Do you feel investment advisors are only for older, more wealthy investors while you may be onto something.
The current state of investment management has less than 2% of traders under the age of 40 working with advisors.
Well, investment management is also pricey with advisors charging fees, but some advisors don't even give their all when it comes to navigating the markets for some of their clients.
Joining us to weigh in here at the New York Stock.
Exchange this morning is Logan Weaver, president and CEO of Surmount.
Well, Logan, thank you so much for joining me.
Thank you for having me.
Well, you're here at the New York Stock Exchange, and when we take a step back and look at the investment landscape, there have been a lot of factors to consider.
So tell us about the current state of investment management from your perspective.
Yeah, absolutely.
I kind of think of it more as on one side you have so many people going to Robin Hood and The self trading applications.
But if you ask those people, there's actually a small niche that are interested in managing all of their own investment decisions themselves.
I think investors under 40, under 45 are really taking that route because they don't necessarily want to settle for their parent's financial advisor.
So essentially I think right now if you look at most advisors, the average age of clients and advisors is in many cases over 5055.
And I think there's a big push to better appeal to the Henry class.
The high earners might not be rich yet, but they're thinking about how to build wealth for tomorrow.
Yeah, and when it comes to managing your own portfolio, there are a lot of pros and cons to utilizing a professional versus going at it on your own, and you mentioned demographics, and I think that is key there because you think about the older generation who may not have access to devices and might not even look at their portfolio on mobile devices as well.
So tell us what's happening when it comes to fees and management.
Yeah, absolutely.
I think the average fee there's definitely a race to 0%.
I think that's largely because if you look at how investment advisory works right now, it's basically an upside down funnel to where you fill out KYC suitability on board with an advisor, and you just get thrown into essentially a basket, you know, these portfolios are made of just ETFs.
They're not necessarily personalized to you.
I think that's one of the big reasons why the younger investors aren't really taking that approach.
They've become accustomed to actually being able to make decisions, be involved, but I think don't want to have to make every decision themselves essentially.
Yeah, and we know that numbers don't lie.
So what does the data tell you when it comes to The pros and cons of both of those strategies.
Absolutely.
So right now we're seeing that basically if you inherit your parents, your grandparents' wealth, there's an 87% probability that within two weeks you're going to churn from that adviser because if you think about it, the portfolio.
It's made for a 70 year old 80 year old isn't the same one that's going to appeal to somebody that's thinking about their child's investment fund or their child's college fund or anything of that nature.
So I think being able to deliver that personalization to each client is something that The industry is adopting towards quickly and especially that software driven approach.
Not many people are still interested in getting the quarterly report in the mail.
I think it's more so having a portal to where they can actually log in and access their investments as well as make decisions and be involved without having to make every single decision themselves.
Yeah, and I do want to ask you about the role that artificial intelligence plays because we may love it, we may hate it.
It might depend on the day, right?
But when it comes to investment management, how is this tech affecting what's happening?
Yeah, I think really one of the things that people aren't talking about enough is machine learning and investment management.
I think natural language processing is a good way to understand.
What a client might be interested in that way you can construct a portfolio for them.
They're really behind the scenes, all the matching, all the clustering that goes into what might be a good fit for each client.
It's really more on the machine learning side.
So I think AI is going to, you know, it's disrupting everything right now.
I think it's kind of The financial services industry is essentially being a little bit of a laggard just because of the regulation, but I do think that over the next 3 years, 5 years, we're going to see a huge increase of AI adoption in terms of investment management, in terms of really just the whole financial sweep from credit to Logan, finally, before I let you go, in New York morning trade, we are looking at a minor pullback for the major stock averages, but this does come on the heels of the S&P 500, the Nasdaq hitting all-time record highs, and we continue to see that grind higher for those averages and we're also seeing other risk assets.
Crypto Bitcoin, as well as treading higher as well.
So given what we're seeing, how do you think advisors should quote unquote play the market?
Absolutely.
I think the advisors that are still kind of writing off crypto and saying it's too high of a risk asset, I think they're not seeing the full picture.
Really it's the more money.
The US prints, the more that it makes sense to look into these liquid assets that ultimately have a high potential for the future.
I think crypto is going to continue playing a large factor in terms of investment portfolios, and I do think that they need to adopt that for clients' assets, as well as, I mean, the IPO market is back to booming again, it seems like so.
Overall, it seems that the US markets are moving forward in the right direction and kind of coming back despite, you know, today's pullback coming back overall and looking pretty promising.
OK, Logan, well, we will have to leave it there, but thank you so much for joining me and thank you so much for sharing your perspective.
Thank you.
I appreciate it.
Thank you.
