WEBVTT - Gatekeepers and Keymasters 0:00:06.000 --> 0:00:09.080 Welcome the trillions. I'm Eric Beltis, and I'm Rachel Levin's 0:00:11.880 --> 0:00:14.440 and Joel Webber, who you're normally used to hearing, is 0:00:14.440 --> 0:00:16.599 not here. He's in China. He's editor of Business Week, 0:00:16.640 --> 0:00:20.560 so occasionally his job somehow Trump's this which I can't believe. 0:00:20.560 --> 0:00:23.279 This is should be way more important. But anyway, Rachel's 0:00:23.280 --> 0:00:25.880 filling in. Um, welcome, Rachel. How are you? It feels 0:00:25.880 --> 0:00:27.400 pretty good to be on this side of the desk. 0:00:27.440 --> 0:00:29.720 I can tell you that Joel better watch his back. 0:00:30.040 --> 0:00:34.479 I'm liking where I'm sat. Um. Actually, I think I'm 0:00:34.560 --> 0:00:38.159 Joel and you're me. If that's okay. I'm not sure 0:00:38.240 --> 0:00:41.080 whose shoes I'm wearing. Either way, big shoes to fail, 0:00:41.159 --> 0:00:42.800 so I will do my best to keep up. You 0:00:42.800 --> 0:00:44.800 even came a little late, which is normally what I do. 0:00:44.920 --> 0:00:46.920 And I was here early, which is normally Joel. But 0:00:46.960 --> 0:00:49.360 Joel has to leave early, so I might just bolting 0:00:49.400 --> 0:00:52.400 them halfway through. God, don't do that. I'll have to 0:00:52.479 --> 0:00:54.440 round things out. No, No, this is good. So we 0:00:54.480 --> 0:00:56.640 have a great episode. I think this is a unique one. 0:00:56.640 --> 0:00:58.960 It's wanted I've been wanting to do a while. You 0:00:58.960 --> 0:01:01.400 don't really see much written about this topic, which was 0:01:01.800 --> 0:01:04.200 the gatekeepers of the E t F world. What does 0:01:04.200 --> 0:01:06.360 that mean? So the metaphor I like to use is, 0:01:07.160 --> 0:01:09.800 let's say you're you make salad dressing and you're trying 0:01:09.840 --> 0:01:12.800 to get it into Whole Foods. Whole Foods has a gatekeeper. 0:01:13.360 --> 0:01:16.280 If they accept your salad dressing, you're in the You're 0:01:16.280 --> 0:01:18.400 in the money, right, your your your whole life changes. 0:01:18.840 --> 0:01:22.280 So the E t F industry has something like that. So, um, Rachel, 0:01:22.319 --> 0:01:24.280 talk a little bit about, you know, why this is 0:01:24.319 --> 0:01:27.640 important and what the platform can do to an E 0:01:27.720 --> 0:01:29.880 t F. Yeah, So, I mean this is something we've 0:01:29.880 --> 0:01:31.560 seen kind of in the E t F industry over 0:01:31.560 --> 0:01:33.759 the last I say five to ten years. We used 0:01:33.760 --> 0:01:36.080 to talk about the spaghetti cannon and the idea that 0:01:36.120 --> 0:01:38.080 you would just kind of fire ideas at the wall 0:01:38.120 --> 0:01:40.959 and see what sticks. Well, increasingly you need to have, 0:01:41.000 --> 0:01:43.920 I don't know, a rotating spaghetti cannon. You need to 0:01:44.000 --> 0:01:46.839 paper that wall with a kind of Jackson Pollock esque 0:01:47.040 --> 0:01:49.520 sort of canvas in order to actually get your product 0:01:49.520 --> 0:01:53.200 to the masses, because having a great idea isn't enough anymore. 0:01:53.240 --> 0:01:56.040 You need to get that great idea out to the masses. 0:01:56.080 --> 0:01:58.320 And one way of doing that is to get your 0:01:58.360 --> 0:02:01.480 e t F onto a platform. So those platforms are 0:02:01.520 --> 0:02:04.160 often run by class some of the biggest banks out there, 0:02:04.200 --> 0:02:06.760 what we call the wire houses and kind of the 0:02:06.760 --> 0:02:09.880 industry terminology. And once you get onto those platforms, you 0:02:09.919 --> 0:02:13.079 have access to all of the financial advisors that use 0:02:13.160 --> 0:02:16.200 their architecture. Now that can be a huge step up 0:02:16.240 --> 0:02:19.240 for some of the ETF issues out there, because, let's 0:02:19.240 --> 0:02:23.079 not forget the big three are really dominant here. We're 0:02:23.080 --> 0:02:26.920 talking of assets. You know, they're getting huge amounts of 0:02:26.960 --> 0:02:29.280 flows because they are so dominant in this space. So 0:02:29.320 --> 0:02:32.080 if you are a smaller issuer, you really really need 0:02:32.160 --> 0:02:34.280 to find a way to get your distribution so that 0:02:34.320 --> 0:02:37.200 you can even compete with these guys. Yeah, you frequently 0:02:37.240 --> 0:02:39.800 hear the smaller issuers at the conferences sort of you know, 0:02:39.880 --> 0:02:42.320 grape to you or on Twitter. You can't get on 0:02:42.360 --> 0:02:46.639 the platforms. The platforms. So we have with us today 0:02:46.800 --> 0:02:49.200 two people who know this world very well and are 0:02:49.200 --> 0:02:53.240 going to take us inside the platform world Gatekeepers, and 0:02:54.120 --> 0:02:59.760 we're joined today by Marianna Bush of Wells Fargo. Marianna, welcome, 0:03:00.080 --> 0:03:02.040 thank you very much. It's a pleasure being here. We 0:03:02.080 --> 0:03:04.240 also have John Mayer who is from global X who 0:03:04.280 --> 0:03:07.160 is an issuer trying to get on the platforms sort 0:03:07.200 --> 0:03:09.920 of like refer to them as the key masters, but 0:03:10.000 --> 0:03:12.560 he was also a gatekeeper in his former life at MARL. 0:03:12.680 --> 0:03:17.200 Welcome John, Thanks Eric, thanks for having me so this 0:03:17.240 --> 0:03:23.760 week on trillions, gatekeepers and key masters. So welcome guys. 0:03:23.919 --> 0:03:26.400 I'm very excited to have you guys here. Um, before 0:03:26.440 --> 0:03:28.200 we start, I just want to get a sense for 0:03:28.560 --> 0:03:31.480 the platforms and how much they actually take in. So 0:03:31.560 --> 0:03:36.240 there's twentytfs right, give or take a dozen. How many 0:03:36.240 --> 0:03:39.080 would you say are on the platforms out of that? Like, so, 0:03:39.160 --> 0:03:41.200 what what? What percentage are we talking here? It's probably 0:03:42.440 --> 0:03:46.000 so it's an exclusive club. It's hard to get into. Marianna, 0:03:46.080 --> 0:03:49.720 let's start with you. I actually met you over a 0:03:49.760 --> 0:03:52.440 decade ago. I was in data. I used to call 0:03:52.520 --> 0:03:55.960 Marianna the George Martin of Bloomberg, you know, the fifth Beatle, 0:03:56.480 --> 0:03:59.240 because she would come at us with such great suggestions 0:03:59.280 --> 0:04:01.480 for the funds data base. Why don't you have this? 0:04:01.520 --> 0:04:04.200 Morning store has this? And they would turn into great ideas. 0:04:04.200 --> 0:04:06.080 So I always thought you'd deserve like a little cut 0:04:06.120 --> 0:04:09.880 from the Bloomberg. But UM. That that aside, talk about 0:04:09.960 --> 0:04:12.080 what you do it wells fargo and how it involves 0:04:12.080 --> 0:04:15.600 et F s UM. I've been with the firm for 0:04:15.640 --> 0:04:19.240 a while. I started with them in We've gone through 0:04:19.279 --> 0:04:22.800 a few name changes, but except for the first two years, UH, 0:04:22.960 --> 0:04:25.680 since then, I've been doing pretty much the same thing, 0:04:26.040 --> 0:04:29.200 covering close end funds and since the mid nineties covering 0:04:29.279 --> 0:04:32.480 exchange traded funds. And what does that mean covering them again? 0:04:32.520 --> 0:04:35.400 You're you're I'm considering you sort of a gatekeeper. You 0:04:35.440 --> 0:04:39.599 are vetting them so that they get onto a platform 0:04:39.720 --> 0:04:42.800 and then the advisors that you service can use them. 0:04:42.839 --> 0:04:45.159 By covering a fund, whether it's on a close end 0:04:45.160 --> 0:04:48.760 funder and exchange traded fund, it means doing research on them, 0:04:48.800 --> 0:04:51.200 trying to understand them very well. In the case of 0:04:51.200 --> 0:04:53.719 an e t F, UM making sure that we understand 0:04:53.720 --> 0:04:57.080 the index methodology of the benchmark that the e t 0:04:57.200 --> 0:05:01.680 F is tracking, UM, understanding the risks, the volatility them, 0:05:02.400 --> 0:05:08.000 the liquidity UH efficiency metrics of them, doing research DP 0:05:08.120 --> 0:05:11.640 research on them, and trying to identify which are the 0:05:11.720 --> 0:05:15.360 e t f s that best fit a specific exposure. 0:05:15.520 --> 0:05:19.080 And in the case where UM they are tracking different 0:05:19.160 --> 0:05:22.880 ets are tracking exactly the same index. What are the 0:05:22.920 --> 0:05:28.119 differences between them besides the easy factor which is expense ratio? 0:05:28.800 --> 0:05:32.600 Um so, just covering them and recommending them to UH 0:05:32.760 --> 0:05:35.680 to the to our advisors and John, when did you 0:05:35.760 --> 0:05:38.480 first meet Marianna? Was as part of that role or 0:05:38.520 --> 0:05:40.839 are you kind of doing something to gentile? I actually 0:05:40.880 --> 0:05:43.440 think it was two decades ago that I met Marianna 0:05:44.040 --> 0:05:46.440 when I was the closed and fund research channel. Is 0:05:46.520 --> 0:05:49.800 that pain Webber, which obviously no longer exists, and then 0:05:49.960 --> 0:05:54.520 UBS purchased pain Webber, and then I left UBS in 0:05:54.560 --> 0:05:57.000 two thousand seven went to Merrill Lynch to do the 0:05:57.000 --> 0:06:00.479 same thing, covering closed down funds. Um so it's in 0:06:00.880 --> 0:06:04.919 Maryland two thousand seven to two thou seventeen, covering clothes 0:06:04.960 --> 0:06:08.280 in funds and then cover I wouldn't say covering E 0:06:08.400 --> 0:06:10.960 t F s. I was managing their et F model 0:06:10.960 --> 0:06:14.080 portfolio business WI started. I started doing that in about 0:06:14.080 --> 0:06:17.080 two thousand nine to interject that model portfolio is what 0:06:17.240 --> 0:06:19.640 exactly is that and how does that kind of relate 0:06:19.760 --> 0:06:22.560 to us? So that the coverage aspect of Marianna was 0:06:22.600 --> 0:06:26.840 talking about, Sure, well, model portfolios is a good way 0:06:26.839 --> 0:06:28.640 to think of it. As it's kind of a managed 0:06:28.720 --> 0:06:32.960 portfolio of using the components of something. And the component 0:06:33.080 --> 0:06:34.920 that what we're talking about now is is e t 0:06:35.120 --> 0:06:37.400 F s. Now, those e t fs have to be 0:06:37.440 --> 0:06:40.480 approved by a particular firm. So there's a different group 0:06:40.560 --> 0:06:42.960 that actually is kind of the gatekeepers within Mery Lynch 0:06:43.400 --> 0:06:46.359 and in that group actually has to approve the funds 0:06:46.640 --> 0:06:48.479 based on some of the things that that Marianna just 0:06:49.040 --> 0:06:54.599 brought up, assets, exposures, spreads, So in other words, sees 0:06:55.400 --> 0:06:59.479 the gatekeeper of the platform says, okay, this is good 0:06:59.560 --> 0:07:01.440 enough to be the platform. And then you were the 0:07:01.480 --> 0:07:04.520 model maker, so you choose from amongst what's on the platform, 0:07:05.200 --> 0:07:06.480 and if you're in the model, you get like a 0:07:06.520 --> 0:07:10.120 billion dollars instantly. So it's like depends on depends firm. Right, 0:07:10.200 --> 0:07:12.400 So yeah, if you're a big Meryl, yeah, because we 0:07:12.520 --> 0:07:15.320 see we actually see when Meryl rotates. You can tell 0:07:15.320 --> 0:07:17.880 in the flows it's just this giant spike out of 0:07:17.880 --> 0:07:20.480 nowhere and you okay, Meryl probably rotated in you know, 0:07:20.520 --> 0:07:23.000 out of this into this. But those ets have to 0:07:23.040 --> 0:07:25.040 be on the platform first. That's the first step, right, 0:07:25.120 --> 0:07:28.200 That's that's correct. And and there's periods of time, or 0:07:28.320 --> 0:07:32.559 like where I may have thought a certain fund should 0:07:32.560 --> 0:07:34.480 be in my portfolios, but it was not approved on 0:07:34.520 --> 0:07:38.160 the platform, so that there would be a process behind 0:07:38.160 --> 0:07:40.920 the scenes, like I was talking to, I would be 0:07:40.920 --> 0:07:42.760 talking to the gatekeepers out of the firm. Would you 0:07:42.800 --> 0:07:45.800 consider using X Y Z fund? Uh? They would say no. 0:07:45.920 --> 0:07:48.920 I say please, UM, and try to make my case 0:07:49.000 --> 0:07:52.200 more than just saying please. So so to to Eric's point, 0:07:52.200 --> 0:07:53.840 I mean, we can definitely see in the flows, you know, 0:07:53.880 --> 0:07:56.480 when we see a big rotation by those models. But 0:07:56.600 --> 0:07:59.320 I'm curious to your point about kind of getting onto 0:07:59.840 --> 0:08:02.320 the platform first, Marianna, can you speak to sort of 0:08:02.360 --> 0:08:05.560 the criteria that you're looking at or that the firm 0:08:05.680 --> 0:08:08.160 is looking at when it's deciding whether this e t 0:08:08.360 --> 0:08:12.160 F versus this ETF is actually available to financial advisors 0:08:12.160 --> 0:08:15.600 to either bio order to put into models. UM. Currently, 0:08:16.200 --> 0:08:18.800 my team and I are in the Well's Farrego Investment 0:08:18.840 --> 0:08:23.440 Institute and within that, within the Global Manager Research Division, 0:08:24.080 --> 0:08:26.800 and so we serve a number of lines of businesses. 0:08:27.400 --> 0:08:31.000 The biggest one is Well's farre Go Advisors, the brokerage firm, 0:08:31.440 --> 0:08:35.839 but also the private bank and family wealth, and so 0:08:37.000 --> 0:08:39.960 it is possible that there may be a search request 0:08:40.040 --> 0:08:42.600 from one of those lines of businesses, that there are 0:08:42.640 --> 0:08:46.240 clients there's demand for a specific exposure or for a 0:08:46.240 --> 0:08:50.800 specific e t F. Sometimes we may also decide that 0:08:51.080 --> 0:08:54.280 our master list is missing a certain type of e 0:08:54.400 --> 0:08:57.280 t F, a certain exposure, and so therefore we will 0:08:57.600 --> 0:09:01.120 UM look into what's available, UM impair them contrast of 0:09:01.240 --> 0:09:04.760 analyze them and figure out which is the most optimal 0:09:04.920 --> 0:09:08.400 one to to add. Well, let's go over that, because 0:09:08.720 --> 0:09:10.480 do you start with a list let's just say it's 0:09:10.520 --> 0:09:12.839 a tech ETF or let's go dividend. I think that's 0:09:12.920 --> 0:09:16.959 just makes sense. They're divid in d TF. Right, there's them, right, 0:09:17.400 --> 0:09:20.200 How do you trim that list to come up with 0:09:20.320 --> 0:09:24.360 what is going to be put on the platform from twos? 0:09:24.840 --> 0:09:27.840 Good question? Assets. It's is definitely a factor, and I 0:09:27.840 --> 0:09:31.880 would say is an important factor because while the factor 0:09:31.920 --> 0:09:35.480 appears to be very simple and very plain vanilla, I 0:09:35.520 --> 0:09:41.079 think it does uh keep us from taking certain types 0:09:41.120 --> 0:09:44.600 of risks, a lot of types of risks. Uh. The 0:09:44.720 --> 0:09:47.040 more assets there are, the more liquid the e t 0:09:47.240 --> 0:09:52.240 F is, UH, the cheaper it will probably be uh 0:09:52.320 --> 0:09:56.880 not only from an expense perspective, but also something that 0:09:57.360 --> 0:09:59.760 maybe not that many people focus on is from a 0:10:00.080 --> 0:10:05.120 udity perspective, bitas spreads um. Closure risk is something else 0:10:05.240 --> 0:10:08.480 that just looking at assets will help you to identify 0:10:09.000 --> 0:10:11.400 closure risk, or at least try to stay away from that. 0:10:11.679 --> 0:10:14.800 You wouldn't want to recommend an e t F that 0:10:14.840 --> 0:10:17.640 doesn't raise enough assets and then a few weeks later, 0:10:17.679 --> 0:10:21.080 a few months later, the sponsor decides, Oops, we couldn't 0:10:21.160 --> 0:10:24.559 raise enough acids, so let's just um close the fund 0:10:24.679 --> 0:10:27.560 or maybe change the index too, hopefully it will be 0:10:27.600 --> 0:10:31.200 more successful then. So assets is a very simple, but 0:10:31.280 --> 0:10:33.560 I think a very effective. And do you have like 0:10:33.840 --> 0:10:36.800 a particular bar you're looking at fifty million, a hundred million, 0:10:36.920 --> 0:10:39.160 a billion, Like if I'm an ECFS, you are how 0:10:39.240 --> 0:10:41.319 much have I got to raise before I am eligible 0:10:41.360 --> 0:10:44.800 to be considered. There's nothing written in stone, but I 0:10:44.840 --> 0:10:48.839 think it is very common um for the minimum to 0:10:48.880 --> 0:10:52.960 be a hundred million dollars. Certain broader exposures I would 0:10:52.960 --> 0:10:56.880 say they can easily go to get to a billion dollars. 0:10:57.520 --> 0:11:00.520 So it depends. So John, you're a global X, you 0:11:00.600 --> 0:11:02.760 probably have I don't know a bunch of ets that 0:11:02.760 --> 0:11:05.920 are blow a hundred million, just a just think you 0:11:05.920 --> 0:11:08.280 have a bunch of big ones to um take those 0:11:08.280 --> 0:11:10.880 small ones or new ones? What do you what do 0:11:10.960 --> 0:11:18.800 you saying to Marianna to get her to add them? Please? UM? So, 0:11:20.000 --> 0:11:22.640 I think we have seventy three between seventy three and 0:11:22.679 --> 0:11:26.560 seventy six funds and we have uh twenty five funds 0:11:26.559 --> 0:11:29.120 that are a hundred million dollars or more. When we 0:11:29.160 --> 0:11:31.160 have certainly some new funds, that we should come out 0:11:31.200 --> 0:11:32.959 with that two million and a half million dollars in 0:11:33.000 --> 0:11:38.360 seat capital. Now, different firms require different things. Some firms 0:11:38.679 --> 0:11:42.040 are more quant based and in terms of how they 0:11:42.080 --> 0:11:47.120 look at uh covering certain funds for the stepping back 0:11:47.200 --> 0:11:50.480 once one moment. UH, certain firms won't even look at 0:11:50.480 --> 0:11:52.440 you if you have just one or two funds out there. 0:11:52.640 --> 0:11:56.680 They want a significant firm, a firm that has every aspect, 0:11:56.720 --> 0:12:00.600 whether it be product management and marketing and research and 0:12:01.000 --> 0:12:03.600 sales and all that kind of stuff. Global X certainly 0:12:03.640 --> 0:12:05.679 falls into that kind of category. We have about eleven 0:12:05.679 --> 0:12:09.679 billion dollars in assets UM. But certain firms required at 0:12:09.720 --> 0:12:12.120 least three months of his trading history, and it doesn't 0:12:12.160 --> 0:12:15.320 necessarily matter if there are a smaller fund. Other firms 0:12:15.360 --> 0:12:19.480 require million fifty million or a hundred million. There's certain 0:12:19.480 --> 0:12:23.160 exposures that certain funds aren't going to cover. There's some 0:12:23.240 --> 0:12:25.280 new funds out there that some of the wirehouses are 0:12:25.559 --> 0:12:27.640 not quite ready to cover yet. We haven't one of 0:12:27.679 --> 0:12:35.160 those funds. Um Yes Marijuana e TF. You caught X 0:12:37.280 --> 0:12:40.040 which which went up like ten percent to that. It's 0:12:40.040 --> 0:12:42.160 one of the tamer tickers, believe it or not, like 0:12:42.320 --> 0:12:44.440 you you kind of sometimes you guys, when I see 0:12:44.440 --> 0:12:47.120 you're filing, I'm expecting something wild and you take it 0:12:47.160 --> 0:12:49.680 down a notch. Actually now, I mean global X is 0:12:49.760 --> 0:12:54.240 very thoughtful and how we market our our funds. Um 0:12:53.960 --> 0:12:57.200 Uh pot x are cannabisy TF is one of our 0:12:57.240 --> 0:13:00.600 newest funds, and we thought long and before we came 0:13:00.640 --> 0:13:02.880 out with that fun But but I digress. There's certain 0:13:02.880 --> 0:13:05.920 other firms that just you're automatically on so usually not 0:13:05.960 --> 0:13:08.280 the wirehouse, and that's where there you get a huge 0:13:08.280 --> 0:13:11.320 amount of But are you talking to Marianna constantly? Do 0:13:11.360 --> 0:13:13.679 you shoot your emails? Like how do you? How do 0:13:13.720 --> 0:13:15.960 you how often are you talking to her to try 0:13:16.000 --> 0:13:18.600 to get her to cover more of your stuff? Global 0:13:18.760 --> 0:13:22.280 X does. It's not me personally. We talk, We talk 0:13:22.360 --> 0:13:25.280 we know each other, but maybe somebody else at global 0:13:25.280 --> 0:13:27.280 ex that will reach out to how many global x 0:13:27.320 --> 0:13:29.040 cts do you cover? Are? Do you do you have 0:13:29.080 --> 0:13:34.160 you allowed on out of seventy three I I don't 0:13:34.160 --> 0:13:36.320 know the answer right now, but not all right and 0:13:36.360 --> 0:13:39.440 not no, not at all right? Okay, please every second? 0:13:39.480 --> 0:13:44.480 Every second? Um, do you ever point out like, let's 0:13:44.480 --> 0:13:46.719 say an e T F has a nice run, right, 0:13:46.720 --> 0:13:48.640 it's up a lot, or it's assets just one over 0:13:48.640 --> 0:13:51.520 a hundred million? Do you fire out emails to the platform? 0:13:51.559 --> 0:13:55.120 But I'm sure there you know it's in terms of performance. 0:13:55.120 --> 0:13:57.520 I don't think that's necessarily helpful. I mean, these are 0:13:57.640 --> 0:14:01.559 index funds um and they go up and down based 0:14:01.600 --> 0:14:04.480 on the underlying exposures, and I don't think they're necessarily 0:14:04.520 --> 0:14:10.600 judged on on that portion. They're they're more judged on fees, assets, liquidity, 0:14:10.720 --> 0:14:14.320 exposures and the actual firm. But certainly, if a fund 0:14:14.320 --> 0:14:16.320 gets to scale, there's going to be a group of 0:14:16.320 --> 0:14:20.040 people within our firm. That's that's calling the Marianna Bushes 0:14:20.080 --> 0:14:22.640 of the world. I would say on on performance, I 0:14:22.640 --> 0:14:25.080 would it shows up in a slightly different way for 0:14:25.200 --> 0:14:27.480 E T s. I would say, Um, if it happens 0:14:27.520 --> 0:14:30.680 to be it's really an index, not the the e 0:14:30.800 --> 0:14:33.000 t F, but an index that or an exposure that 0:14:33.120 --> 0:14:36.160 is doing really, really well. Chances are there's going to 0:14:36.160 --> 0:14:39.480 be more demand for that exposure, especially if it's a 0:14:39.600 --> 0:14:42.920 unique and niche exposure. And that's where we're going to 0:14:43.000 --> 0:14:45.840 start seeing the demand from the financial advisors or from 0:14:45.880 --> 0:14:49.720 the client saying you don't offer this, I'm interested in 0:14:49.720 --> 0:14:52.040 this e t F and this exposure. Can you please 0:14:52.040 --> 0:14:54.240 look into that? So that's how performance is going to 0:14:54.400 --> 0:14:58.800 show up. And maybe performance is measured a slightly different 0:14:58.840 --> 0:15:02.400 way with e t S, for example tracking error. Um, 0:15:02.720 --> 0:15:05.840 so it's it's a different way of well attracts the index, right, 0:15:06.000 --> 0:15:08.400 which is its job in life, right, but the performance 0:15:08.760 --> 0:15:12.120 Sometimes ETF will just have a shardy object moment and um, 0:15:12.160 --> 0:15:15.960 nobody can ignore it like pot a year ago or robotics. 0:15:16.040 --> 0:15:19.120 And you're saying that advisors itself might come up to 0:15:19.120 --> 0:15:21.960 you and say, hey, starting to get some inquiries about this, 0:15:22.320 --> 0:15:24.720 and that's when performance would matter, right. Well, Well, there's 0:15:24.720 --> 0:15:28.120 certain firms where the interest by the financial advisor is 0:15:28.160 --> 0:15:32.200 the first point that is required before a firm will 0:15:32.240 --> 0:15:34.680 actually look at the fund for the due diligence process. 0:15:34.720 --> 0:15:37.320 So the tell where the dog, and sometimes that tell 0:15:37.400 --> 0:15:40.280 is really strong for us. It is a factor, it 0:15:40.440 --> 0:15:43.800 is an input. It's not necessarily I don't think I 0:15:43.800 --> 0:15:48.560 would say it's the number one factor, um, but certainly 0:15:48.560 --> 0:15:51.480 if there's demand, we certainly want to serve our clients. 0:15:51.760 --> 0:15:55.520 And so there's demand, we want to meet that demand. Uh. 0:15:55.560 --> 0:15:59.720 Now with demand also it is possible that it is 0:15:59.720 --> 0:16:05.920 a hot area and it may not become hot it 0:16:06.040 --> 0:16:08.720 maybe like the parents would be like, look, let's see 0:16:09.240 --> 0:16:14.800 x IV. You don't trust me on this. But there 0:16:14.840 --> 0:16:17.560 were times at Meryl where I really wanted to cover 0:16:18.040 --> 0:16:22.160 include a certain funds within the models that I was managing, 0:16:22.920 --> 0:16:24.440 and I would have to go to the due diligence 0:16:24.480 --> 0:16:28.040 department and say this is the reason why I want 0:16:28.040 --> 0:16:31.920 to include X y Z fund and over time they 0:16:32.000 --> 0:16:35.000 usually would kind of work with me. So again, the 0:16:35.040 --> 0:16:44.120 tail wagon the dog. So when we're looking at kind 0:16:44.120 --> 0:16:45.920 of what makes it onto the platform, So you've got 0:16:45.960 --> 0:16:48.480 all of these different inputs. You've got that the assets 0:16:48.520 --> 0:16:50.080 that that you want to see from a fund. You've 0:16:50.080 --> 0:16:52.400 got potentially track record and that kind of an amount 0:16:52.440 --> 0:16:55.120 of time trading. You've got maybe the issuer like how 0:16:55.280 --> 0:16:58.320 established they are and potentially kind of that demand and 0:16:58.400 --> 0:17:02.080 performance kind of aspect. John, when you don't get onto 0:17:02.160 --> 0:17:04.639 a platform, what does that kind of look like for 0:17:04.680 --> 0:17:06.400 you guys? I mean, is it a question of well, 0:17:06.440 --> 0:17:07.960 we've we've got to get on one, so we're going 0:17:08.040 --> 0:17:10.560 to keep on lobbying, or do you think about other 0:17:10.720 --> 0:17:13.840 kind of strategies to kind of get distribution. Well, so 0:17:14.000 --> 0:17:17.800 there are certain firms that on day one that that 0:17:17.840 --> 0:17:20.000 a E T F trades that you can you can 0:17:20.040 --> 0:17:24.520 buy UM that particularly TF like SWAB and Pershing and 0:17:24.640 --> 0:17:28.560 Commonwealth and Raymond James and RBC to name a few. Um, 0:17:28.600 --> 0:17:31.440 there's there's there's several others. Then there's other firms where 0:17:31.480 --> 0:17:35.960 there's three months requirements, so that that's the starting points. 0:17:36.560 --> 0:17:40.200 Now if there's major interest, obviously the assets will grow 0:17:41.160 --> 0:17:43.960 that certainly will help get onto some of the other 0:17:44.000 --> 0:17:48.160 platforms over time. There's certain platforms like Wells which takes 0:17:48.160 --> 0:17:52.280 about a year before they'll consider, and there's kind of 0:17:52.720 --> 0:17:56.080 different firms in between. And then in that time we 0:17:56.160 --> 0:17:58.720 do a lot of marketing. You know, we have we 0:17:58.800 --> 0:18:02.399 have sales sales to both internals next ternals that so 0:18:02.440 --> 0:18:04.080 it's still kind of an end goal. Like even if 0:18:04.080 --> 0:18:06.320 you're kind of like pursuing other other kind of methods 0:18:06.359 --> 0:18:08.320 to try and kind of like boost the assets and 0:18:08.359 --> 0:18:10.959 the other short term there's still long term kind of 0:18:11.040 --> 0:18:13.680 or medium term like outlook is we want to get 0:18:13.680 --> 0:18:18.040 on the wirehouse platforms. Is that important? It's very helpful. Um, 0:18:18.080 --> 0:18:20.960 It's not an absolute You can still be successful without 0:18:20.960 --> 0:18:22.560 being on the wires. But if you get to a 0:18:22.600 --> 0:18:25.760 certain scale, and if you're a firm like globle X, 0:18:25.800 --> 0:18:28.720 where we have a decent amount of assets, UM, we 0:18:28.760 --> 0:18:31.800 have a defined process in terms of every functional area, 0:18:32.400 --> 0:18:35.679 it's likely we will get onto the wires at some point. 0:18:36.000 --> 0:18:38.280 But then you have the other shops out there with 0:18:38.359 --> 0:18:41.639 one or two ETFs. They may never get on, but 0:18:41.680 --> 0:18:46.199 they still can achieve scale. Is it How quickly do 0:18:46.240 --> 0:18:49.040 you feel the effects of getting on the platform? Um? 0:18:49.320 --> 0:18:52.359 Is it very obvious that yep, that fund you know 0:18:52.640 --> 0:18:55.040 within a year you assets double kind of thing or 0:18:55.240 --> 0:18:57.639 not necessarily. It really depends on the exposure in the 0:18:57.640 --> 0:19:00.159 demand and and need a perception of the needed in 0:19:00.200 --> 0:19:04.640 the market. So it also depends on what's what's out there, 0:19:04.640 --> 0:19:08.320 and we're you're competing against so we could be the 0:19:08.400 --> 0:19:13.320 only e t F that the financial technology e t 0:19:13.520 --> 0:19:17.720 F or autonomous vehicles or um robotics, well there was 0:19:17.800 --> 0:19:22.359 a bunch of those. If you're number one, meaning the 0:19:22.400 --> 0:19:25.199 only fund out there, certainly helpful. And if you're too 0:19:25.400 --> 0:19:27.720 you have that great ticker and lower expenses, that's certainly 0:19:27.720 --> 0:19:32.280 helpful as well. But bots was an interesting example. Robot 0:19:32.320 --> 0:19:35.520 came out first, but bots passed it in assets. Was 0:19:35.600 --> 0:19:40.360 platforms part of that? I I think platform was certainly 0:19:40.680 --> 0:19:43.400 part of it. We dedicate a lot of time to research. 0:19:43.840 --> 0:19:45.960 A research team headed by j Jacob said, you know, 0:19:45.960 --> 0:19:48.919 we have four or five people working with him. So 0:19:49.960 --> 0:19:54.000 and that particular fund is a lot more defined then 0:19:54.080 --> 0:19:58.560 it's competitor, so that we and if we can articulate 0:19:58.600 --> 0:20:01.320 that properly, that is helpful to the market. Maybe if 0:20:01.320 --> 0:20:04.840 you're lucky and something happens in the news, that helps 0:20:04.960 --> 0:20:07.280 to right. We saw that with hack, you know, back 0:20:07.320 --> 0:20:09.439 in twelve I think you know when we saw kind 0:20:09.440 --> 0:20:11.680 of like suddenly a really big interest in sort of 0:20:11.880 --> 0:20:15.760 security and cybersecurity just after it had launched and suddenly 0:20:15.800 --> 0:20:18.280 asked its went skyrocketing. But I just want to circle 0:20:18.320 --> 0:20:20.520 back to a point that that John made about a 0:20:20.640 --> 0:20:22.600 sort of you know, et f issuers that may have 0:20:22.640 --> 0:20:24.480 like two or three funds and may never kind of 0:20:24.520 --> 0:20:26.800 get onto a wirehouse. UM, there's been a bit of 0:20:26.880 --> 0:20:30.359 kind of a sort of conversation or griping depending on 0:20:30.359 --> 0:20:33.240 on your perspective, from some of those smaller issues, and 0:20:33.280 --> 0:20:35.359 like the SEC has actually said it will look into 0:20:35.720 --> 0:20:38.960 kind of whether sort of investors are losing out from 0:20:39.040 --> 0:20:42.000 smaller issuers finding it tougher in the marketplace to get 0:20:42.040 --> 0:20:45.560 their funds distributed and to keep their funds going. Like, Marianna, 0:20:45.600 --> 0:20:47.520 do you have any kind of sort of sympathy for 0:20:47.560 --> 0:20:50.440 that perspective you know of of the smaller issu where 0:20:50.520 --> 0:20:52.920 that's you know, really got a great idea but they 0:20:53.040 --> 0:20:56.760 just can't get that distribution. Are they right to be 0:20:56.840 --> 0:21:01.280 angry that the wirehouses won't take them? Well, I can, 0:21:01.359 --> 0:21:05.960 I can understand, UM. But from our perspective, our clients 0:21:06.000 --> 0:21:09.119 our highest priority, and then number two our clients, and 0:21:09.160 --> 0:21:12.159 then number three are clients. So we're not here in 0:21:12.200 --> 0:21:17.600 the business to support um other businesses except for our clients. 0:21:17.640 --> 0:21:19.960 So we have to think if they have a product 0:21:20.000 --> 0:21:23.160 that makes a lot of sense, and we think there 0:21:23.280 --> 0:21:26.840 is a need for that. We're absolutely going to be 0:21:26.960 --> 0:21:30.600 looking at that, um, but we have to think of 0:21:30.640 --> 0:21:32.879 our clients. Of course, you know, you also have to 0:21:32.880 --> 0:21:34.200 think about it. And I'm trying to put my hat 0:21:34.240 --> 0:21:36.720 on when I did work at a wirehouse risk these 0:21:36.800 --> 0:21:40.199