00:00 Speaker A
I think this is a really interesting conversation to have, especially at a time when you have um such a growing class of wealthy in this country.
00:07 Speaker B
Of course, yeah.
00:08 Speaker A
In part because we've seen in the markets, in part because of the explosion of the tech industry and people making money from that, etc.
00:15 Speaker A
Um but it must be sort of overwhelming in some cases
00:20 Speaker B
It is.
00:20 Speaker A
to manage through that. So what like what kind of mistakes do people make? What kinds of things do you sort of try to address with them?
00:26 Speaker B
So I I think the the thing that's most important is that everyone we work with, whether it's across law firms, professional services, asset managers, pre IPO, post IPO companies, they're really busy professionals. So they're trying to take care of their careers, they're trying to take care of their families and there's honestly like not enough hours in the day sometimes to focus on your own financial wellness and your own financial plan. So I would say, you know, the number one thing is just having a financial plan.
00:54 Speaker B
So one out of three Americans has actually completed a financial plan. Another fun stat is one out of three Americans has a will in place.
01:02 Speaker B
So some of these basics going around, what are my goals? How am I going to achieve them? Am I set for retirement? What will happen in case I pass away, my spouse passes away. Those are things that we really try to um hit on very, very early on.
01:15 Speaker B
But I think the number one thing is we don't teach this in school. So financial literacy is something that impacts everyone. You can graduate from some of the best universities out there and you may have all of your money in a savings account because you haven't been taught to invest. And so we find that we're able to get in there, get in there early and drive better financial outcomes for our clients.
01:31 Speaker A
I'm also curious though, at a time where as I mentioned, part of the what's been driving wealth creation and growth in this country is investment in the stock market, right? Uh many people who are invested, we've had a big up year again, right? Yeah.
01:42 Speaker A
Um and so I wonder if some people become over indexed to that and what, you know, what the outlook for the market is and what the outlook for what that rebalancing should look like.
01:50 Speaker B
I think risk aversion is is a really primary driving force. So what we tend to see is people under allocated.
01:57 Speaker A
Interesting.
01:57 Speaker B
to the market, to alternatives for example. When it comes to certain vehicles like 401Ks or retirement accounts, I think generally you tend to see within the professional space that people know that they should be doing that, that they should be allocating. There's a tax benefit there and they're very comfortable letting that capital sit. Ironically, that tends to be the best performing capital because it's something that is is invested in the market. You are benefiting from from that experience and you're also not trying to market time that capital.
02:26 Speaker B
And so more often than not, we come across someone who, yes, they have their retirement account set up, but then they have a a huge chunk of their assets sitting in cash. And in this environment, yes, that may be okay given where interest rates are, but if we're going to be living longer and we need our money working for us harder and we want to retire at a reasonable age, it means that you are going to need exposure to not only just equity markets, but you're going to need exposure to alternatives as well.
