The transcript from this week’s MiB: Jason Wenk, Altruist founder and CEO, is below.

You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube (video), YouTube (audio), and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

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MASTERS IN BUSINESS Jason Wenk, Founder & CEO, Altruist

Hosted by Barry Ritholtz  ·  Bloomberg Radio  ·  Interview Transcript

BARRY RITHOLTZ (00:00:08): This week on the podcast, yet another extra special guest. Jason Wenk is founder and CEO of Altruist, a new artificial-intelligence-driven custodian challenging a lot of the legacy entities like Fidelity and Schwab that are stuck with all of their old hardware and software. I thought the conversation was fascinating, and I think you will also. With no further ado, my interview of Jason Wenk.

Jason Wenk, welcome to Bloomberg.

JASON WENK (00:00:50): My pleasure. Such a great intro.

BARRY RITHOLTZ (00:00:52): So I’m fascinated by the through line of your career. You are constantly focusing on creating lower-cost, tech-enabled financial advice. But I’m gonna put a pin in that and come back — I gotta start with your background. You studied computer science at Grand Valley State University. What was the original career plan? Was it technology and computers, or finance?

JASON WENK (00:01:19): No, so I’d never taken a finance class. I’d never met anybody who had money. My family never owned any stocks or mutual funds. I didn’t know what an IRA was, or even a 401(k) for that matter. But I grew up in the eighties and nineties, so I remember getting our first personal computer in the mid-nineties. The internet started to pick up a little bit of speed in the late nineties, and that was my dream — to go to Silicon Valley and work at a dot-com. You probably recall the market peaked out around 1999, and then a pretty major crash ensued.

So very accidentally, I did an internship at Morgan Stanley at 19 years old. I was a bit of an odd duck in that I took a lot of college classes when I was in high school, so I was already doing internships my first year of university. And I was presented an opportunity to move here to New York and to join Morgan Stanley. That was really my crash course in finance.

BARRY RITHOLTZ (00:02:20): And you were 19 or 20?

JASON WENK (00:02:22): Nineteen as an intern, and officially joined at age 20.

BARRY RITHOLTZ (00:02:25): What drew you to financial services instead of technology? Was it simply the dot-com implosion, and there were no jobs to be had in technology?

JASON WENK (00:02:35): I was still working in technology. My role — the internship — was productivity software; it just happened to be for a big investment bank. And then I spent about two years building different types of technology within the Morgan Stanley ecosystem. By the time I joined, they were Morgan Stanley Dean Witter, so they had this big retail wealth business. They also had prop trading and a number of other divisions, too.

So I didn’t really get too involved in personal wealth until maybe the last six months I was there, when I was put on a project. We were doing a lot of work with Morningstar, which back then was still sending out CD-ROMs to branches around the country. And if you had a big branch, that’d be hard — who had the CD-ROM? So we were just building networked versions of essentially the Morningstar database.

But I remember around that time, I was doing some pre-built prompts inside of these research platforms. And the way my mind worked, which was more around math, physics, computer science — I looked at these prompts and I thought, these are terrible prompts. In other words, the prompt would be: let’s build a screen so that financial advisors can easily build a portfolio, and the screen will be something like, find funds that have been around for five years, with turnover under 100 percent, with the same manager for five years or longer, that’s in the top quartile of their peer group. And on the surface you go, well, that seems pretty reasonable and fair — but that is no prediction of the future result. That is a terrible predictor of future outcomes. But it was sort of built as though it was a good predictor.

BARRY RITHOLTZ (00:04:18): Well, you have the data — past performance is right there. We have to do something with it.

I give Morningstar credit — they had an internal survey that more or less said, hey, don’t worry about the stars. The data shows if you just buy the least expensive fund, that’s the one most likely to give you the highest level of performance. And to their credit, they published that. I wanna say that was 2011, 2012. Really fascinating.

So you never really rotated through the departments where you’re smiling and dialing? Did you ever work as a broker?

JASON WENK (00:04:51): So I got licensed. I took the Series 7, Series 8, Series 24, Series 3 — all the classic licenses.

BARRY RITHOLTZ (00:04:58): The 24 — you wanted to be a supervisor?

JASON WENK (00:04:59): Yeah, and I’m not sure why. I was also a registered options principal — why I did that, I have no idea. Managed futures — again, not sure why I did that. But yeah, I did all of the research to understand the space, and I did go through the broker training program, sort of 2021 —

BARRY RITHOLTZ (00:05:26): 2021?

JASON WENK (00:05:27): Excuse me — 2001. Yeah, a little bit of a mistake there. And part of it was ’cause I wanted to move back to the Midwest. I think I had this romantic notion of going back home and helping people that I knew. The reality is nobody I knew had any money, so that wasn’t really going to work anyway. And really, before I even got started, I made the decision to leave and go start another business — kind of in the space, but adjacent. I didn’t do direct work with clients.

BARRY RITHOLTZ (00:05:52): So let’s talk about that. What was the first thing that you noticed in financial advice that led you to say, hey, this is broken, and I think I could use technology to build something better?

JASON WENK (00:06:04): Two things in particular. One was, around that time there was a transition from commission-based sales — brokers, if you will — to more fee-oriented financial planners. And for me, that really resonated. So this notion of, hey, can you give people more comprehensive planning advice —

BARRY RITHOLTZ (00:06:27): And be a fiduciary?

JASON WENK (00:06:28): Yeah. And also, I looked realistically at the way asset management worked, and I very much agreed with the Morningstar study that they published some 10 years later. A lot of this goes all the way back to Jack Bogle’s work. But just looking at a couple of years’ worth of research around asset management, I didn’t see a discernible benefit to stock picking or market timing. High cost, high turnover, high taxes — these things all eroded wealth. So part of me thought, well, is there a way that you can just get more people access to empirical, evidence-based investing? Maybe that also helps people do better.

The other part was accessibility. Again, I grew up in a farming town. There were no brokers, there were no bank advisors, there were no Edward Jones offices — there was really no access to advice. And I could see the direction the internet was taking us, really flattening the world. Everybody should be able to find advice and help through the internet.

So really, the first business, from an accessibility perspective — it was gonna be internet-based, it was a subscription service, and it was designed for people with 401(k)s. Because when I looked at the people I knew, that was about the closest thing they had to Wall Street, to a brokerage account — their defined contribution plan. So the idea was, let’s make it easy for people that have a 401(k) plan to get the absolute best results they can from their 401(k). And I spent almost three years building that business.

BARRY RITHOLTZ (00:08:07): This is Retirement Wealth Advisors?

JASON WENK (00:08:08): No, this is the one that doesn’t exist on my LinkedIn profile.

BARRY RITHOLTZ (00:08:12): This is before that.

JASON WENK (00:08:14): Yeah. So I spent from 2021 until 2024 —

BARRY RITHOLTZ (00:08:24): 2001 to 2004.

JASON WENK (00:08:25): 2001, yeah. Gosh, it shows how old I am. My mix-up — it only gets worse. The decades, the dates —

BARRY RITHOLTZ (00:08:30): The names. It just trends in one direction.

JASON WENK (00:08:32): Yeah. So 2001 till 2004. And honestly, when I look back at it, it was maybe a little bit too early. This was pre-robo-advisor, right? Pre-blogging — pre a lot of things that just got more people connected.

BARRY RITHOLTZ (00:08:50): Blogging was just starting around then. We went from GeoCities to things like TypePad.

JASON WENK (00:08:55): Yeah. You were a real trailblazer in that regard.

BARRY RITHOLTZ (00:08:58): It was compulsion — I had no choice. I had to.

JASON WENK (00:09:02): So look, pay-per-click advertising was just coming out. So you had things like Overture, which is kind of pre-Google, but you could buy the keyword for a phrase like “how to manage my 401(k)” for a penny, and you could be the top-ranked search. People would then land on my website, which was called Smarter Than Wall Street back then. And it would allow you to say, I work at General Motors, answer a few questions, and it would say, here’s how to allocate your 401(k). They’d get an email once a month if there was anything they should do differently. Of course, the emails never said that they should ever do anything differently.

And after about a year, I had built a pretty good-sized subscription business, but I started to have some churn, because people were like, why am I paying you every month to just send an email that says the same thing as the email the month before? And eventually I started asking people, well, what would be more valuable — sort of a churn survey, if you will. And people would say, look, if you would just do this for me, I’d pay you a lot more than 20 bucks a month. And that was really the genesis of Retirement Wealth. That’s even why it was called Retirement Wealth — because a lot of these 401(k) folks were retirement-focused.

BARRY RITHOLTZ (00:10:10): And that scaled up pretty rapidly. Was that the $4 billion advisory shop? No? So where did that go?

JASON WENK (00:10:18): So I ended up going to about 1.1 or 1.2 billion in assets. But yeah, it grew really fast. I started it in November — December of 2004 was when I got my registration — and ran that for about six years, roughly.

BARRY RITHOLTZ (00:10:34): And a billion in AUM is not insubstantial. That puts you into a category of —

JASON WENK (00:10:39): Especially back then.

BARRY RITHOLTZ (00:10:40): Yeah. Inflation-adjusted, we’re probably talking about 3 billion today. But that’s real revenue, that’s real clients. What made you say, all right, I’ve kind of done this — now let’s look at FormulaFolios?

JASON WENK (00:10:55): So I was always driven probably more by impact than by the size of assets or revenue. That company was bootstrapped. I built every single thing myself, wrote all of the code. Although the name was Retirement Wealth, it was a fairly tech-forward platform. I built my own proposal systems to really analyze the portfolio and then propose a new solution, digitized a lot of onboarding to really automate getting new clients on, and it was mostly virtual. So it was also before its time in the sense that it was built mostly from blogging, back in like the 2006-to-2010 era. It was a lot of things — it was doing well before its time.

And what ended up happening — really the catalyst to moving into the next business — was I was invited to speak at TD Ameritrade’s national conference. They were my custodian at the time. I loved the people there. They saw the unusual growth, and also that I was still in my twenties, and they thought, hey, we’d love to have you come speak and share a bit of how you’re doing what you’re doing. So I went to San Diego and I gave a session where I just said, hey, here’s how I’m getting new clients. I’m writing these blog posts — here’s the framework, how I do it. Here’s how I take these people from a stranger from the internet into a defined financial planning process, and then a defined portfolio. And it was so structured that I could then train other advisors. So I hired a few other advisors, and they came in and they could then run the process.

And at that time, a bunch of other advisors — I’d say hundreds of other advisors — started to reach out inbound: hey, how can I get access to your “system,” they would kind of call it. And the reality was, I didn’t want to hire 50 financial planners. I’ve always been a bit reclusive.

BARRY RITHOLTZ (00:12:56): You don’t wanna manage 50 people. But selling them the software — that’s a fair relationship.

JASON WENK (00:13:01): That seemed a lot better, right? So that’s where the idea was spawned — hey, maybe it makes more sense to license the software, make it easier for people to run their own business, but leveraging a lot of our technology.

BARRY RITHOLTZ (00:13:15): Was that FormulaFolios?

JASON WENK (00:13:15): Correct. Yeah.

BARRY RITHOLTZ (00:13:17): All right. And how big did that scale up to?

JASON WENK (00:13:19): It went zero to 4 billion in five years. And today it’s, I think, 14 billion or something like that.

BARRY RITHOLTZ (00:13:25): So I know that you were a programmer in college. You describe yourself as a developer and a math geek — you very much have a little bit of a hacker mentality. How did that technical — I don’t want to use the word self-identity, but just your self-perception — how did that affect your view of, here are the services that make sense for investors, for advisors, for this whole ecosystem that had been, especially in the two thousands, mostly ignored by Wall Street? It took 25 years for the fiduciary side to pass the commission-based brokerage side. So how did the technology background affect your perception of that market?

JASON WENK (00:14:10): Sure. Look, I think I’ve always been a little bit idyllic — you name your company Altruist, you probably have some generally idealistic tendencies. I think people who know me well would say I’m a bit of a macro thinker, but I don’t like working in the day-to-day weeds of most things. So for me, I’ve always thought in decades, and it wasn’t hard to look at the market in the early two thousands and say, well, this is the future. Even though, to your point, the RIA fiduciary channel back in 2004, when I started my first firm — it was maybe six to 800 billion in assets. Today it’s probably 10 trillion. So today it seems very obvious, but back then it was a relatively small part of the market. It was not obvious, maybe, to everybody.

But I looked at the demographics of the country, and there will be such a huge number of people who are going to need good-quality advice and planning. And if you think in first principles, which is a very common technology metaphor, and you have no bias about the way things had been done historically — to say, well, what is the right way to do things? — that just seemed like the obvious and only and objective future for this industry. And I wanted to be on the forefront of that.

So now, some 20-plus years later, the market is very obvious. A lot of people want to build in this space, and it’s the place that seems to be growing the fastest. That was crystal clear to me 20 years ago. And I think a lot of that comes from, again, that more first-principled, sort of Silicon Valley way of seeing the world.

BARRY RITHOLTZ (00:15:55): Coming up, we continue our conversation with Jason Wenk, founder and CEO of Altruist, discussing how he built the firm to compete with the big guys. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.

I’m Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My guest this week is Jason Wenk, founder and CEO of the new custodian Altruist.

So Altruist describes itself as a modern custodian — emphasis on modern — for independent financial advisors. What does that mean in the real world? This has always been such a boring, plumbing type of industry. What was broken that required your attention?

JASON WENK (00:16:45): Well, I guess the opposite of modern is not modern, and the whole rest of the industry is pretty old. If you think about most of the infrastructure that’s used by financial professionals, the majority of it is 50 to 70 years old.

BARRY RITHOLTZ (00:17:01): That’s amazing.

JASON WENK (00:17:02): And it operates on mainframes, not cloud-native platforms. So I think the starting point is — and with no disrespect, these were innovative companies 50 years ago. They’re just not that innovative today.

BARRY RITHOLTZ (00:17:16): You’re saying the electric typewriter isn’t cutting-edge anymore?

JASON WENK (00:17:19): I mean, they’re still fun to use — the click and the clack.

BARRY RITHOLTZ (00:17:21): They make a nice noise.

JASON WENK (00:17:22): Right? It feels very — it reminds me of my grandparents’ house in the nineties or something. So look, getting to the problem statements: having been in this space a long time, for the longest time I would look at the industry and go, that just doesn’t make any sense. Why do we do it this way?

BARRY RITHOLTZ (00:17:42): Again, we’ve always done it that way.

JASON WENK (00:17:43): Yeah, exactly. It doesn’t mean it’s the right way. And so some examples of that. I think it’s a bit crazy — if you’re a financial advisor or wealth manager… and I think if someone’s listening to this and they’re not one of those people, they’ll think, this is literally crazy. But this is the way it works. So first you have to have a custodian, right? This is a place where you’ll open accounts for your clients. They’ll safeguard your client assets, do all your record keeping, process trades —

BARRY RITHOLTZ (00:18:06): A trusted third party who is not managing the money. And that creates a built-in checks and balance.

JASON WENK (00:18:13): Somewhat — or it could be a built-in limitation, keeping that advisor from doing high-quality work. Which is what I sort of discovered as I peeled back the layers of the onion.

So these custodians — one would think a very simple thing they should be able to do is, let’s say you have three accounts with your financial planner. You’ve got an IRA, maybe a Roth IRA, a joint account with your partner, and you wanna know: how am I doing over the past 12 months? You’d think you could just log on to Schwab or Fidelity or Pershing or wherever and just click a button, and it would tell you that. But the reality is that you cannot get that information from your custodian. The custodian will only be able to tell you what you have today. It will give you access to your statements. The statements are not bundled at the household level. And what the custodian will tell you is that if you want that type of information, you need to buy a third-party portfolio accounting software: we’ll send them a daily file of all of your positions and transactions, that third party will reconcile all that data, and it will then allow you to run reports for your clients. And you’re gonna have to pay, depending on the size of your firm, anywhere from tens of thousands to millions of dollars for this third-party software. And this just fundamentally makes no sense at all. The custodian has all of the data. It should easily be able to reconcile that and run reports for advisors. But they can’t, and they won’t.

And you could go down this long list of things that they should be able to do, just as logic would tell you. For example, if you wanna bill a fee to your client — the client signs a fee agreement that says, I’m willing to pay my advisor 1 percent, hypothetically, and I’m willing to pay them that every quarter, calculated on the average daily balance, and bill me in arrears. Something simple. The custodian will say, that’s cool — what you need to do is, we’ll send your data to a third party, they can reconcile the data, you can then run a billing schema, it’ll create a CSV file, you can then upload that to our system, and we’ll then debit those fees from the accounts. But this whole process can take days. And by the time you go to debit those fees, sometimes a client will have had a distribution in their account, or a trade or something, and the fees get busted. It creates an account that gets overdrawn.

And fundamentally, again, there’s hundreds of these things, and you go, this makes no sense. Why is this the way things operate? This is largely the genesis of why you would build a brand-new custodian from scratch. And if you were going to build it in a modern way, you would probably make sure all of these things are just built in automatically.

BARRY RITHOLTZ (00:20:39): So that raises a really fascinating observation. Altruist first came to market 2020 — was it ’21?

JASON WENK (00:20:48): We wrote the first lines of code in January of 2019. I think we went into beta in early 2020, and then launched the product right in the heart of the pandemic, in 2020, 2021.

BARRY RITHOLTZ (00:20:58): So I remember when the firm first launched, and I remember hearing about it, and the initial reaction was — I don’t wanna say crickets, but kind of low-key: yeah, someone’s gonna disrupt these guys? We’ve got $10 trillion, we know what we’re doing custody-wise. And what started out as sort of a shrug — it didn’t take very long before there was a little bit of a freak-out. Like, wait a second, what’s going on here? They’re actually winning clients. How is this a thing? From your perch within building the company, how did you see the rest of the custodian market react to Altruist launching and just rolling out one new capability after another?

JASON WENK (00:21:48): So — and I wish I could remember where to properly attribute this — there’s a great saying: first they ignore you, then they laugh at you, then you win. So it’s not surprising, when somebody makes a big, bold declaration that they’re going to change an industry and make it better, if you are effectively a duopoly or oligopoly, as our industry was. Almost all the assets were held by, at the time, three custodians. Back then it was Schwab, Fidelity, and TD Ameritrade. TD Ameritrade, shortly after we launched, was acquired by Schwab, really making the power dynamic two companies that have 80-plus percent market share. So, respectfully, I think there’s going to be a natural rent-seeking sort of mentality from those people who are the dominant players. Why would they ever want there to be any change? Why would they want to change their cost structure? Why would they want to modernize their systems? Things were great for those companies. So you’re not surprised that some folks may have been dismissive.

But advisors never were. When we first started putting prototypes out into the public and sharing our vision, we had thousands of advisors that signed up for our waitlist, hundreds that decided to become design partners — very early design partners — to help us build the platform. And we have this very loyal base of users that are very loud about how happy they are with the product. And we’ve done this by co-creating it with the advisors. It’s not lost on me that there are literally thousands of features that you have to build to support the wealth management industry. We can’t possibly know all thousand internally, so you need to have some awesome partners that can help shine a light on what the most important things are. So yeah, in the end, I think we have more than caught their attention. I think now there’s a fairly deep-rooted fear, actually, from a lot of the bigger boys.

BARRY RITHOLTZ (00:23:51): Yeah. So you have the three big incumbents — it’s a little bit of an oligopoly of Schwab, which is now Schwab-TD combined, Fidelity, and Pershing–Bank of New York. Everybody kinda looked at them and said, there’s no way we’re going up against those behemoths. You are one of the first companies to say, we’re gonna take on the custodians, because their legacy platforms just can’t do the things that we can do at scale. How do you think about the challenges of going up against — what is Fidelity, 18 trillion? And Schwab is 12 trillion? These are monsters. Bank of New York Pershing is the oldest bank — that’s Hamilton’s bank, literally. These are not, oh, I think I could disrupt Nokia with a better product. These are just the most entrenched, well-thought-of partners for advisors. What gave you the confidence to say, we could beat them at their own game?

JASON WENK (00:24:58): I think a big part of the confidence came from that early advisor reaction. But the truth is that these companies don’t have high NPS — these aren’t companies loved by their customers.

BARRY RITHOLTZ (00:25:14): NPS — net promoter score. We do one of those surveys every year, and I know that’s become super popular everywhere the past 20 years.

JASON WENK (00:25:22): You don’t have to look very far and wide, or have too many conversations, to hear wealth managers gripe about their custodians. Again, I was running one of the largest — I think when I stepped down from FormulaFolios, at the time it was the fastest-growing RIA in the history of the entire industry. We were growing at 16,000 percent on a three-year growth rate. So it was a true rocket ship in the sense of the RIA space. And I felt tremendous pain. My biggest pain point was my custodian — onboarding new clients. They were making you download forms from a form library, populate the forms by hand, send them out via DocuSign at best, sometimes requiring wet signatures or medallion stamp signature guarantees. It was literally like going backwards in time 20 years. Meanwhile, you had companies like Robinhood, where you could download an app on your phone at 18 years old, have your account open in 30 seconds, fund it with a hundred dollars, and buy fractional shares of Berkshire Hathaway stock commission-free.

It was so obvious to me that the old way custodians had been operating — they were still charging commissions, using paper — this was definitely not the right way to do things. And if you started looking at the impact to clients: what is the impact of forcing people to use whole shares? Why would the big custodians force you to use whole shares versus fractional shares? Fractional share trading had been around for over 20 years.

BARRY RITHOLTZ (00:26:47): It’s just math. It’s not that difficult to execute.

JASON WENK (00:26:49): Correct. This isn’t even hard — it’s arithmetic, geometry, algebra, right?

BARRY RITHOLTZ (00:26:53): You’re not talking about exponential algos or anything like that.

JASON WENK (00:26:56): Precisely. But a lot of it is, you just start going, okay — and maybe this is a good tinfoil-hat theory here, but I’d say, what would the benefit to them be of not enabling fractional shares? Maybe that means more cash will be in client accounts — maybe they make half of their revenue from the cash spread, right? The net interest income on the cash that sits in client accounts. Maybe it also forces you — if you do want to use fractional shares, the only vehicle that trades in fractional shares, in other words where you can do notional, dollar-based buying, is mutual funds. And these mutual funds pay tremendous fees for distribution through these brokerage platforms. What if they are not allowing fractional shares because they really don’t want to disintermediate packaged products in general — to make things like direct securities more accessible to more people?

I just went down this rabbit hole, but the end result is, it costs investors a ton of money. You end up limiting the amount of tax benefits, you end up increasing the average client account size — so if you really want to have great efficacy in investment outcomes, you’d have to have tens of millions of dollars. And if you had fractional shares — as just one example — all of a sudden, a ton of that entrenched history goes away completely. Everybody can get access to the same type of investment strategies: individually managed accounts, lot-level tax trading so you can get the best possible after-tax outcomes. You can compress cash down to the lowest amount, so you’re reducing cash drag — this increases outcomes.

So I think in the end, if you put yourself on the right side of the client and you have time on your side, you will absolutely win. I think one of the best examples of that in our industry is Vanguard. What they did — they were laughed at for decades, a long time, and they didn’t even really reach massive scale until 25, 30 years into their journey. But again, if you just put yourself on the right side of the client — the end client — hey, we are going to do things that objectively and obviously produce better outcomes on an after-fee, after-tax, after-cash-drag basis; we’re going to provide delightful experiences with a true partnership with our advisors and clients — these things will work.

And again, I think you have to have a certain amount of craziness. One of our early investors — you might know Omani Carson, formerly known as Ron Carson.

BARRY RITHOLTZ (00:29:23): I was gonna say — Omani is his new name, his post-retirement name.

JASON WENK (00:29:26): And I love him dearly. But I remember, I met him very early in building Altruist, and we met for coffee in Venice, California, where the company was started. And Omani looks at me after I explained the company, and he’s like — pardon my French — “This is the craziest effing idea I’ve ever heard. I’m in. How do I give you money?” I think there’s a certain number of people who — when we’ve been doing this a long time, you eventually become numb to the status quo. And the status quo was totally shitty, right? It was not good for anybody.

BARRY RITHOLTZ (00:29:59): Except for the custodians themselves.

JASON WENK (00:30:00): Yeah, there was one party that really was happy with the status quo, right? And so I think as soon as we shed a little bit of light — now, there’s a ton of challenges you have to overcome, but again, there was no doubt in my mind this was gonna work when I started.

BARRY RITHOLTZ (00:30:11): You mentioned Robinhood and zero commission, which I wanna say was 2014 or 2015, and then Schwab rolled out commission-free trading in 2019. What did that shift in cost structure do to the relationship between investors and custodians, advisors and custodians? Did that change the way everybody looked at this? Or was this just, okay, I guess this is an even lower-margin business?

JASON WENK (00:30:42): So I think that’s a huge misconception. What’s interesting is that I wrote this piece in 2018, and we had one of our designers draw an infographic behind it. And it was the classic tip of the iceberg, where we showed what you see above the waterline and then what exists below the waterline.

BARRY RITHOLTZ (00:31:04): I just did one of those two weeks ago.

JASON WENK (00:31:06): It’s a pretty metaphor.

BARRY RITHOLTZ (00:31:08): It really is just so perfect — hey, here’s what you’re focusing on, but you gotta look at the things that matter even more.

JASON WENK (00:31:15): So we did this for custodians. And the thing people saw was the commission. So there was this belief — and advisors even didn’t know the facts. They would go to clients and say, hey, when you work with us and our independent third-party custodian, here’s how they get paid: they get paid $7 if you do a trade. It’s a pretty cheap, one-price —

BARRY RITHOLTZ (00:31:36): What about spreads? What about payment for order flow? I mean, the big money — the commission is just a break-even.

JASON WENK (00:31:42): A hundred percent, right. If you look at the big public companies that were in the space, maybe five to 10 percent of the revenue was from transactions, and commissions were maybe half of the transaction revenue.

BARRY RITHOLTZ (00:31:55): And that’s before we get to the float, which everybody loves.

JASON WENK (00:31:57): Correct. So there’s a ton of things that had, I’d say, historically been ignored or unknown. The biggest revelation when everybody went commission-free was that people started asking the question, well, how the heck do you make money? How does this business actually work if you’re giving away everything for free? Only then did people start to go, oh, wait a minute — that wasn’t even how you made money. That was literally just a complete smoke-and-mirrors way to fool me into believing you only made $7 a trade, when the reality was all of the real money was made by paying me 0.01 percent interest on my idle cash; making me trade whole shares, which makes me have more cash in my account than I really should; making me buy these different funds that all have a bunch of conflicts of interest through all of their various forms of 12b-1 and 15c-3 revenue-sharing agreements — just very esoteric stuff that very few people ever talk about. And to your point, on float and liquidity through PFOF — payment for order flow.

It really opened everyone’s eyes to the fact that the clearing and custody business, it turns out, wasn’t a high-scale, low-margin business at all. In fact, it was a very high-margin business, and that was just one kind of irrelevant piece that confused people into believing that was the full price of admission.

BARRY RITHOLTZ (00:33:20): I recall a couple of years ago — it was after Schwab went zero-commission, commission-free trading — I don’t remember if it was TD or Schwab, but one of the public companies, in a quarterly earnings report, 57 percent of their gross came from the float — came from what they got paid on the difference between what they were paying investors, 0.0-whatever, and the actual rate that they could generate internally. How does Altruist deal with that?

JASON WENK (00:34:00): So I think the key is doing whatever you’re doing transparently, and whenever you can, giving as much of the economics to the client. I’m a big believer in the flywheel, made popular by Good to Great, one of my favorite books. And our flywheel is: the first spoke is, invest in innovation that drives better outcomes for advisors. The second is, invest in innovation that drives better outcomes for end consumers — the end client. If we do those two things, it will drive the highest satisfaction amongst our user base. This will increase the amount of assets on our platform, which gives us the scale to invest more in innovation — which drives better outcomes for advisors, better outcomes for clients.

If you’re going to do that, you have to earn revenue, of course. But in our case, we built a very integrated wealth platform. So yes, we have custody and clearing revenue. We make money on net interest income — the float, if you will. We make some revenue on payment for order flow, but we built what’s called the Wheel order routing system. It’s 100 percent optimized to drive the best possible execution for every single client transaction. If we happen to get a better execution through Citadel or Jane Street, whomever, we might make a tiny amount — literally measured in fractions of basis points, mills. It’s the lowest amount of revenue we earn, but there is something there. We do earn money, again, on float, but we offer fractional shares, so we have the lowest cash holdings in the entire industry — people can hold virtually nothing. We also have some earnings from things like mutual funds, but we have the lowest amount of mutual funds in the entire industry, because we offer fractional shares — people can buy ETFs, they can buy individual securities. So we have very, very little in the way of rev share through fund companies. But there’s definitely money that is made at that clearing layer.

Where we’ve really innovated is that we also do all of the software layer for advisors, and we offer an asset management layer for advisors. So each component of the Altruist business is generally going to be 60 to 80 percent cheaper than if these things were bought individually. So you may recall, when I shared the story about how you go to a custodian and you say, why can’t you do my fee billing? That makes no sense — you have to buy a third-party software. We built all of these things natively, and most of them are either free or very low cost, because we have this benefit, if you will, of stacking the various forms of services that advisors and their clients need.

BARRY RITHOLTZ (00:36:26): On a modern platform.

JASON WENK (00:36:27): Correct. And we do it with, I’d say, fairly insane amounts of automation. So the knock I made on using PDFs — there’s no PDFs necessary at Altruist.

BARRY RITHOLTZ (00:36:40): You’re not exporting CSVs and then having to upload them to Claude to get a report once a quarter or a year.

JASON WENK (00:36:48): A hundred percent. You can open an entire family’s accounts, do all of their account transfers, link all their bank accounts, and do the whole thing in under two minutes. The accounts are being real-time validated, the transfers are being real-time validated — in 98-plus percent of these workflows, there’s no human being ever involved. So every time we build a new innovation or automation, we’re able to operate with a much higher amount of operating leverage than anyone else in the industry. This allows us to invest back into more innovation, which allows us to offer more services at lower price points.

So look, we earn revenue just like everyone else does. I think one interesting tidbit we don’t talk a lot about is the fact that, on the aggregate, Altruist earns more revenue than, I believe, any other RIA custodian on a per-dollar basis — meaning, per dollar on our platform, we earn more revenue than the big players. And it’s not because we charge more. In fact, we have the lowest fee schedule in the entire industry. But it’s because we do more for those advisors than just provide custody and clearing. We’re offering software and services, AI products, asset management services, automations around things like tax management and tax-loss harvesting. So because people use more surface area, we end up having more — and more diverse — revenue as a business, and we have much better operating leverage, because we have so much automation that we don’t have to hire a lot of people to actually offer this at scale. So these are a lot of the benefits of modern, right? If you build in this day and age, you’re not going to build the same way you would if you did it 50 years ago.

BARRY RITHOLTZ (00:38:17): You are earning more revenue as the custodian per dollar on the platform, yet at the same time the advisor is paying less cost per dollar on the platform — of course, because they’re not working with five or ten third-party add-ons. It’s just one turnkey solution, correct?

JASON WENK (00:38:36): Yeah, it’s material. And consumers, if they’re using the platform correctly, are getting better results as well. Because they don’t have things like cash drag, because they can be more fully invested, because they can reduce the need for third-party investment products — they can hold securities directly on the platform, reducing expense ratios — and because we have automation around tax management, they can drive down the tax consequences of investing materially. So again, it’s one of these things where it almost sounds too good to be true, right? But yes — advisors should be able to run more efficient, better businesses, we can have a great business, and consumers can win, too. That is very much a real possibility. There doesn’t have to be a loser. It’s a win ecosystem.

BARRY RITHOLTZ (00:39:20): Let’s talk about AI and automation and your platform, Hazel. I know my team loves it — everybody’s super positive about it. Is Hazel a standalone AI bet? Is it part of the long-term vision? Is it planning and custody and other services as one seamless workflow on a single platform? Tell us all about Hazel.

JASON WENK (00:39:48): So first, to answer your question: it’s very tightly integrated with Altruist, but it’s available totally separately, so really any wealth manager can use it. We have people using it all over the world, in many different industries. We have large CPA firms that are using Hazel, and obviously large financial advisory firms.

Part of the thinking here is that the Altruist business will eventually be a very large, scaled business with trillions of dollars in assets, but the total size of our industry is going to be tenfold that, right? So we don’t want to limit the power of AI to just whatever percentage of market share Altruist has — we want everybody to benefit from these innovations. And the things that are really cool with Hazel — again, it can be used by any financial advisor, or really a lot of different segments of financial services. It’s been a ton of fun to build. And a lot of what we’re doing is just taking the hardest, most laborious, non-glamorous but important work that used to be really hard to get if you didn’t have tens of millions of dollars, and we’re bringing the unit cost down to like three to five dollars. So you can do incredibly complex tax planning, and do it for, again, effectively a dollar to five dollars. This makes it accessible to everybody. And AI — people have their fears about what could go wrong, but we like to think this is a lot of the “what can go right.”

BARRY RITHOLTZ (00:41:19): Coming up, we continue our conversation with Jason Wenk, founder and CEO of Altruist, discussing how he built the firm to compete with the big guys. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.

I’m Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My guest this week is Jason Wenk, founder and CEO of the new custodian Altruist.

I’ve seen some crazy numbers as to what advisors manage. I don’t wanna talk about mutual funds — I wanna talk about straight-up RIAs, who are your prime clients as a custodian. Ten, 12, $20 trillion — just crazy numbers out there. What is the total addressable market there, and how much does the oligopoly — the big three — have of that total market?

JASON WENK (00:42:17): So the approximate number is 10 trillion today. It’s about 35,000 firms. Roughly half of these firms are SEC-registered investment advisors, meaning —

BARRY RITHOLTZ (00:42:27): More than a hundred million each.

JASON WENK (00:42:28): More than a hundred million. And then the other half are state-registered firms that are sub-100 million. Some of those are just new entrants — firms at their first registration that will probably mature into the SEC within a year or two. And others just operate small, independent businesses serving a loyal but small group of clients.

At the top of the market — I think Pershing oftentimes gets lumped into the big three. They don’t have much market share of the RIA segment. It’s a bit muddy, but the reason is they support all of the big broker-dealers, which usually have a companion corporate RIA, and that’s kind of how they get in here. But for true standalone RIAs, 85 percent of the assets are with just two companies: Schwab being the largest — they’re north of 50 percent market share — and then Fidelity being the second largest. So it’s your very classic disruption setup. If you were to just say, hey, what would be the recipe for disruption? You’d say: big, fast-growing market, dominated by old companies, using old infrastructure, with generally low NPS — low customer satisfaction. That is exactly the market that we are in today.

BARRY RITHOLTZ (00:43:39): Huh. Really, really fascinating. So given the fact that you got to build a clean-sheet custodian — you’re not built on this legacy hardware that can’t do all these things fast and easy — what’s the biggest take-up from advisors? Where are they still inefficient? Is it just paperwork and portfolio management? Is it tax? Is it compliance? Is it client service and disbursements? Where are the biggest advantages? Or is it just the whole thing?

JASON WENK (00:44:11): So we break this down into two elements. With Altruist, we have our core wealth business — this is the custody and the software related to custody. We started there. It’s a super big, hairy build. It just takes a long time — hundreds of thousands of engineering hours. There are no shortcuts. Very expensive, time-consuming.

BARRY RITHOLTZ (00:44:34): Was that a BHAG reference I heard?

JASON WENK (00:44:34): Oh, absolutely. This is as big and hairy as they get, right? And again, there are no shortcuts. But that infrastructure is so critical, because what it allows you to do, if it’s done the right way, is tackle all the other work. So I’ll start with the custody part. You can open accounts super fast and do all of the automation around onboarding clients. This is great, but you only onboard a client once — ideally. And so if you serve a client for 30 years, the custody part is really a pretty small part of the picture. It was a huge friction point, because it was oftentimes one of the first experiences that a client would have with their advisor. And if it was a bad experience — as it often was — it’s usually not fast, you don’t have a lot of clarity: hey, when is my transfer going to be done? Why did this thing get rejected? Why am I redoing this paperwork? So we solved a lot of the infrastructure.

Now, with our AI products — Hazel — we’re tackling the rest of the 30 years, right? So maybe there’s 5 percent or less of a client relationship that’s really connected to the custodian: you’re onboarding the client, you’re setting up rules around trading and rebalancing and tax management. But a lot of the work really is all of the one-to-one, hard-to-scale work. So you meet a new client — they’re a prospect at this point. You need to uncover a bunch of data that they have, you need to then analyze that, build a financial plan, create a proposal. Once they agree to it, then you do that onboarding, and now you have to serve that client for decades. And there are going to be all of these life events that happen, all of these emotions that these folks will live through with you. It could be massive changes in macro conditions; it could be changes to their family — whether it’s death, divorce, new children, etc. There are so many things that happen, and advisors have to be able to react — ideally, be proactive, but react to all these things — and make sure your money’s aligned at all times.

And this is where AI is incredibly powerful, where you can take a ton of that work that used to be heavily compromised… And compromise is interesting, because every advisor, whether they want to admit it or not, historically has been making compromises for their clients. And it goes one of two directions. One compromise is: I wanna save the world, I’ve got a hero complex, I’m gonna take every client under the sun. If I do that, the compromise is I can’t possibly give the highest level of quality, care, and service to every client — it’s just not possible; you can’t earn enough money and revenue from the lower end of your client base. The other compromise might be: I am not willing to compromise on the quality and service and attention, but as a result, I can only serve 50 families, and so my minimum is going to have to be $10 million or something like that. Where the compromise is, I can’t actually give my advice to as many people as I’d like to.

AI is this great equalizer. You think about all the infrastructure we built at Altruist, and you then layer on all of the agents that can do things like gather data for you, build financial plans, build tax plans, help you be incredibly responsive to client emails and questions — to build a level of intelligence across your client base that no human being could ever possibly attain. So it’s very easy to have an incredibly precise and highly personalized perspective on every unique client that you serve. So these are the things that we’re building. I think in the end, the clearing and custody business will end up becoming very agentic. These agents will be the ones who are probably logging on, if you will, and they’ll be performing functions that today humans have to log in to do. But it’s a pretty exciting time to build.

BARRY RITHOLTZ (00:48:22): Really interesting. I recall a couple of years ago — and I don’t wanna put words into anyone’s mouth, but it was the CEO of either BlackRock or Vanguard or somebody that size — was asked, what keeps you up at night? And the answer was cybersecurity and fraud. And I totally understand — no one wants to wake up one day and a billion dollars is missing. How do you integrate that into Altruist? How do you think about the human element — deepfakes and synthetic identity and voice fraud and cloning and all that stuff? What can the modern custodial platforms do that, hey, some of the big guys don’t have the integration with technology to do, to engage in this arms race against the bad guys?

JASON WENK (00:49:18): I mean, I think the biggest reason they’d have that paranoia is that they’re working on a 50-year-old tech stack. And we see this with the latest Anthropic models — you connect those models, they sit on top of some legacy infrastructure, and they’ll find hundreds of critical vulnerabilities that no human being could have ever identified, because the code base is essentially one giant monolithic code base. It is just this huge albatross that these companies have been dealing with for decades. And replatforming is really hard. If you’re already big, you’re at scale, and you’ve got tens of trillions of dollars, it is nearly impossible to replatform and go from physical, mainframe-based technology into a cloud-based infrastructure using smaller, more manageable microservices. So yeah, it’s a huge risk. If I was running a giant old bank or brokerage, I would probably have the same primary paranoia.

If you’re building today, the best defense is oftentimes a strong offense. So why not just build, again in first principles, a bunch of protocols to make it much harder for bad actors to even get in the door? And this is overstating the obvious, but just having modern multi-factor authentication and requirements for security keys — even eliminating some of the highest-risk channels; for example, phone calls are a lot easier to dupe, ironically, than a properly built multi-factor authentication program. So I think there’s a lot that will change. We don’t rest on the fact that, oh, we’re a tech company, therefore we’re impenetrable. Of course we have bad actors trying to come after our clients all the time. And I think that if you’re not building — especially AI that can help identify other AI and other bad actors — you’re in a bit of a quandary. And it’s really hard to do that if your core platform, again, has tens of millions of lines of code written in languages that honestly nobody uses and hasn’t used for decades. That is a major problem with financial services.

BARRY RITHOLTZ (00:51:29): So you’ve raised a decent amount of venture capital money. I wanna say the 2025 Series F gave you a just-under-$2-billion valuation. I think it was the Series F — I don’t remember.

JASON WENK (00:51:42): Yeah, correct. Last year.

BARRY RITHOLTZ (00:51:42): Discuss the need for capital to build out. And we’re not talking about the hyperscalers that are spending ungodly amounts of hundreds of billions of dollars — this is just a nice little startup that’s taking on a couple of big, entrenched companies and working off a clean sheet. What has the capital spend been like on the technology side?

JASON WENK (00:52:08): So we’ve raised a little over 600 million in capital over the last seven years. I don’t think we’ll need any additional capital going forward — we still have a lot of cash on the balance sheet.

BARRY RITHOLTZ (00:52:20): You’re cash-flow positive now?

JASON WENK (00:52:23): Our broker-dealer’s been profitable for about three years.

BARRY RITHOLTZ (00:52:26): Profitable — I wasn’t even talking profitable. I was just asking if you’re at least holding your head above water.

JASON WENK (00:52:31): Yeah. Well, look, in our industry, every broker-dealer’s financial records are public, so you can go look up our balance sheet — it’s not hard to find. But we still use cash on the balance sheet for R&D investments, to keep building more tools. You can imagine, if we backed off from our aggressive building of products and features, it wouldn’t be a hard business to run standalone for decades.

But there’s a serious cost to starting a custodian. Beyond the cost of building all of the technology, there are also the regulatory requirements and the capital requirements. When you run a brokerage business, every time you add a new client, a new dollar to your platform, you have to have reserve capital in your broker-dealer. And so there’s no shortcut. This is something where I tell people every now and again — they’ll ask me, hey, what would it take for someone to compete? I’d say, well, it’ll take about five years and at least $250 million just to have a shot — just to have any shot in the dark of making it. And that assumes, of course, you do it right, and what you build is somehow substantially better than anything else in the market, and you can get enough clients to run it on. But just to give yourself a shot — it’s, again, non-trivial.

And just to pick up on it, ’cause you made a comment about these sort of hyperscalers building these foundation models — I’m not so sure that when we look back in 20 years — or maybe 30 years, 40 years, 50 years, some amount of time in the future — at what were the most impactful companies that made the biggest difference for society, I’m not so sure those are the ones that we’ll be talking about. Really, I think it’ll be businesses like Altruist that we’ll be talking about, and going, wow, they have managed to unlock trillions of dollars for consumers. And that is not something that any of us can be convinced is possible with foundation models yet, at this point. All they are are money-guzzling machines that have yet to figure out how to turn inference into profits. In other words, their costs are higher than what they’re reselling their products and services for. I’m as big a fan and believer and user of AI products as anybody, but when we really start measuring impact — what changes the world — that’s very possible, but there’s nothing proven about it.

What we’re doing is very proven. You can very objectively say, if we give every single client, I don’t know, 1 percent back in economic advantage, and you scale that across trillions of dollars for decades, you can start measuring your impact in hundreds of billions of dollars. That, to me, is more than a small startup. It’s incredibly ambitious, but it’s incredibly good for humanity. I hope more people do this type of stuff.

BARRY RITHOLTZ (00:55:10): That’s Eric Balchunas’ column, which became a book — the Vanguard Effect. I wanna say it was like 2016, 2018: Vanguard has saved $2 trillion in fees for clients. I mean, that’s an insane, insane number. And you guys are looking to push into the same space.

I want to be respectful of your time. Before I jump to my favorite questions, I just have to ask one other question. You’ve built multiple businesses in the wealth management and fintech space. What’s the repeatable lesson that carries over from one to another? Or is each one a completely different animal?

JASON WENK (00:55:51): I mean, these are all pretty connected businesses. If someone looks at the evolution arc of my career, it’s sort of like each time I find a problem —

BARRY RITHOLTZ (00:56:01): Go on to the next one.

JASON WENK (00:56:02): Yeah. You kinda go, okay, well, that was an interesting problem, but this is an even bigger problem, and this is an even bigger problem. I’m curious — now, I think there’s going to be a reasonably good need for a highly specialized LLM, specifically narrowly trained for our industry. I’m not sure the big LLMs will do it, so maybe we’ll do that at some point in the future. But the point is, there’s always something that has the potential to make a bigger impact.

And one thing I’ll say — for me, I don’t spend a ton of time trying to compare what I do to what other entrepreneurs do, so I can’t really say if there’s a lesson to be learned broadly. But with each venture that I’ve been involved with, I’ve started with a pretty simple North Star, which is: I want to help people. These are all mission-driven organizations, and I’m very passionate about that. This allows you to attract other people that are also mission-driven — these are your missionaries versus mercenaries. And we have some of the most incredible people. I could never even dream of assembling a team like what we have at Altruist, but it’s because they share that same core ethos of serving clients, driving better outcomes — again, sort of being on the right side of the customer, doing things that really matter.

BARRY RITHOLTZ (00:57:18): So given that, look out five to 10 years. Where is Altruist? What are you doing? How big is Altruist at that point?

JASON WENK (00:57:28): It’s hard to predict with precision just how big, but I suspect we’ll be very large. If we look at the trajectory of the business today — again, we don’t talk a lot about our numbers publicly, so people have to sort of take Jason’s word for it — but in our first five years of operating, from when we opened our first account, we had more assets on our platform than Robinhood, Betterment, Wealthfront, Public, Stash, M1, and Acorns combined. So when people wonder, is this working? It’s scaling very, very rapidly, and it’s growing at a really, really fast pace. People sometimes don’t understand the sort of network effect you get when you serve advisors and those advisors are growing fast. Firms like yours are growing super fast, the clients are adding deposits to their existing accounts, and the market tailwind is pretty material.

BARRY RITHOLTZ (00:58:19): Fifteen percent a year for the past 15 years.

JASON WENK (00:58:20): Yeah. And it’s better for advisor clients than it is for self-directed clients. So these are all things that create enormous tailwinds for businesses like ours. So I think 10 years out, we’ll be multiple trillions in assets, serving many millions of end clients. And likely, where advisors have kind of capped out at a hundred or 125 or 150 clients, those laws of physics will sort of be removed. And I think that’s a net great thing.

BARRY RITHOLTZ (00:58:44): All right, I wanna be respectful of your time, and I’m gonna jump to our speed round — we’re gonna do these really quickly. Starting with: who are your mentors who helped shape your career?

JASON WENK (00:58:55): So, Nick was our first investor at Altruist. He was also a big supporter of me at my last company. He’s a partner at Venrock, and he’s just awesome.

BARRY RITHOLTZ (00:59:04): What are your favorite books? What are you reading currently?

JASON WENK (00:59:07): Right now I’m reading Life 3.0 by Max Tegmark. It’s a book from 2016, 2017. He’s a professor at MIT and one of the real forward, early thought leaders in AI. There are three phases of AI, and I’d say we’re in Life 2.0 right now — so, human-powered. Go read the book and you’ll find out what comes with 3.0. It’s a good one.

BARRY RITHOLTZ (00:59:33): That’s interesting. And you mentioned Good to Great. Anything else you wanna mention?

JASON WENK (00:59:37): Yeah — these are a little bit cornier, but some of the most important books for me… I’m a total math nerd, so I can live in a Max Tegmark book forever. But I had to learn a lot of soft skills to be a better entrepreneur, and I learned a lot of those from reading Seth Godin’s books. One of my favorites.

BARRY RITHOLTZ (00:59:51): Seth is great — amazing books, great blog as well. Let’s talk about what you’re listening to, streaming, or watching. What’s keeping you entertained on these cross-country flights?

JASON WENK (01:00:02): So I don’t watch much TV, although I did watch your Knicks. Congratulations.

BARRY RITHOLTZ (01:00:07): Talk about perfect timing and a fairly easy path — it was the perfect storm.

JASON WENK (01:00:14): They avoided my Pistons — I’m a Detroit Pistons fan. But yeah, I don’t watch a lot of TV. I do listen to a lot of podcasts. I listen to yours. I’m a big fan of Harry Stebbings, so 20VC is a good one I listen to quite a bit. And then I listen to Lenny’s Podcast — if you’re a tech person; Lenny is a product person who goes deep into how different tech companies are being built, especially product-led companies. So those are some things I listen to a lot.

BARRY RITHOLTZ (01:00:42): Huh, really interesting. Final two questions. What sort of advice would you give to a recent college grad interested in a career in — fill in the blank — entrepreneurship, fintech, or even financial services?

JASON WENK (01:00:55): I think in any career, I would become the most AI-forward person in your field that you could possibly be. It does not matter if you’re working in sales, if you’re working in tech, if you’re working in financial services. If you can become the person who, when you walk into the room, is the absolute master of Claude for your job function, I think that’s one of the most important things for any person. I think young people have an actual advantage there, and it’s one they should definitely be leveraging.

BARRY RITHOLTZ (01:01:25): You’re not gonna be replaced by AI — you’re gonna be replaced by someone who uses AI better than you do.

JASON WENK (01:01:30): It’s getting cliché, but it’s very true.

BARRY RITHOLTZ (01:01:33): And our final question: what do you know about the world of technology, entrepreneurship, or financial technology today that would’ve been helpful back in the two thousands when you were first ramping up?

JASON WENK (01:01:47): I mean, I don’t know that there’s necessarily some innovation that I wish I knew. I just wish I would’ve spent more time getting proximate to really high-caliber people. Now that I’m older and I’ve done a few things, I’ve gotten the chance to meet some just outstanding people. Man, if you can get close to those people early in your career, it’s just going to be such a massive accelerant, because your way of thinking is going to be so much better and sharper and inspired. That’s what I’d do.

BARRY RITHOLTZ (01:02:16): Thank you, Jason, for being so generous with your time. We have been speaking with Jason Wenk. He is founder and CEO of fast-rising custodian Altruist. If you enjoyed this conversation, well, check out any of the previous 648 we’ve done over the past 12 years. You can find those at iTunes, Spotify, Bloomberg, YouTube — wherever you get your favorite podcasts.

I would be remiss if I didn’t thank the crack team that helps put these conversations together each week: Alexis Noriega is my video producer; Anna Luke is my podcast producer; Sean Russo is my head of research. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.

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• 2% of What? Redefining inflation is not the way to achieve price stability. Warsh confirmed that 2% is the target level, but he did not, and has not, confirmed that PCE prices are the yardstick. Aside from reading out results from the FOMC projections that he chose not to participate in, Warsh has not referred to PCE prices once during his confirmation hearing, first press conference, a central banker panel in Sintra, or two days of congressional testimony. PCE inflation is the yardstick at the Fed. That’s a glaring omission for a Fed Chair, and for a person who likes catchphrases, it’s unlikely to be an oversight.  (Stay-At-Home Macro)

• SpaceX Slump Set to Wipe Out $1 Trillion in Value as Shares Slide: SpaceX shares tumbled on Friday, erasing more than $1 trillion in market value from the rocket and artificial intelligence giant’s all-time high. The stock fell 5.4% to $123.99 per share, giving the company a market value of $1.63 trillion. The value stood at $2.64 trillion at the close on June 16, its third day of trading.(Bloomberg).see also SpaceX Bonds Are Trading Like Junk Bonds. What Does That Mean for Investors? (The Globe and Mail)

• Nondiversifiable Risks in Investment Portfolios: The risks you can’t diversify away — geopolitical, systemic, regulatory — and why pretending they don’t exist is the most common failure in portfolio construction. (CFA Institute)

• Can Netflix Become (More Like) YouTube? Faster Than… YouTube is poised to unify the streaming championship belts… (Spyglass)

• How Trump’s Policies Cost US Travel Industry $40 Billion:  Tariffs, toughened borders, and visa policies have pushed the US into a tourism trough. (Bloomberg)

• The Americans Striking It Rich in the Data-Center Buildout: One family sold its struggling farmland for $22 million, joining a new class of multimillionaires who are cashing in on the AI data-center boom.  “Their 89-acre farm in this rural town of 4,000 might be worth more than $20 million. To Marilee and David Kiliti, that ridiculously high price sounded like a bunch of deer bologna.” 96 families in Salem Township, Pa., sold about 1,700 acres to data-center developer QTS for $586 million. (Wall Street Journal)

• Disaster Rehearsal: Faking death at O’Hare’s triennial airplane crash simulation. Morley Musick’s essay in n+1 on the strange ritual of preparing for catastrophes — the drills, the kits, the mental models — and what it reveals about how we process anxiety in an era of compounding crises. (n+1)

• Punctuation: A Generational Divide: Judith Shulevitz on commas, periods, and what texting has done to them. Can parents ever learn to text like their kids? Should they even try? (The Atlantic)

• Could That Museum Visit Help You Live Longer?: The data on arts engagement and longevity is surprisingly robust. Regular museum visits correlate with longer life — even after controlling for income, education, and health. A psychiatrist says engaging with the arts not only helps biologically. It can also make you feel more alive. (Wall Street Journal)

• This World Cup sealed it: Messi is the best male athlete of all time: Messi is the best player at the World Cup, and the best male athlete of all time. Ryan O’Hanlon makes the data-driven case (ESPN)

Video of the day: Why AI Can’t Take Your Job

Be sure to check out the latest Masters in Business with Jason Wenk, founder and CEO of Altruist, a modern custodian built as a clean sheet from the ground up, fully integrated with artificial intelligence. He began his career at Morgan Stanley before launching Retirement Wealth Advisors, and then FormulaFolios. The through-line of his career has been creating lower-cost, tech-enabled, financial advice.

Source: BIS

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• Inside Nokia’s Race to Catch the iPhone and Android Wave: IEEE Spectrum’s oral history of Nokia’s doomed attempt to compete with the smartphone revolution — a masterclass in how incumbents fail even when they see the future coming.  (IEEE Spectrum)

• The CDC Has a Cyclospora Lab. DOGE Downsized It Last Year: Former CDC staffers on the cuts now haunting the outbreak response: “Based on simple math, these outbreak responses—which require rapid, timely responses—are going to be greatly diminished,” the former CDC lab director tells WIRED. (Wired) see also Why Do We Need Explosive Diarrhea to Remind Us Public Health Matters?  Lisa Jarvis on the Michigan cyclosporiasis outbreak and hollowed-out public health. Headline of the day! (Bloomberg free)

• An SEC email address mix-up is causing confusion and threatening to disrupt its proposal to scrap quarterly reporting requirements: The comment (or…comments) period on the semiannual reporting rule closed on July 6, but the email address confusion cropped up on Monday in a letter to the commission from nonprofit investor advocate Better Markets. The letter, addressed to SEC Chairman Paul Atkins and Commissioners Hester Peirce and Mark Uyeda, said the posted email address was “incorrect,” and said the error “undoubtedly deprived some members of the public of the opportunity to express their views on an extensive, far-reaching and dramatic change to corporate reporting that upends half a century of practice.” So on brand…  (Fortune)

• Its the golden age of insider trading:
–Truth Social to sell trading firms ‘fastest’ access to Trump’s posts. Trump Media & Technology Group has unveiled a paid-for, licensed data feed that will give banks and trading firms “the fastest” access ‌to posts from influential Truth Social accounts, such as President Donald Trump’s, whose posts often move global markets. The product, called “Truth API,” will deliver posts from the 10 most influential accounts to customers at a significantly faster pace than a regular push notification on the Truth Social platform, a spokesperson said. (Reuters)
-White House teleprompter operator made more than $100K betting on Trump’s speeches: Gabriel Perez, a technical assistant who has been operating Trump’s teleprompter since 2016, is in talks with federal regulators to settle allegations he used his inside knowledge of the president’s speeches to win more than $100,000. (ABC News)

• Counterfeit Air-Bag Parts Are Killing U.S. Drivers—and the Government Can’t Stop It: Counterfeit airbag parts are killing American drivers, and regulators can’t stem the flow. The Journal investigates the replacement part that might be a grenade. After 10 deaths, regulators are warning the public about airbags in used cars with components marked as made by a Chinese company, but tracing them is difficult (Wall Street Journal)

• For Software Engineers, the AI Reckoning Is Already Here: Artificial intelligence has changed computer programming more than it has any other profession, and coders are transforming right along with it. (Businessweek)

• The Mystery Money Powering Trump’s Second Term: The president and his allies have built a network of groups financed by wealthy donors and businesses that is advancing his priorities with little public disclosure. (Wall Street Journal)

• The Big Read. After the strongman The Magyar revolution: Hungary’s new era What will the dismantling of the Orbán machine lead to? (Financial Times free)

• A Free-Speech Meltdown: PEN America’s president resigned over an article detailing the isolation and exclusion that many Israeli and Jewish writers feel after October 7. (The Atlantic) see also FCC Officials Took Pricey Gifts From Paramount as the Company Needed Approval for Billion-Dollar Deals: ProPublica documents the gifts — Kennedy Center galas, fancy dinners — that Paramount lavished on FCC officials while seeking regulatory approval. The appearance of corruption is indistinguishable from the thing itself. (ProPublica)

• Vinyl in the Veins: Behind the nostalgia lies an uncomfortable truth: every record is made of oil. (Longreads)

Video of the day: We Need to Talk About Louis – Part 1 of 5

People in Many Countries Now View China More Positively Than the U.S.

Source: Pew Research Center

Be sure to check out our Masters in Business this weekend with Jason Wenk, founder and CEO of Altruist, a modern custodian built as a clean sheet from the ground up, fully integrated with artificial intelligence. He began his career at Morgan Stanley before launching Retirement Wealth Advisors, and then FormulaFolios. The through-line of his career has been creating lower-cost, tech-enabled, financial advice.

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~~~

To learn how these reads are assembled each day, please see this.

The post 10 Sunday Reads appeared first on The Big Picture.

This week, I speak with Jason Wenk, founder and CEO of Altruist, a modern custodian for independent financial advisors. We discuss why Jason started the company and his plans to change asset management through technology. He weighs in on the state of RIAs, and how AI is going to change everything.

A list of his current reading/favorite books is here; A transcript of our conversation is available here on Tuesday.

You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube (video), YouTube (audio), and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business next week with Lori Heinel, Global Chief Investment Officer of State Street Investment Management, the asset management arm of giant State Street Corp. She oversees over $5.7 trillion in assets (as of year-end 2025), which includes everything from index funds and ETFs to active strategies, multi-asset solutions, and alternatives. She was named to Forbes’ 2025 “50 Over 50” list.

Current Reading/Favorite Books

Life 3.0: Being Human in the Age of Artificial Intelligence

This Is Marketing: You Can’t Be Seen Until You Learn to See by Seth Godin

Our Mathematical Universe: My Quest for the Ultimate Nature of Reality by Max Tegmark

Good to Great: Why Some Companies Make the Leap…and Others Don’t by Jim Collins

Books Barry Mentioned

The Bogle Effect: How John Bogle and Vanguard Turned Wall Street Inside Out and Saved Investors Trillions by Eric Balchunas

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• The American E.V. Has Been Crushed. Will It Take the U.S. Auto Industry With It? The largest U.S. automakers have backed away from electric vehicles, even as global sales are booming. The decision may make them obsolete. (New York Times)

• AI is changing what we can do. Who we become is still our choice: To understand AI’s effect on moral character, ethicist Kwame Anthony Appiah goes back to John Stuart Mill, and the idea that people are shaped by their choices. (Humanist Review) see also AI isn’t destroying entry-level jobs. It’s changing them: Here are the ways leading companies are already responding to the AI revolution in professional services. (Financial Times)

• From Hong Kong to Xiānggǎng: The Hong Kong of old is over. Go to Xiānggǎng and see for yourself. Stephen Roach on Hong Kong’s transformation into Xiānggǎng — the slow-motion absorption of a once-global city. (Conflict Stephen Roach)

• Shooting Starlink: The “no limits” partnership between Russia and China is taking aim at Elon Musk: Secret documents from a series of clandestine Russian-Chinese military forums reveal a joint plan to defeat Elon Musk’s Starlink and a weapons development partnership far deeper than either country will admit. From air- and missile-defense systems to AI-enhanced drone capabilities, cooperation between Moscow and Beijing is allowing Russian forces to keep pace with Ukrainian innovations while China gains the opportunity to test its wares under combat conditions. Although the threat of increased Western sanctions continues to place constraints on their “no limits” partnership, Russia and China are moving forward with several joint projects — and former U.S. military officers are concerned about Washington’s will to stop them. (The Insider)

• What Even Is Ultraprocessed Food? It’s less a useful label and more of a vibe. One of the biggest boogeymen around these days is ultraprocessed food. You can see dozens if not hundreds of news articles every week decrying the damage that these foods are doing to our health. UPFs are apparently responsible for everything from dementia to heart disease and virtually every other health problem in between. They’re so bad that the U.S. Food and Drug Administration is considering “taking action” against UPFs to stop Americans from eating them. (Slate)

• The Lost Joy of Music Piracy: What.CD, Oink, and the banalities of streaming. As an avid pirate suddenly finding himself in the midst of the music business, Sheridan saw the issue from a different angle than most of the suits he was surrounded by. “I got brought in and we were being flown to New York, the label was taking us out to these expensive dinners and paying for everything—top notch hotels, everyone had private cars and drivers. There was so much money going around, and it wasn’t the artists who were rolling in cash. I remember one of my first comments to Trent [Reznor] was, ‘Now I see why CDs cost 18 dollars.’” (Pigeons & Planes)

• What will be left for us to work on? A thoughtful essay on the shrinking frontier of human-only work as AI capabilities expand. The question isn’t whether machines will take jobs — it’s whether the jobs that remain will be worth doing. My keynote at ICML 2026 (AI As Normal Technology)

• Winners of the International Aerial Photographer of the Year: Stunning images from above — the kind of photography that makes you reconsider what the world actually looks like when you’re not standing on it. A collection of winners and selected images from the competition’s “Top 101” grouping, chosen from more than 1,500 entries by professional and amateur aerial photographers around the world (The Atlantic)

• The 25 most influential works of American culture: A decade-by-decade look at the books, music, art and ideas that shaped society. The Washington Post’s interactive ranking — across music, literature, film, TV, and art. The list will start arguments, which is the point. (Washington Post)

• The bitter history of England vs Argentina, a World Cup semi-final steeped in bad blood: Maradona’s Hand of God, Beckham’s red card, the Falklands — every England-Argentina match carries the weight of decades of grudge. The Athletic previews the latest chapter. (The Athletic)

Video of the day: Does Anyone Know the Real Mick Jagger? He’s Not So Sure

Be sure to check out our Masters in Business this weekend with Jason Wenk, founder and CEO of Altruist, a modern custodian built as a clean sheet from the ground up, fully integrated with artificial intelligence. He began his career at Morgan Stanley before launching Retirement Wealth Advisors, and then FormulaFolios. The through-line of his career has been creating lower-cost, tech-enabled, financial advice.

The Most Valuable Brands in the World

Source: On Deck

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Perhaps the question I hear asked most often is: “Are we in a bubble?” and “What’s happening with this artificial intelligence thingie?”

I picked a few of my favorite charts that shed light on this issue. All of these were pulled from my Q3 Review & Update quarterly call, which I do for RWM clients.

I have heard a lot of kvetching (sorry about the technical jargon) about the S&P’s big 5, mag 7, and top 10. Let’s see if the noise contains any signal.

The top five is now ~27% of the index, about where we were in the late ’60s and early ’70s, but up substantially from where we were in the 1990s and 2000s. What sent concentration down over the 30-years from 1960-90 wasn’t a market crash; I believe it was mostly a serious lack of Anti-Trust enforcement.1

Giant conglomerates were not in favor; M&A was cautiously watched. Most vertically integrated industries were carefully monitored; anywhere the consumer was disadvantaged, they were often not allowed to proceed. You simply could not just merge or buy whoever you wanted.

Concentration really began to tick up after a very significant regime change in M&A and antitrust enforcement in the late ’80s and early ’90s. Fast forward to what’s taken place since the GFC — it’s really gone postal.

Chart via Deutsche Bank Research Institute

I showed Eric Balchunas’ table last year, which revealed the M&A history of the Magnificent Seven: 846 mergers had taken place over the prior 15 years (as of a year ago!). In an era of traditional (read: Serious) antitrust enforcement, we simply wouldn’t have 7 companies become the giant conglomerates that dominate everything (as we have now).

Instead, these companies would be several hundred competitive firms, and if you believe what Adam Smith had to say, this would lead to better services at lower prices. The Mag 7 are in reality something like ~100 standalone companies, most of which would be S&P 500 companies in their own right.2

So while the bears are focused on concentration, they are ignoring the history of how these companies got so huge. The concentration memeists mistake these 900ish companies for just 7 giant vertically integrated firms; that is a conceptual mistake…

~~~

Let’s see how market concentration around the world looks. This chart is quite telling.

Many of the world’s largest and/or most advanced economies have a concentration of their top 10 companies at 60, 70, even 80% — Canada, France, the UK, Germany, Italy, Hong Kong, Taiwan, and Korea. Yes, equity market concentration is something we should all pay attention to — but the US is on the relatively low end of the scale compared to the rest of the world.3

~~~

Perhaps the most interesting answer to the question “Are we in a bubble?” comes from comparing the four biggest companies pre-dotcom dot-com peak versus today.

Intel and Microsoft (before they entered the Dow) sported P/E ratios of 47 and 60, respectively. Oracle was at 120, Cisco, 130.

Today, Microsoft is under 20. Wait — you’re telling me that heading into the dot-com implosion, Microsoft was 3X as expensive as it is today? Apple at 33, pricey, but they are not only one of the biggest companies in the world, but one of the most profitable. Google at 25. Nvidia at 18? That sounds reasonable.

Ed Yardeni reminds us that the forward P/E of the technology sector today is 22; for the entire S&P 500, it is 20.4. In 2000, we were looking at 55 and 25 — Technology was 2.5 X as expensive as it is now.

~~~

Home in on Nvidia, the poster child for the claim of an artificial intelligence bubble. It has grown into its price. It now sports the same P/E ratio it did way back in 2019 — before the pandemic, before the CARES Act, the semiconductor bill, and way before ChatGPT became a household name. It’s back to that exact same P/E ratio.

That is an astonishing data point I find hard to ignore.

Its earnings have caught up to its price — and, more precisely, it’s given up a trillion dollars in market cap this year, so its price has become a whole lot more rational relative to earnings.

Again, when you see a chart like this, does it scream bubble to you?

~~~

Finally, I want to share an astonishing chart via the Deutsche Bank Research Institute. It shows how much the US has been spending on private AI investment relative to the rest of the world. This is a red flag for the people hyper-focused on a bubble.

The more accurate way to think about it (IMO) is that every new technology comes with massive overinvestment and an over-allocation of capital toward that technology.  This turns out not to be a bad thing (unless it’s your capital).

We built thousands of miles of railroad track in the 1800s, and most of those rail companies went bankrupt. The survivors bought up all that railway and connected those tracks into a giant coast-to-coast network for pennies on the dollar. Then came the Telegraph companies; into the 20th century, you had Telephone, Radio, Oil, Automobiles, Television, Aviation, Semiconductors, Computers, etc.

My favorite example is bandwidth and fiber. Global Crossing and Metromedia Fiber laid 1000s of miles of dark fiber for thousands of dollars per mile — then went bankrupt. The telecos and cable cos bought it up for pennies per mile. If that did not happen, YouTube, Facebook, Netflix, Instagram, and all the rest of the bandwidth-intensive firms would not be free or even reasonable.

Would you subscribe to Netflix or Disney+ if they were $400 per month? Without those cheap, fat pipes, those services would not exist. Somebody had to spend billions to build them and then go belly up…

Misallocation of capital is ultimately a positive. My friend Dan Gross wrote a book called Pop: Why Bubbles Are Great for the Economy — this chart could come right out of his book. Look at US investment in AI: it’s 20 times greater than China’s, which in turn is more than double the UK’s, or Canada’s, or France’s.

There’s a reason the US is the leader in this space: so much money is sloshing around, and that money is finding its way to investments like AI. Is there overinvestment in this space? Probably. There is endless amounts of capital. Go to any of the wealthier areas of the country — the Hamptons, Palm Beach, Newport, Nantucket — and it’s astonishing how much money is out there. Some of it buys beach houses, but a lot of it gets misinvested.

~~~

Does that mean this is a bubble? Does that mean AI is going to put everybody out of work?  Does that mean this is a disaster?

Historically, probably not. Most of the data I see does not say we are in the midst of a bubble remotely like 1999-2000.

That doesn’t mean capital won’t get misallocated, and it doesn’t mean this can’t become a bubble.  I can promise you it DOES NOT mean that this bull marekt will not end one day. But so far, so good.

Previously:
The Magnificent 493 (August 12, 2025)

Stocks, Bubbles & Market Myths (January 16, 2026)

Rational Exuberance? (November 24, 2025)

A Short History of Bubbles (October 24, 2025)

NOTE: My biases should be self-evident, but here they are: The firm’s clients are long (a few have long/short holdings with AQR); my 401K is long only; tax-free munis make up my entire bond portfolio. My only short is an ongoing bet against silver (I thought Gold was way ahead of itself at $5,000; then Silver spiked even more, and the trade was obvious).

___________

1. Some of the lower prices and lower concentration seem to be related to both A) De-Conglomerization, and B) higher inflation post 1073 Arab Oil Embargo.

2. Facebook would have to compete not just with TikTok, but with Instagram, WhatsApp and Messenger, Reels, Threads, etc. Google may have started out as search, but its leveraged that into dominant positions in enterprise software, Storage, Google Drive, YouTube, Google Cloud, Chrome, Android, Google Play, Google Maps, Gemini AI, Nest, Motorola, Waymo, Wiz, etc.

The same is true for Amazon — which includes streaming Amazon Prime, mega firm Amazon Web Services,  as a giant standalone entity.

Look at Apple: while the phone is a big part of their revenue, Apple Services alone would be an S&P 500 company. The earbuds, Beats, and the rest of their audio business would be its own standalone company. This is to say nothing of Microsoft, which owns so much stuff it’s almost impossible to keep up.

Google bought YouTube ~20 years ago in 2006 for the then-outrageous price of $1.65 billion. On its own, YouTube would be one of the biggest companies in the S&P 500.

3. The caveat here is that the US population is less than 5% of the global population, and yet we’re 25% of world GDP and 50% of world market cap. Perhaps other countries don’t have room for so many companies, and only their big winners show up. I can’t fully explain it — I can just point out that if this is a problem in the US, it’s a much bigger problem in the rest of the world.

AI Disclosure:  I wrote this myself. I used Claude and ChatGPT for research.

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• Wall Street Traders Are Having Their Best Year Ever: JPMorgan, Goldman and other big banks are raking in trading revenue this year as “the market is clearly extremely risk-on.” (Wall Street Journal)

• Robotaxi Riders Are Falling Asleep, Sparking Frantic 911 Calls: Passengers are also spilling food, getting sick and, in at least two instances, giving birth in self-driving vehicles. (Bloomberg free) see also Popular Cars to Avoid and What to Buy Instead: Skip high-selling models with low scores or reliability ratings and consider these winners instead. Consumer Reports’ annual name-and-shame list — the best-selling models that score poorly on reliability, safety, or owner satisfaction, plus what to buy instead. (Consumer Reports)

• From spicy claypot chicken to ‘digitally enabled technology infrastructure player’: Back in 2017, a tiny US-listed drinks company called Long Island Iced Tea suddenly announced that it would henceforth be known as Long Blockchain Company and promptly jumped as much as 500 per cent.  It ended pretty much as you’d expect. Even the Nasdaq was shamed into taking action, delisting the company from its exchange. The SEC then got involved, and today the company is no more. Did doubt for even a minute t hat this would end in any other way?! (Financial Times)

• This factory was severely short on workers. Then it offered flexible work. With U.S. manufacturers struggling to staff up, a handful are opening the doors to people who may not be seeking a traditional career in the industry or even a 40-hour workweek. (NPR)

• Generative AI Is an Engineering Disaster: A shockingly inefficient trillion-dollar project. (The Atlantic)

• The Misinformation Gap: The Psychologist Who Defined the Dunning-Kruger Effect Says You’re Probably Using It Wrong: Dunning, co-discoverer of the Dunning-Kruger effect, investigates the misinformation gap built into our brains: We don’t know what we don’t know. (ZME Science) see also Too Many Books? Mendel Uminer faced a crisis when his landlord objected to the 10,000 volumes in his New York studio apartment. (New York Times)

• The solarisation of Pakistan’s energy economy: Distributed solar is driving up electricity demand, bringing huge social and economic benefits. (Ember)

• What are the cool kids doing in NYC this summer? Ditching their phones. Pervasive techno-pessimism has sparked a burgeoning analog movement and offline “Summer of Ludd” festival. (Washington Post)

• Why Is Digital Freedom Making Us Exhausted and Sad? From “The Burnout Society” to “The Tonality of Thought,” tech philosopher Byung-Chul Han’s ultra-short books reveal why online liberation has felt more like voluntary captivity. (The New Atlantis) see also A Philosopher’s One-Word Theory to Explain Why the World Feels So Weird: Once you learn what the “uni-context” is, you won’t stop seeing it everywhere. (Derek Thompson)

• How coach-on-pitch Messi undid England’s tactics on the fly: As England conceded control of the World Cup semi-final because of their own fatigue and Thomas Tuchel’s in-game changes, veteran Messi strolled authoritatively and effectively served as Argentina’s on-field coach. So how did Messi find and exploit England’s weaknesses to deliver victory for Argentina in Atlanta? (BBC)

Video of the day: Why Twitter became such a disaster

Be sure to check out our Masters in Business this weekend with Jason Wenk, founder and CEO of Altruist, a modern custodian built as a clean sheet from the ground up, fully integrated with artificial intelligence. He began his career at Morgan Stanley before launching Retirement Wealth Advisors, and then FormulaFolios. The through-line of his career has been creating lower-cost, tech-enabled, financial advice.

Retail Resilience Defies Doomsayers

Source: Federal Reserve Bank of Richmond

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I have been busy on a few projects, most of which are wrapping up. Blogging has been light, but I have some fun things teed up in the near future.

I wanted to come out of hiding to share a few recent media mentions of “How Not to Invest,” along with a broader list of summer reading.

The 7 Best Investing Psychology Books from Next Book included HNTI, plus the latest work from my colleagues Ben Carlson (Risk & Reward) and Nick Magiulli (Just Keep Buying).  Along with those three, the top 7 list also includes Nudge by Nobel laureate Richard Thaler; Thinking in Bets by Annie Duke, Fooled by Randomness by Nassim Taleb and Trading in the Zone by Mark Douglas.

The other mention was from Jason Zweig of the WSJ. His Summer Reading List has a dozen books worth your time this summer.

In addition to “How Not to Invest,” it includes Robin Wigglesworth, A Fabulous Debt: The Epic Story of How Bonds Built the Modern World; Joseph Moore, How to Get Rich in American History; Morgan Housel,The Art of Spending Money and Alex Edmans, The Madness of Markets: Why Smart Investors Make Crazy Decisions and How to Exploit Them. 

A lot of good choices!  I have the Wigglesworth and Moore books on my desk, queued up for my hammock reading…

Sources:
Best Investing Psychology Books: 7 for Managing Your Own Behavior
NextBookList, July 19, 2026

A Summer Reading List
by Jason Zweig
Wall Street Journal, July 14, 2026

The post Summer Reading List appeared first on The Big Picture.

• What Americans Need to Understand About China: Ezra Klein interviews former Australian PM Kevin Rudd — one of the West’s most fluent China hands — on the gaps in American understanding that keep producing bad policy. (New York Times)

• Jony Ive is cooking in the OpenAI kitchen. “Perhaps a computer that makes you feel that you want to hug it is in order?” The former Apple design chief is now deeply embedded in OpenAI’s hardware ambitions. What happens when the man who designed the iPhone tries to design the AI device that replaces it? (Feed Me) but see Generative AI Is an Engineering Disaster: A shockingly inefficient trillion-dollar project. The Atlantic’s cover piece argues that generative AI isn’t just overhyped — it’s fundamentally unreliable as engineering, and the industry is in denial about it. The systems don’t work the way their makers claim they do. (The Atlantic)

• Two Million Workers Are Locked Out of an Improving Job Market: The share of job seekers out of work for six months or longer is hovering near highest level in five years. Share of job seekers out of work for six months or longer hovering near highest level in five years The headline numbers look better. But two million people — disproportionately older, less educated, or formerly incarcerated — aren’t benefiting from the recovery at all. (Wall Street Journal)

• Mapping the World’s Prices 2026: Which are the world’s cheapest and most expensive cities? Mapping the World’s Prices, now in its tenth edition, is the definitive guide to quality of life, rental costs and prices for phones, coffee, taxis and more in 69 cities from Abu Dhabi to Zurich. (Deutsche Bank Research Institute)

• JPMorgan is closing in on a $1 trillion market cap after posting record profits: The Wall Street giant’s market cap stood at about $935 billion. It would be the first bank to ever join the $1 trillion market cap club. Jamie Dimon’s bank is approaching a market cap that would have been unthinkable a decade ago. Record profits, dominant market position, and a stock price that reflects both. (Quartz) see also BlackRock Shares Rally After Assets Soar Past $15 Trillion The money manager’s stock rose 6.6%, powering the S&P 500 Financials to a record high (Wall Street Journal)

• Failing is Common, Trying is Rare: Putting in a mediocre effort at a given task is deeply irrational if our goal is success at that task. But often, when we put in a mediocre effort, it’s because we have other covert goals we’re not really acknowledging. The real bottleneck isn’t failure — it’s the unwillingness to attempt anything in the first place. Most people don’t fail; they never start. (Raptitude)

• What Would Jesus Design? A growing number of faith-forward interior designers are decorating homes Christ-first. Turns out it’s as good for business as it is for their souls. Architectural Digest visits the Christian interior-design movement. What would Jesus design? Apparently: lots of neutrals. (Architectural Digest)

• How Ukraine Brought the War to Russia: Long-range drone and missile strikes on Russian soil have shifted the balance of the conflict—will they be enough to end it? (The New Yorker) see also US military smartphones targeted through roaming and ad tech: Cyber attacks tried to track down American personnel in Middle East as Tehran attacked forces in the region. (Financial Times free)

• Researchers are uncovering ADHD’s links to these other health conditions: A growing body of evidence suggests that people with ADHD may be at risk for anxiety, disordered eating, migraines, long covid and other problems. The diagnosis turns out to travel with a surprising amount of company. A useful survey of the emerging comorbidity research. (Washington Post)

• There’s an Injury Epidemic in Pro Sports. There’s Also a Recovery Revolution. Athletes are pushing their bodies to astonishing feats, knowing that medical advances can heal them quickly.Pro sports has an injury epidemic and a recovery revolution running simultaneously. Bodies break faster; the science fixes them faster. (New York Times)

Video of the day: The Billy Joel Interview

Be sure to check out our Masters in Business next week with Jason Wenk, founder and CEO of Altruist, a modern custodian built as a clean sheet from the ground up, fully integrated with artificial intelligence. He began his career at Morgan Stanley before launching Retirement Wealth Advisors, and then FormulaFolios. The through-line of his career has been creating lower-cost, tech-enabled, financial advice.

Capital Markets Strategy. The AI Arms Race

Source: MUFG

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At The Money: When Should Do-It-Yourself Investors Fire Themselves? (July 15, 2026)

DIY investors have been a force in the market, pouring trillions into indexing and remaking asset management. But at a certain point in their lives, their needs become more complex and may require help. How can they tell when it’s time to bring in some professional assistance?

Full transcript below.

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About this week’s guest:

Dr. Jordan Grumet is a physician who works at the intersection of money, mortality, purpose, and regret. His work focuses on internal medicine and hospice care. His recent book is “Taking Stock: A Hospice Doctor’s Advice on Financial Independence, Building Wealth, and Living a Regret-Free Life.”

For more info, see:

Personal Bio

Professional website

LinkedIn

Podcast

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Find all of the previous At the Money episodes here, and in the MiB feed on Apple Podcasts, YouTube, Spotify, and Bloomberg. And find the entire musical playlist of all the songs I have used on At the Money on Spotify



TRANSCRIPT:

Doctor, my eyes have seen the years
And the slow parade of fears, without crying
Now I want to understand

Barry Ritholtz: Are you a do-it-yourself investor whose needs have become more complex? Is the world making you concerned about your portfolio? How do you know when it’s time to bring in some professional help?

To help us unpack all of this and what it might mean for your portfolio, let’s bring in Dr. Jordan Grumet, a physician whose specialty is the intersection of money, mortality, purpose, and regret. He’s trained and worked in both internal medicine and hospice care. His prior books include Taking Stock: A Hospice Doctor’s Advice on Financial Independence and Living a Regret-Free Life, and The Purpose Code.

So, Doc G, let’s start very basically: what does it mean to fire yourself as a DIY investor?

Jordan Grumet: I grew up in the financial independence, retire early movement. These are the young, scrappy people who are trying to save enough so that they never have to work again. And so we were kind of cheap back in the day, right? This idea of, why pay someone else to do what you can do for yourself? That was good sense, because it made us deeply understand our investments. But as I get older, I realize that sometimes it makes sense to fire yourself. In other words, bring in the help when you need it, because you can’t know everything.

Barry Ritholtz: I know you’ve worked with other financial advisors. What has your own experience taught you about what financial advice should and should not address?

Jordan Grumet: I had Roger Whitney on my podcast, and he is one of the financial advisors I really respect. And we were talking about this idea of the balcony of your life — this idea that you want to stand on that balcony with your financial advisor, look out at your future, and start to plan.

This doesn’t look like, “Boy, I want my net worth to be this many millions of dollars.” It’s more a question of, how do I see the landscape of my life appearing in the future? That has to do with money, but that also has to do with family. It has to do with travel. It has to do with career. And so it’s really this holistic approach. As a doctor, we used to see people and we talked about the biopsychosocial model — the idea of not just seeing what’s hurting a patient, but how they fit in their environment and their needs. And I think with the financial advisor, it’s actually very similar.

Barry Ritholtz: What are the tasks that a smart do-it-yourself investor can probably handle by themselves – and what areas do they tend to run into trouble?

Jordan Grumet: So the truth of the matter is, when you’re young and you’re in the accumulation phase, it’s almost hard to mess up, right? You have to do it. Nick Maggiulli says, “Just keep buying.”

So when we’re young, there’s lots of room for error. Starting to understand the stock market, starting to understand index investing, writing out your investor statement or plan — basically, accumulation is really something that most people can manage.

The caveat is that you have to be able to control your emotions. Anyone who’s going to sell the minute the stock market drops on any given day probably needs financial advice right away. But assuming that you have the solidity of your character enough to be able to realize, okay, the market dropped, but I’m going to stay where I am and leave my money where it is — as long as you can pass that hurdle, a lot of accumulation and being young is quite possible to do it yourself.

Barry Ritholtz: How can a do-it-yourself investor recognize the difference between being reasonably capable and becoming overconfident? What are the red flags that they should pay attention to?

Jordan Grumet: Well, here’s something I think we don’t normally think about. When we’re talking about building wealth, what we’re really talking about is concentrating risk. For your average person, you’re going to be concentrating risk in your career, right? You’re going to be building and getting promotions and making more. You’re going to be concentrating risk in your business if you’re a founder or have a side hustle.

What you don’t want to be doing, unless you’re a professional, is concentrating risk in the stock market. Overconfident people seek alpha. They’re saying, boy, I don’t want to just take what the market has to give me — beta — but I’m going to seek alpha. And that’s exceedingly hard.

Some of the signs are: you’re zooming in and out of positions, you’re looking at lots of multiple stocks instead of thinking about index funds, you’re falling into the trap of FOMO, right? You’re starting to fear missing out. And so you’re making very reactive decisions.

If you’re setting it and forgetting it and maybe evaluating every six to 12 months, you’re probably on the right track. But if you’re looking at that stock market every day and buying and selling on a regular basis, you’re probably overconfident.

Barry Ritholtz: So this conversation is a giant exercise in confirmation bias for me. I’ve spent, I don’t know, three decades telling people you can do it yourself — but there’s an important caveat. You have to have a plan. You have to be disciplined. And when things start to head south, you must manage your own behavior.

Is that oversimplifying advice for do-it-yourselfers, or is it more or less a path to success you’ve seen in your career?

Jordan Grumet: No, I think it’s a beautiful assessment of how things should be.

Really, there are two things you need to watch out for as a young person. The first is your own behavior, which we just talked about. And the other is when you go from accumulation to decumulation — that’s a hard stop in my brain. That’s when you should really say, okay, do I need some professional help?

But when you’re a young person, those are really the two red flags. I think if you can keep those under control, doing it yourself is very reasonable.

Barry Ritholtz: We’ve built a firm over the past 13 years, and perhaps the biggest surprise to me has been how difficult it’s been to get people with plenty of money — lots of runway, they’ll never outlive their cash — to actually turn around and spend the money when they want. Whether it’s taking the whole family back to the old country to see where they came from, or buying a vacation property, or a boat. I got a phone call from somebody who wanted to buy a Ferrari, and I’m not exaggerating: he could buy a Ferrari every month for the rest of his life and never run out of money.

It’s shocking to me how challenging that is. Why is that decumulation phase — why is that spending the money that’s there to spend, even if it’s setting up a trust for your kids and grandkids, or giving it to philanthropy — why is that so challenging?

 Jordan Grumet:  I have this theory, and I call it escape velocity. If you listen to personal finance gurus, if you sit there and debate the 4% rule and talk about safe withdrawal rates and all those kinds of things, you’re under the assumption that the whole idea behind building a net worth is to have enough money so that you can decumulate during retirement.

I think that’s all false. Actually, all of our talk of safe withdrawal rates and net worth — all it is is the amount of money that gives you enough courage to walk away from the life you don’t want and start living the life you do want.  Believe it or not, I don’t even think that amount of money has anything to do with what you’re going to spend. It’s the amount of money that gives you the courage.

What we tend to find is, when people finally get the courage to leave the life that they’re living, that they don’t like, and then live the life they want to live, it’s actually just not that expensive. You can do a lot of the things you love without spending much money.

One thing is, it’s just not that expensive. The other thing is, we actually like having a safety net. People like having a lot of money in the bank — even to the extent that they’ll pass up on things they say they want to do — because that security and that good feeling, that identity of having a lot of money in the bank, actually serves them.

A lot of people see this as negative. And I agree, in a sense: this idea of working so hard and accumulating this much money and not spending it sounds bad at the forefront. But I’ll tell you, I know lots of happy people who are underspending, and yet they’re still happy. They’re still giving to charities. They’re still going on great vacations. They’re just not spending everything down. And one thing I think we need to come to peace with is, maybe that’s okay; maybe it’s fine if you die and you bequeath tons to either your kids or charity. And that just is what it is.

Barry Ritholtz: So I have a family member — I won’t mention their name, but they’re in their 50s, and, I don’t know, maybe the portfolio is $10 million. And I can’t get him — he’s constantly asking me about convertibles, and he sees the cars I drive, which are not crazy expensive but a lot of fun. I can’t get him to spend $25,000 or $50,000 on a convertible that he’s jonesing for and that will have no impact on his net worth. How do you advise a person like that?

Jordan Grumet: I just had a conversation with Jean Chatzky, who wrote a book that’s forthcoming soon called “The Forever Paycheck.” She makes a brilliant point with some of these people. What you have to do is set up a paycheck, so they feel like they have money that they either can spend or have to spend. You take someone with a net worth of $10 million or $11 million. The idea is to structure their assets in such a way that they feel like they’re getting a paycheck every year, and they have the freedom to spend that paycheck till it’s at zero.

Barry Ritholtz:  A muni bond portfolio or something like that, that just kicks out regular yield?

Jordan Grumet: You can do it in so many different ways. You can do it with annuities. You can do it with a mix of annuities, their Social Security, muni bonds, what have you.

Or you can even go the other way, which is have your adviser say, I’m just going to liquidate this much in equities every year, regardless of where the market is, and we’re going to call that your paycheck. It’s funny — this is not a math problem, this is a brain problem. And so the question is, how can you set these things up?

A good friend of mine made the joke. He said, well, I have something called the fun bucket, and I put as much money as I think I can spend every year in the fun bucket, and whatever is left, I either spend it or I have to donate it to a political candidate I hate. And that is the trick he plays on himself to make sure he spends it.

Barry Ritholtz: The fun bucket – I love that idea. So you mentioned the transition from accumulation to decumulation. What are the other big transitions — retirement, inheritance, selling a business, divorce — where the people who are doing it themselves might be most vulnerable?

Jordan Grumet: I think there are really two situations. One is where emotions play a big role. For some people, retirement — they just get very emotional, they don’t make great decisions. A family member dies and they get an inheritance, and you tend to make emotional decisions, especially at the beginning.

One is any place — whether it’s a divorce or a death or even retirement — where you feel exceedingly emotional. This is going to be different for each person.

The other time where I think it’s really important is when the room for error is small. And so, for instance — and this is why I always say, when we go from accumulation to decumulation, we have to be really thoughtful — because you might be depending on health care subsidies. If you decumulate incorrectly, you may find that those subsidies are no longer there.

Or you might be making complex Roth conversions, and if you do that wrong, it can really mess you up and put you in different tax brackets. Or if you have a disabled child, you’re starting to plan for the fact that you’re not going to have any income anymore. The room for error can be very small in those situations. And so that’s an indicator that a financial advisor, a professional — even if all they do is look over your work — is important.

We tend to forget: hiring a financial advisor doesn’t mean you hire them and they do everything for the rest of your life. It’s a continuum. You can hire a financial advisor to look over your work. You could pay them hourly. They can give you some recommendations, and then you can carry it all out yourself. There’s really a continuum of how we use a financial advisor in the first place.

Barry Ritholtz: You mentioned several behavioral mistakes. I’m curious: what do you see as the most common behavioral mistakes from young DIY investors? And what do you see amongst the more financially sophisticated investors?

Jordan Grumet: In the young investors, it’s definitely an overconfidence issue. We talked about this a little bit — it’s the seeking alpha when they should be concentrating on beta. It’s this idea that I know better than everyone else. And maybe they haven’t been around the block enough times to see a stock go to zero.

You see this all the time in alternative assets, too. We’re experiencing this right now with multifamily syndications. For years, people were telling me and everyone else, multifamily syndications are the way to go — very little work, very little risk. And what are we seeing now? We’re seeing some of these go to zero. Literally, people are losing everything. It’s overconfidence, and a lot of times it’s seeking alpha.

As you get older, believe it or not, I think the bigger problem in really mature DIY investors, is you get complacent. The world changes. For instance, I am a big believer in index funds, and I want to believe that index funds will be able to ride that wave for the next 50 or 75 years.

But I’m also open to the idea that we can become complacent, and we have to keep our eyes open, and we have to look for how the world is changing. Will index funds be the way to go in 50 years? I don’t know. I’m going to keep paying attention.

That doesn’t mean I’m changing things. That doesn’t mean reacting to little changes in the market. But I’m keeping my eyes open — especially as I get older and I’m in decumulation, we’re really talking about risk modification. So I’m not as worried about returns as I used to be; I’m worried about losses. I want to modify my risk in such a way that I don’t have those really deep losses anymore. Whereas if my money returns 4% one year, 8% one year, 6%, but the market does 7 or 7.5%, I might be okay with that.

Barry Ritholtz:  Last question. As a physician, you compare good advice to a diagnosis. What should the diagnostic process look like before someone either recommends a portfolio or recommends a change in course of financial behavior? Tell us what that looks like.

Jordan Grumet: So when a person comes into the office and has a medical problem, I can assess that medical problem, give them a quick treatment, and send them off. And that’s very transactional — it solves the problem for the moment, but doesn’t solve the greater problem.

I talked about this idea of the biopsychosocial model. We need to put a person in the context of who they are, who their family is, what their stressors are, and what their goals are.

When you walk into a financial advisor’s office and you’re trying to assess, is this the right financial advisor for you or not . . . One of the first questions they should be asking you is, “Tell me about your goals. What are your dreams?”

It shouldn’t be, “What is your goal net worth? It shouldn’t be, how many millions do you want to have by the age of 50 or 55?” Because that’s only one of many questions. The bigger questions are “What do you want to accomplish? What’s important to you? Who are the important people in your life? And what are the must-haves?”

Once you get past that, that’s when we can start looking at your specific financial goals. What are the trade-offs? Is retirement important to you? Or maybe you’re willing to work longer to enjoy life more now. All of those are bigger questions. It’s equivalent to the biopsychosocial model.

We really have to put people in context, and any good advisor is going to put you in the context of your life and try to stand on that balcony with you, look across the fields of your future, and try to help you plot out that best life — not just financially, but generally.

Barry Ritholtz: To wrap up: if you’re a do-it-yourself investor, there are a handful of mistakes you need to avoid. When you’re younger, you have to be aware of overconfidence and alpha chasing. When you’re older, complexity — changes in life, changes in the world — might lead you to seek additional help.

You can do it yourself if you’re disciplined, have a plan, and manage your own behavior. But there are times when you might need various types of help, and lots of it is available across all sorts of different price points. If you need assistance, go find it.

I’m Barry Ritholtz, and you’re listening to Bloomberg’s At The Money.

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