Ric Edelman on Translating Financial Language for Consumers

in a in a way that is fairly unique. When when he launched Anentileman financial services, there weren't very many, if any other similar firms. He he was a pioneer. He was doing things before there was a script or a roadmap or any sort of guidance. And he and his wife we're kind of making it up along the way. They knew what they didn't want to do. They saw what was taking place at the big brokerage firms, and

they kind of became the anti broker. Uh. Not only are they um a traditional r i A as we think of them, meaning their fee based, not commission or transactional based. Uh, but they effectively have no minimums If you're a five thousand dollar account, they'll take it. If you're less than five thousand hours UH, they'll take your money and wave their fee on a pro bono basis. I can't think of any other firm that approaches asset management that way. It's fairly unique and and Edelman says,

shame on people who don't do that. If you're in the services industry, like a doctor, you have an obligation to your clients. If it's If it's not quite a hippocratic oath, certainly the fiduciary standard requires not only putting the client first, but putting people who might not be clients first. And I think that's both a a unique and refreshing perspective that we don't hear a lot of UH in the world of finance. So I expect you'll find this conversation fascinating. So, with no further ado, my

conversation with Edelman Financials Ric Edelman. My special guest today is Rick Edelman. He is chairman and co founder of Edelman Financial Services, affirm that manages well over twenty billion dollars in assets for thirty four thousand families via forty three offices across the USA. Rick is the author of no less than nine books on financing, perhaps most notably The Truth about Money, which is now in its fourth edition.

Is that right correct? Fourth edition? It is the winner of several prizes and awards on financial liter racy and education. Edelman Financial Services has been ranked either one or two, uh, the number one or two independent financial advisor in the US by Barons for the years two thousand and nine to two thousand and twelves. And then they kicked me off the list. They kicked you off the list. We'll get into that, Rick Edelman, Welcome to Bloomberg. Thank you,

very great to be with you. Uh. You know, I've been looking forward to this since we bumped into each other at a conference way back when in um the spring, and you just sort of derailed me. Why did they Why did they kick you off the Barons list? How do you go from number one to off the list? Well, because they wanted to shake up the list and create an opportunity for others to get accolades. Is number one, and I was number one three times, and that one

in between it was number two. And so we agreed that I was evolving personally. I was spending as our firm grew, we we were much bigger than the typical advisory firm, of course, with twenty one billion in assets and with forty three offices, a hundred sixty advisors, six hundred employees. These days, I was spending as much of my time as CEO running the business as as an advisor, working with individual clients and the folks at Barons, and I recognize that we were creating the next generation in

the advisory marketplace. You know when when we started, way back when I got licensed in eighty six, how about you, uh ninety something? Yeah, I mean back then everyone was the seven. I didn't get the six, I didn't get

sixty five, and he gave up the seven. So when we began back in the eighties, there was no financial planning firm you could go join, so we had no choice but to start our own because the industry was brand new, and I was that first generation among the pioneers who create did this into you an early CFP? I never obtained my CFP. I didn't have the time, and I ended up teaching classes of CFPS and um A continuous certified Continuing at Instructor, and I taught at

Georgetown University for nine years. I hold six professional designations, but never bothered to get that one. So so wait, let me interrupt you here because this is really fascinating. You began more or less as a financial journalist, and is that? Isn't that the background? Yes? And where did where did Georgetown fit in in the chronology? So my background as is as a journalist. That was my degree.

I have a communications degree, not a business degree. And I'd like to brag that I graduated college without ever having taken a business class, which means I wasn't brainwashed. In journalism school, they teach you two things. One how to ask questions and to how to explain the answers in plain English. And my very good skills very important when dealing with individual consumers who aren't expert in this subject.

And so I was writing in the financial trade press out of college, and that was my entree to personal finance. The publisher I started in the financial in the medical field, but my publisher owned a variety of financial publications, and there were twenty three of us on the editorial staff, and we ended up writing for a whole bunch of different things. And I wrote for some financial publications and

that was my entree. And my wife and I in our early twenties, recognizing with my experience now as a writer in the financial press, Hey, we ought to pay attention to this and we decided to go to a financial planner. Like most young couples, we wanted to buy a house, and we went to a financial planner for advice on how to do that. He ended up telling us to lie on our mortgage application, told us to commit a felony qualify for the mortgage. Um. The guy

was a jerk. He We could not believe that this crook was telling us to do this. It really made us mad. And that was the impetus for us saying, you know what, why don't we learn how to do this ourselves and then teach others what we've learned. And that was the basis and thes and not lying. To give people good advice, not bad advice. And so Jean quit her job, went to work for pain Web and they're back of office to learn the back end operational

side of the business. I got securities licensed, joined an independent firm, became an independent advisor immediately on the broker dealer side or on the broker dealer side, like there really wasn't There wasn't scenario side back then, it really didn't exist. I mean it technically did, but nobody. Why are you explained to listeners the difference between commission and

fees just the nickel version. Well, back in the old days, you had the brokerage licenses where you made money commissions selling mutual funds um and every time you sold a mutual fund you're in a commission for doing so. The notion of a fee based advisor being licensed by the SEC came about much later, and we made that jump in the early two thousand's, And so we began our firm in the nineteen eighties and focused on financial education, teaching consumers how money works and how to make it

work for them. And we did it by seminars, teaching elementary school e t A S. How to say for college, and the word spread and we ended up being invited on the radio and eventually being offered my own radio show, and now twenty seven twenty eight years later, it's the longest running national personal finance radio show in the country.

That's fantastic. You launched the firm in eight six as a broker dealer I was affiliated with a broker dealer for licensing and then the r I A part wasn't until the two came in oh three and we launched our fee based money management program, the Edleman Managed Asset Program. We launched that in two thousand five. Today it's one of the largest turnkey asset management programs in the industry with twenty one billion in assets. That that that's quite amazing.

So the real question that's on my mind after hearing this is you've been doing this for twenty seven years. Who who is your competitors in that same space. Is it the big Merrill Lynches, is it the lpls, is it uh Dynasty or high Tower? How do you look at the world out there and say, oh, we're competing head to head with these guys. It's everybody and nobody. It's a I'm a big fan of astronomy and Gene and I have done some phone throughout activities in astronomy

of a big interest there. So let me give you one analogy. We know how big galaxies galaxies are, and we know that a couple of galaxies are colliding, including ours, including ours, and when you look at the nasive photographs of these colliding galaxies, there's an assumption when you first look at them, that all of the stars within the galaxies and all the planets within the galaxies will collide and be big explosions and all that kind of good stuff,

except for the vast spaces between the stars exactly. And the galaxies are so huge that they will so called collide, but they will pass through each other and nothing will ever touch anything else because the spaces are so vast. By the same notion, in the financial services industry, our industry is so big. It's an nineties seven trillion dollar economy.

That's how much money is invested. That's the net worth, the market value of all things in this country that have assets and market values, stocks, bonds, real estate, business assets. Ninety seven trillion dollars. No one in our industry has market share. Merrill Lynch, one of the biggest in the industry, has about three trillion dollars three out of ninety seven. They have coming up on five, Black Rock on six,

and there's no market share anywhere. If you look at the soft drink industry, there's coke and Pepsi and everyone else. Look at the airline industries, Delta United and everyone else. In most businesses, there are three or four major competitors who have market share. They're competing all the time in our industry, Barry, you're a competitor of mine. Have you ever encountered one of my clients ever anywhere? And I've never encountered one of yours? Because this industry is huge.

We're talking about three hundred million Americans dealing with three hundred thousand advisers, most of whom have a couple of hundred clients, and dealing with a couple of tens of millions of assets, and so On the one hand, this industry is so huge, this economy is so vast, our country so broad. We will never encounter competition anywhere. We're all on the frontier and there are a bunch of

guys in the wilderness trying to shoot game. But we'll never account each other on the mountains because the mountains are too big. That's one answer. Here's the other answer. Everybody is my competition everywhere. Money magazine and kiplingers to publications that are constantly giving financial advice for five a month are competition in may because I'm in the business of trying to get consumers to listen to my advice, and they're being distracted by the advice for Money magazine

and Kiplingers. They're being distracted by the Motley Full. They're being distracted by Dave Ramsey and Susie Orman and Jim Kramer and CNBC. And they're being distracted by the brokerage, the big box brokerage firm Merrill Lynch and Well's, far Ago and Ubs and all the majors. They're being distracted by the mutual fund company's Fidelity in Vanguard and t ro Price and t I A A. They're being distracted by the banks, um Us Trust and Bank of America

and on and on and on. So in one sense, everybody, everywhere is my competition. So it depends on how you look at it. I have to mention, you have a weekly radio show, you hold regular seminars, You've written nine books. What does that footprint do to distinguish you Rick Edelman from your everyone in No One competition. Well, it provides

name recognition. On the one hand, it also very importantly helps consumers understand our philosophical view on financial planning and investment management, allows them to kick the tire, so to speak. It allows them to get a lot of freer, low cost advice um that can be applicable to their own

personal situation in a non threatening way. They can digest it as they wish, whether it's listening to the radio or watching our videos or my television series on Public Tape TV, or going to our seminars, or reading our newsletter or going to our website. We we make financial education accessible, we make it easy, we make it non threatening,

and I try really hard to make it fun. So Scott Galloway is a professor and while you stern and he covers a lot of technology companies like Amazon and Facebook and Google, and he constantly says Amazon is where they are today because their narrative is so clear, so

well defined, so well told by Jeff Bezos. How it sounds like you're describing a somewhat similar approach that the Rick Edelman story or Edelman Financial Services story is the business you're in, and everything else is just running the nuts and bolts of it. That's correct. Um. Most of the advisers in this industry, in my experience, come from a business background. They came from the brokerage industry of

the insurance industry. They spend most of their time talking to each other, which means they're talking shop and filled with jargon, and they don't know how to talk to ordinary consumers in plain English, in language people understand that is understandable and actionable. And my background and communications helps me talk in plain English to folks in in clear, easy language, and it's I've learned. It's a big advantage because consumers are intimidated by this subject. They don't have

any background in it. Most people go through their entire K to sixteen education without ever taking a personal finance class. Their parents taught them nothing about money, their employers teach them nothing about money, and they're a litter. We have a nation of financial literance. Every study tells us this that more arey Americans can't pass a basic personal literacy financial literacy class or test, and so we are the oasis for these folks. We help them understand that this

stuff is not complicated. It's incredibly simple and easy to understand. It's Wall Street that tries to make it intimidating, to make you their slave, to make you think that you're dependent on them to buy their high priced, high commission, high risk, low liquidity products that are designed to benefit themselves first and the consumer second. Actually the consumer third, they benefit themselves first, the broker, yeah, so right, the

consumers fourth. And so we've always taken a different attitude, My wife and I we we took this from a consumer perspective and said, we want to understand how this works as consumers, and we're somebody going to share what we've learned with others. And that's the basis of our books. The tag onto my first book is that uh Personal Finances fund uh And you know we we wrote it and I'll do all the other financial education we do

because very simply, uh, money doesn't come with instructions. You know. You you reference the complexity and the complications of finance on Wall Street that has been described as a feature not a bug. You obviously agree with that, meaning if we make this really sophisticated and complex and convoluted, people just pay us a fee to manage it. And made camp people in Wall Street made its money by intimidating people, obfuskating by being opaque and not being upfront and transparent.

Our attitude is I don't have to have a bias. I don't have to try to sell you a product. Instead I'll just teach you how money works. I'll explain to you the difference between a stock and a bond, and once you understand the difference, which is really easy, you can then make an informed decision. And as long as you retain me to assist you with this, then I can make a living and we both win. So I don't have to be a champion of any particular product,

or any particular company, or any particular strategy. We're free to do whatever is in the client's best interest, and that is uncommon in our industry, so we didn't really talk about this previously. What about things like alternative investments, hedge funds, vetric capital, private equity? Is that something that you guys look at or do you? Is that just too complicated and too expensive for for your client base.

We have available to us, as you do, virtually every product available in the industry, so we can give our clients anything. We choose not to give them any of the stuff you've just described because they are not in the client's best interests. These products are too complicated, they're too expensive, they have a terrible history of underperformance, they're

very high risk, and they're ill liquid. Aside from those, Well, I'm awesome, very often very adverse tax consequences rather than that, you know, how was the how was the playing right? I'm fond of saying, come for the high fees, stay for the underperformance. Is it works out really well? And you mentioned earlier, uh, the Dave Ramsey's and Susie Orman's of the world, and how do you contrast what the Rick Edelman's of the world do versus that group? Well,

we would you put yourself in that ground? You know, if I were trying to be provocative, you know, I would do something funny by saying the difference between me and them is that I'm not an idiot. Um, but but you're not gonna be provocaive. I'm not. I'm not gonna be provocative and say that more seriously. I mean, both of them are very talented and proven um successes, and what they do there's a very big difference and what they do versus what I do, and um, it's

twofold number one. I'm an actual practicing financial planner dealing with actual clients, sitting across the coffee table, giving advice to people on a long term, years and decades basis, getting to know them, and their families in very intimate ways.

That is a very different perspective than when you're just talking into a microphone on the radio to the masses, where even if you're doing a call in show, as Susie does and Dave does and I do, you really can't do all that much for someone in a three

minute radio telephone conversation. And so when you are only doing mass media activity, you're limited in your ability to truly serve the client well, which is why we always say on my show, don't act on anything you ever here on the show uses as the basis for learning more and talking to an individual advisor about your own personal circumstances. There's one other very fundamental difference between Susie

and Dave and myself. They're talking to a different audience, and that is why their advice is different than mine. So who is your audience and who is their audience? Their audience i'd like to refer to as the young and the stupid um and again I'm not going to be particularly provided um. They're talking predominantly to people who are young, uh. Demographically if you look at their data that there is more as a gray year audience, not at all eighteen to thirty four year old single females

predominantly as our audience. Uh, and these folks don't have much money, they don't have much knowledge, and they are often in many cases, the vast majority of both of their audiences are immature and irresponsible with personal finance. Dave's big thing is helping people get out of debt. People have too much credit card debt, they're over their heads with mortgage debt, stream owned debt, and his advice, which is a huge focus on getting rid of that debt,

is absolutely right, absolutely perfect for his audience. Susie very similar. When they're talking to people who are irresponsible with money, who are dealing with the emotional issues of money, who are dealing with money as a power tool, and it's an impact on their relationships that they have with their their partner, their spouse, their families. The advice they're giving them is very very good, very very important. But I'm not talking to those people. People on talking to are

fifty years of age plus. They tend to be married, they tend to be dual income, they tend to be college educated, they tend to have half a million dollars of investments, are more. All of this data is shown by the survey research of our radio audience and our seminar audiences. And we know that these folks don't need my advice and whether or not they can afford a

cafe latte, they don't because they always advice. But there you know, if you if a fight at a latte is going to make a difference in your ability to retire, you're doing something else very well. And that's my point. So my audience doesn't need that kind of advice. They don't need me to harp on them about the fact that they're acting stupid, that they're buying, you know, fancy pocket books and lots of jewelry and big costly vacations when they're not even joining their four O one k

at work. I don't have to tell my clients this because my clients are mature, intelligent, responsible members of their community who simply want to understand the complexities of money, of tax law, state planning, insurance, long term care, family issues to help them make the best decisions that they're already trying to make. So all we do is kind of like tweak our clients along, do this instead of that, because it's more efficient, more effective, it's lower risk, lower cost,

lower in tax, and so our audiences are very different. Therefore, the advice Dave Ramsey gives is dead wrong for my clients, but the advice I give my clients is probably dead wrong for his. And so there is a place for Dave Ramsey in this world, and for Susie Orman and for me, and the audience needs to recognize who is that they need to be listening to based on their own situations. Let's talk about running a firm as large as yours. You have forty three offices in sixteen states,

You work with thirty four thousand families. How many employees do you have working? So that's a really big shop. And you earlier, either proudly or cheapestly, admitted you took no business classes whatsoever. How do U s chairman oversee such an empire? Well, these days I don't have to, so that's the good news. A year and a half ago we brought in a CEO for the first time so that I didn't have to continue running the firm

on a daily basis. My wife and I started the firm thirty one years ago and we ran it ourselves for a very very long time, the first thirty years, and we began to realize that I was doing three major things. One uh serving as a financial planner to my personal clients that I've had for decades. Uh to serving as the public face of the of the firm, writing books, doing radio and TV seminars, public appearances and all that kind of good stuff. And third, serving as

CEO of a growing enterprise. When you do all three things in a full time basis, something has to slip, and so we recognize that it was. You know, I'm a really good CEO. I've I've done better as an entrepreneur and founder than most in the industry. But I

wasn't doing it full time. So better to bring in another talented, proven executive in our industry as a full time CEO, so I didn't have to deal with the day to day because, let's face it, dealing with I T and operations and compliance and you know, finance and accounting. You're right, that's not fun. That's all why I got into the business. I got into the business because I love consumers and I'm not a big fan of money.

I'm not a big fan of the subject of personal finance and in sins I'm a big fan of individuals, of people of their families, helping them achieve the goals they have in life, getting their kids into college and buying homes and caring for aging parents. That's the fun. That's why we all get into financial planning, and the operational side of the business is a distraction, necessary one,

an obligatory one, but nevertheless a distraction. So by bringing in Ryan Parker, he was at LPL previously and before that, which had seventeen thousand, I think fifteen thousand financial advisors in their organization prior to that, uh frank Russell one of the biggest firms in our industry, and before that Franklin Templeton one of the biggest mutual fund companies in America. Twenty year executive um fabulous guy, very skilled and talented

who's now running the firm day to day. So I don't have to deal with all of that, and I have my financial planning team working with my clients for the most part, and so I can focus my energies and attention on bigger picture stuff that is really going to move the needle for a America, not just our firms, but all of America dealing with a major challenges. We're dealing in the field of personal finance. So you're now twenty point six. I always afraid to round up, but

let's call it one. It depends on what the market did today. You know, it's one billion, you know, so it's not swinging five percent a day. But when did that really ramp up? If you launched thirty one years ago, was it was it that hockey stick growth immediately? Was it a long slow process? Tell us about what that growth curve looked like. It has been growing steadily and growth was never our goal. Gene and I we real

simple about it. We said, look, we're going to help people, and if somebody asks for our help and we don't have the capacity to help them, we'll grow. We'll add a financial planner who can assist, and we'll stop growing when people stop asking us for help. But we continue to receive tens of thousands of phone calls and emails a year from people asking for our help, and so

we continue to grow to serve them. The real key for us as we've grown is to sustain who we are, because that's why people culture of the philosophy that you know, there's a phrase somebody in your office referenced one face, one voice. That's an internal phrase. It's gotten out into the public, which is fine, but it was never meant to be a slogan externally, but it's kind of become one.

The real message is this whene when someone calls our office asking to talk with an advisor, the reason they're doing that is that they've had some exposure somewhere to our organization. They've heard my radio show, they've been to a seminar, they've read one of my books, they've seen my TV show, they've been to our website something somewhere, and because of that, they've been exposed to our philosophy. They know how I feel about mortgages, which is different

from most advisors. They know how I feel about muni bonds. They know how we feel about investment management and insurance and taxes and all this kind of good stuff. So when they call in, it's because they liked what they heard.

They enjoyed that advice, and they want to know that the advice they're going to get from my colleague is the same as the advice they would have gotten for me personally, And so we work really hard to make sure that the client experiences uniform within the firm, that no matter which of my hundred sixty advisers you talked to, the philosophy, the methodology, the entire client experience will be

the same. It's the Starbucks model. Go to any Starbucks in the country, you know what your experience will be. Every latte tastes the same no matter where you are. The stores all have the same look and feel. The client's service, customer service for them is similar. The baristas all act the same way. They can meet you, they

greet you the same way. And so we want the client experience to be not dependent on you talking to me, but on the firm itself, because that's the Achilles hel In the financial services industry, Merrill Lynch has what fifteen thousand brokers the thundering her, and the experience you have as a client depends on which of those fifteen and you talk to, because totally you have one guy buy an IBM and another one is shorting it, one guy

is trading options, another one is buying mini bonds. Meryl couldn't care less as long as those brokers are acting honestly and ethically, morally and profitably. The advisors are free to do what they want, which means the advice you get is dependent on the advisor, not on Meryl. That's not the same at Edelman Financial. At our firm, it's all about the firm, it isn't about the individual advisor.

So that has been a hamstring in our growth because we can only bring in advisors who agree with me, who adhere to the philosophy, methodology and the process that we use so that we can sustain the corporate culture and the client experience. And so we don't have fifteen thousand brokers like Meryl does. I wish I did, but we don't. One day, I hope we will. We have a hundred sixty and the client experience I fully believe is consistent across the spectrum in our firm. What surprised

you about how you've developed was it? Was it the number of advisors you've added, the number of clients, Like, what was that process and what was as expected? And what was Hey, I really wasn't thinking about that, I guess the surprise to me was that we serve a marketplace and we deliver services to that market in a manner that is different from pretty much everybody else in the industry. When you say you deliver services, is it the services to clients or is it the footprint you

have that attracts the clients in the first place? The services to the client. Most advisors, most firms are targeting the high net worth. They want to deal with people who have a million dollars or more. And you're a minimum is five thousand dollars. That's very unusual. It's unheard of, and it used to be fifty. Is it five thousand with an advisor or five thousand worth a robo advisor? Either way, and if you don't have the five thousand

will help you anyway. We'll treat you as a pro bono case, so we'll help you until you get the five thousand. Really, so, we don't care whether you have any money or not. We only care as to whether or not you want to improve your financial lot in life and if you're willing to take you our advice.

So let me push back at that. I could hear all the advisers listening saying, well, you're there are certain costs associated with each household you have, legal and accounting and compliance and all the software stack we have, each of there's a per household cost to that at forget fifty thousand, at five thousand, it's a big money loaser yea. And what's your point, Well, this is what the why. I think a lot of people don't take those clients. Yeah,

we'll shame on them, arrogant s obs. They ought to get the hell out of this industry and explain what motivated. Would you imagine a physician saying I'd love to help you, but unfortunately you don't have any money, so I'm sorry, I'm not gonna give you. That gets said every single day, Oh we don't have insurance, Well go to the emergency room. I can't help you. And so that's exactly what happens.

And they you do get the services and the care that they need, because that's what There isn't a physician in this country that will turned down a sick patient because they don't have the money. And that's ridiculous. And if they don't have the insurance, they're not getting past in there set the front door only in certain small private practices. But if you look at the vast majority of physicians who are dealing with the hippocratic oath, they are not going to look at somebody lying on the

sidewalk bleeding to death. Same Wait a minute, I think I want to check the guy's wallet before if it's the same thing here, these people are coming to us saying I'm bleeding to death and I need your help, and I'm not going to say to them, well, can you afford my faith? My answer is I'm going to help you, and if you can't afford my fail, I'll waive my faith because what matters more is that you

get the help that you need. And you're right, most advisors won't do it because their attitude is I can only handle This is what most advisors say. I can handle a hundred and fifty families and that's it, and I can't fill them with people who can't afford me. So this is why they're arrogant and they're idiots. If you can't handle to serve these people because you can only handle a hundred fifty clients, then double your capacity

to three hundred. Bring in another advisor. Because now you've got two advisors, you now have double the capacity, and you build the infrastructure so that the criteria of can I afford you is no longer gone. And I'll take it a step further from a practice management perspective. And in this radio show we're talking to consumers. Let me talk to advisors for a moment. If you're an advisor and your attitude is I can't afford to take on that small client because they don't have any money, let

me tell you something. The good will you will generate and serving that client for years, that person will age in life, and as they do, they will get money, they will get an inheritance, they will win a legal judgment, they will win the lottery, they will get uh, they will marry up. That something will happen in their life, and the good will you have bestowed on them for years will come back to you in spades. Who referrals you don't know who they know. You don't know who

they're going to become. So if you insist on being self interested in self motivated, treat it like planning seeds. Stop looking inward at what's in it for you, and recognize that you have an obligation with your skills, talent, and knowledge to help people who lack all three, to serve them the way they need to be served. Don't fulfill and maintain the terrible relationship and reputation that our industry has, which is that we will only serve the

one percenters. This is why the hate Wall Street. It's a terrible reputation Wall Street hasn't. It's well deserved. So if you are a consumer, let me shift gears now

and talking to consumers. If you're trying struggling looking for an advisor who won't help you because you're not already a millionaire, well now you know there's a firm that will help you, an award winning organization that will give you the advice you need in the services that you need, whether you have the million or simply wish that you did. I love that. I love that I've pushed your buttons and gotten you rolling. Let me ask you another question

that I know you're somewhat passionate about. You mentioned there are three hundred thousand financial advisors in the United States. I've heard you say that most of these folks are either going to have to merge or get hired by a bigger firm, or go out of business. True or false. Yeah, So over the next five years, half of them will be gone. Half will be gone. So the three will

be one fifty. What what are the other half going to be doing They'll be other than working for you or you or they'll be They'll be they'll get together and and create larger practices. They will merge with each other, they will join larger practices, or they will be out of the business. The notion of a small solo practitioner will be gone. That's that's a point notion. But it's very you know, Norman Rockwell, Americana. Hey, here's a person

who's in a small town. He hung a shingle loud He or she is working with his friends and neighbors. And what is wrong with that model? It's unsustainable. This is the model that you began with. It's the model I began with. Model we all did. And it's not that the model is bad. It's simply not sustainable into day's environment. And there are three reasons for it. One is regulatory, two is competition, and three is technology. From

a regulatory perspective of the SEC is more demanding. And I put that in quotes as a good word, not a bad word. The SEC is more demanding than ever in making sure that advisors are serving the client's best interests, that they that the advisors are engaging in practices that are in the spirit and intent of the law, not merely the rigs of the law, and so many advisors are currently selling products that in the future will not be able to be sold. We're already beginning to see

the beginnings of the fiduciary standard coming about. Despite the best efforts of the current administration, who are not apparently big fans of the fiduciary nor is the industry, and despite all of their efforts to delay it quash it, it's eventually going to happen. And when it does, the majority of investment products currently foisted on the American populace today will cease to exist. And when they cease to exist, so will the commissions that are behind them, the non

traded reads that have a ten percent commission variable. Universal of a problem with non traded reads with a ten percent fig And how is how is uh? How are the boys going to make their money down by the docks If they can't charge a ten percent tax on that, they won't be able to And they're going to quit the business, and they're gonna become used car salesman, which

is what they should be doing anyway. So they're not going to be able to survive because the regulatory environment will not allow them to continue operating the way that they currently do. Margins are going to be crushed, revenues are going to be decreased, and many of these organizations will just be thrown out of business. In fact, that's one of the arguments the industry has used in court to overturn the rule. They finally said to the judge, if this rule goes in, we're going to be out

of business because we can't make the money we're making. Well, that's the whole point of the rule. So that's a rather silly argument. I thought. That's number one is regulation. Number two is competition. Firms like mine are growing in ways that have never been before. There are probably a dozen of US firms like mine that have become not

just practices, but companies, businesses, survivable businesses. Yeah, where we have the funding of private equity firms, where we have incredibly depockets, we world class executives from a variety of of expertise, and I T finance and accounting, in operations and compliance and all over the map. Allowing us to run our company is the way that IBM runs its company. Enabling us to do things on a huge impactful basis. You're going to see these mega firms like Edleman Financial.

In the future, you're going to see a trillion dollar r i A, just like you have trillion dollar brokerage firms, and that's going to create a big challenge for the individual practitioner because he isn't gonna have the financial resources largely again because of technology. Point number three. Technology is getting to the point where much of what that old country doctor does is being supplanted by technological solutions. The same thing to advisors. Investment management is already a commodity.

You already have the ability to get investment management for twenty five basis points one quarter of one percent per year, incredibly low cost. So advisors who make their money by charging big fees on investment management, or who claim they

can beat the market, those days are gone. So the technological environment is going to be that the guy who's got in that little Norman Rockwell town of a hundred and fifty clients, the clients are going to be saying to that advisor, I want the services of the biggest, best firms, and that little country bumpkin isn't going to be able to provide it because he doesn't have the money to invest in that software, to build those technological platforms and systems, and he's gonna lose out to the

competition voisted by the regulation, all because of the technology revolution underway. These guys are dinosaurs and part of the reason the average age in our industry, Barry, you know, the answer is it's almost sixty years of age. So facing this conundrum, the typical advisor is gonna say, in his sixties, oh the hell with it, I just quit instead, And that's why half of them are going to be gone. We have been speaking with Rick Edelman. He is the

founder and chairman of Edelman Financial Services. If you enjoy this conversation, be sure and stick around for the podcast extras, where we keep the tape rolling and continue to discuss all things investing. You can find that wherever fine podcasts are sold iTunes, Overcast, SoundCloud or Bloomberg dot com. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. Check out my daily column on Bloomberg View dot com. You can follow

me on Twitter at rid Halts. I'm Barry rid Halts. You're listening to Masters in Business on Bloomberg Radio. Welcome to the podcast, Brick, Thank you so much for doing this. This has been a conversation I have been looking forward to and I have I have so many more questions we haven't gotten to. UM. I have to ask you launched us thirty one years ago. You look back. Do you ever turned around and say, how the hell do we get to twenty one billion dollars? It? It is

the success of of this like, wait, what what? How did that happen? Yeah? Because it wasn't. It wasn't. Never the intention when I created my first business plan, which Gine and I did when we were planning the launch of our little practice. My business model called for us earning three thousand dollars a month. Did you did you bootstrap this or did you use an outside investor? No? No, no, we we bootstrapped. I don't get the sense you're a

big private equity guy. Though you referenced the availability of capital. Do you use private equity capital? We do now? And what do? We were one of the first to have done that. We started in two thousand five with our first we've gone through UM use it for acquisitions or how does that just just to fund the growth and fueling of our firm. You know, we got to the

point recognizing No. Five we built a very nice little practice at that point was one of the largest and industry, and like any other self respecting entrepreneur, all of my net worth was tied up in the value of the business.

People say where do you investment? Used to say, highly speculative growth company, And so I guess I'm gonna steal that line from As we wanted to grow on a national scale, we realized that would be very expensive and very risky, and any self respecting financial planner would say you shouldn't throw off some of that risk, yes, And so that was what we did. And so we are now on our third private equity partner and our best to date, Helman and Freeman and um So it's been

a great ride. And I assume you guys are still majority owners, you and and Gene. No, we're not any longer. I'm still the largest individual shareholder of the farm, but Helmant and Freeman is now the majority old is it? Is it? Oh? Really that's quite fascinating In terms of control,

Do you still maintain control or no longer? I used to, but I gave that to Helman and Freeman, but they their attitude is that and the reason that they were interested in partnering with Gene and May in the firm was that they love what we do and they want to sustain and expand it. They don't want to change it in any way. And they are quite passive in their ownership and they are fabulous Pete partner. There has been no nothing noticeable by any of our staff, or

our planners or our clients by their presence. So one of the questions that come up all the time with the solo practitioners is, Hey, what happens if you're hit by a bus? What sort of succession plan do you? So? So what you just made me think of this? Now? What how do you guys think about the future of Edelman Financial? What sort of succession plan? We recognized this a long time ago, and that was the impetus of getting outside money to bring in and create a very

talented executive team. Uh. And so we've been working very hard at this for years and we've made um I'd say it's almost total, not yet total, but almost total. And its transition. I now have to co hosts on my radio show so they noticed that they can take the show over at any moment. And I noticed the on your video segments you were rotating a lot of other people through UM. Well, in house, we have ten

full time instructors who do all of our seminars. Will do six hundred seminars this year nationally, Like I do virtually none of them. I used to do all of them, do all them. Now I do virtually none. So we have all of our instructors doing all of our seminars. Were how productive of the seminars? Because quick flashback, I remember about fifteen years ago going with a buddy name is Tony Dwyer who was I forgot the name of the farm he was at, and it was my this

like late nineties, early two thousands. It was my first exposure to that sort of seminar. And obviously the nineties are a different era than today. Wait, you could show up and have a long discussion with people, and that's the difference between them breaking out a checkbook and saying here's half a million dollars versus a phone call and email or what ever, how how successful, how productive do you find that form of communication versus radio, television, everything else.

Our seminars are very effective. We'll have tens of thousands of people attend we've we've over the years have had I don't know how many millions, millions points, I don't know how many people have attended our seminars over the decades. But they're very effective as an educational tool because it allows people to sit in a ninety minute session um with a speaker and you know, there's audio and there's video, there's handouts there. It's it's very disarming. It's very low risk,

very low pressure. We're not doing product pitching seminars like the guy's pitching annuities. But we're doing is education. And people pay a fee to come to our seminars, to typically charge fifteen bucks to get in. Just in order to make it, they have to really be committed to down. We were not, and we're not giving them a free state dinner. We're not you know, we're not there to

feed their stomach. We're feeding their brains. And we're giving them information that they can use on their own with their own advisor, or if they choose, they can hire us. That's entirely after them. But nobody's pulling out a checkbook, No be signing up anything that night. They're simply getting an education. That's fascinating. So you do books, you do radio, you do your own video. In terms of the time

you put in, what is the most time consumptive? And then I have a follow up question, what what takes more of your time and attention writing a book or doing the radio show or or And now you don't do the seminars, Well, they're all I mean, I create the seminars still and train the speakers. So again that one face, one voice, they're all messaging the same thing. They're following my script um. And so they're they're all, I don't know how much. I mean, the businesses are

life and and you know, I don't know. I don't have any. So then the flip side of that is what do you think resonates the most with the consumer or or different consumers. It's different. Some people love listening to the radio, Others love going to seminars of love love reading the books that different people like to digest the content in their own style. And then and now you think I've prone to be I'm master at all

of those forms of communication, master of all media. I think how it's going to get angry at you if you can quite say it that one I did, though, UM, and the videos, that's relatively new in the history of of what I mean. I know you've been doing it for a while, but the books, the radio came away before that. Well. I've been doing TV for almost twenty five years. My first TV show was back in the nineties, and I've hosted a variety of them currently on PBS,

and I do specials for them as well. And uh, TV is probably my least favorite. Why a medium, Well, because it's personal finance is not a very visual medium. You know, there are no cars exploding on set, there's no you know, there's nobody with a low cut dress and standing in front of a blue screen. I mean, it's just it's it's a yeah, you know, it's a medium that UM doesn't. I don't think it's terribly conducive.

It's a talking head conversation. So I work really hard on our TV shows to make get visually interesting and stimulating, and I think we do a really good job at that. But television is much harder to produce than radio because it has to be scripted to the minute. You're creating a visual element in addition to an audible element, and it's just very it's very difficult to do. It's it's the audience loves it. It's great. But radio is so

much easier to produce. I also noticed that the television clips are the on on your site are two three four minutes. Yeah, we carve them up and the radio is much longer form correct because people are usually listening to the radio or a podcast and while they're doing other things. That's good and bad. The good news is you can multitask. The bad news is you're only half listening and you usually got wrong what you thought. I said, if you're in the car, or on a treadmill or

on a bike, you're really paying attention. It's if you're trying to read while you listen, or your vacuuming, or you're yelling at the kids or whatever. You know, so and that you so. People often will call and they'll say Rick said on the radio. The following they're like, no, he didn't. But before we get to our favorite questions, I have to ask about this astronomy thing. How did you get interested in astronomy and what are you doing

with that? Well? I'm really bad at it. Um when you say bad at it, So you haven't discovered gravity waves. I appreciate that, but all you know, I can't. I can't tell you most of what I'm looking at at the night. There are apps for that, you have any fantastic But no, no, no, no, no no, I don't

like them. I mean, I have a GPS on my uh own um saddle, on my own um telescope, but I don't like to use it because what what fascinates me about astronomy is what a fascinated Galileo and Hyigans and um uh Hovelius and and all of these guys from the Renaissance. They were looking up the night sky,

not knowing what they were looking at. And when Galileo pointed his telescope to Jupiter and saw the moons of Jupiter for the first time ever, when he looked at the rings of Saturn for the first time, the first time that uh Clavicus saw the orion Nebula. Uh this it was the age of wonder. And so when I use the telescope, I don't use a GPS, which tells me, you know, pointed to Neptune because I want to see it. Uh Instead, you know, I don't want don't show me

a a a dark cluster. I instead want to just take my telescope pointed up at the sky and see what I see and enjoy the wonder of this. And that has been our basis of astronomy. So what you and I do is we collect rare astronomy books. We collect books from the fifteen hundreds and sixteen hundreds written by bra hay And and these greats in the field of astronomy who were documenting for the very first time things that no human had ever seen before, trying simultaneously

to explain what they were looking at. And it's the age of wonder that, unfortunately we've gone away. We had this this solar eclipse a couple of months, amazing, fascinating, but everybody knew it was coming, and everybody knew what it was, and everybody knew why it was and what

it all meant. Back in the sixteen hundreds and in the in the year a thousand, when a solar eclipse came, they would cause wars, It caused people to panic, the exactly And so we've lost the wonder of astronomy fascination. So here's where I have to totally disagree with you. We absolutely have not lost the wonder of astronomy. Right now, the biggest debate going on in in cosmology is dark matter.

Have we found We've actually recently discovered that most of what we thought was dark matter is really just very thinly dispersed gases and dust. Understood, and I'll take it a step further, and that's the multiverse concept. Um, that's a whole, that's a whole, different layer. I understand that. But so yes, I don't mean to suggest that the age of one or is gone, but what you're talking about requires a pretty advanced level of knowledge that most

consumers looking up at the night sky. In fact, let's face it, most people looking at the night sky can't see any stars because of pollution, and they live in cities where the lights just kill it. And so what I have been focusing on is this age of wonder. And so what Gene and I did was we gave a bunch of money to Rowan University to create the Edelman Planetarium, and we have thousands of school children every

year going to the planetarium for free. Because if you can get a child excited about science at a young age, they become immersed in science for life, and we know that that's the key to America's productivity in the future is stem education. So we're very heavily focused on science education for for kids. This is why we've given rowing another big bucket of money for the Edelman Fossil Park,

which is paleontology. We're finding dinosaurs in South Jersey. Um, they're everywhere, They're everywhere and define but they're everywhere not at the Fossil Park. You go in there for an hour, you will find fossils and you get to take them home. And so by getting kids to focus on I think the two most fun sciences dinosaurs and stars, paleontology and astronomy, we can make a big difference in uh these kids lives and in the nation's competitive edge over the next

several decades. So what do you what do you read? What do you pay attention to related to astronomy? Because if you're on Twitter, you could follow some amazing people. It's like building your own um Phil played as Bad Astronomer and Michelle Taylor and there's a whole run of people who are just wonderful. Is there anything you anyone you read? Any blogs you follow, any television shows you like,

not in astronomy particularly. I am more focused these days over the past ten years on exponential technologies generally because I think that's more impactful to our daily lives and of to me, just greater fascination of artificial intelligence, robotics, machine learning, big data, uh neuroscience, but striguing things. Yeah, and that's what my new book is, My ninth book is all about the truth about your future, how these

exponential technologies are going to impact our personal finances. Let me make one television recommendation and then we'll get back to our questions, which is on the on the Science Channel, How the universe works. Yes, we do watch that. We also watch planets Planets is interesting. Yeah, so yeah, I mean it's have you been paying attention to the thought process about the new ninth planet somewhere out beyond the uh um one of the big asteroid belts beyond Uranus

is planet Uranus. Is this giant planet that we've never been able to see that is potentially disrupting um comments and other things. Yeah, and I'm a big fan of the fact that Pluto was demoted. I don't know, I don't disagree with Yeah, I I do. In fact, I went to a an event at the Smithsonia and by the guy who did it, and it was a great presentation. He said, why I killed Pluto, Pluto and White deserve. His daughter was very angry at very much so because

of the whole Disney thing. Um, but um, yeah, so there's no question I think you're right that the ninth planet, that real ninth planet, has been discovered in our Solar System. I'm fascinated by, um, the fact that we now have satellites that have reached interstellar space. I mean, the the original voyage that they have. No people don't understand what

you mean by interstellar space. There's there's some argument if it's truly in interstellar they're at the outer edges of the Solar System, but they're far beyond Pluto concept that the light from the Sun doesn't reach it. That isn't a I mean, look up at the sky and when you see something black, it means that what's behind it hasn't been able to reach us yet. And that's how far away Voyager is. That's just heady to me. And

the one big reason I like astronomy. It helps ground us, It helps us realize in our busy important days, tiny insignificant nothing exactly, So let's not get too caught up in our own self importance, which, by the way, is what's so fascinating about the rare Earth thesis. And I'll give you a thirty second digression. So originally, UH go back a thousand years and Earth is the center of the universe, and there is no other planets, and there

is no other life anywhere else. It's just us. And then we discover not only are there a hundred billion stars or two billion stars in our galaxy, there are a couple of hundred billion galaxies in our known universe before we even get to the multiverse. But it turns out the universe is an extremely hostile place with in the center of a galaxy, there's just too much radiation

to sustain life as we know it. UH. In the outer parts of the galaxy, there just isn't enough heavy metals to create UH planets that have enough gravity or have enough actual landmass that you can have an atmosphere and have And you end up turning out that the sort of most systems are binary, which creates very irregular orbits,

which creates very regular seasons. The all the unique factors that came together in the Solo System with this planet, with this unusually large moon relatively close to us, is exceedingly rare, and you may end up when not with millions of planets that can sustain earthlike intelligent advanced life, but only a dozen or so per galaxy. I love that whole fascinating digression because it's just full circle for completely different reasons. And by the way, I have no

idea if it's true. It's just a fascinating thought experiment. Yeah, until it's all irrelevant, because until they conquer the speed of light, which well, but they're on the verge of doing this. There's a design underway now that they think they can send spaceships out at the speed of light. That itself is pretty remarkable. They're doing with laser beams. Um. That's until they solve that issue. It's all academic because

everything is so far away. Even if the life is there, were too far away to ever know it right by the time you get there, that their life cycle is already over. It's fascinating, all right. In the last twelve minutes or so, we have let's attack the last of our questions. Who are some of your early mentors, anybody really stands out as guiding your career in the financial industry,

that we're none. I invented most of what we do in our firm, and we were pioneers in the type of advice we were giving and the way we were delivering it, who we were delivering it four. So there really weren't mentors in the field itself. I have to thank my parents, my father and my mom, because they were entrepreneurs and business owners, and most of what I learned about being a business owner I learned from osmosis from growing up in that household. What did your parents

do what? My dad was a pioneer in his industry, in the bowling industry. He ran bowling tournaments across the country and became the biggest at it. And even today my brother now running the business outside of out of Las Vegas, UM. So it's you know, bowling was a huge industry in this fifties, sixties and seventies in this country. The number one participant sport in the nation. Some argue it's fishing, but there are no numbers to support that.

Everybody knows how many people go to a bowling alley, So Um, so that was a neat way to grow up. Um. Within the media world, I have had a large number of mentors radio and TV. There were a large number of people who helped spur my growth and development and skill set at being a host of radio and television. And I've found over the years that in the media world there are a lot of people who will help

you in your success. I'm sure you've experienced that here a bloom Shot unlike Wall Street, where it's very cutthroat and people will do whatever they can to hurt you and harm you and steal your business. But that's not the way it works in media. People are very helpful and and supportive to uh eight year career. At least

that was been my experience. And there is some mentorship that actually takes place in Wall Street, but I think it's faded over time, and the sort of mentorship that existed twenty years ago or fifty years ago, it is all but but gone today. It's it's few and far between. How about how about investors? Who has influenced your approach to thinking about portfolio management? Marco Witz clearly um Harry Markoitz, winner of the Nobel Prize for his modern portfolio theory.

The basis of his work is the foundation of our investment management approach. Famine and French who just who also have won the Nobel Prize. They are three factors. French, uh yeah, Well their joint work is what led to it. French is overdue. Um yeah. And he you know, maybe he left Chicago a little too early, you know, being a dartmouth. You imagine going to New Hampshire because the weather is better than Chicago. What can I tell you?

So they're a three factor model. Now five factor model is um uh taking the industry to a whole another level and investment management concepts. And now Richard Taylor, who's this year's winner of the Nobel a behavioral finance guy. Um Marco Witz told me I've had the opportunity to spend a lot of time with Marco Wits and he told me that he Although Taylor is considered the father of behavioral finance, MARKA. Witz considers himself with the grandfather.

He wrote the He wrote the first paper on behavioral finance back in the fifties, and it's a fascinating um thought experiment that acknowledges that humans don't behave the way classical economists expect humans to behave and everybody gets it except economists. That's what's so fascinating about behavioral finance. So we've been studying all of us. I've been writing about it for decades, and those three major themes explained the

basis of our investment management approach. Let's talk about books. What are some of your favorite books, be they fiction, nonfiction, finance related or not. What What are you reading? What have you enjoyed. I'm a huge fan of Early American his three of written or not written read most UH of what I can get my hands on. Churnow and Isaac Center my two favorite UH authors. Stories. Did you get the good new Galleo book from? I do have it, but I'm not reading it yet because I'm reading Churnow's

book on Grant. Oh really, I'm a third of the way through that thousand page book. I brought the Galleo book home and my wife grabbed it and she's like, I'm like, can I take a look at that? She's like, I'm a hundred pages into it. I'm sucked in. I'll give it back. So so that's my next biography. I'm a big fan of American history and biography and and uh. The problem I have with the books that the Gene and I have collected on early astronomy is that they're

almost all in Latin, which we don't read. A few of them are in Greek, which is even worse. Google translated, just translated right for you. Yeah. Are these books, by the way, are they purely are they not in digital format? No? I understand that, But have you gone through the process of preserving them for prospect for for the future in some digital format? You are entrusted with these rare books.

We do recognize that we are the current caretakers as opposed to the owners of these books, and so, um, you know, we have plans, so so think about going digital with those eventually. Try now has put out a number of spectacles. What else have you read of his that you really like? Um? I like everything that that he's written. His book on Washington, I love and U. I mean it just their history is not dry when it's done correctly, and they read like fiction. They read

like thrillers. And even when you know the outcome, you're amazed at what you didn't know that and it helps you gain a fresh appreciation and humility for the founding of our nation. And that's what probably my biggest regret. If I had things to do over again, I would join the military. I grew up in an arrow. It was just after you both after the Vietnam War and the draft was over, and before the Gulf Wars, and so how how old are you all right? So you

got you got three years on me. I've always had a similar thought. I debated it very briefly in college. I never it wasn't even a debate for me. I mean, my father was adamant. He served in World War Two, as did my uncle's but my dad coming out of Vietnam was adamant on my brothers, and I had no it was not a conversation. So but looking back on it and reading, um, what these folks did to build our nation, Um, it's it's very humbling. We we have a number of military vets in our office and where

we have a disproportionate number. And it's always been one of those things, you know, when I was younger and less disciplined and less responsible, that's something I would have loved to do. Um did churn out write JP Morgan biography, And I'm remembering that correctly. I don't know if that wasn't somebody else but but Washington and granted the two you really Benjamin Franklin's that Isaacson did is awesome. I mean, they're two great writers, and so whoever they write about

is worth reading. So all biographies, let's let's talk a little bit about UM and lots of books on exponential technologies. Let's I have on my website a complete list of the books I recommend as well as in our industry. There's so many books in our field about manias and crashes that go back a hundred years to help people understand what to do when markets tank, which they inevitably do, going back to the tool of Craze of sixteen thirty six and all the way through to the crash of

twenty nine. UM. So d Burger is the bo that's one of them. Uh, there are I list a couple of dozen books on my website, UM that you ought to read if you want to become more familiar with how money works and how to make it work for you it. I will include a link on the right up to this to to your book list. UM. Now, and when I was trying to pull it up on Google, but it didn't come up. House of Morrigan is what

did come up? That is a churn out book. Um, so let's talk about a time you fail to tell us when you tried something it didn't work, and what you learn from the experience. I've never failed at anything. I've just learned lots of ways not to do things, meaning meaning what you know you learn more from your

failures than your successes. You know you learn more when you're listening to when you're talking, and so we you know, entrepreneurial activity means taking risks, doing things that have never been tried, and they don't always work out the way that you'd hoped. I can't begin to tell you the money that we've blown doing things in ways that didn't work out. But you know what you learn how not to do it next time. And there's a rule in our firm, a basic rule that we teach at New

Higher Orientation everybody who comes in. And one of those rules is the following. You're allowed to make mistakes, You're expected to make mistakes. You're simply not allowed to make the same mistake twice. Always, always a new mistake. Go make a new one. There are plenty of mistakes out there to make. There's no mistake. We tell our staff, there is no mistake you can make that I can't fix. We're not in the medical field. You're not gonna kill anybody.

Don't worry about this. There's nothing you can do we can't fix. Don't worry about making a mistake that costs a client money, because we'll reimburse the client. So don't worry about this. Do what is in the best interests of the client. Do what you think is right, use your judgment, use your brain. That's why we're hiring you. And if you do make a mistake, tell us we'll fix it. And now you know what not to do next time, and go on and figure out something else

to do wrong. Um, down to a last few questions. What do you do to keep mentally sharp outside of the office? What do you do to relax? My wife and I love to entertain We love movies. Um. We love to travel, which historically we've never really been able to do, but finally, thanks to Ryan Parker as our new CEO, we get that opportunity now. Uh and I love to play cards, love to play chess, love the shoe pool, and we'd just be with that's a nice,

nice list. If a recent college grad or millennial came to you and said they were interested in going into finance, what sort of advice would you give them? Don't do it the way I did it, because the way I did it no longer exists. If I don't do what you're trying to do either, Barry, I mean, I would tell them not to do what you're doing because what you and I do no longer exist. And that is is that true that you can't go backwards into this, No,

you can't become a mass media guy anymore. Radio, as you know, Barry, has evolved and changed dramatically over the years. The opportunity that I had to host a radio show twenty seven years ago doesn't exist today. And so I would not encourage somebody new in the business to try to become a mass media person. Do not try to become a broadcaster. Instead, become a narrow caster, meaning develop

a niche. Um. I know, yeah, I know an advisor in Maryland who only works with Marriott employees, as office is across the street from Marriott's world headquarters. I know an advisor in Dallas who only works with the United Airline pilots because that's their hub. I know an advisor who only works with retirees, another one only with executives, another one only with divorces. Um. It's like medicine. My farther just had surgery on his thumb, and the surgeon

is a guy who only operates on thumbs. He's the thumb guy. You no matter if you've got an issue, you're gonna go see this guy. Yeah, well, we need to specialize in our field. There are we're becoming more complex, more complicated with tax law and everything else, investment management issues. Be be the planner to plumbers. Go to the plumbing convention, right for the plumbing magazine, and don't take anyone who's not a plumber. Be a narrowcaster. Focus on your niche,

what motivates you, What do you love? Serve that audience and no one else. That's fascinating. And our final question, and my personal favorite, what is it that you know about investing management, financial services, the whole field we toil in today that you wish you knew thirty years ago.

I wish I had realized earlier that what we were doing in our firm and Edelman Financial was unique in the industry, that the fact that we were serving the mass affluent, middle class Americans and that the rest of Wall Street wasn't. I didn't realize. I didn't. It took me over a decade to figure that out. I couldn't understand why we were so popular and why so many people were coming to us. It's because nobody else would

talk to them. They had been orphaned by the rest of Wall exactly, and so had I realized that earlier we would have become our begun our national growth earlier. That's quite fascinating. Rich, Thank you for being so generous with your time. This was really quite delightful. Barry, you make it easy. Thank you. Um We have been speaking with Rick Edelman. He is the chairman, co founder and

uh no longer CEO at Edelman Financial Services. If you enjoy this conversation, be sure and look up an Intra down an inch on iTunes, I I Everything, iTunes, Overcast, SoundCloud, Bloomberg dot com, and you can see any of the other hundred and sixty plus or so such previous conversations that we've had. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. If you enjoyed this, go to Apple iTunes and give

us a review, write something up. You can see that at iTunes dot com Slash podcasts, and you could just search for Masters in Business. Uh. Not only can you see all the other previous podcast but there's an opportunity to give us a review and share your thoughts with us. I would be remiss if I did not thank my crack staff who helps put together these shows. Medina Parwana is our audio engineer, Slash executive producer. Taylor Riggs is our booker. Michael Batnick is UH in charge of research.

I'm Barry Hults. You've been listening Anisters in Business on Bloomberg Radio. M