Full Transcript for Day Two Live from the Future Proof Festival

investment horizon. And the research speaks to decades long of patterns and data as opposed to like what's going to happen tomorrow or what's going to happen in the you know, in the next few months. 00:05:29 Speaker 6: So Fama French was a good couple of decades ago. Those first three factors were really interesting. You're essentially an academic at heart. What's the most interesting new research you're finding that might eventually become some form of real life application of theory. 00:05:47 Speaker 4: Well, there's always little improvements that we can make. But I would say profitability was the last really big one. Some people might think of it as quality. 00:05:56 Speaker 6: I was going to ask, I think of quality as the last big one. You using profitability in the same way as quality. So when I think equality, I think of low debt, good management, no other problems, and you're just cutting that down to straight up profitability. 00:06:11 Speaker 7: Just straight up profitability. 00:06:12 Speaker 4: And once you capture profitability, a lot of those other variables they're not important for explaining it. 00:06:17 Speaker 3: Over revenue growth. 00:06:19 Speaker 2: Well, revenue growth, So we it's just so funny we talk so much about the importance of like growing your business, because profitability great profits you can play around with. 00:06:27 Speaker 4: Well, let's let's back it up and just talk about why profitability should help explain returns in the first place. 00:06:33 Speaker 7: When you invest in a company. 00:06:35 Speaker 4: You get future cash flows and it's all discounted back to a price today. 00:06:40 Speaker 7: That's the stock price. 00:06:41 Speaker 4: That discount rate is the expected return. So what we want is we don't get to look up the expected return in Bloomberg. Instead, we have to infer it from two variables that we can sort of see. We definitely get to see price today, but we don't get a perfect view of those exps future cash flows. But it turns out today's profitability just levels our pretty dang good predictor of those profits several. 00:07:08 Speaker 7: Years out into the future. 00:07:09 Speaker 4: The most company the most profitable companies today tend to stay the most profitable companies for many years now. Profitability growth is another aspect that does help a little bit, but the most important one to capture is the level of profits. 00:07:25 Speaker 6: Ye. 00:07:25 Speaker 4: And then the challenge with profitability growth is it does introduce a lot of additional turnover. So it's something that we're actively partnering with Robert Novi marks another academic that we work very closely with to see if there's there's certainly something there in the data, but whether it would survive transactions, costs, things like that are also very important before you add something to a live portfolio, where you have to patrading costs and things like that. 00:07:48 Speaker 6: Yeah, so I want to unpack why profitability has persistence into the future when and what's so different from just profits because most people think of pe as their measure, but profitability means it's a company that sometimes has a moat and a strategic advantage that they're not carrying a lot of debt that can eventually eat into future profits. What other elements are you looking at that explain why profitability tends to persist out into the distance. 00:08:18 Speaker 4: It's a fantastic question, Barry, because actually, across a lot of different measures of profitability, you see that companies with higher profitability have higher returns than companies with low profitability. That's you can look at a very top line number like revenues, you can look at net income, so at the very bottom it all helps create spreads and returns. So that's really important because it gives you a better sense that that's something that's real in the data. You're not just cherry picking something that's really like a fragile academic result, and so that's comforting. What we end up using in our portfolios we call operating profitability because. 00:08:56 Speaker 7: We want something that's going to predict future profitability. 00:08:59 Speaker 4: So you don't want things that are super variable year year or one one time events. So operating profitability gets to the heart of what are kind of a more stable stream of revenues minus costs, and that's what we see or what we use in the portfolios. That is something that is stable enough where we can run a portfolio that focuses on high profitability names in a portfolio without a lot of turnover. 00:09:27 Speaker 6: Is there an overlap between profitability and momentum or is that just something completely different? 00:09:31 Speaker 7: It turns out to be different. 00:09:33 Speaker 4: The thing that's more related to momentum or price momentum, which is what we usually think of as momentum, is earning's momentum is related. So Robert Novemars did have a paper or a few years back where he showed that those two things are quite related. We do take account momentum in. 00:09:49 Speaker 7: The portfolios as well. 00:09:51 Speaker 4: But the thing with momentum, just like I was saying with profitability growth, is that it does tend to have high turnover if you try to pursue it directly. So a better way to take advantage of momentum is if you're already managing a portfolio. Let's just say that's pursuing size, value, profitability. You want to trade a little bit every day in order to make sure you're focused on those premiums, not introducing style drift into the portfolios. But you can take into account something like price momentum at that point of trade. So I could say, hey, here's the stock I want to buy, but it's down momentum, therefore it should continue to underperform for a little while. 00:10:32 Speaker 7: Let's just wait before I buy it, or vice versa. 00:10:35 Speaker 4: If I want to sell something that has up

momentum, I could just wait a little. 00:10:39 Speaker 6: Just I just want to follow up with that because I understand the way we use dimensional funds in our shop. I understand the way they operate. But I want you to clarify something because I don't want people to misunderstand what you say. 00:10:52 Speaker 5: What you said. 00:10:54 Speaker 6: It's not that you think you have to trade every day for the sake of trading. You what I The way I know the way you guys have run various funds are you are opportunistically looking for your time and place to pick up specific things. And it's not like, hey, let's go trade today. It's let's see if anything that's on our by list that we're looking to accumulate has become a more attractive price point. 00:11:20 Speaker 7: Am I? 00:11:20 Speaker 6: Am I doing that any justice? 00:11:22 Speaker 7: So great? 00:11:23 Speaker 3: That's absolutely right. 00:11:25 Speaker 4: When I say we look to trade every day. The turnover in our portfolios are is very low. So a core portfolio might have something in the high single digits. A higher, more narrow portfolio like a small value portfolio, for example, might be somewhere between twenty to thirty percent turnover. Just to translate that, a twenty five percent annualized turnover means when I buy a stock, I expect to hold it for four years. So it's a long holding period, which we think is really important because as you're incurring trading costs, you can spread that across a long holding period. But the daily rebalancing also just gives us a lot of flexibility. So those are index like levels of turnover, like passive indices like level of turnover. 00:12:09 Speaker 7: Right, But whereas an index might. 00:12:11 Speaker 4: Try to drive all of that turnover into defined reconstitution days once to four times per year, we can spread it across two hundred and twenty trading days a year, which makes it really easy to control training costs. 00:12:23 Speaker 3: More, Does the macro change any of this impact this? 00:12:27 Speaker 2: I mean, here, we are, you know, obviously in a you know, waiting the FED meeting, and I do wonder as the Fed's getting ready to finally cut rates, like it's a different cycle environment, does the macro play into this? 00:12:38 Speaker 4: You know, I would love to be able to say here's when the premiums are going to be higher or lower, But the data is just too noisy. So we view, at least in these equity portfolios, we want to be focused on these premiums day and day out, and macro environments don't really change that view. And it goes back to that idea for why we see these premiums in the first it's low prices combined with good future cash flows, and that should always indicate higher expector returns than something with a high price and low cash flow. 00:13:09 Speaker 7: And that's true regardless of what the Fed's going to do. 00:13:12 Speaker 4: Recession expansion, regardless of recession, long recession, doesn't matter.

Those premiums are not correlated with all of these macroeconomic variables. And we would love to be able to figure out to crack the nut of how to focus on these premiums during certain times, but we think it's best to do it every day. 00:13:29 Speaker 6: Really interesting, very cool. 00:13:30 Speaker 2: Stuff in a nutshell ten seconds, the market environment an interesting one, a hard one, a complex one. 00:13:36 Speaker 3: How would you describe it? 00:13:37 Speaker 4: It's always complex, it's always changing. It is easy, But I do think that when you have a long term view. 00:13:47 Speaker 3: Right now today, it doesn't matter or what. 00:13:49 Speaker 4: It doesn't matter, like we're going to be positioned on these premiums regardless of and that's part of why our clients like this, because they know what to expect from us. 00:13:58 Speaker 2: It's really interesting, kind of a healthy thing, right when we're so day to day to talk about the long term. 00:14:03 Speaker 6: I always think of Dimensional funds as indexing plus it's indexing, but the next level goes beyond it. 00:14:09 Speaker 3: Very cool stuff, Marlena, thank you, Thank you, appreciate it. Marlene ut Lee. 00:14:12 Speaker 2: She's global head of Investment Solutions at Dimensional Investing, joining us right here on Bloomberg BusinessWeek. 00:14:18 Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us Live weekday afternoons from two to five pm. Easter listen on Apple car Play and then Broight Auto with a Bloomberg Business app or wants us Live on YouTube. 00:14:31 Speaker 2: You are listening and watching future Proof pub Carol Manser, Almit, Barry Ridholtz. And we should point out that Bloomberg Radios Live broadcast from future Proof is sponsored by JP Morgan Asset Management. All right, we do want to get to our next guest. She is Joanne Bradford. She's president and Chief Money Officer ever to Main Money. It was founded in twenty twenty two by Adam Dell, former head of product at Marcus by Goldman Sachs. It's a financial advisory firm and her background is killer. We're going to get into that because she was a chief revenue officer at Microsoft, president of Honey of so FI. 00:15:01 Speaker 3: Welcome, welcome, welcome, and you're a friend of Barry's, of course, how are you good? 00:15:06 Speaker 8: Thanks? 00:15:07 Speaker 2: Talk to us a little bit about the environment today. And when you come to an event like this, what do you want to hear? Who do you want to hear from? What are the questions you're asking of people? 00:15:15 Speaker 9: Yeah? I do two things here. I advise a company called Wealth dot com and they announced a thirty million dollars Series A led by Google Ventures and City Congratulations yesterday, which was exciting and it shows you that, like, hey, look it's time for some automation and some technology and for some AI to be applied to this category because it's sort of the last one to break, you know. I was in the

advertising business, which they said will always be sold over Martini's people to people, and this business has said the same. And I think we're sort of seeing the beginnings of that in this part of the business, not you know, like the Visa's MasterCards, plaid stripes, those things, but actually in in the wealth management side of it. So it's exciting to see that to be a part of it. I think there are sort of two camps here, and all the people I've talked to one is, hey, look, I'm just going to keep doing what I'm doing and I hope that I get to the end of my career before the iceberg melts. And then there's other people that are like, no, I actually I'm going to try to change this. I want to be digital first. I want to go after millennials. I want to talk about how people have different needs around their money today. You know. So those are the two sort of camps, and I think it sort of happens in every industry, but it's clear it's playing out. 00:16:39 Speaker 5: Here, Joanne. 00:16:40 Speaker 6: Are those two very different generations? Is it philosophical or is it The fifty and older group is like I'm just going to run out the clock, and the thirty forty some things are like, no, it's got to be digital. It's got to be technology. That's what our clients want. 00:16:56 Speaker 9: I think it's both the providers and the customers right, because you know, I think the last conference we were at they said, you know, in the next ten years, a third of this industry is going to retire. And then you know, I worked at SOFI and we built a digital first tool right where everybody wants to do everything on a device, wants to have it done, and then they still do want to know that there's human and a person that understands their values on the other side of it. I think it's happened everywhere in life except in personal wealth management. So it's finally going to show up here, but it's not. We're not quite ready for it yet. 00:17:37 Speaker 3: But how does it change? 00:17:38 Speaker 2: How do you see the transformation in terms of it becoming more digital or digital you know, and embracing of technology. 00:17:45 Speaker 9: Yeah, I mean I literally I have a private wealth manager. I don't really want to talk to them. I just open up my schwab every day and look. 00:17:52 Speaker 6: At it, and we'll first stop opening it every day. 00:17:55 Speaker 7: Please every No, I like it once a week. 00:17:59 Speaker 5: It feel good. 00:18:00 Speaker 2: I just had a conversation about long term investing every day. 00:18:03 Speaker 5: Is too much. 00:18:04 Speaker 9: Every day, But I look at my AMEX bill every day. You want to show me your AMX bill on the credit card, Like what did I buy? 00:18:09 Speaker 3: When my husband says, let's look at the AMEX bill, I'm like, well I do it. 00:18:13 Speaker 9: You know, in this morning, I was like sitting watching TikTok. Next thing, you know, I'm like, oh, Apple pay oops, bang. My husband calls it the BOD and he's not talking about Board of directors. 00:18:23 Speaker 5: Box of the day. 00:18:24 Speaker 3: So he's like a box of the day showed up for you. 00:18:27 Speaker 2: But what does it mean for estate planning and tax planning and educational planning? 00:18:33 Speaker 3: Like how do you guys think about because that's your world. 00:18:35 Speaker 9: Yeah, so when we want to let's talk about domain money for a second. So our average customer is thirty nine years old, makes two hundred and fifty thousand dollars a year, and doesn't really want to put their money into Aumah. They have made some money, they're trying to figure it out. They might have some stock, they get a bonus, and they just don't know what to do. They're overwhelmed. They may have gotten married, may have gotten divorced, and they want some professional help. So it's a flat fee financial plan. We saw one for twenty five hundred dollars. We look at all your expend to, we look at all your spending, we analyze it. We use a bunch of technologies in AI. We put together a plan with a paraplanner, and then we give it back to you in a ninety minute discussion, and then we set up a discussion after that with. 00:19:22 Speaker 5: All your to dos and follow ups. 00:19:24 Speaker 9: Well, actually log into Zoom your Schwab account on Zoom with you and help you change, like move that there, because that's really where people freak out is they don't know how to do that. Our NPS score is ten out of ten. It's NPS Net Promoter score. It means would you recommend it? And we use it again? And on a one out of ten that's unheard of. 00:19:45 Speaker 3: Get it. 00:19:45 Speaker 9: We get a ten. 00:19:46 Speaker 3: That's a perfect score. 00:19:47 Speaker 9: It is a perfect score because everybody at the end of it is like, wow, you helped me, you heard me, I got value, and I know what to do. We have a twenty five hundred dollars version of forty five hundred dollars version and a seven five hundred dollars version. Most people end up taking forty five hundred because they want actually. 00:20:04 Speaker 3: A year or one time plenty went. 00:20:07 Speaker 9: And then they can come back to us for three to five hundred dollars an hour to be like, hey, I want to truck to key? 00:20:13 Speaker 3: Is it How long do people stay with you guys? 00:20:14 Speaker 9: Well, I mean, you know, it's they come back a little bit every couple of years. But I think it should be like the dentist, you know, right you you know, if you're using a sonic toothbrush, maybe you don't go every year, right, yeah, you know, the dental industry came up with you need to go every six months. 00:20:32 Speaker 6: Three times a year. They want cleaning three times a year. 00:20:34 Speaker 3: That's really But I wonder. 00:20:35 Speaker 2: If you can tell there's a trajectory of somebody who comes to you when they first get married, and then maybe they go through a divorce, they come back, and then they get married again,

and then they have kids and they have to think about college planning, and then they have to think about, you know, retirement. 00:20:47 Speaker 3: So do you see that trajectory. 00:20:49 Speaker 9: There's four there's four personas. There's the twenty nine year old that's like, hey, I need some help here. I have a good paying job and I just I like to be prepared. I call them like sharp pencil people, you know, They're like, I want help. I'm going to hire a trainer, I'm going to go to a therapist. I'm going to have the best of every tech check check. Then the next group is like a thirty nine year old that's like, I didn't do anything, and please help me catch up very fast so we can do that. The next group is a fifty year old who is like, wow, I had something happen in my life, health, in my family, divorce, partner, I hate my career, I can't do it for the rest of my life, and I need to know how do I get out of this? And they want a financial plan for that. And then there's a group of people that need to help family members where they're like, hey, I'm now this sandwich generation. I have to take care of a parent and I have to take care of a kid. And there's really not anybody that serves that rights so real, So like description you know, and I've talked, I've I listened to every conversation. I know this audience from my time. 00:21:59 Speaker 5: It's so. 00:22:01 Speaker 9: And there's nobody really serving that market. 00:22:05 Speaker 8: Right. 00:22:06 Speaker 9: We don't tell them what products you use. We're like, use fidelity U schwab do whatever. And my entire sort of mission in life is I don't care who you use for your financial plan. I just want you to actually have one. I don't care if you do it yourself. I don't care if you sign up for you know, missus Dow Jane's and take the course. A friend of mine the other day she works at Apple. She has worked there for thirteen years, never sold a sheriff's stock. 00:22:31 Speaker 5: I said, how do. 00:22:32 Speaker 9: You manage your money? And she said, oh, I'm taking a course on the weekend. Yes, And I said, oh, okay, great. And you know, she's mother of three. She's like, I got a save for college. I have to do these things. 00:22:43 Speaker 5: Da da da da. 00:22:44 Speaker 9: And I'm like, well, I'm glad you have a plan, right, And she paid three thousand dollars for that course, and I'm like, well, you could have just paid someone to do it for you and not spent your Sundays and a course. But like whatever, you know, I'm just happy that people are doing it doing something because you and I know the power of compounding, the power of starting it off, and it just really matters. And so at Sofi, I saw so many people with student loan debt. I met thousands and thousands of people. I had dinners with them once a week, and I know this customer and I know most people do not pay attention to their finance. 00:23:19 Speaker 6: So, Joanne, you started out by discussing how it's digital first, there's technology driven. But what I'm really hearing from you with these four different categories of people are that they want somebody, a live human to talk to yes and hear what their issues are. How do you marry technology with live human advice. 00:23:39 Speaker 9: Well, we do it all on Zoom. We have an app where they upload all their documents, makes it easy for them. We give them the report and the action items. Afterwards, we let them schedule all their meetings and times via technology. We follow up with them. So everything that is possible to take out of the process of friction of humans do accept that conversation and the review of the plan and the input and really understanding your values. Some people are like, I want adventures. Some people are like I want a career. Some people are like, I'd like to get rid of my spouse. You know, you know, there's just everybody has something and they want someone on the other end of it to hear them and to acknowledge. 00:24:20 Speaker 3: What's the most common mistake? Is it just people not having a plan. 00:24:22 Speaker 9: It is just not knowing the number, not ever looking at the numbers. 00:24:27 Speaker 3: What do you mean just everything? 00:24:29 Speaker 5: Yeah, I'm in their head. 00:24:31 Speaker 6: It's sort of juggled, like what's your checking balance? I don't know, it's around this. 00:24:35 Speaker 9: I'll give you a perfect example. I was talking to a and just got about forty seconds. Yeah, a Bloomberg reporter one day and she said, not me, I have student loans. And I said, well, how much do you owe? What's your interest rate? And when will you be done? And she said, I don't know. I just know one day it'll be gone. 00:24:52 Speaker 3: Okay, So I don't care who you are. 00:24:55 Speaker 9: You got to look at the number. 00:24:57 Speaker 6: Really interesting me. 00:24:58 Speaker 3: If you don't know what you have, how do you figure? 00:25:00 Speaker 5: No, And most people don't. 00:25:01 Speaker 3: Yeah, they just don't. Really cool stuff, so fun, really cool. 00:25:06 Speaker 6: Stuff, really really cool stuff. 00:25:07 Speaker 3: I'm kind of taking note. It's going to share, folks. 00:25:10 Speaker 6: I told you before she came on. She's a fascinating person with an amazing background, and I love how she's combined technology and human advice into one and bringing so far in with the student loans on top of it. 00:25:22 Speaker 3: It is pretty cool, like how all the stuff you did let. 00:25:24 Speaker 9: Up to where you are honey coupon code, one click coupon code. We sold it for four billion dollars. There's always a tech solution there. There you go exactly, Thank you so much. Okay, thank you guys. 00:25:34 Speaker 2: You bet Joan Bradford, President and Chief Money Officer, for it to main money. 00:25:39 Speaker 1: You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and Android

Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa, playing Bloomberg eleven thirty. 00:25:57 Speaker 2: We mentioned this yesterday about the great well tramsfer baby boomers, the silent generation they're going to pass down to combine eighty four point four trillion dollars in assets to younger generations is going to happen in the next couple of decades. 00:26:12 Speaker 3: Our next guest, safe to say. 00:26:13 Speaker 2: Is pretty familiar with all of that with us now from future Proof is Tim White. He's co founder and chief growth officer at the estate planning platform Wealth dot com. How are you and nice to have you here with us. 00:26:23 Speaker 8: Oh my gosh, this is absolutely this is our second year a future Proof. 00:26:28 Speaker 5: We absolutely love it. 00:26:29 Speaker 8: It's just great to be immersed in this advisory community. It's absolutely incredible. So, well, that's energy. 00:26:35 Speaker 2: Well when you it is great energy, and there's there's something about being outside and next to the beach. I'm not gonna lie the positive or negative ions that come from the ocean. 00:26:43 Speaker 3: I don't know what it is. 00:26:44 Speaker 2: Having said that, you know, there's a lot of firms that are here involved in the management of money. 00:26:50 Speaker 3: What is it? 00:26:50 Speaker 2: What are the kind of things that you're looking for? Are the conversations? There's various panels. There's one happening behind me. What are you looking to find out? 00:26:57 Speaker 8: Well, I think this, I mean, it's a really exciting time for us here at Wealth dot com. On Monday, we actually announced a series A led by Google Ventures GV, followed by City Ventures Outposts which is Newburger Berman and also Firebolts. So we're really excited. We're running with that energy and I think for us, like it is a very exciting time. You talked about the Great Wealth Transfer right, nearly half of all assets over the next two decades are transferring over right to a new generation. And so part of that is like how do we empower advisors through technology? And it's just an exciting time to be at Wealth dot com because you know, as a founding team for GV for us, they have just such an incredible track record of supporting advisors with big aspirations and big ideas to make. 00:27:47 Speaker 5: A generational company. 00:27:49 Speaker 8: And so we couldn't be more excited to be here and just to be around this incredible advisor community. 00:27:55 Speaker 2: Tim talk to us about does Google Ventures get involved? They they is it a financial investment, but do they also I mean understanding of technology, of data, the power of it, the impact, what it can do, the productivity of it. 00:28:07 Speaker 3: How else do they assist you guys in what you're doing. 00:28:09 Speaker 8: Carol, That is an absolutely fantastic question because when we actually ran the Series A, there was so many advice excuse me, and investors interested in our organization. 00:28:19 Speaker 5: But GB was absolutely the right fit. Is because of just. 00:28:22 Speaker 8: Their expertise right not only access to incredible talent, but also how we can add supercharge our AI capabilities within our ecosystem. Because here at Well dot Com, we are just really focused on building the most complete, most comprehensive ecosystem in the market. So, whether there's an advisor here, Carol that is serving the mass affluent high net worth or even the ultra high net worth that is well dot com, and so they're going to be here to really help us supercharge things. 00:28:52 Speaker 2: Well, tell people who might not be familiar with you, guys Bloomberg, it's a smart audience. But remind people about what you do specifically. And I'm curious about your debito. Who are really tapping into your services? 00:29:02 Speaker 5: Well, that's a great question too. 00:29:04 Speaker 8: So yes, we are a digital state planning ecosystem, servicing advisors that have clients across the entire well spectrum. So whether it's a client or household that needs those foundational documents or even worse. 00:29:18 Speaker 3: Some basic stuff like KENI oh. 00:29:20 Speaker 5: But not this there, Carol. 00:29:21 Speaker 8: We work with the ultra high net worth as well, so families that have one hundred million dollars plus in assets, we're helping them visualize those complex estates. And so we are the one stop shop for big large firms to be able to supercharge their state planning strategy and empower their advisors to have these incredibly important topics and conversations. You know, today, Carol, sixty percent of Americans do not even have a will in place? Can you believe that in forty percent? Well, there's a probably good share of them that actually need to do a restatement. And so having technology be able to compliment accomplish that is a big thing. 00:29:57 Speaker 5: And we're here to solve big problems. 00:29:59 Speaker 2: Well, and to be fair, we had a conversation with Joanno over at Domain Money, right, So there's a couple of you guys right that are out there certainly helping people think about, Okay, what's my complete holistic financial picture and what do I need to be taken care of? 00:30:13 Speaker 3: I am curious about you know. 00:30:15 Speaker 2: The majority you say you have clients, you know, all different types of spectrum. Is there though a demographic? Is it people getting their first big job? Is it people getting married? 00:30:23 Speaker 6: Like? 00:30:23 Speaker 3: When do people often come to you? 00:30:25 Speaker 5: Absolutely? So we power the financial advisors. 00:30:28 Speaker 8: So we work with all different type of advisors, whether they are working with the family office. 00:30:34 Speaker 3: It's can provide the services for those. 00:30:37 Speaker 5: So what power those conversations? 00:30:38 Speaker 8: So

it can arrange for a variety of different and type of client right, they have a new family getting those foundational documents using our AI capabilities. Like just case in point, right, a new client comes to an advisor that used to have to sift through those really complex legal documents. We have AI capabilities and this is what Giv's really excited about. To read those existing plans into a visualizer report in layman terms, so be able to sit with the client and say, look at it's time. You've created this plan about twenty years ago. Let's set you up with the restatement, let's give you access to wealthne. 00:31:11 Speaker 3: So this is happening already. 00:31:12 Speaker 8: Yes, yes, yes, it's really It's an amazing time for the space. We work with actually over five hundred institutions, right, we have some massive, massive partnerships we're going to be announcing in the next few weeks as well. 00:31:24 Speaker 2: Tell me about the technology curve, because obviously we have all been all in on AI of the last year and a half or so, Tim and I think we've seen a lot of spending on the infrastructure side of it, the build out. But you guys, you know obviously it's already happening, right, the yes generated AI, the large language models are already adapting what financial advisors can do in those companies. 00:31:45 Speaker 8: Yes, so, Carol, this is the uniqueness about wealth dot com when you think about the landscape, the category, the founding team, myself, our CEO, executive chairman, Ray Carvallo, We come from technology. We created a fintech that we scale globally, working with large financial institutions, leveraging machine learning, leveraging AI, and we sold the business to Lexus Nexus for five hundred million dollars in twenty nineteen. We actually took that expertise that a players from that company over to well dot com to supercharge this and bringing in that into our DNA has been so important because what again, what makes us unique? This is all done with technology but also with a human touch. 00:32:25 Speaker 5: But well, but. 00:32:25 Speaker 2: What's different because as you know, Tim, I mean AI, we know has been a lot around for a long time, and so I always feel like, you know, we're all talking about AI, but it's not like a new new thing. So tell us about, like, what's the next level of everything that we've been talking about in the last year year and a half in terms of what it can do and help financial advisors going forward? It's all will some say it's you know, we're scratching the service in terms of what it can do. 00:32:49 Speaker 8: Yes, and I think we are scratching the surface. I really truly believe that. But it's all about efficiency right where the firm for the advisor. Yeah, for us, how we look at that. 00:32:58 Speaker 3: Everything needs a human essentially, everything. 00:32:59 Speaker 8: Needs a human, but there is a role for the human. We've seen that too. I mean, look at several years ago, it's

all about the robo advisor to disrupt. The advisor is never going to be pulled out in that very important relationship with the household of the client. 00:33:12 Speaker 5: But how do we make his and her role more efficient? 00:33:16 Speaker 8: And that's using AI, that's using technology, and that's using the skills that we have to read through Again, some of these legal documents are sixty pages. To be able to read through that instantaneously extracting all that important document in that way, I'm. 00:33:30 Speaker 2: Looking forward to the AI chatbot or AI power tool that looked at a document and said, Okay, ninety nine point nine percent of this is yes, unnecessary, Yes, here's what you really need in like a couple of setons. 00:33:43 Speaker 5: Let me let me seriously, let me just tell you this. 00:33:45 Speaker 3: We've all been there. 00:33:46 Speaker 8: We are going to be really launching this in such a direction. We're crossing new frontiers. I you know, look at us in five years. It's going to be remarkable. 00:33:55 Speaker 3: All right. 00:33:55 Speaker 2: So okay, I don't know. Take us five years from now, what is it going to be. I go to my financial advisor, I open up my laptop, or I pop up my phone, Like what is it it is? 00:34:04 Speaker 5: It's gonna be there. 00:34:05 Speaker 8: It's going to be a living and breathing ecosystem that is dynamic as your life, that's feeding you that important information. Because state planning is at a one and done transactional thing, right, it moves because your life evolves. You know, whether Carol, you're in California, you moved in New York. You need to be notified of that, and those documents need to be optimized for that state. 00:34:26 Speaker 5: And that's the type of stuff we're going to be doing. 00:34:28 Speaker 8: In addition to that, what we can do with scenario analysis as well, really empowering the advisor, informing the client. 00:34:35 Speaker 5: Because this is extreme, So. 00:34:36 Speaker 3: What do I mean? 00:34:37 Speaker 2: Like you can play all right, so perhaps I do this and that's what does it mean? How does it impact my financial. 00:34:42 Speaker 8: Trajectory exactly exactly, and that's the power of wealth dot Com. 00:34:46 Speaker 2: What's the tricky part of this and part of me, like my you know, radar goes off in terms of it's a lot of information, right that's out there increasingly in the digital world. That's already out there in many ways, but it sounds like this is going to take it to potentially another level. 00:34:58 Speaker 3: What do we have to be concerned about? What are the risks in all of this? 00:35:02 Speaker 8: Honestly, I mean the good thing about this is wealth dot Com is prepared as an organization. We actually process transactions with American Express in twenty eight countries. Bringing that level of security to firm is extremely important. 00:35:15 Speaker 5: So that is number one. 00:35:17 Speaker 8: And then also for us, it's like, you know, giving the right information to the advisor. Don't overwhelm the I mean, do not overwhelm the client. And that's the problem today even with the traditional model with its state planning attorneys. You get a sixty page document. I could walk around this event and say, who's actually read through this? I'll give you ten thousand dollars that if somebody has nobody absolutely, you know. 00:35:40 Speaker 2: What's also interesting is I'm thinking about the money that you're getting from Google Ventures. 00:35:45 Speaker 3: You talked about GV. 00:35:46 Speaker 2: What do you guys do? Is it all about being paid? You know, investing in technology? Like, what do you do with it? 00:35:52 Speaker 8: I think the unique position of GV both on to be able to work with us to develop the technology, but access to talent. 00:35:59 Speaker 5: It's all about growing our team in the. 00:36:02 Speaker 8: Right and healthy way and bringing additional experts to already amazing organization. 00:36:06 Speaker 3: You sound super optimistic. I am so really cautious. 00:36:12 Speaker 2: But as we move forward because it does feel like the financial world. We've talked about fintech for a long time, right, but this is something. 00:36:19 Speaker 8: Different, This is this is I will tell you this why I'm optimistic. I have an experienced team. I've done this before, we have a track record, and I'll tell you something. Walk around future Proof today, You're going to feel the excitement of wealth dot com. You're going to see it now, especially after this conversation. So I hope that you actually stop by and talk to the team. We should get you. Where are you with your state plan? 00:36:40 Speaker 6: Hi? 00:36:40 Speaker 5: For every statement. 00:36:41 Speaker 2: Probably always, always, always, Well, so as you go around here, who are the voices that you want to be talking with? Obviously, a lot of the probably big financial advisory firms. 00:36:49 Speaker 5: Right. 00:36:50 Speaker 8: Honestly, when you're building a brand like wealth dot com, I want to speak to every single person at this event. I want to speak to every single person. One thing that we do really well here is marrying phenomenal people, great tech. And we've built this brand based off of the evangelists within our advisory network, our community advisors. They're out there actively running around this event selling our product could be in a better position, and that's why GV invested in us. 00:37:14 Speaker 3: Yeah, and so what do you hear? 00:37:15 Speaker 2: What are you know in terms of the financial advisory community, As you say, they want things that are going to be easier, right, make what they do in terms of working serving their clients easier. 00:37:24 Speaker 3: What else are they looking for? 00:37:25 Speaker 8: They're working for a team that understands integrations right, right, So you have all these disparate technologies and how can somebody bring

it all together? That's also strength. We api connect to all the major CRMs, the major planning softwares, even into larger firms proprietary systems, so they have access bi directionally to this important data. 00:37:46 Speaker 3: What's the long term plan for you guys? Do you go public? At some point I would one. 00:37:50 Speaker 5: Hundred percent IPO all the way, all the way how long. 00:37:54 Speaker 2: I mean, you obviously are getting money right and we've talked about this for a long time at Bloomberg how there's a lot of money out there in the private markets which gives you a certain luxury right as you do the build out. I don't know, is there a plan, Is there a trajectory? 00:38:07 Speaker 8: There is a trajectory, there is, there is, and there's a few stadiums out there that I can imagine Wealth dot Com being on. Okay, so yeah, we have big aspirations. Look at our team, done it, We've done it before. We're gonna be patient in what we're building here, and we're gonna build it right. And we want Wealth dot Com within the advisory community to be actually enabled to every single one within our group. 00:38:27 Speaker 2: As I kidded you before about like your enthusiasm, and it's really it's pretty fun to be and I feel like in general and as we kind of bary when when he's here, we're talking about it's hard not to when you're in California near a beach, and this is a really wonderful event to have a financial conference, having said that there are some real concerns, you know, in terms of the economy, the elections, geo political risks, macro concerns. We're talking fed policy, We're talking could there be a recession? Any of that impact eventually or does tougher time make you need to do what you're doing even more urgent. I'm just curious about the macro environment. When you're building out a business, it matters. You know, you did get money and that is going to keep you going for whatever. But I just do wonder about the macro environment what that means for you as a business owner, Carol, I'm gonna be guys running your business. 00:39:19 Speaker 8: I think that's a great question, and I'm gonna go a little bit backwards before I go forwards. Yeah, the company that we created in the past was in the actual account opening work stream and also the e commerce work stream. 00:39:31 Speaker 5: We sold it right before Covid. Could not be a better sale, right. 00:39:35 Speaker 8: I also look at I know, right it was a great success, great time for us with the email agent, also for Lexus and Next it's one of their most successful acquisitions and that was really important for us. 00:39:45 Speaker 5: Now with wealth dot. 00:39:45 Speaker 8: Com and seeing what's happening in the world today, The need, the demand for estate planning is going nowhere. Now is the demand going and paying you know, ten thousand dollars for these foundational documents or getting it through your advice as a value add right? Right, it's going to be really, I

think, a great position for us, whether economy booms or it slows down. 00:40:08 Speaker 2: Yeah, and I guess as we've seen more and more wealth creation certainly in society, right, there's more demand. Do you think about it as you say you're serving advisors? Is it going to be though, what you guys are doing available for all of the economic strata, if you will. 00:40:23 Speaker 3: Ultimately? 00:40:24 Speaker 2: Is that the thinking one? I mean, I understand for the high net worth and no, no. 00:40:29 Speaker 8: But so for the mass effluent, high networth and ultra high net worth. That is the solution of wealth dot com. 00:40:34 Speaker 5: You know. One of the things that we're very principled. 00:40:36 Speaker 8: We love our go to market and selling through financial advisors, and that is always going to be our strategy is solving the problem statements of this wonderful industry and event and that people here that they're dealing with on a day to day. 00:40:48 Speaker 3: Yeah. 00:40:48 Speaker 2: I think that, you know, if I think about the Bloomberg audience or people who use an advisor, they just assume they're there. They do their thing. But there's a lot that's going on or that can be transformative ultimately in the next few years or even sooner because of technology. 00:41:01 Speaker 8: I would say this for it is already Carol, for your audience, I would say fine. A Wealth dot Com advisor, I'm just sameless plug shout out to our wonderful advisory community. Thank you so much, Carol, interesting stuff. 00:41:15 Speaker 2: Tim White, thank you so much, co founder and Chief growth Officer at the estate planning platform Wealth dot Com. Brother mac. 00:41:25 Speaker 8: A journal. 00:41:27 Speaker 2: How about you let me drive? 00:41:28 Speaker 3: Oh no, no, no, no, who's going. 00:41:31 Speaker 5: Honey? 00:41:31 Speaker 1: Please gravel let's mate, I want to drive. 00:41:37 Speaker 8: It's a good question. 00:41:42 Speaker 1: This is the drive to the Globe. 00:41:44 Speaker 7: Dot com to me than well Bun. 00:41:47 Speaker 5: On Bloomberg Radio. 00:41:51 Speaker 2: All right, everybody, it's time for the Drive to the Close today from future Proof Bloomberg Radios. Live broadcast from future Proof is sponsored by JP Morgan Asset Management. So let's get to our Drive to the close. Guest, I'm Carol Master alone with Barry Ridholtz did a diorias with us Co Cio of investment. It's a fintech company offers software services for the financial industry and financial advisors. 00:42:10 Speaker 3: Welcome, Welcome, Welcome, How are you. I'm great, Thank you so much for having me. I'm happy to be here. 00:42:14 Speaker 2: I didn't get to tease this, but you have talked about our notes that you shared with our producer that inflation is the flying the ointment. 00:42:20 Speaker 3: I get that. I get that. 00:42:24 Speaker 2: So with a FED meeting and we're all like, you know, there's expectations and there's a lot of debate and

investors, traders thinking it should be an aggressive move. 00:42:34 Speaker 3: They still have to keep a watch of inflation, don't they They do. And you know what's funny is and we saw retail sales today. Yeah, you know, which is good. It means the economy not falling apart what inflation. There's goods and then there's services. And I think we're saying, ye, a pretty big split, right, and so you know, goods, interest rate cuts are needed. Services. I think they're still gonna want to keep an eye on I've been you know, it's gonna be a twenty five. It's hard for me to believe that they're going to take their hand off and do a fifty right out of the gate, but it would be very unlike this FED. And I feel like Jay Powell, right, I agree with you, I think, And you know, there's a lot out there around inflation coming in waves, and yes, maybe we've got a handle on it for this time around, but you know it could come back. You know. I think twenty five is the safer bet. And I still would say twenty five, but it wouldn't blow me away if it ended up being fifty. 00:43:30 Speaker 5: Yeah. 00:43:30 Speaker 6: This seems like a very timid, cautious, why are we taking chances type of FED. And every time we talk about the FED, I feel obligated. It's like my disclosure. Inflation peaked in June to twenty twenty two. The FED was late to recognize at start it's peak. It's finish. Is it fair to say they are institutionally behind the curve? That's just the nature of a big, you know, conservative institution. 00:43:57 Speaker 8: Yeah. 00:43:57 Speaker 3: I think they're going to act with a little bit of a lag, my polite way I. 00:44:02 Speaker 2: Can symtance, Yah, Yeah, I think haven't they lagged a lot already? 00:44:07 Speaker 3: I think, Well, I mean there's look, there's a whole narrative out there around we're way behind on these cuts that you know, and and a lot of it too is why why do we think we're having these CAUs Is it just to get to neutral or is it because we actually think that, you know, we didn't stick the landing that recession is coming. I mean that that that's a debatable question as well. But I think when you're looking at the cuts and you're looking at the FED, yeah, they've been they they are not quick to want to act. They have a dual mandate. Unemployment is still pretty pretty tame, right. I mean, we're certainly seeing a cooling in the job market, but jobless claims still don't speak to having something like a bazooka fifty basis point rate cut for a FED that hasn't really wanted to take that kind of you know, big action. 00:44:50 Speaker 2: I also wonder about the elections, like do they want to do something like that, whether or not they say, you know, they're not political, I do wonder about the appearance of that. 00:45:00 Speaker 3: Yeah, I'm well, I mean just I'll say I'll simply say if you look historically, typically in an electioneer you get you know, some easing, right, Like that's not an unusual thing to expect an electioneer. I don't think this FED is really looking to be political. I mean, I really do think, you know, Barry said it, they're cautious, and they're just you know, they're moving cautiously. And some of it too. Don't forget. You know, the markets are going to front run anything that they do. So whether they give us a twenty five or they give us a fifty. If they talk about if they give us the twenty five, but they say, ah, you're going to get a hundred by the end of the year, it's kind of takes you to the same place. It has the same impact at the end of the day, and so there, and they're willing to do that. 00:45:37 Speaker 6: So you mentioned retail sales. One can't help but notice the bottom half of the economic strata is carrying a lot of credit card debts. We had a guest yesterday talk about not a big uptick, but a modest uptick in credit card delinquencies. In defaults is starting to show. It seems like the higher rates are falling disproportionately on those lower end retail shoppers. 00:46:01 Speaker 3: I agree. I the COVID money's gone right and we've eaten through that buffer. I also think, Look, let's not forget inflation coming in line doesn't mean the level of the prices are going down, right, we have to have we all know, just not going up much as much. And so you know, it was a big increase for people to take. And when you talk about the lower income groups and trying to keep pace with you know, even discretionary needs, a little one non discretionary needs and needing to borrow maybe to kind of meet that make those ends meet. So they're they're sort of facing this double whammy of much higher prices than just a couple of years ago, and then on top of it, really high interest rates. And so yes, I agree, it's not a great place for you know, kind of common man. 00:46:46 Speaker 6: So the two follow up questions. We know wages have risen fairly in line with inflation, but real estate is probably the thing I hear more people complain about, especially first time home buyers. What my ID a series of rate cuts do for that audience. 00:47:02 Speaker 3: I think it could unlock that. 00:47:05 Speaker 5: I agree. 00:47:06 Speaker 3: I mean, there's it's interesting you bring that up because in my discussions of the advisors, and of course they're working with people, you know, they're they're talking to them about all their problems, not just how do I allocate my financial assets, and they're talking to them about things like, yeah, my kids can't buy a home, you know, or I put it in a they put in an offer on a house and you know, they were beat by like one hundred thousand dollars to try to get this house or whatever. You know, just like just you know, crazy kind of premiums being spent on the you know, existing homes and that they can't get into the market. So I think this is a major concern for people. I think advisors are worried about it from this, not only from the standpoint of you know, whatever allocations from a financial perspective, but to your point on just the real estate market in general and what their clients are facing. But I do think rate cuts can start to unlock that because bringing rates back down, of course, under where a lot of those mortgages are dan. 00:47:59 Speaker 2: The penalty you're involved in here at future Proof is about the future of investment delivery. How are you, you know, thinking about where that all goes. You've been talking increasingly about the role of technology and how that can change things. 00:48:14 Speaker 3: But what are your thoughts, what do you what's your vision. Yeah, so coming from investment a wealth tech ecosystem, we're really from our perspective, it's about outsourcing to managed account type solutions and really bringing scale. And I add to that that we see the future of investment solutions as leaning toward personalized services. Personalized solutions. This is you know, is that courtesy of AI or something else. I think it's I think it's just look at today, Look at your smartphone. Yeah, all the recommendations that serves up to you, the expectation you can around kind of drives me crazy. Does it drive you crazy? 00:48:47 Speaker 6: I turn most of my notifications so it can't be bothered. 00:48:53 Speaker 3: Sorry, but younger you know, younger generations aren't right. I'm right there with you. No, no, no, you know they're they're they're looking for, you know, a personalized services and they're going to expect that from their financial advisor. And gen Z actually wants a human being in the room with them, but they're going to expect technology to bring personalization. And the only way an advisor can do that is with tech to scale those types of solutions. Direct indexing, tax overlay, high net worth type services. 00:49:21 Speaker 5: Yeah. 00:49:21 Speaker 2: I like the combination, though, I think there's a lot of things tech can take care of that you don't necessarily need an individual, but you want an individual for the stuff that really matters. 00:49:30 Speaker 3: This was fun. Thank you so much. Thank you really appreciate it. Danna Dioria, co Cio of Investment. 00:49:35 Speaker 1: This is the Bloomberg Business Week podcast of a little lot of Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also want us live every weekday on YouTube and always on the Bloomberg Journal alone.