. Thank you very much. Simon Roy is 0:21:00.400 --> 0:21:04.359 the president and the chief executive of invest Goos gems Step. 0:21:17.960 --> 0:21:23.160 We are broadcasting from b n Y Melon's inside in Orlando, Florida, 0:21:23.440 --> 0:21:26.119 and that one of the topics today is the European 0:21:26.240 --> 0:21:29.399 Central Bank, the chief economists signaling that the bank's first 0:21:29.520 --> 0:21:33.680 formal round of talks on when to stop buying bonds 0:21:34.240 --> 0:21:36.440 is imminent. Here to tell us more about this and 0:21:36.520 --> 0:21:39.520 what it means for your investments is Marvin Low, Managing Director, 0:21:39.680 --> 0:21:43.440 senior global market strategist for b n Y Melon. Marvin, 0:21:43.640 --> 0:21:45.199 A pleasure to have you with us, and thank you 0:21:45.240 --> 0:21:48.040 for being with us here at this conference. So what 0:21:48.080 --> 0:21:50.359 do you make of these comments from the European Central Bank? 0:21:50.600 --> 0:21:54.040 You know, I guess, um, everyone's certainly UH is worried 0:21:54.040 --> 0:21:57.399 about it because it does represent a turning point to 0:21:57.840 --> 0:22:00.600 one of the largest amounts of liquid that has been 0:22:00.640 --> 0:22:03.520 put into the financial systems in the history of the world. 0:22:03.760 --> 0:22:06.120 But ultimately, you know, it shouldn't be a surprise. It's 0:22:06.240 --> 0:22:08.680 you know, they need to make some an announcement by September. 0:22:09.119 --> 0:22:12.040 Um data has been okay, you know, firming from kind 0:22:12.040 --> 0:22:13.720 of where we were last year. But I guess just 0:22:13.800 --> 0:22:15.840 the fact that it's stark and in front of us 0:22:15.840 --> 0:22:18.119 now people are are someone concerned about it. You know. 0:22:18.160 --> 0:22:21.480 One thing that I'm struck with is investor positioning right now, 0:22:21.520 --> 0:22:24.080 because you do have a generally hawkish tone coming out 0:22:24.080 --> 0:22:27.840 of the central banks UH, and people had been flooding 0:22:27.920 --> 0:22:31.520 into short term debt, which sensibly would suffer if rates 0:22:31.760 --> 0:22:34.640 rose substantially on the short end, I was done seeing 0:22:34.640 --> 0:22:37.040 a couple of really big flows out of short term 0:22:37.119 --> 0:22:40.359 exchange traded funds. There was about a billion dollars pulled 0:22:40.440 --> 0:22:43.440 from uh I share a short term Higle bondy TF 0:22:43.520 --> 0:22:45.639 in the past week, and there was another billion dollars 0:22:45.680 --> 0:22:48.680