00:00:02 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. 00:00:08 Speaker 2: This week on the podcast, yet another extra special guest. Jason Wenk is founder and CEO of Altruists, a new artificial intelligence driven custodian challenging a lot of the legacy entities like Fidelity and Schwab that are stuck with all of their old hardware and software. I thought the conversation was fascinating, and I think you will also with no further ado, my interview of Jason Wenck. Jason Wenks, Welcome to Bloomberg. 00:00:50 Speaker 3: My pleasure, such a great intro. 00:00:52 Speaker 2: Full disclosure. My Firmer Holtzwalth Management uses Altruist, and both myself and my firm are investors in the firm. So I'm fascinated by the through line of your career. You were constantly focusing on creating lower cost, tech enabled financial advice. But I'm going to put a pin in that and come back. I got to start with your background. You study computer science at Grand Valley State University. What was the original career plan. Was it technology and computers or finance? 00:01:27 Speaker 3: Yeah? 00:01:27 Speaker 1: Yeah, no, So I'd never taken a finance class. I never met anybody who had money, my family never owned any stocks or mutual funds. I didn't know what an IRA was, or even a four to one K for that matter. But I grew up in the eighties and nineties, so I remember getting our first personal computer. 00:01:46 Speaker 3: In the mid nineties. 00:01:49 Speaker 1: You know, Internet started to pick up a little bit of speed in the late nineties, and that was my dream, was to go to Silicon Valley work at a dot com. You know, you probably recall the market peaked out around nineteen ninety nine and then you know, a pretty major crash ensued. So you know, very accidentally did an internship at Morgan Stanley at nineteen years old as a bit of an odd duck in that I took a lot of college classes when I was in high school, so I was already taking doing internships, you know, my first year of university. And yeah, it was presented an opportunity to move here to New York and to join Morgan Stanley, and that was really my crash course in finance. 00:02:28 Speaker 2: And you were nineteen or twenty. 00:02:30 Speaker 1: Nineteen as an intern and officially joined at age twenty a half. 00:02:33 Speaker 2: So what drew you to financial services instead of technology was simply, you know, the dot com implosion, and there was no jobs we had in technology. 00:02:43 Speaker 3: Yeah, I was still I was still working in technology. 00:02:45 Speaker 1: So my role, you know, the internship was like productivity software, but again just happened before for a big investment bank. And then I spent about two years building different types of technology, like within the Morgan Stanley ecosystem. By the time I joined, they were Morgan Stanley Dean Witter, so they had this kind of big retail wealth business. They also had like prop trading in a number of other divisions too, So I didn't really get too involved into personal wealth until kind of the latter maybe the last six months I was there. 00:03:17 Speaker 3: I was put on a project. 00:03:19 Speaker 1: We're doing a lot of work with morning Star, which back then they were still sending out cd ROMs to branches around the country, and so you know, if you had a big branch, that'd be hard who had the cd romy. So we were just building networked versions of essentially the morning Star database. But I remember around that time, you know, I was I was doing some like pre built prompts inside of these like research platforms. And you know, again my u the way my mind worked, which was more around math, physics, computer science. I looked at these prompts, and I thought these are terrible prompts. In other words, like the prompt would be, let's build a screen so that financial advisors can. 00:03:55 Speaker 3: Easily build a portfolio. 00:03:58 Speaker 1: And the screen will be something like find funds that have been around for five years with turnover under one hundred percent with the same manager for you know, for the five years or longer. That's in the top qure tile of their peer group. And it was when you, like, on the surface, you go, well, yeah, it seems like pretty reasonable and fair. But that's as like that is no prediction of the future result. Like I mean, there's like that is a terrible predictor of future outcomes. 00:04:24 Speaker 3: But it was sort of built as as it was a good per. 00:04:27 Speaker 2: Well, you have the data past performances right there. We exactly something with it. I give Morning Star credit. They had an internal survey that more or less said, hey, don't worry about the stars. The data shows if you just buy the least expensive fund, that's the one most likely to give you the highest level of performance. And to their credit, they published that. I want to say that was like twenty eleven. Yeah as well, really fascinating. So you never really worked rotated through the departments where you're smiling and dialing. Did you ever work as a broker? 00:05:00 Speaker 3: So I got license. 00:05:01 Speaker 1: I took the series seven, series eight, series, twenty four series sort of like all the classic life. 00:05:06 Speaker 2: Twenty four you want to be super. 00:05:08 Speaker 1: Yeah, yeah, I'm not sure why. I also like a registered options principle. 00:05:11 Speaker 3: I did that. 00:05:12 Speaker 1: I have no idea manage futures. Like again, not sure why I did that, but yeah, I did all of this, the the did all of the research to understand the space, and I did go through the broker training program sort of twenty twenty one. And part of it was because I wanted to move back to the Midwest twenty one actually two thousand and one. 00:05:37 Speaker 3: Yeah, yeah, little datch mistake there. 00:05:39 Speaker 1: Yeah, And you know, I think I had this like romantic notion of like going back home and you know, helping people that I knew. The real is nobody knew any money, you know, so like that wasn't really going to work anyway. And really before I even got started, I made the decision to leave and go start another business. I'm kind of in the space, but adjacent didn't do direct work with clients. 00:06:01 Speaker 2: So let's talk about that What was the first thing that you noticed in financial advice that led you to say, hey, this is broken, and I think I could use technology to build something better. Yeah. 00:06:13 Speaker 3: I mean so two things in particular. 00:06:14 Speaker 1: I mean, one was the around that time there was a transition from commission bake based you know, sort of sales brokers, if you will, and there was a transition to more fee oriented financial planners. And for me that really resonated. So I think this notion of hey, can you give people more comprehensive planning advice and. 00:06:35 Speaker 2: Be a fiduciary? 00:06:36 Speaker 3: Yeah. 00:06:37 Speaker 1: And also I mean I look, I looked realistically at the way asset management worked, and I thought that, you know, I've very much agreed with the morning Star study that you know, they published, He said some ten years later. You know a lot of this, Uh you know, I'd say, goes all the way back to Jack Bogel's work. But I just, you know, looking at you a couple of years worth of research around asset management, I didn't see a discernible benefit to stock. 00:07:00 Speaker 3: Picking or market timing. 00:07:02 Speaker 1: You know, again, high high cost, high turnover, high taxes like these all eroded wealth. So part of you, well, is there a way that you can just get more people access to empirically sort of evidence based investing. Maybe that's will help people do better. The other part was accessibility. Again, I grew up like in a farming town. Really there were no brokers, there were no bank advisors, there were no Edward Jones offices, like, there was really no access to advice. And I could see the direction the Internet was taking as to really flattening the world, like everybody should be able to find advice and help, you know, through through the internet. So really the first business was from accessibility perspective is going to be internet based. It was a subscription service and it was designed for people with four to one k's because when I looked at the people, I knew that was about the closest thing they had to Wall Street to a broke Wridge account was their defined kind tribution plan. So the idea was, let's make it easy for people that have a four one K plan to get the absolute best results they can from their four one K and and I spent about almost three years building that business. 00:08:14 Speaker 2: It's like not environment Wealth Advisors, this this. 00:08:17 Speaker 1: Is the one that doesn't exist on my LinkedIn profiles. 00:08:20 Speaker 2: You know, this is before that. 00:08:22 Speaker 1: Oh yeah, yeah, yeah, is I spent you know, from twenty twenty one until twenty twenty four, effectively building a four to one K subscription business. 00:08:32 Speaker 2: Two thousand and one to two two thousand and one. 00:08:34 Speaker 1: Gosh, you' shows how old I am, very my vision only my decades and just trends in one yeah. Yeah, yeah, so two thousand and one until two thousand and four, and yeah, it was honestly, like when I look back at it, it. 00:08:48 Speaker 3: Was just kind of like maybe a little bit too early. 00:08:50 Speaker 1: This was like pre robo Advisor, pre blogging, like pre a lot of things that you know, just got more people connected, but. 00:08:58 Speaker 2: Those just start. Yeah, we went from GeoCities. 00:09:03 Speaker 3: Yeah, you're a real trailblazer in that. 00:09:07 Speaker 2: Yeah, it was a compulsion. 00:09:09 Speaker 1: I had no choice, so I look the the pay per click advertising was just coming out. So you had things like overture, which is like kind of pre Yahoo, pre Google, but you could buy the keyword for something like a phrase like how to manage my four one K for a penny, right, and you could be the top ranked you know, search people then land on my website, which is called smarter than Wall Street back then, and yeah, and it would allow you to say, I work at General Motors, answer a few questions, and it would say, here's how to allocate your four one k. They'd get an email once a month if there was anything they should do differently. Of course, the email never said that I should ever do anthing differently. And after about a year, you know, I started I built a pretty good size subscription business. But I started to have some churn because people are like, why am I paying you every month to just send an email that says the same thing as the email the month before. And eventually I started asking people what would be more valuable, sort of like a churn survey, if you will, and people would say, look, if you would just do this for me, I'd pay you a lot more than twenty bucks a month. Like that was really the genesis to retirement wealth, you know, And that's even why it was called retirement wealth, because a lot of these four and K folks were retirement folks. 00:10:19 Speaker 2: And that scaled up pretty rapidly. That when was that the four billion dollar advisory shop or that? Where did that go? 00:10:26 Speaker 1: And so I ended up going to about one point one or one point two billion in assets. 00:10:30 Speaker 3: Yeah, groovily fast. 00:10:31 Speaker 1: I started it in November December of two thousand and four, was when I got my registration. Ran that for about six years. 00:10:41 Speaker 2: Roughly a billion in AUM is not in substantial. It put you into. 00:10:47 Speaker 3: A category, especially back then. 00:10:49 Speaker 2: Yeah, no, the inflation adjusted, we're probably talking about three billion today. But that's real revenue, that's real clients. What made you say, all right, I've kind of done this, now let's look at formula folios. 00:11:03 Speaker 1: Yes, so I was always I was always driven probably more by impact than by like the size of assets or a revenue. 00:11:11 Speaker 3: You know, that company was bootstrapped. 00:11:13 Speaker 1: I built every single thing myself, wrote all of the code. 00:11:16 Speaker 3: You know. 00:11:16 Speaker 1: It was although the name was Retirement Wealth, it was a fairly tech forward platform. I built my own proposal systems to help, you know, really analyze the portfolio and then propose a new solution. 00:11:28 Speaker 3: H digitize, a. 00:11:29 Speaker 1: Lot of onboarding to really automate getting new clients on boarded. 00:11:33 Speaker 3: And it was mostly virtual. 00:11:34 Speaker 1: So it was also before it's time in the sense that it was built mostly from blogging, you know, back in like the two thousand and six to ten era. So you know, it was a lot of things that was doing well before it's time. And what ended up happening really the catalyst to moving into the next business was I was invited to speak at TDM Error Trades National Conference. 00:11:56 Speaker 3: They were my custodian at the time. I loved, loved the people there. 00:12:00 Speaker 1: They saw the unusual growth and also that I was still in my twenties and and they thought, hey, we'd love to have you come speak and share a bit how you're doing what you're doing. So I went to San Diego, Uh, you know, I gave a session where I just said, hey, here's how I'm get you know, getting new clients. I'm writing these blog posts. Here's the framework how I do it. Here's how I take these people then through you know, from a you know stranger from the internet, you know, into a defined financial planning process and then a defined you know portfolio. And it was so you know, structured that I could then train other advisors, and so I hired a few other advisors. They came out they could then run the process, and so that was the content and at that time a bunch of other advisors and I'd say hundreds of other advisors started to reach out inbound, Hey how can I get access to your system, they would kind. 00:12:50 Speaker 3: Of call it. 00:12:52 Speaker 1: And the reality was, like, I didn't want to hire fifty financial planners. I I've always been a bit reclusive, so I didn't, you know, I didn't want to. 00:13:04 Speaker 2: You don't want to manage fifty Yeah, but selling them the software, yeahs a fair relationship. 00:13:10 Speaker 3: That seemed a lot better, right. 00:13:11 Speaker 1: So yeah, so just the idea of responded, Hey, maybe it makes more sense to license the software, make it easier for people to run their own business, but leveraging a lot of our technology. 00:13:22 Speaker 2: And that was the was that formula folios? 00:13:24 Speaker 3: Correct? Yeah? 00:13:25 Speaker 2: All right? And how big did that scale up to? 00:13:27 Speaker 1: Someone went zero to four billion in five years and today it's I think fourteen billion or something like that. 00:13:33 Speaker 2: So I know that you were a programmer in college. You describe yourself as a developer and a math geek. You very much have a little bit of a hacker mentality. How did that technical I don't want to use the word self identity, but just your self perception. How did that affect your view of here are the services that make sense for investors, for advisors, for this whole ecosystem that has been especially in the two thousands, mostly ignored by Wall Street, Like it took twenty five years before the fiduciary side to pass the commission based brokeward side. So how did the technology background affect just your perception of that market? 00:14:19 Speaker 1: Sure, I mean, look, I think I've always been a little bit idyllic. You know, you name your company altruist, you probably have probly have some like generally, yeah, I don like tendencies, but you know, I think you know, I think people know me well they would say I'm I'm a bit of a macro thinker, but I don't like working in the day to day weeds of most things. So for me, I've always thought in decades, and it wasn't hard to look at the market in the early two thousands and say, well, this is the future, even though to your point, like the RIA fiduciary channel, back in two thousand and four when I started my first firm, I mean, it was maybe six to eight hundred billion in assets. You know today it's probably ten trillion, So today it seems very obvious, but back then it was a real relatively small part of the market. It was was not obvious maybe to everybody. But I look at like the demographics of the country and just there'll be such a huge number of people who are going to need good quality advice and planning, and that just again, if you if you think in first principles, which is a very common technology metaphor, and you you have no bias of like the way things had been done historically, just say well, what is the right way to do things? That just seemed like the obvious and only an objective you know, future for this industry, and I wanted to be, you know, on the forefront of that. So yeah, so now you know, some twenty plus years later, you know, the market is you know, very obvious to a lot of people. They want to build in the space, and it's the place that seems to be growing the fastest. That was crystal clear to me twenty years ago. I think a lot of it comes from just again in that more first principled you know, sort of Silken Valley way of seeing the world. 00:16:03 Speaker 2: Coming up, we continue our conversation with Jason Wenk, founder and CEO of Altruist, discussing how we built the firm to compete with the big guys. I'm Barry Ridults. You're listening to masters in business on Bloomberg Radio. I'm Barry rid Haults. You're listening to Masters in Business on Bloomberg Radio. My guest this week is Jason Wenk, founder and CEO of The New Custodian Altruist. So Altruist describes itself as a modern custodian emphasis on modern for independent financial advisors. What does that mean in the real world? And this has always been such like a boring, you know, plumbing type of industry. What was broken that required your attention? 00:16:54 Speaker 1: Yeah, well, I guess you know, the the the opposite of modern is not modern. 00:17:00 Speaker 3: And you know, so that the whole rest of the industry is pretty old. 00:17:02 Speaker 1: If you think about most of the infrastructure that's used by financial professionals, the majority of its fifty to seventy years old. 00:17:10 Speaker 2: That's amazing. 00:17:11 Speaker 1: And it operates on mainframes, not you know, cloud native platforms. So I think like the starting point is and with no disrepect, these were innovative companies fifty years ago. 00:17:20 Speaker 3: You know, they're just not that innovative today. So as far as I get. 00:17:24 Speaker 2: You're saying the electric type right or heage anymore. 00:17:27 Speaker 3: I mean they're still fun to use, you know. 00:17:29 Speaker 2: The click and they make a nice noise. 00:17:31 Speaker 1: Yeah, it's like it feels very uh, you know, it reminds me of like my grandparents' house in the nineties or something. 00:17:35 Speaker 3: You know. 00:17:37 Speaker 1: So look the I think getting to the problem statements. Having been in the space a long time, for the longest time, I would look at the industry and go, that just doesn't make any sense. You know, why do we why do we do it this way? Right, So you've always done it that way, Yeah, exactly right, It doesn't mean it's the right way. And so some examples of that, I think it's a bit crazy that if you use if you're a financial advisory, wealth manager, and I think if someone's listening to this and they're not one of those who they'll think this is literally crazy. 00:18:06 Speaker 3: This is what works. 00:18:07 Speaker 1: But so first you have to have a custodian right and this is a place where you'll open accounts for your clients. They'll safeguard your client assets to all your record keep being process frustrateds. 00:18:15 Speaker 2: Third party who is not managing the money, and that creates a built in checks and. 00:18:21 Speaker 1: Balance somewhat I mean, or it could be a built in limitation keeping that advisor from doing high quality work, right, which is I think what I sort of discover is I kind of peel back the layers of the onion. But so these custodians, one would think a very simple thing they should be able to do is, let's say you have three accounts with your financial planner. You've got an IRA, maybe a roth IRA, a joint account with your partner, and you want to know how am I doing over the past twelve months. 00:18:47 Speaker 3: You'd think you could. 00:18:48 Speaker 1: Just log on to schwab And or Fidelity or Pershing or whatever and just click a button or something and it would tell you that. But the reality is that you cannot get that information from your custodian. The custodian will only be able to tell you what you have today. It will give you access to your statements. The statements are not bundled at the household level. And what the custodian will tell you is that if you want that type of information, you need to buy a third party portfolio accounting software. We'll send them a daily file of all of your positions and transactions. That third party will reconcile all of that data and it will then allow. 00:19:20 Speaker 3: You to run reports for your clients. 00:19:22 Speaker 1: And you're gonna have to pay, you know, depending the size of your firm, anywhere from tens of thousands to millions of dollars for this third party software. And like this just fundamentally makes no sense at all. The custodian has all of the data, it should easily be able to reconcile that and run reports for advisors, but they can't and they won't, and you could go down this long list of things that they should be able to do again, just like the logic would tell you. For example, if you want to bill a fee to your client, client signs of fee agreement says I'm willing to pay my advisor one percent hypothetically, and I'm willing to pay them that every quarter, you know, by calculating the average daily balance and build me in arrears something simple. Custodian will say, that's cool. What you need to do is we'll send you the data to a third party. They can reconcile the data. You can then run a billing schema. It'll create a CSV file. You can then upload that to our system. Will then debit those fees from the accounts. But this whole process can take days and by the time you go to debit those fees. Sometimes a client will have had a distribution in their account or a trade or something, and the fees get busted. It creates an account that it's overdrawn, and like just fundamentally, again, there's hundreds of these things, and you go, this makes no sense, Like why is this the way things operate? This is largely the genesis to why would you build the brand new custodian from scratch? And if you are going to build it in a modern way, you would probably make sure all of these things are just built in automatically. 00:20:48 Speaker 2: So that raise is really a fascinating observation. Altruists first came to market twenty twenty, was it twenty? 00:20:57 Speaker 1: We wrote the first lines of code in January of twenty nineteen, and I think we went into beta in early twenty twenty and then launched the product right now the pandemic and twenty twenty tweve. 00:21:06 Speaker 2: So I remember when the firm first launched, and I remember hearing about it and the initial reaction was, I don't want to say crickets, but kind of low key, yeah, someone's going to disrupt these ten we got ten trillion dollars, we know what we're doing custody wise, and what started out is sort of a shrug. It didn't take very long before there was a little bit of a freak out, like, wait a second, what's going on here? They're actually winning clients? How is this a thing from your preceipt within building the company? How did you see the rest of the custodian market react to Altruis launch and so just rolling out one new capability after another. 00:21:57 Speaker 1: So there's I wish I could remember where to properly attribute this to. But there's a great saying that is that first they ignore you, then they laugh at you, then then you win. So it's not surprising that somebody has a big bowld declaration they're going to change in industry and make it better if you're you know, effectively like a duopoly or oligopoly, as our industry was. You know, almost all the assets were held by at the time three custodians. Back then it was Schwab Fidelity and ted Am Error Trade. Td amer Trade shortly after we launched, was acquired by by Schwab, really making the the the powerdynamic, like two companies that have eighty plus percent market share, So you know, respectfully, I think, yeah, like there's going to be a natural rent seeking, you know sort of mentality from those people who are the dominant players. Why would they ever want there to be any change, you know, why would they want to change their cost structure, Why would they want to modernize their systems? Like things were great you know for those companies, so not so prose that some folks may have been dismissive, but advisors never were. Like when we first started putting prototypes out into the public and you sharing our vision, we had thousands of advisors that signed up for our waitlist, hundreds that decided to become design partners, like very early kind of design partners help us build you know, the platform, and you know, we have this sort of very loyal base of users that are very. 00:23:26 Speaker 3: Loud about, you know, how happy they are with the product. 00:23:29 Speaker 1: And we've we've done this by co creating it with the advisors. So you know, it's not lost on me that there are literally thousands of features that you have to build to support you know, the wealth management industry. We can't possibly know all thousand internally, so you need to have some awesome partners that can help, you know, try to light on, like what are the most important things? So yeah, in the end, I think we have more than caught their attention. I think now you know, there's a fairly deep rooted fear actually from a lot of bigger. 00:24:01 Speaker 2: So you have the three big incumbents, it's a little bit of an oligopoly of Schwab which is now Schwap TD combined Fidelity Pershing Bank in New York. Everybody kind of looked at them and said, there's no way we're going up against those behemoths. You're one of the first companies to say we're going to take on the custodians because their legacy platforms just can't do the things that we can do at scale. How do you think about the challenges of going up against what is Fidelity eighteen trillion and Schwab is twelve trillion? Like these are monster bank of New York. Pershing is the oldest bank, it's Hamilton's Bank literally, Like these are not Oh, I think I could disrupt Nokia with a better product. These are just the most entrenched, well thought of partners for advisors. What gave you the confidence to say we could beat them at their own game? 00:25:06 Speaker 3: Yeah, I think. 00:25:10 Speaker 1: So. A big part of the confidence came from that early advisor reaction. 00:25:15 Speaker 3: But you know the truth is that these. 00:25:18 Speaker 1: Companies don't have high nps like these aren't like loved by the net promoter set promoter. 00:25:23 Speaker 2: Okay, yeah, we do one of the surveys every year. I know, that's become super popular everywhere the past twenty years. 00:25:31 Speaker 1: You're gonna have to look very far and wide or have too many conversations to hear wealth managers gripe about their custodians. I mean again, I was running one of the largest I think when I stepped down from former flows. At the time, it was the fastest growing RA in the history of the entire industry. 00:25:46 Speaker 3: You know, we were growing. 00:25:47 Speaker 1: At sixteen thousand percent. You know, had a three year growth rate. So it was a true rocket ship, you know in this in sense of like you know, the RA space. And I felt tremendous pain. My biggest pain point was my custodian onboarding new clients. 00:26:04 Speaker 3: Skin. 00:26:04 Speaker 1: They were making you download forms from a form library, populate the forms by hand, send them out via DocuSign at best, sometimes requiring wedding signatures or medallion stamp signature guarantees like it was literally like going backwards in time twenty years. Meanwhile, you had companies like Robinhood that you could download an app on your phone at eighteen years old, have your count open in thirty seconds, fund it with one hundred dollars and buy fractional shares of Berkshire Hathaway stock commission free. I mean, it was so obvious to me that the old way that Custodian has been operating, they were still charging commissions using paper. This was definitely not the right way to do things. And if you started looking at the impact to clients, So what is the impact of forcing people to use whole shares, Like, why would the big custodians force you to use whole shares versus fractional shares? Fractional share trading had been around for over twenty years. Well, just math, it's not that difficult to correct. And this is even like or you know, Gemetric right. 00:27:02 Speaker 2: About exponential algos or anything like that. 00:27:05 Speaker 1: Precisely, but you know, a lot of it is you just start kind of going okay, like you know, maybe this is a good tinfoil hat you know, theory here, But I'd say, what would the benefit to them be by not enabling fractional shares, maybe that means more cash will be in client accounts. Maybe they make half of their revenue from the cash spread, right, the net interest income on cash that sits idle in client accounts. Maybe the it also forces you, if you do want to use fractional shares, the only vehicle you can use that trades and fractional shares. You know, there's a you can do notional dollar base buying our mutual funds, and these mutual funds pay tremendous fees for distribution through these brokerage platforms. What if they are not allowing fractional shares because they really don't want to disintermediate packaged products in general, Right, so make things like direct securities more accessible to more people. I mean, I just went down this rabbit hole. But the end result is it costs investors a ton of money. You end up limiting the amount of tax benefits, you end up increasing the average client account side. So if you really want to have great efficacy kind of investment outcomes, you'd have to have tens of millions of dollars. And if you had fractional shares as just one example, all of a sudden, you know, a ton of that entrenched you know kind of history goes away completely. Everybody can get access to the same type of investment strategies individually. You know, managed accounts, you know lot level tax trading, so you can get the best possible after tax outcomes. You can compress cash down to the lowest amounts, you're reducing cash drag. This increases outcomes. So you know, I think in the end, if you if you put yourself on the right side of the client and you have time on your side, like you will absolutely win. I think one of the best examples of that in our industry is Vanguard. Like what they did, they were laughed at and long time, you know, and they didn't even really reach massive scale for twenty five thirty years into their journey. But I think again, if you just put yourself on the right side of the client the end, client, hey, we're going to do things that objectively and obviously produce better outcomes on an after fee, after tax, after cash trag basis. We're going to provide delightful experiences with the true partnership with our advisor clients. These things will work. And again I think you have to have a certain amount of craziness. One of our early investors you might know Omani Carson, formerly known as Ron Carson. Samani is his new new names retirement name, and I love him dearly. But I remember I met him very early in building Altruists, and we met for coffee in Venice, California, where the company was started, and Omani, uh, you know, looks at me after I explain the company and he's like, that's the and you know, pardon my friends. 00:29:51 Speaker 3: Everybody's like, you know. 00:29:52 Speaker 1: This is the craziest efen idea I've ever heard. I'm in, like, how do I give you part of it? I think there's a certain number of people who just like, we've been doing this a lot long time. You eventually become numb to the status quo. The status quo was totally it was not good for anybody. 00:30:07 Speaker 2: And so except for the custodians, yeah, there was one. 00:30:10 Speaker 1: Party that really was happy with the status quo, right, and so I think as soon as we shed a little bit of light, now there's a ton of challenges you have to overcome. 00:30:17 Speaker 3: But again, there's no doubt in my mind this is going to work. 00:30:19 Speaker 2: When I started, you mentioned Robin hon and zero commission, which I want to say was twenty fourteen or twenty fifteen. Then Schwab rolled out, you know, commission free trading in twenty nineteen. What did that shift in cost structure due to the relationship between investors and custodians, advisors and custodians. Did that change the way everybody looked at this or was this just okay, I guess this is an even lower margin business. 00:30:51 Speaker 3: Yeah, so I think that's a I think it's a huge misconception. 00:30:54 Speaker 1: Yeah. So what's interesting is that I wrote this piece in twenty eighteen, and and you know, we had one of our designers kind of draw infographic kind of behind it, and it was the classic sort of tip of the iceberg where we showed the you know, what you see above the water line and then what exists below the water line. 00:31:12 Speaker 2: I just did one of those two weeks ago. 00:31:14 Speaker 3: And great metaphor. You know, it really is so. 00:31:18 Speaker 2: Perfect to like, hey, here's what you're focusing on, but you got to look at the things that matter even more. 00:31:23 Speaker 1: So, we did this for custodians, right, and the thing people saw was the commission. So there was this belief and advisors even didn't know, you know the facts. They would go to clients and say, hey, when you work with us in our independent, third party custodian, here's how they get paid. They get paid seven dollars if you do a trade. It's a pretty cheap water price. You know, it's for waterflow, correct. I mean the big money is the commission is just to. 00:31:50 Speaker 2: Break even one hundred percent. 00:31:51 Speaker 1: Right If if you look at the big public companies that were in the space, they were making maybe five to ten percent of the revenue is from from transactions, and commissions were maybe half of the transaction revenue. 00:32:03 Speaker 2: Right. The trends, well, we get to the float, which everything I love. 00:32:06 Speaker 1: So there's there's a ton of like un things that it's a historically. 00:32:10 Speaker 3: Been ignored or unknown. 00:32:13 Speaker 1: The biggest revelation when everybody went commission free was people start asking question, well, how the heck do you make money? Like, how does this business actually work if you're giving away everything for free. Only then did people start to go, oh, wait a minute, like that wasn't even how you made money. That was literally like just a complete smoke in mirror's way to fool me into believing you only made seven dollars a trade, when the reality was all of the real money was made by paying me zero point zero one percent interest on my idle cash, making me trade whole shares, which makes me have more cash my account than I really should, making me buy these different funds that all have bunch of conflicts of interest through all of their various you know forms of twelve B one and fifteen C three revenue sharing agreements. I mean, like just like very esoteric stuff, but very few people ever talked about and to your point on float and liquidity through pefoff payment for order flow. I mean, it just it really opened everyone's eyes into the fact that the clearing and custody business turns out it wasn't a high scale, low margin business at all. In fact, it was a very high you know margin business, and that was just one kind of irrelevant piece that you know, confused people into believing that was the full full price admission. 00:33:29 Speaker 2: I recall a couple of years ago, it was after Schwab went free commission zero commission free trading. I don't remember if it was TD or Schwab, that one of the public companies in a poorly earnings fifty seven percent of their gross came from the float came from what they got paid. The difference between what they were paying investors go whatever and the actual rate that they could generate internally. How does how does altruist deal with that? 00:34:08 Speaker 1: So I think the key is doing whatever you're doing transparently, uh and whenever you can, giving as much of the economics to the client. 00:34:16 Speaker 3: So I'm a big. 00:34:18 Speaker 1: Believer in uh, you know the flywheel kind of made popular by Good to Great, one of my favorite books. And you know, our flywheel is that the first spoke is uh, invest in innovation that drives better outcomes for advisors. The second is invest invation that drives better outcomes for end consumers, the end client. If we do those two things, it will drive the highest satisfaction amongst our user base. This will increase amount of acets on our platform, which gives us a scale to invest more in innovation, right, so, which drives better outcomes for advisors, better outcomes for clients. You if you're going to do that, there's uh there. You have to earn revenue like of course, but in our case, we built a very integrated wealth platforms. So yes, we have custody and clearing revenue. We make money on net interest income the float, if you will. We make some revenue on payment for order flow, but we built what's called the wheel order routing system. It's one hundred percent optimized to drive the best possible execution for every single client transaction. 00:35:19 Speaker 3: If we happen to get a. 00:35:20 Speaker 1: Better execution through US at Adel or Jane Street, whomever, we might make a tiny amount, like literally measured in fractions of bases, points and mills. It's the lowest amount of revenue we earn, but like there is something there. We do earn money again on float, but we offer fractional shares, so we have the lowest cash holdings of the entire industry. People can hold virtually nothing. We also have some earnings from things like mutual funds, but we have the lowest amount of mutual funds in the entire industry because we offer fractional shares, so people can buy ETFs, they can buy individual securities. So we have very very little in way of rev share through fun companies, but there's definitely money that is made that clearing layer. Where we've really innovated is that we also do all of the software layer, you know, for advisors. We offer an asset management layer for advisors, so each kind of component of the ULTRAS business is generally going to be sixty to eighty percent cheaper than if these things were bought individually. So you may recall, you know, when I shared the story about how you go to a custodian and say, why can't you do my fee billing? 00:36:20 Speaker 3: That makes no sense if to buy a third party software. 00:36:23 Speaker 1: We built all of these things natively, and most of them are either free or very low cost because we have this sort of benefit, if you will, of stacking the various forms of services that advisors and their clients. 00:36:34 Speaker 2: Need on a modern platform. 00:36:36 Speaker 1: Correct, and we do it with i'd say fair the insane amounts of automation, so you know, the the kind of knock I made on using PDFs, like, there's no PDFs necessary at ULTRAS, so. 00:36:49 Speaker 2: You're not you're not exporting csvs and then having to upload it to cloud to get a literally ridiculous or. 00:36:56 Speaker 3: A year a hundred percent. 00:36:57 Speaker 1: Yeah, you can open an entire families accounts, do all of their account transfers, link all their bank accounts, and do the whole thing in under two minutes. The accounts are being real time validated, the transfers are being real time validated. Ninety eight plus percent of these workflows there's no human being ever involved in them. So every time we build a new innovation or automation, we're able to operate with a much higher amount of operating leverage than anyone else in the industry. This allows us to invest back into more innovation, which allows us to offer more services at lower price points. So look, we earn revenue just like everyone else does. I think one interesting tidbit we don't talk a lot about, but is the fact that on the aggregate, ultrast earns more revenue than I believe any other ri custodian on a per dollar basis means per dollar in our platform, we earn more revenue than the big players, and it's not because we charge more. In fact, we have the lowest fee schedule in the entire industry. But it's because we do more for those advisors than just provide custody and clearing. We're offering software and services, AI products, asset manage services, automations around things like tax management and tax loss harvesting. So because people use more surface area, we end up having in more and more diverse revenue as a business, and we have much better operating leverage because we have so much automation that we don't have to hire a lot of people to actually offer this at scale. So these are a lot of the benefits to modern Right, you do it this way in this day and age, you're not going to build the same way you would. 00:38:25 Speaker 3: If you did it fifty years ago. 00:38:26 Speaker 2: You're earning more revenue as the custodian per dollar on the platform, yet at the same time the advisor is paying less costs per dollar on the platform. Of course, they're not working with five or ten third party add ons. It's just one turnkey solution, correct. 00:38:45 Speaker 1: Yeah, it's material and consumers. You know, consumers if using the platform correctly, are getting better results as well, so because they don't have things like cash drag, because they can be more fully invested, because they can reduce the need for third party investment products. They can hold securities directly on the platform, reducing expense ratios. Because we have automation around tax management, they can drive down the tax consequences of investing materially. So again it's one of these things where it almost sounds too good to be true, right, But like, yes, advisors should be able to run more efficient, better businesses. We can have a great business and consumers can win too. Like that is very much a real possibility. There doesn't have to be a loser. It's a winning system. 00:39:29 Speaker 2: Let's talk about AI and automation and your platform, Hazel. I know my team loves it. Everybody is super super positive about it. Is Hazel a standalone AI bed? Is it part of the long term vision? Is it planning and custodi, custody, ship and other services as one seamless workflow on a single platform. Tell us all about Hazel. 00:39:56 Speaker 1: Yeah, so the basic thought, so first to answer your question, it's very tightly integrated with Altrus, but it's available totally separate, so really any wealth manager can use it. We have people using it all over the world in many different industries. So we have large CPA firms that are using Hazel, and obviously large financial advisory firms. So part of the thinking here is that the altruist business will eventually be a very large scaled business with trillions of dollars in assets, but the total size of our industry is going to be tenfold that, right, so we don't want to limit the power of AI to just the whatever percentage of market share that Altruis has. We want everybody to benefit from these innovations. And so the things that are really cool with Hazel is that again it can be used by any financial advisor or really a lot of different segments of financial services. 00:40:51 Speaker 3: It's been a ton of fun to. 00:40:53 Speaker 1: Build, and a lot of what we're doing is just taking the hardest, most like laborious, non glamor but you know, important work that used to really be hard to get if you didn't have tens of millions of dollars, and we're just bringing the unit costs down to like three to five dollars, so you can do like incredibly complex tax planning and do it for again effectively like a dollar to five dollars. 00:41:19 Speaker 3: This makes it accessible to everybody and AI. 00:41:21 Speaker 1: You know, people have their fears about you know, what could go wrong, but we like to think this is a lot of the wook can go right. 00:41:27 Speaker 2: Coming up, we continue our conversation with Jason Wenk, founder and CEO of Altruist, discussing how we built the firm to compete with the big guys. I'm Barry Ridults. You're listening to Masters in Business on Bloomberg Radio. I'm Barry Ridults. You're listening to Masters in Business on Bloomberg Radio. My guest this week is Jason Wenk, founder and CEO of the New Custodian Altruist. I've seen some crazy numbers as to what advisors manage. I don't want to talk about mutual funds. I want to talk about straight up rias. Who are your prime clients as a custodian, Ten twelve, twenty trillion dollars just crazy numbers out there. What is the total addressable market there? And how much do you know? The does the oligopoly the big three have of that total market? 00:42:25 Speaker 1: So the approximate number is ten trillion today, it's about thirty five thousand firms. These firms are roughly half our SEC registered investment advisors is meaning. 00:42:36 Speaker 2: More than one hundred million or more than a hundred million. 00:42:38 Speaker 1: And then the other half are state registered firms that are a sub one hundred million. Some of those are just new entrants, like there are just firms that are first registration. They they'll probably mature into the SEC within a year or two, and others just you know, they operate small, independent, you know businesses serving a loyal but small group of clients. The uh yeah, the the top of the market, you know, I think it's Persian gets oftentimes lumped into the big three. They don't have much market share of the RIA segment. It gets it's a bit muddy, but the reason is they support all of the big broker dealers that usually they have a companion corporate RIA and so that's kind of how they get in here. But true standalone rias, I mean eighty five percent of the assets are with just two companies, Schwab being the largest they're north of fifty percent market share, and then Fidelity being the second largest. So it's your very classic you know disruption. Like if you were to just kind of say, hey, what would be the recipe for disruption, you'd say, big, fast growing market dominated by old companies using old infrastructure with generally low NPS like low customer satisfaction. 00:43:45 Speaker 3: That is exactly the market that we are in today. 00:43:48 Speaker 2: Huh. Really really fascinating. So given the fact that you got to build a clean sheet custodian you're not built on this legacy hardware that can't do all these things asked and easy, what's the biggest take up from advisors? Where are they still inefficient? Is it just paperwork and portfolio management? Is it tax is it compliance? Is it client service and disbursements? Like where are the biggest advantages or is it just the whole thing? 00:44:19 Speaker 3: Yeah? 00:44:20 Speaker 1: I mean, so we break this down into like two elements. So you know, with ultrast we have our core wealth business. This is like the custody and lated software to custody we started there. It's a super big, hairy build, like it just takes a long time, you know, just hundreds of thousands of engineering hours. You know, there's no shortcuts, very expensive, time consuming. 00:44:40 Speaker 2: But that was that a B. Hag reference? 00:44:42 Speaker 3: Oh absolutely, Yeah. 00:44:43 Speaker 1: I mean like this is like as big and hairy as they get, right, and there's just again there's no shortcuts. But that infrastructure is so critical because what it allows you to do, if it's done the right way, is it allows you to tackle all the other work. Right, So I'll start with this work right, the part you can open account super fast, you know, do all of the automation around onboarding clients. This is great, but you only onboard a client once, you know, ideally and so if you serve a client for thirty years, the custody part is really a pretty small part of the picture. It was a huge, you know, kind of friction point because it was oftentimes one of the first experiences that a client would have with their advisor, and if it was a bad experience, like yeah, it's usually not fast like it's it's you don't have a lot of clarity like hey, when is my transfer going to be done? Like why did this thing get rejected? Why am I redoing this paperwork? So we solved a lot of the infrastructure now with our AI products Hazel or tackling like the rest of the thirty years, right, So maybe there's again a five percent or less of a client relationship that's really connected the custodian. You know, you're onboarding the client, you're setting up rules around trading and rebalancing and tax management. But a lot of the work really is all of the the one to one, hard to scale work. So you meet a new client, they're a prospect at this point, you need to you know, uncover a bunch of data that they have. You need to then analyze that, build a financial plan, create a proposal. 00:46:13 Speaker 3: Once they agree to it. 00:46:14 Speaker 1: Then you do that onboarding, and now you have to serve that client for decades, and there's going to be all of these life events that happen, all of these emotions that kind of these folks will live through with you. So it could be massive changes in macro conditions. It could be you know, changes to their family, whether it's you know, death, divorce, new children. I mean, there's so many things that happen, and advisors have to be able to react. Ideally, be proactive, but react to all these things and make sure your money's aligned at all times. And this is where AI is like incredibly powerful, where you can take a ton of that work that used to be heavily compromised and you compromise. Is interesting because every advisor, whether they want to admit it or not, historically has been making comprom for the clients. And so kind of one of two directions, Like one compromise is I want to save the world. I've got a hero complex. I'm going to take every client under the sun. If I do that, the compromises, I can't possibly give the highest level of quality care and service to every client. It's it's not possible. You can't earn enough money and revenue from the lower end of your client client base. The other compromise might be I am not willing to compromise in the quality and service and attention, but as a result, I can only serve fifty families, and so my minimum is going to have to be ten million dollars or something like that. Whereas the compromise is I can't actually give my advice to as many people as i'd like to. AI is this great equalizer where we think about all the infrastructure we built on altruists, and you then layer all of the agents that can do things like gather data for you, build financial plans, build tax plans, help you be incredibly responsive to client emails and questions, to build a level of intelligence across your client base that no human being could ever possibly attain. So it's very easy to have, you know, incredibly precise you know, uh and highly personalized uh you know, perspective on every unique client that you serve. 00:48:13 Speaker 3: So these are the things that we're building. 00:48:14 Speaker 1: I mean, I think in the end, you know, the clearing and custody business will end up becoming very edgentic, Like these agents will be the ones who are probably you know, logging on if you will, and they'll be performing functions you know that today humans have to log into. 00:48:28 Speaker 3: But it's a pretty exciting, uh. 00:48:29 Speaker 2: You know, time of field really interesting. I recall a couple of years ago. I don't want to put words into anyone's mouth, but it was the CEO of either Black Rock or Vanguard or somebody that size was asked what keeps you up at night? And the answer was cybersecurity and fraud? How do you make sure? And I totally understand no one wants to wake up one day and a billion dollars is missing. Uh, how do you integrate that into altruist? How do you think about the human element? You know, deep fakes and synthetic identity and voice fraud and cloning and all that stuff. What can the modern custodial platforms do that? Hey, some of the big guys don't have the integration with technology to engage in this arms race against the bad guys. 00:49:27 Speaker 1: I mean, I think the biggest reason they'd have that that that you know, paranoia, is that if you're working on a you know, fifty year old tech stack and we see this with like the latest anthropic model, these kind of meethos you know connected models where you know, they sit it on top of some you know, legacy infrastructure and they'll find, you know, hundreds of critical vulnerabilities that no human being could have ever identified because the code base essentially one giant, monolithic code based So like it's just like this huge albatross that these companies have been dealing with for decades. And replatforming is really hard. If you're already big in your scale and you've got tens of trillions of dollars, it is nearly impossible to replatform and go from you know, physical mainframe based technology into a cloud based infrastructure using you know, smaller, more manageable micro services. 00:50:20 Speaker 3: So yeah, it's a huge risk. 00:50:21 Speaker 1: If I was running a giant old bank or brokerage, I would have the same probably primary paranoia. If you're building today, you know, the best defense is oftentimes a strong offense, So why not just build again in first principles, a bunch of protocols to make it much harder for bad actors to even get in the door. And this is like overstating the obvious, but just having like modern multi factor authentication and requirement of security keys even eliminating some of the highest risk like, for example, like phone calls are a lot easier to dupe, ironically than is a properly built multi factor authentication program. So, you know, I think there's a lot that will change. We don't, you know, rest on like the fact that all we're a tech company, therefore we're impenetrable, Like, of course, we get it. You know, we have bad actors trying to come after our clients all the time. And I think that if you're not building especially AI that can help identify other AI and other bad actors, you're in a bit of a quandary. 00:51:25 Speaker 3: And it's really hard to do that. 00:51:27 Speaker 1: If your core platform again has tens of millions of lines of code written in languages that you know, honestly nobody uses and hasn't used for decades. That is a major problem with financial services. 00:51:38 Speaker 2: So you've raised the decent amount of venture capital money. I want to say, the twenty twenty five Series F gave you just under two billion dollar valuation. I think I'm in the Series F E. 00:51:49 Speaker 3: I don't remember correct. 00:51:51 Speaker 2: Last year discuss the need for capital to build out, and we're not talking about the hyperscalers that are spending you know, ungodly amounts of hundreds of billions dollars. This is just a nice little startup that's taking a couple of big entrenched companies and working off a clean sheet. What has the capital spend been like on the technology side. 00:52:16 Speaker 1: Yeah, so we've raised a little over six hundred million in capital over the last seven years. Yeah, I don't think we'll need any additional capital going forward. Like, we still have a lot of you know, cash on balance sheet. 00:52:29 Speaker 2: You're cash flow positive now, you're you're actually. 00:52:32 Speaker 1: Our broker dealer's been profitable for about three years profitable. 00:52:36 Speaker 2: I was even going profitably, just like at least holding your head about. 00:52:40 Speaker 3: Yeah, we'll look on our industry. 00:52:41 Speaker 1: Every broker dealer's financial records are public, so you know, you can go look up our balance sheet. It's not hard to find, you know. And then but we still we still use cash on balance sheet for R and D investments to keep building you know, more more tools. But you can imagine if we backed off from you know, our aggressive building of products and features. Yeah, it wouldn't be a hard business to run standalone for decades. But yeah, there's a serious cost to start a custodian so beyond the cost of building all of the technology, there's also the regulatory requirements and the capital requirements. So when you run brokerage business, every time you add a new client, a new dollars to your platform, you have to have reserve capital on your broker dealer. And so there's no shortcut. Like this is something where I tell people every now and again. The last be like, hey, you know what would it take for someone to compete? And I said, We'll take about five years and at least two hundred and fifty million dollars just to have a shot, just to have any shot in the dark of making it. That assumes, of course, you do it right and what you build is somehow substantially better than anything else in the market, and you can get enough clients to run it on. But just to give yourself a shot, it's like again non trivial. 00:53:52 Speaker 3: And just to pick up because you made it. 00:53:54 Speaker 1: Come about these these sort of hyper scalers building these foundation models. 00:53:58 Speaker 3: I'm not so. 00:54:00 Speaker 1: Sure that when we look back in twenty years and say, okay, well maybe thirty or four years, fift years, but some amount of time in the future, we look back at what were the most impactful companies that made the biggest difference on society. I'm not so sure those are the ones that we'll be talking about. 00:54:14 Speaker 2: Really. 00:54:14 Speaker 1: I think it'll be businesses like Altruists that we'll be talking about and going wow, Like they have managed to unlock trillions of dollars for consumers, and that is not something that any of us can be convinced as possible with foundation models. Yet at this point, all they are are money guzzling machines that have yet to figure out how to turn you know, sort of inference into profits. It's their costs or higher than what they're reselling their products and services for. I'm as big a fan and believer and user of AI products as anybody, But when we really start measuring impact, like what changes the world, you know, that's very possible, but there's nothing proven about it. What we're doing is very proven, Like you can very objectively say, if we give every single I don't know, one percent back in economic advantage and you scale that across trillions of dollars for decades, you can start measuring your impact in hundreds of billions of dollars. That's to me more than like a small startup like that's incredibly ambitious, but it's like incredibly good for humanity. I hope more people do this type of stuff. 00:55:19 Speaker 2: That's Eric Belchunis's column, which became a book, The Vanguard Effect. I want to say it was like twenty sixteen twenty eighteen, Vanguard has saved two trillion dollars in fees for clients. I mean, that's an insane, insane number. And you guys are are looking to push into the same space. I want to be respectful of your time. Before I jump to my favorite questions, I just have to ask one other question. You've built multiple businesses in the wealth management and fintech space. What's the reputable lesson that carries over from one to another? Or is each one a completely different animal? 00:55:59 Speaker 3: They are all pretty connected businesses. 00:56:01 Speaker 1: If someone looks at like the evolution arc of my career, it's sort of like each time I find a problem, uh you know again metaphorlity, Yeah, you gotta go okay, well that was an interesting problem, but this isn't even bigger problem. And this is even bigger problem. Yeah, I'm curious now. I think there's going to be you know, reasonably good need for a highly specialized l M specifically narrowly trained for our industry. I'm not sure the big LF, so maybe we'll do that at some point in the future. But the point is like, there's always something that has the potential to make a bigger impact. And you know, one thing that I'll say this is for me. Again, I don't spend a ton of time just trying to compare what I do compared to other entrepreneurs, so I can't really say, like, if there's a lesson to be learned, you know, broadly, But with with each venture that I've been involved with, I've started with a pretty simple north star, which is I want to help people. These are all missions driven organizations. I'm very passionate about that. This allows you to attract other people that are also mission driven. These are your more missionaries versus mercenaries, and we have some of the most incredible people that I could never even dream of assembling a team like what we have at Altrus, But it's because they share that same kind of core ethos of serving clients, driving better outcomes again, sort of being on the right side of the customer, doing things that really matter. 00:57:26 Speaker 2: So given that it's a huge came out, I was going to say, so, given that look out five to ten years, where's Altrus? What are you doing? How big is Altrus at that point? 00:57:37 Speaker 1: Yeah, it's hard to predict with precision just how big, but I suspect we'll be very large, you know, if we look at the trajectory of the business today. Again, we don't talk a lot about our numbers publicly, so people have to sort of sort of like a we'll take Jason's word for it, you know, but in our first five years of operating, from when we opened our first account, you know, through five years, we had more assets on our platform than Robinhood, Betterment, Wealth Front, Public Stash, m one, Acorns combined. Right, So when people wonder like is this working, it's scaling very very rapidly, and it's growing at a really really fast pace. People, I think sometimes don't understand that this sort of network effect you get when you serve advisors and those advisors are growing fast. Firms like yours are growing super fast, the clients are adding deposits to their existing accounts. That market taalwind is pretty material and. 00:58:27 Speaker 2: It's percent fifty and it's better. 00:58:29 Speaker 1: For advisor clients and is for self directed clients, you know. So these are all things that create enormous tailwinds for businesses like ours. So I think even ten years out will be multiple trillions in assets serving you know, many millions of end. 00:58:41 Speaker 3: Clients, and likely we'll be doing them. 00:58:44 Speaker 1: Has kind of capped out one hundred, one hundred, twenty five or one fifty like those things, these laws of physics will sort of be removed, and I think that's a net great thing. 00:58:53 Speaker 2: All right, I want to be respectful for you of your time, and I'm going to jump to our speed round when we do these really quickly, starting with who your mentors, who helped shape your career? 00:59:04 Speaker 1: Yeah, so Nick Baim was our first investor at Altruist, who was also a big supporter me my last company. He's a partner at ven Rock, and he's just awesome. 00:59:13 Speaker 2: What are your favorite books? What are you reading currently? 00:59:16 Speaker 1: So right now I'm reading Life three point zero by Max tech Mark. It's like a book from twenty sixteen, twenty seventeen. He's one of the he's a professor at MIT and one of the like real four like early thought leaders in AI and so he kind of like, yeah, there's three phases of AI and I'd say we're in like life two point zero right now, still human powered and like get to read the book you'll find out three point Oh it's a good one. 00:59:42 Speaker 2: That's that's interesting. You mentioned good to great? Anything else you want to mention? 00:59:46 Speaker 1: Yeah, I mean, look, these are a little bit cornier, but some of the most important books for me. I'm a total math nerd, so I can live in a max tech mark you know, book for you know. 00:59:53 Speaker 3: Uh forever. 00:59:54 Speaker 1: I had to learn a lot of soft skills, you know, to be a better entrepreneur. I learned a lot of those from reading Seth Godin's book. It's like one of my favorite amazing books. Great blog as well. 01:00:04 Speaker 2: Let's talk about what you're listening to, streaming or watching. What's keeping you entertained on these gross country flights? 01:00:10 Speaker 1: Yeah, so I don't watch much TV, although I did watch your knicks congratulations. 01:00:15 Speaker 2: I was talking about perfect timing and a fairly easy path. 01:00:21 Speaker 3: Yeah, well, perfect. 01:00:22 Speaker 1: Storm avoided my Pistons. You know, I'm a Detroit Pistons fan. But so, yeah, I don't watch a lot of TV. I do listen to a lot of podcasts, so listen to yours. I listened to a big fan of Henry Stebbings so twenty VC and I listened to you quite a bit, and then I listened to Lenny's podcast. If you're a tech person, everyone who Lenny is you're a product person that goes into deep I'm like how different tech companies are being built, especially kind of product led companies. 01:00:49 Speaker 3: So those are some things I listened to a lot really interesting. 01:00:52 Speaker 2: Final two questions, what sort of advice would you give to a recent college grad interest in the career and fill in the blank entrepreneurship, fintech or even financial services. 01:01:03 Speaker 1: Yeah, I think in any career, I would become the most ai forward person in your field that you could possibly be. So it does not matter if you're working in sales, if you're working in tech, if you're working in financial services. I mean there, if you can become the person when you walk in the room, you are the absolute master of claude for your you know, kind of job function, I think that's one of the most important things for any person. I think young people have an actual advantage there, and it's when they should definitely be leveraging. 01:01:33 Speaker 2: You're not gonna be replaced by AI. You're gonna be replaced by someone who uses AI better than you do. 01:01:38 Speaker 3: And that's it's getting cliche, but it's very true. 01:01:42 Speaker 2: And our final question, what do you know about the world of technology, entrepreneurship or financial technology today that would have been helpful back in the two thousands when you were first ramping, right? 01:01:56 Speaker 1: I mean, I don't know that there's necessarily some innovation that I wish I knew. I just I wish I would have spent more time getting proximate to really high caliber people. Now that I'm older and I've done a few things, I've got the chance to meet some just outstanding people. If you can get close to those people early in your career, it's just going to be such a massive accelerant because your way of thinking is going to be so much better and sharper and inspired. 01:02:24 Speaker 3: That's what I do. 01:02:24 Speaker 2: Thank you, Jason for being so generous with your time. We have been speaking with Jason Wanks. He is founder and CEO of Fast Rising Custodian Altruist. If you enjoy this conversation, well check out any of the previous six hundred and forty eight we've done over the past twelve years. You can find those at iTunes, Spotify, Bloomberg YouTube, wherever you get your favorite podcasts. I would be a remiss fund and thank the correct team that helps with these conversations together each week. Alexis Noriega is my video producer. Anna Luke is my podcast producer. Jean Russo is my head of research. I'm Barry Retorts. You've been listening to Masters in Business on Bloomberg Radio