Day Two at Commonwealth Financial Network’s 2019 National Conference

on iTunes, SoundCloud, or Bloomberg dot Com. You can also listen to our radio show weekdays at two pm Eastern only on Bloomberg Radio. One of the major themes that has been coming up on the first day of coverage from the Commonwealth Financial Networks National Conference is the idea of looking at financial and retirement planning those golden years in a holistic and mindful way. Johnny young Worth is Managing Principal of Practice Management at Commonwealth Financial Network developed

and now runs Commonwealth's Mindful Retirement programs. I love the name of it. She's with us on site here in Colorado. UM. You know what, I was curious if you went back five or ten years and you went to like the heads of financial advisory firms and retirement planning firms and said, hey, listen, I want to do a mindful retirement program. They'd be like, wait, what are you talking about. Absolutely, to tell us a little bit about how we've involved in terms of how

we think about retirement. Well, you know, before it used to be all about money, and I'm the lottery perhaps well, or just your savings and getting into a position where you're ready financially for retirement. But about ten years ago, maybe seven years ago, I had an advisor colony said Joanie, I see all these clients and I've worked with them a decade of two and they're all ready for retirement. Financially. We've gotten there, They've got enough money. Then I watched

them retire and they're not always happy. They've got all the money, they're all set financially, but they're not ready for retirement emotionally, they're not ready in terms of living fully in that last stage of life. And that last stage of life is so much longer than it used to be even ten years ago. So um, he said,

what what do you have to help me? At the time, I had not a But since then it put us on a stage and a platform for building things that our advisors can use, and so what does the that look like? What are you arming them with? Then as you go into these workshops and whatnot? What what are

you doing with folks? It depends. There's many things. In about twenty minutes, I have a presentation I'm giving and it's questions advisors need to think about in terms of their interaction with clients about retirement, including what do you call it? You know, the R word sets us a little bit on the wrong path. I love some of the work that M I T has done, the M I T. H Lab, and they talk about the last eight thousand days of life as being the phase of exploration.

So you know, we have eight thousand days of learning and eight thousand days of growing, and eight thousand days of maturing and eight thousand days of and one might used to say retired, but no, no, it's exploration. And I love that because I think it puts us on the hook. You know, we don't just sit back there and say I'm gonna retire now and do it the way our parents did it or our grandparents. They we

had this much time, we've got that's okay. We're just sometimes sometimes the headphones fall off it's happened to me. Sometimes we all get excited and you get excited. But you know, I think that is such a good point. So many things are different from how our parents, certainly how our grandparents did it. Um So what's the conversation you sit down with somebody and said, Okay, financially, you guys are set. Emotionally, how do you walk them through them?

What are the questions? What are the things that they need to think about so that they're emotionally prepared for retirement? Well, I think there's you know, we can go to many gurus in this area, but there are buckets of things you look at. What is the whole concept of working in retirement? So people used to think retirement meant you stop working. But but if we talk about this being

the expiation face, working is part of it. I think the Department of Labor says that forty four per cent of people will continue to work past sixty five in the next ten years or so. So more and more and more of us are working way past six. I see it with But I'm from a large family and have older siblings and they are going into retirement, but they are working and not looking to you know they're financially said, but they're thinking about, Okay, maybe I'll now

run my own little business or something like. They're thinking about kind of a soul second life. And it's really fascinating to see how that's working. Yeah, in a second life where you grow and develop and you have an explosion of learning. And I think about this for myself because I'm that age and I've loved my career, But where do I get one of those next explosions of

learning and growth in my next decade and beyond. But I also think about how it impacts the labor force on a day where we're talking about the job market when you do have older individuals right there, not just going off to the golf course or what have you, UM, but they're staying in the workforce and whether that can be a positive or just how you know it affects

it well. It also leads to this question of how many people are doing that by choice and how many people are doing it they have to well, a ton are doing it because they have to uh for sure that a group of folks are not necessarily the group that are financial advisors are working with working with UM.

And I think it raises a whole. Another social issue for our country is that we have so many people that are unprepared here in this community, though you know, we're talking about really a different set of people who who are prepared financially and are looking for more. They're looking beyond golf, beyond knitting, beyond bingo, beyond all that stuff that used to be enough. And there's nothing wrong

with any of that, No, there isn't. And so as you talk to people, what are some things that have surprised you in terms of what they choose to do? Because if you're talking about a financially stable group of people the world's they're oyster in a lot of ways. They're very healthy, they're taking good care of themselves. So they have both the physical ability and the fiscal ability to then make these choices. So what are they choosing to do? Oh, it's it's all over the place. But

I'll give you an example. I was doing one of these mindful retirement workshops for one of our advisor's clients and there were maybe people in the room. Um, and we had gone through things like work in retirement and health and wellness, and we've gone through family relations and leisure and social and personal devomenting. And we got to this point. I remember this man, he was an E. N T. He was sixty two year result and we're

talking about working in retirement. And I asked the question, what did you want to be when you were in high school? And I saw this transformation as he was sitting there in the audience, and he said, you know, I always wanted to do theater, and I let all that go because as a physician, no time even to go to theater, much less to participate in. He said, I can start a theater of my own, I can be the theater director, I can put on local performances.

And that was a really fun example. And all all it was was that question, well what did you want to be? And he just exploded into I forgot about this. This is a huge opportunity. So you find your ways of helping people envision something other than what they've done for the past fifty years. Well, in technology and travel and all of that I would imagine just really opens

up the world even more for everyone. Yeah, travel is really an interesting one because it's one of the number one things people say they're going to do in retirement. And when you look at the data. They don't do it. They don't do it as much. They don't do it as much. But but as for projectable reasons, it can be for money or it can be for health. Sorry, I'm gonna leave it on that note. Really interesting. Love

your energy, Joanie young Worth. She's managing Principle of Practice Management at Commonwealth Financial Network on site here at Commonwealth Financial Networks National Conference. Yes we are. We're all talking about the labor market today, and of course we are talking about the weekend, so we are that too. We got to talk about today's at jobs report. Lindsay Piegsa certainly a known guest friend of the show. Chief economist

Stephile Financial on the phone from Chicago. Lindsay, it was interesting to watch as everybody weighed in on the jobs report this morning, because I feel like some are all right, another sign of economic slowdown in the US. Others were like, yeah, not so bad. Um, how do you see it? Oh?

I think it was pretty disappointing. It fell short of even the lower bar of expectations and reaching a four month low, pulling that three month average now closer to just a hundred and fifty thousand and the most disappointing component that I saw was efforts hourly earning flat in September, pulling that annual growth right now below three for the first time since mid So I do think there's a number of red flags here that suggests the labor market

is slowing, and I think coupled with the very disappointing I s M manufacturing and non manufacturing numbers we saw earlier this week, this really puts a lot of press. You're on the FED to take action at the upcoming October at l MC meeting. And so, given what you just said and your analysis I think is shared by many, lindsay, then you look at the stock market today and investors seem to be saying, no, it's cool, we're good. We're going to drive all the major industries up more than

one percent at this point in the trade. So why that reaction do you think? Well, I think that because there was because there wasn't just one data point that was weak. There wasn't just two, there was three. So the market is saying, now there's enough evidence that the

FED is going to be four. So it's almost as if the initial I s M number, the market was very negative about that reaction because they didn't know if it was enough to really tip the hand for the FED to step in and give us an additional twenty five basis points. Then we saw the service sector of the market said well, maybe this is enough. Then we saw a moderate jobs number, and the investors seemed convinced that the FED will be forced to provide that third

round raid cut in October. The unemployment out of the badness. Yeah. Well, the unemployment rate, though, did dip, right, So three point five three point seven percent was the survey that we had here at Bloomberg. Unemployment rate also, which we closely watch UM, came in lower than the month before. How do you read that? Is that a positive or is it people just kind of giving up? Well, I think

it's both. On the one hand, we have seen the unemployment rate stubbornly low, not only within what the FED considers the full employment range, but breaking through that lower bound, and we've been there for quite some time. So I don't know if the unemployment rate is really capturing the level of joblessness out in the market, because when we look at the millions of Americans that are still sitting

on the periphery of the labor market not participating. That's a lingering structural disconnect that I don't know that it's being accurately captured in these calculations. In fact, if we add it back in all those discouraged workers, all those marginally attached workers, all of those workers struggling with temporary, low wage part time labor, I think at the unemployment rate jumps closer to seven. So that sinks a much different picture than this record thow of three point five percent.

And so you know, you did a nice job laying out all the data that investors and clearly the FED have been looking at. Anything else on the horizon that could either cement this decision as as you as it sounds like you're saying the FED is getting closer to

or could introduce some doubt for the market. Anything else you're looking at, well, I think the consumer is the big question mark because as we saw in the second quarter, the consumer was the sole organic support to growth, and if the consumer numbers begin to falter, I think the question will not be whether or not we see an October rate cut, but how big of an October rate cut We could start hearing the market price in a fifty based point or even seventy based point cut, depending

on whether or not we do see pronounced weakness on the consumer side. Now we're not necessarily looking for extreme weakness, but we do expect to continue to see waning momentum again, keeping the FED on track for an October cut, but likely more a modest cut around twenty five basis point. Is there some though, you know, something positive to be made though that the service industry subcategories which are vulnerable to weak factory data or factory conditions. Um, they did

post net hiring gains. I'm looking at some analysis BIA Bloomberg Intelligence Team. Is that not a positive? Oh? I think there are some pockets of positive. Absolutely, And I think it's also tempting to look at that non manufacturing number and say, well, it was still above fifty, so

we're still seeing an expansion in the service sector. But we have to be careful because looking at that from a nominal perspective, we're actually seeing suddenly that non manufacturing activity fell below that that troughs that we've reached in two thousands sixteen, But we're now well below the pre recessionary levels that we saw on the service sector going into the Oh. One recession and going into the oh

seven crisis. So we are seeing very clear recessionary red flags being posted in the service actor even though we're still seeing modest growth. All right, Well, we're always happy to get your analysis. Lindsay Piegza, chief economists at St. Full Financial, joining us on the phone from Chicago, breaking down the jobs report, which the market likes because it provides maybe a little bit more certainty as to what we may see from J. Powe and friends. Right that

easy monetary environment continues. We are definitely in Colorado Mountains all around to the Rocky Mountains practically from where we're sitting just right. So coming on Financial Network, they began working with independent financial advisors back in nine. So here we are, I think forty years right, forty years later, A lot has changed and continues to do so in the investment arena. Let's get some perspective. Trapped Cleman is

with us. He's president and chief operating officer at Commonwealth Financial Network. Of course on site with us our host. He is our host, and you know, we're kind of marveling, like go back to kind of when it started and kind of where we are today in terms of what really consumes, uh, the work of financial advisors. Sure, it's it's been a tremendous journey, and having been in the industry about fifteen years, I've seen a good chunk of it. But it goes back so much farther than that, and

just some hugely influential visionary people. UM really back in uh you know, in our case, nineteen seventy nine, but really took off in the late eighties and into the nineties. I really had a vision for what financial advice could become. Uh. It's much more than just asset allocation, investment selection. UH. And to watch the evolution of the industry UH, and it's only accelerating right now. As I think what financial advisors can do for retailers, investors, it's almost like healthcare

at this point. You really need a trusted person who understands everything about you UM and all the skills that come into that. As a financial advisor. UM, it's more than just finance and understanding the markets. It's being a psychologist. It's being a friend. UM, It's it's being a visionary looking forward uh and really helping people on very complex things. Right.

And that that sort of human element has come through you know, sort of loud and clear here, and we're sitting sort of in the midst of all of it. You can sort of hear a lot of it in the background. Is people move from session to session, and you know, even as people walk by. I mean, you've got a lot of slices of life here represented. It feels like different ages. You know, folks, who are you know, needing to really connect with people? How do you arm

people to do that? Because it's one thing to sort of teach them how to use the software program and input numbers and things like that, but you know those sort of dare i say, softer skills of being able to connect with human beings? How do you arm them to do that? Yeah, it's that in and out of itself has changed. It's a great time in terms of the tools and resources that we have available to really

help and connect with people. But the reality is, for you know, the majority of the first forty years in Commonwealth case is we have about a two and a half advisors to one home office staff ratio um, which is pretty much the lowest or best however you to freeze it in the industry. It was really making those personal connections and us understanding the individual advisors in their needs instead of giving them a cookie cutter playbook. Uh. But we're growing to a size and scale where that's

you know, becoming more challenging. At the same time, there's so much more out there and ways to reach people, uh through a learning, training and development and utilizing gamification. And so we're investing more in a learning and development team and using marketing to help deliver that too. Advisors while still frankly maintain that same ratio of employees which I trap Cloman, President and Chief operating Officer a Commonwealth

Financial Network. Trapp, What do you guys, because you you have to think ahead to about what your members, your the financial advisors that you work with guide what will be the trends of the future. So I'm curious, who do you look at? Is it Facebook? Is it Google? Is it I don't know what are you looking at? Maybe it's something else in terms of trying to figure out, okay, what these financial advisors have to know about for the

fewer for their clients. Yeah, I think it's important to look around both for inspiration but also um, how to differentiate yourself. I think Joe uh, Peter Wheeler and the rest of the team that's really led this company for the past thirty years have done an unbelievable job of uh sticking to what they do best while surveying the environment. And I think a great example is on the technology side. Technology has been so much applied to help with service,

but it's really discerned intermediating the customer experience. And so technology is being used to drive down cost and uh really frustrate people. But as soon as the technology is aware that the customer is about to leave or quit altogether, walk away from your cable provider, walk away from your phone company, all of a sudden, the live person pops on and offers you what you've been wanting for the past hour on the phone. And I don't want to

replicate that experience. Uh it might be more cost effective, but that's a horrible relationship. And so as we think about what we do, I'm really looking around the world for firms that are doing a good job with a human element, because that's what we need our advisors to

do with their clients. That's going to differentiate them um, and so we want to do the same with our advisors, and so gathering like this obviously, you know cool seminars, cool speeches, all that, but we all know the most fun conversations happened at the bar, over a dinner or whatever, you know, as all these people get together. We yeah,

we had a lot of great conversations last night. What are you hearing is you as you sort of work your way around and interact with folks, Because there are a lot of people we were talking about this before we came on a or who know each other and they sort of get together every year. What are you

hearing from people that's striking you as the most interesting? Frankly, I'm I'm thrilled and I've loved We came to this week and the markets are very volatile right now, especially in the financial services space, and when everyone's here on site together, you worry a little bit about the distraction and you know, people being pulled away from this experience.

It's a very personal experience. And I think if our advisors were focused on solely performance in the market um and chasing that return and that's their value proposition to their clients, they'd all be running back home or on their phone. But they're all here, they're present, they're working with each other because I think they've done a fantastic job providing such more value and service to their clients than just promising the market. And they really educate them.

So the more educate your client are, um, they're prepared for things like this and it doesn't create panic or chaos. And so that I think that's been the number one thing that's really thrilled me this week. It's really comes through well. I think what's also interesting as you hear more individuals book who are running their own UM advisory firms, you know, bringing in their kids. Thinking about the next generation, I mean that's a big thing when we look about

you know, here we are in job's day. UM. Maybe the data came in weaker than expected, but it is very tight, and we constantly hear about companies and employers having a hard time finding workers. And I do think thinking about training that next generation financial advisors, that's a big topic. It is, and it gets a lot of coverage in the news about the average age of the advisors is getting older every year, fifty and where's the

next generation going to come from? And frankly, I'm not that worried, uh, primarily from the viewpoint of our advisors are doing a fantastic job of identifying wonderful people and oftentimes it is a center daughter uh to bring into their practices. What we need to do is help them train those people. But the advisors are really finding the answers for themselves because they're small business owners, they're entrepreneurs um.

They have a lot at stake here both in terms of the business they created but making sure their clients are taken care of. So they're solving that for us, and we we can help them with the training to make sure the next generations are ready. All right, Well, it's great to catch up with you. We really appreciate your hospitality here at this level event. Trap Cloman is

President and Chief operating Officer of Commonwealth Financial Network. He's here with us at Commonwealth Financial Networks twenty nineteen national Conferences. It's blue skys just you class as far as the I can see here on the front range. Let's see, let's see people. All right, Well, let's stick into the world of venture capital. Jeff Grabo back with us. He is US venture capital leader for Ernston young E Y as it's known. He joins us on the phone from

New York. He's usually based out on the West coast in San Jose. So we've heard everything that's going on in the VC world, but now we've got some fresh data from the third quarter. Jeff, great to have you back with us. Thanks for having me. Great to be here. All right, So what's the takeaway here? What do we know coming out of the third quarter about the state of venture capital because the public markets have been a little skeptical about some of the venture backed companies that

are coming public. Well, I mean, we finished the third quarter with point nine billion dollars going into the you know, into venture back companies. It's the third straight decline, it's down fifteen sent quarter on quarter, but it's still really strong. And you know, we are on pace exactly where we were a year ago today, and we will have our second successive hundred billion dollar a year of venture backed investment into companies. So which is which is We're so

we continue to be in record territory, record territory. You're talking us, correct, These are US numbers. These are US numbers. Just so there's no chill or chilling effect in Silicon Valley as a result of you know how Uber has played out this year, how lift has played out this year. Um, you know obviously slack, uh, we work, we work right, not happening, peloton No one kind of slowing down in

terms of where they're investing. Well, I think right now where we are is you know, we've nothing stays up forever, you know, and then especially in the you know, in the near micro terms. So what we're hearing is companies are being told to get out and make sure that they're fully funded because if you look out across the macro environment, there's a lot of certainties you know, Brexit, trade wars, potential recession, you know, globally, you know, instability,

We keep getting data points that bounce around. So they're being encouraged to get out and make sure that they're fully funded to stay, you know, out of the tail winds or the head winds of anything that's outside of their control. And so you know, one of the issues, Jeff, that we've been talking a lot about when it comes to Silicon Valley and the venture world is, for lack of better term, the sort of tech clash that we're seeing.

You know, we hear a lot of questions coming from lawmakers and regulators, and I do wonder how that's playing through the funding landscape. Are the VC backers, are they

worrying about this? Are they changing behavior at all? Yet? Well, I think the better way to look at it is what what does that mean from a M and A perspective, Because you know, if large corporations that are currently public are coming under scrutiny, they're not they may not be necessarily looking at making large acquisitions that may make them

look even more monopolistic. So that could slow that level you know, that exit opportunity, uh and push you know, companies more towards the public market, so more going because they're they're not going to have that avenue toward being acquired by a big tech company just because the appetite is not going to be there because of some of the uncertainty. Potentially, Yeah, I mean it depends upon the size the transaction and you know, you know how closely

aligned it is. But I just think that that's going to be something that you need to think about as you move forward, that that may not be you know, the option to have that may not be there as it has been in the past. Um. I am curious too about you know, if the uncertainty continues though in

the overall market and economic environment. We got the jobs data today and there's you know, some are reading some of the positives out of it, some are seeing you know, more than negative or as more of a negative report. If we continue to see kind of this environment of uncertainty continued Jeff, what would you anticipate as the impact on venture capital. Well, at some point we're going to see a slowing of funding, and that's you know, we've

been talking about that over a period of time. And you know, I guess a broken clock is right twice a day, you know, but if you know, if I knew exactly when it were, you know, if the clock was going to stop, I would, you know, things would be a lot easier. But you know, you don't, but things will not. You know, can't continue on this pace and uh, this is a marathon, not a sprint in the venture business, and so you can't keep sprinting forever.

And I'd say we've been in a sprint for a few years, um picking up the pace, and at some point you need to kind of get down, you know, we've been sprinting. At some point you need to clock back to pace and trade war, any impacts you're seeing so far in specific sectors. Well, I think, um, some outlet, you know, some outlying tech frontier air. He's like agritech. You know, trade wars haven't been frontly to farmers, which is going to impact their ability to buy an invest right.

So you know, it's kind of a direct and you know, an early direct investment. Depending upon how deep those uh, how deep and long this goes, that could be you know, branch out in other areas. Great to catch up with you as always. Jeff gray Bow, us venture capital leader for e Y, joined us on the phone from New York City on his way back to San Jose. Where his face you know what's interesting. While we're seeing venture deals in the US up second quarter from a year ago,

European investments also up. China they plummeted seventies seven percent according to Frequent That was second quarter from a year ago. So we're seeing certainly um not so much activity and we know some of the questions about the outlook there and the investment outlook all right, So we have been thrilled to be here in Colorado. It's so beautiful. Carol Sauce Bison, I've gone for some nice runs. We have been we ate some bison circle of life here on

the front range. Richard Watkin is an Associate dean for Business and Government Relations at University of Colorado at Boulder up the road. He's teaching downtown. He's nice enough to come and spend some time with us here in Aurora. Rich great to have you with us, My pleasure. He's also had to put up with us, like stealing each other's food. He's a little nervous about what's gonna happen next. You never know, you never know. Thank you for refereeing

what's going on here. Um, but tell us about where we are, because we were just talking to before we came along the air I mean this where we're sitting as a fascinating place for about fifteen minutes from the airport, about half an hour or so from downtown. This was the planes not too long ago. It was the plans not too long ago. They bought fifty square miles of property to put the airport in back in the ninety nineties, with the long run plan of developing around it way

out from the city. Can add more runways when they need to, add more concourses when they need to. And now seventh busiest airport in the world I think at this point, but top five in the US in terms of flights in and out and the most connected airport in the entire United States in terms of direct flights

to other cities. So this is an ideal location for this particular facility in terms of doing conferences and quick in and out well, and that airport and places like this have contributed to Denver being one of the fastest growing economies too. It's a boottown right now. It is a bootown. I think there's a variety of answers to that question. We've since the airport in the nineties and

ever since, we've really diversified the economy a lot. We've had a very strong uh telecoms sector, and that connects started out. Now it's kind of laughable, but it started out because we had one bounced communications to Europe and to Japan during the workday, so we were kind of time zone. We were ideally located, and we our telecom sector has been very strong, but we also have very strong tourism. We have an ad sector or top ten

energy producing state. So it's a combination of factors. What I love about what's going on here is that what we kind of takes off in a big picture and look at the national unemployment rate, what's going on the jobs picture. It's a reminder that city states are moving along, you know, moving forward with infrastructure investments, thinking about what they're cities or what their state needs to be in the future. I mean, I this is pretty interesting. This

is long term planning and you're seeing it. I have an impact. Well, at the time the airport was built, or hadn't been another one new airport built in the US in like twenty years, and it really was an aim at moving forward. And then we've had political leader since the mayor who later became the governor, who really invested in the downtown Denver infrastructure. PICKN. Looper your aragument, right, right, John heck and Looper creative class kind of attraction of

art museums and bike paths and jogging. And if you thought the jogging was nice out here, you should see what the jogging is in downtown. I know, it's so incredulous. I mean, and it is such an outdoor vibe. And we spent so much of our time here talking about people taking a much more holistic view of their financial planning. Much less their lives. And that's the vibe here for sure. That is the vibe here for sure. How main quality

of life. We've been able to attract very well educated workforce where in the top five to ten states for population growth every year, and it's because people want to live here. Well, that's a that's an important part, you know. Here we are on job's day, right, we got the monthly jobs report, and I do think about companies and institutions competing for workers. I mean, what you folks are doing to attract companies in and to also bring in workers. Absolutely, and but it is a big issue. We have a

very tight labor force. Are an employer rights under three percent and and even though UM top five kind of job generating state, it's keeping the labor force very tight. One thing of interest compared to the country as a whole is we've had a pretty big increase in labor force participation over the last couple of years. It's been kind of flat nationally, but a lot of people have come back into the workforce man older workers, older workers and UM dual income households and so on. We've seen

a pretty big surge in that. And we're several percentage points higher in terms of labor force participation. Do you have a sense yet from a net economic effect of legalizing marijuana. You know, we don't have a total picture when when this um. Certainly we know it's generated tax revenue that's been a positive. UM. We we do feel that it's had a positive effect on certain aspects of tourism.

People come have come to you know, get high whatever, Rocky mountain high in the ultimate sense, right, But there's a play. I'm just saying, T shirts are you know, can pick your pick up your shirt on the way out. Good. But you know it has both sides of it, the aspect of it younger people maybe spoken pop more and those types of things. So net net, I think most people think it's worked out much better than they had hoped for. Uh. But now with so many other states legalizing,

it's probably run its course. So I gotta ask you from weed to economists. You've got a bunch descending this weekend right for big conference next week. You've been involved in the planning. I've been on the planning committee and past president of the National Association for Business Economics, and we have a great crowd coming in. What do you think it's gonna be the biggest topic. We know J Powell will be there. We've just got about forty seconds.

What's the big question that you guys all want to Well, I'm gonna have a topic discussion of negative interest rates, but I think the biggest things are going to focus on the growth in the global economy at Europe and what that might be in terms of impact overall. Is there a drinking game like every time we hear the word recession, are data dependent dependent? Or maybe maybe it involved the marijuana? And yeah, we'll see, we'll see how it goes. We'll be checked in actually out here with

our own Michael mckeblan work televisions. Michael McKee he'll be here. We'll be checking in with him. We're so delighted to spend some time. Richard Wabkin, he is Associate Dean for Business and Government Relations involved in the n a B which will be here next week. Is a really great context. Seriously, you can see some more bison eat some more bison, and you know, who knows what would happen to say, hey,

he's on the bison, need me all right? So, as we come close to wrapping up our time, here at the Commonwealth Financial Networks twenty nineteen National Conference and nice forward looking conversation ahead with Jason Wheeler. He is CEO Wealth Advisor for Pathfinder Wealth Consulting. He's based back east in Wilmington, North Carolina. Good Southerner, also a surfer. I could talk to you about surfing and probably how jealous I am and how good you are, but we're not

going to talk about that. We're going to talk about the next generation of financial advisors because it's important and I feel like that succession is something that maybe folks haven't spent as much time one How are people looking at it now? Yeah? I agree, Um, it's funny. I'm uh in my mid forties now and I had a lot of people approached me about their succession plan and

thinking about that over the years. It's it's one of those things that inevitably somebody wants to get their value out of their firm right retire um, but they also want to control it right till the end. Well, seeing that it's it became very obviously how can a firm that grows be able to pass it down to one generation?

So you really have to build out that next generation to be able to scale your business and that type of stuff, and UM, people were coming to me say, how have you been successful recruiting this next generation inside your firm when we can't do and we've got twenty more years of experience on you. So what's the secret,

sauce Jason. So Um, you know, first of all, I stayed very actively involved in my alma mater, and so I stayed involved in the universe for my situated from my master's program, became the chair of the alumni association. I've stayed involved, but I actually went back and was teaching in the department as an adjunct, and so I just kind of stayed in touch, I would say, with the college kids of the day, and so um that helped. I think being a little bit immature at times helps.

Um wanting to be younger all the time. Officially, that is my favorite moment. So um, you know what that said. And we were successful in bringing out a gentleman right out of school and he's been with us now in almost eleven years now. And so looking at the next generation, UM, we said, well, what are ways that we can sort of attractive So we've done things like internships, we go back to Business Week, and I have people, you know, we speak in front of people UM Career Center, we

get on boards UM. But when we look for that next generation, when I found that really differentiated what people are getting from the independent financial advisors in particular, was a track like, this is the career ahead of you. And so what you get is you get the job description that they're looking for war instead of this is how your life will progress professionally if you wanted to down this. And so the people who came to us UM. Ironically,

the last two hires were both career changers. We had a UM elementary school teacher who was finishing up her master's at U n c W and was volunteering at her church with people in their money and decided she wanted to do this professionally. Well, she saw that career path and the trajectory and so it really got her excited. In the same one, we had a gentleman of non

traditional students. He was in the actual food service business, working as a manager in a country club and went back to school because the people at the club said you need to go back to school, and got a finance degree. And then again he saw the path ahead of them as far as laying out what are the steps in my career rather than just getting out there and you know, sort of the way I came up with sales had twenty seven to twenty nine. So I mean,

it's not that you're not not necessarily right out of school. Um, it's very young and certainly new to our profession. Um. We were fortunate enough my business partners ten years older than me, and then it's me, and then our next one is about ten years younger than me. That we didn't plan it that way, but it's nice to have that. I think they see that, and so the cultures there and so what do you think it is that attracts uh, someone who's in their twenties to this business because it

is a different business. We've certainly gotten that sense from talking to some of your colleagues and peers here that it's a different business than it was ten twenty years ago. For sure, what's different about it at the end of the day, I think, you know, the whole idea of that we were becoming more planning focused and UM, I'm not going to go to the extent that we're someone's psychologist, UM, but to the degree times it probably feels that. I just feel like there's a little bit of a therapist

as a part of this position. I call it getting uh, you know, you're getting financially naked. It's kind of like going to the doctor for the first time. Bloomberg Business Week after Dark. But when we think about that, I think they see that as a way to actually have a career that gives back an impact moment um. You know. I see big, bigger firms m my friends. I've got a buddy who works for an insurance company. He works from his house. He does um underwriting for medical claims.

He could care less about his company, right. He makes a lot of money, so his life is go to work, to get a check, to have your life. Where I think people in this profession going forward look at it is I'm going to be spending all this time. I want to make a difference with my life. And they can see that versus the sort of the mindset of all I'm doing is managing money. It's a difference with you work to They have lived to work, correct concept, right.

I do think certainly the younger generation is thinking an awful lot about that too. Yeah, And I think they see the they see the impact directly in the lives of individuals. And speaker here that talked about how um emotional connection to the way you spend your money. Well, I think the same thing. It's emotional connection to the way you spend your time. Yeah, that's great, that's great, really smart. Jason Wheeler, CEO, Wealth advisor for Pathfinder Wealth Consulting.

He's big based back east in Wilmington, North Carolina, on site with us here in Colorado's to Japan. Have not been surfing it yet. There's a great story in the magazine. Yeah, because we're going to tell you a little bit part of pat I'm grow turn on. Yeah, but you let me drive. No, no, no, no, dr home, honey, please, I'll do the right rivel. Lets me. I want to drive, just drive by the question drives the drive to the globe.

Give me thanks. We'll drive us on Bluebird Radio. It is time for the drive to the close this last trading day of the week. In fact, stonks just taking another leg up. We are pretty much we are at our highs of the session, about one point four percent higher on each of those major equity averages with us is vance bars. He is well strategist at your dedicated fiduciary based in San Diego, California, on site with us

at Coming Well Financial Networks twenty nine national conference. Were actually caught up with him last night talking a little bit about what's been going on market volatility, vents like we've seen this week. How does that help or hinder what you do when you're working with your clients. That's

an excellent question. Short term market volatility is never of that much concerned because most of the families that I serve have a very long term view and have been investing long enough to feel comfortable with short term market fluctuations. There is some concern over the recent inversion of the yield curve because some people are inclined towards propeller head thinking and they go, I remember the last time that

yield curve inverted. It was two thousand seven, right, is it the same thing that funds you know, in May of two thousand seven was at five point to five per cent. Oh no, And that's when all of the behavioral coaching comes into play, and so as you sort of take a step back, you know, we've had a chance that Carol said to catch up with you here, you're sort of like a man about the conference. I feel like you know a lot of people here are you know, work in the work. It's great to see

about the conference. Goes to the conference, You're welcome. But one of the things we were talking about, which I'm so intrigued by, is eusynthesis and analysis of some of the mega trends we see in sort of society and business, not the least of which sort of gig economy and airbnb and all these things, and how that placed through

to retirement. Tell us about that. So one of the really unique things that I've seen as a recent trend in retirement planning is the emergence of what are called a d U S and a D use an acronym for an accessory dwelling unit. Many of us that know them as in law suites or in my house, we call them the grandmother suite, right, or the granny flat.

And what's interesting is people remember two thousand eight. They remember the market correction, and they also remember the Fed funds right being much higher back in two thousand seven. And with this near decade that we've had observed or zero interest rate policy, yield starved investors have had to find unique ways to make up for the difference in income.

So for example, if you work for decades and decades and you saved up a million dollars in your nest egg, and you were to put that in the tenure treasury back in two thousand seven, you could earn say fifty plus thousand dollars. Right fast forward to today, the tenure is at one point six, so that income has all of a sudden sixteen thousand. So that's a big delta.

So what's really fascinating is with the emergence of Airbnb and verbo or vr b o, we have seen this pretty profound interest in these success re dwelling units for two reasons. One owners want to use them for family members when they come and visit, but two, when they're not there, they like the additional income that they can get by renting them out. Yeah. I see that more

and more with friends where my neighborhood. I even think about, like my home when I retire, not getting close, but I think about not selling it, but not selling, you know, not using it as like a rental property in terms of income or something like. I don't know, you really,

I see a lot more people talking about it. I have nothing to tell you all right here for a while, alright, Um, But you know the other thing that I feel like we're one of the other things that we're talking a lot about, and we've talked with you about as well advance as this, you know, sort of holistic approach. I do feel like people are not sort of making these decisions in terms of who they work with, maybe as

quickly anymore. It's like you got a guy, I'm gonna use them cool, Like they're gonna, you know, give me a model, and I'm gonna do these things with my stocks and bonds and I'm gonna quarter yes the next quarter. So but how does that change what you do? You've worked as a consultant in this business before, so you sort of see it holistically. Um, how should people be sort of choosing someone to work with? Excellent question, Jason,

and thank you very much for that. So, prior to becoming a financial advisor, I spent roughly a decade as an investment consult to too many of this nation's leading private wealth and retail financial advisors at all different types of firms wire houses, independent broker dealers, are as family offices. So I have a pretty unusual perspective on how practitioners

serve their clients. And I have an insider's knowledge, if you will, on the planning strategies that they offer, but many of the plantaging planning strategies excuse me that they don't offer, and that's where a lot of value can be brought. Many people select the financial advisor based on trust, and I propose that it's way more important than trust.

It's about accountability, it's about transparency, it's about honesty, it's about integrity, and ultimately, what value will that practitioner bring to your overall planning life. How do you check that out? Though? That's a great question. It really has to start with an analysis and an understanding of the tax return profile. And financial advisors say, well, I don't do tax planning. Well that's okay, but you're tasked with serving someone in

a pretty serious financial capacity. We you go to the doctor and it's a new doctor, or if you go to a specialist, they typically want your general health history. So a financial advisor, in an analogous way in serving as the doctor, should really get the general health history, which is comprised of the tax returns. You really have to understand the tax profile, and concurring with that, having a deep understanding of the estate planning documents that are

in place, the business assets, the real estate assets. You take all of those holdings and you put them together in a very comprehensive way to get an understanding of what we call the fact pattern. And then you really get to know the client. What are their intentions with their estate, what are their fears, do they have charitable intent what are the family politics like? And that's an

art form that really takes very specific navigation. Yeah, I know we only have a minute left, but I also love the fact that, in addition to you know, the background that you describe, your undergraduate degree is in neurobiology. I think so, I mean you must be always thinking about, like literally how someone's brain is working around this stuff. Yeah. I was gifted, for better or for worse, with a very analytical brains. Anyway, it does serve me well with

conducting analyzes on behalf of clients. Yeah, and by the way, this is my twelve year in attending Commonwealth conferences. So I used to attend as a consultant and used to see many of my clients here, and now it's wonderful to be here as a fellow colleague. Well, now we've solved that. We've solved the question like why he's the man about the conference because he already knows everybody. All right, Well,

it's great to catch up in vance. Bars is well strategist at a firm called You're Dedicated Fiduciary Space in San Diego, California. He's here with us at Commonwealth Financial Networks twenty nineteen conference in Colorado. Thanks for listening to Bloomberg Business Week. You can subscribe to the podcast on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show every weekday at two pm Eastern only on Bloomberg Radio