Talk Your Book: Future Proof Festival

0:04Welcome to Animal Spirits, a show about markets, life and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

0:34We're so excited to be joined today by our friend and co-founder and CEO of Advisor Circle, Mr. Matt Middleton. Matt, welcome to the show. Thanks, guys. Thanks for having me. All right. So for those who are not familiar with Matt, you're definitely familiar with what he's doing with us. Matt is one of the people, main people, founder and CEO behind the best conference in all of wealth management called Future Proof. And it is 50 some odd days away. And I'm getting giddy. I'm super excited. Matt, for people that have not had the pleasure to interact with you, just a quick background. Who are you and how did we form a relationship?

1:17Yeah, absolutely. So my career started at a pretty big media conglomerate called Informa back in 2010. It's a company that really focuses on the B2B space, publishing, live events, business intelligence. And so I started my career there working in the events space, found my way into financial services through payments and fintech. Then Informa in 2015 acquired a company called Inside ETFs, which was the events arm of ETF.com, which is where I met most of the folks that are part of Advisor Circle now. We scaled Inside ETFs to being the largest investment management conference in the world, specifically focused on the exchange-traded funds industry.

2:13After that, that's where we all got connected. We created a fintech event for advisors, Wealthstack in 2019, and then boom, right? COVID happens. The entire events industry completely comes to a halt. How harrowing was that period for you? I mean, obviously, there's a lot of businesses and industries that were just thrown a huge wrench. But for you, what were you thinking at that time? Well, it's interesting. So there's two different thoughts, right? I was thinking something, and then the business was thinking something. And as an industry, everyone was saying, okay, digital, digital, digital is the only thing you could do, right?

2:52So what you actually saw in the market is a lot of new event tech startups come out with the promise of virtual events, live events are dead, who would travel across the country or the globe to go see people, you know, content is pretty much everywhere. And that is all true. So at that time, you know, most folks were scrambling to take what was was in-person meetings and just simply shift that into the virtual world. Very interesting, though, they actually didn't think about the production of a virtual event, and it is far different than what live events are. And so most of those events were very poor in terms of performance and experience.

3:31I did a few speaking gigs virtually, and it was not great. For anyone. It's a bizarre experience, right? And it was always the people weren't quite ready in terms of understanding how to use the Zoom and how to bring people in for questions. And it was always a little awkward. Yes. And yeah, I mean, it still is. And so that virtual event world really hasn't been solved. Thankfully, COVID is behind us in a way where we can have live events again. So at that time, my mind was centered on, do I think live events are going to come back? And the answer for me was yes. And then I looked at, well, what's going to change?

4:09And if you really look at live events in the B2B space, specifically in our area, prior to COVID, they all were the same. There was a lack of innovation. There wasn't a lot of technology. We talked about it a lot on stage, but we actually didn't incorporate it into the events. And so thinking about post-COVID, the focus that we all came and the thesis we all had was simply the experience is going to matter than anything else. And how could we create a live event that is large scale by nature, that covers a large swath of the industry, but that creates an experience that you can't miss? Because if we could do that, we could connect people at the human level, which we hope will allow people to learn better, connect in more unique ways and foster relationships.

4:56And really, that's kind of the genesis behind Future Proof. So as we were thinking about getting the band back together and really going for something big, we learned what not to do. And we learned what we didn't like doing. And not just us, but people went to conferences not to see somebody on stage who they could easily listen to from a podcast. The main draw is the people that are actually inside of our industry and the connections that we can make and learn and share and collaborate. So how did we lean into that idea in a way that is just a complete 180 that existed prior to COVID with the event space?

5:37Yeah, no, it's great. And I don't want to diminish the role of content in live events. But to your point, it is not the most important thing like it used to be. That's a pie chart. And that's not the main portion of the pie. Correct. Yeah. So I mean, with us in Future Proof, from day one, we wanted to be different, right? We called it a festival, which in the industry, when we announced it, it got a lot of people to scoff at and laugh or question it. And we had no shortage of skeptics up until the event last year. And so with future proof - Matt, hand in the air. When you came to us and said, we're going to do this in Huntington Beach.

6:17We have these hotels. We have this restaurant. It's going to be by the beach. When you told Michael and Josh and I this, I was so excited. And then like my flight to the conference, I had a mini panic attack because I was thinking, wait, we've never done anything like this outside before. Is this really going to work? And then I got there. I was timely bullish the entire time. I was like, I had like five minutes of zero head and I told Michael this, but I, and then I got there and I saw everything and how it looked and how like amazing it was going to be. And I was I quickly realized, like, oh, this is going to work.

6:49But I mean, just the whole idea of having people speak outside and be on the beach and how in the sun and how that's going to work. I was like, wait, is this really going to work? And then it like it it just surpassed my wildest dreams. But did you have any thoughts of like, how are we going to pull this off? Yeah. I mean, look, I think the event transformed way more than what we could have expected, one, in a year one event, but two, just in general, right? I think we get a lot of credit for creating this, but it's the community that adopts it and supports it and embraces it that really makes what we all experienced in 2022 and what we'll experience in two months in Huntington Beach.

7:30And so I think it's just the, it was the moment in time where people said, yes, I needed something different. And we were just the ones to say we could create something different. And so I do think there's a lot of nuance that we realized in running an outdoor festival than running a, you know, in a hotel conference that we've worked through. And we'll see some of those, you know, adjustments in 2023. but generally, yeah, I was certainly nervous the same way. It was just like, this is something I've never done before. The traditional conference, whether it's wealth management or probably most other industries, is you're in a hotel ballroom and sometimes it's standing room only and you're next to a friend and you have to whisper, right?

8:19If you're trying to commute, and it's just, that's not why you're there. The best parts are in between the events. And listen, like I said, I'm super excited to see Cliff and Cutlake, but there are other aspects of it. And so taking that where there's no windows and there's limited time to see your friends and to learn about what they're up to, maybe do some business, like that was the focus. And so when we say that this is on the beach, it's literally, it's outdoors. What was it like getting all of the, I mean, it's in parking lots, right? How did that process work out? Yeah. One, we had over 150, it's called third-party vendors, working to produce last year's event.

9:05We'll have even more this year. But it's everything from working with, you're not working with one single hotel. You're working with four. Now we're working with six properties for 2023. You're working to get permits with the city of Huntington Beach to use some of that public space. you're then working to create this space. I mean, everything is a blank canvas. And in one side, that is exciting and freeing. On the other side, it's really overwhelming because there's so much that could go wrong that you don't typically encounter in a traditional event at a hotel. And so, yeah, it's a lot. I mean, our operations teams, you guys know, Lindsay and Co.

9:49I mean, they're the real magicians behind this orchestration. So yeah, it's tough, I would say. I thought the stuff that we really got right last year, I thought was having the big stage right there and having that for main stuff, but also having the smaller breakout stages and the live podcast booth. I thought it was genius to have the food trucks because every other conference I've been to before has been, all right, at noon, everyone's going to have lunch and you wait in line at a buffet or they bring it out to you and everyone eats at the same time. Instead of this, you could kind of graze.

10:16I thought the food trucks was amazing. And you guys shared with us one of the new food trucks coming, which is, I think, going to blow people away and it's going to be awesome. So I thought all that stuff, having the social areas was great. What are some of the things? Because it was an amazing event, but we realized there are some things around the edges that could be improved after living the experience. So what are some things that are going to be a little different this year that's going to make it even better? Well, yeah, we learned a lot, right? I mean, just sheer shading, free space for people to hang if they want to break away from content or people or networking, what have you, and just do some work or answer a call.

10:50You know, having more space where you actually do not have to leave the outdoor area to go back to a hotel to do. More fans and cooling areas, definitely something, you know, we've learned. More SPF sunblock, certainly. That was a busy tent, the Ritholtz sunblock tent last year, right? Yeah. Yeah. But I think I think it's more so of not like the the festival operations. I think it's important to kind of set the stage of what does our industry standard event look like and what does Future Proof do to combat, you know, those those, I guess, challenges. And so, one, think about it. You have an event that, to Michael's point earlier, it's forced.

11:35Everything about it is forced. You have structure where there is certain rooms you have to go into. Most advisors in our space are spammed way before the event, and so they try to avoid the trade show floor at all costs. Vendors are sitting there trying to hand out fact sheets and business cards. And it feels this very forced and inorganic way to meet people, to connect with the industry. On the other side, you're then forced with content for eight to nine hours a day in various rooms, and you're constantly dangling carrots for attendees to do the things you want to do as an organizer. And what we did, as you pointed out, Ben, with Future Proof was we didn't have structured times for food.

12:21We just said, there's food for five hours a day. Go eat when you want. If you want to grab a snack, great. If you want to sit down and have a proper lunch, we have that too. Hey, we have these content sessions. They're far ranging in topics and people. Not everything's going to be applicable for you, but that is fine. Go peruse and find the areas that are most exciting. Pop in and out because there's no actual rooms that you're going into. Oh, and then we'll have over 150 vendors from all parts of the ecosystem. Go and join them. But instead of having awkward exhibit spaces, create more inviting meeting spaces in the form of cabanas, where you could pop in and have a conversation, but don't feel like you're getting pitched.

13:03And so thinking about really what's wrong with the traditional model and changing that is really how we created Future Proof. And I think most people that have experienced or still experience that traditional model came to Future Proof and were wowed for that. And a lot of people say, oh, it's the sun, it's the beach backdrop. And that's all true. But I do think it's the many elements and activities that really make Future Proof special and got us such a high ranking in terms of customer satisfaction. Matt, what are some of the things, aside from like the little things you mentioned, like, we need more shade, we need more sunblock for my bald head, we need maybe more direction in terms of who's on stage when, like, okay, we're working through that.

13:44What are some of the things that are going to look markedly different this year that maybe weren't there last year that you're really excited about? Yeah, so we've incorporated Breakthrough, which is going to be the wealth management industry's largest meetings program. So think about it, or if you could envision this, an acre-long space dedicated to pre-scheduled one-to-one meetings. So we're going to host over 10 ,000 meetings in those spaces. We have no conflict in terms of other activities going on at these times. So we structure it where it's a part of the agenda and the program. No content will be on stages.

14:23Nothing else will be going on. It's really dedicated to allow people to meet with each other, discover new solutions and technologies, and really grow. I think the biggest issue that events have once they get to a certain size is a lot of people go because it's the thing to do, but they actually are leaving the event with a lack of ROI or wondering, I didn't meet anyone new. And that sounds counter to what you're saying, right? Because the larger the event, you should be meeting more people. But human nature is the larger the event, you find your tribe, which is usually people you know, and you hang out with them, whether that's during the day or scheduled dinners.

15:01And so, yes, you're strengthening relationships, but you're actually not expanding your relationships. And this is a B2B event. Our focus here is to connect people, to allow, from an advisor perspective, allow you to grow, allow you to recruit, allow you to retain employees. And then thinking about how do you facilitate that? Well, no one likes to be spammed before the event on LinkedIn, in email, right? The more the sponsors, the more attendees, the more emails, unsolicited emails you receive. It's everyone gets it. It's, it's a, it's a horrible thing to have. And so what we did is with breakthrough.

15:37Matt, I'm still getting those emails from an event that I was at three months ago. Yes, exactly. Circling back. I get it too. Yeah. I get it too. As an event organizer and I attend a lot of events, right? I'll get them from, you know, sales folks that product providers. I'm like, Hey, did you ever look at my website? I am not your client. I think the thing that helps make it not seem so much like transactional and just more of a meeting and talking is the fact that it's so much more laid back. People aren't wearing suits and ties. There might have been a few people that showed up last year and they quickly realized, like, oh, people are in shorts and comfortable here.

16:10Michael and I are in Hawaiian shirts, or, you know, people are in t-shirts. And so it's a little more laid back and you don't feel like there's a transaction. And even with the vendors, a lot of the vendors last year got really creative. There were surfboards and skateboards and someone had a bar at the, you know, so it was more outdoor and there was tents and stuff. And I think the vendors will probably get more creative this year too, now that they've actually seen. Cause I know I'm talking for a lot of them. They realize like, oh, we get it now that we can see it. And now, now we understand it.

16:37Well, I think they'll get more creative. So it doesn't feel like as a transactional in nature and those meetings don't feel like you're being sold to something. It's more of a conversation. I think that helps too. But Matt, with breakthrough, how are you, how is that, how does that come together? Like why, so I'm an advisor or if I were an advisor, Or why would I get, why would I donate my time for, what am I getting for that? Yeah. So there's two parts to this, right? So breakthrough meeting program, facilitating 10 ,000 meetings across the entire ecosystem. We basically put this as a benefit for all attendees.

17:12They can participate in it to, again, like I mentioned, meet new people, you know, meet with the colleagues, whatever it is, it helps facilitate. So we provide an interface for these folks a month before the event. they could see everyone who's attending. There's no messaging, none of the cringe stuff that happens before events or the things that are just time wasted are built in. It's really simply, here's this company, here's these individuals. Do you want to meet with this person? Yes or no. And then the other side, similar to a dating app, you're met with that request and you could decide if you want to accept that or not.

17:47And then the magic is that it coordinates, you know, series of workflows coordinates that meeting on site. So that is the meetings program. There's a component of this, which is called hosted program. And this is to, you know, an incentivization model for both advisors and the industry. And so for advisors, you could come to this event in our hosted program and get a free ticket plus a$750 travel reimbursement to participate in up to eight meetings with select industry participants. Now, the important piece here is this isn't like your timeshare model. This isn't forced engagement. You are basically accepting that you will look at these companies.

18:31And if any of them are interesting to you, you'll take that meeting. And so again, whether you take two, one, or up to the eight, it doesn't matter. You're still provided that free ticket and credit. Wait, hold on, Matt. I want to be very clear that we're not misleading anybody. Do you have to do a minimum of eight or what exactly do you have to do in order to get a free ticket and the$750 voucher? What exactly do you have to do to get that? Yeah. So there is no forced engagement. So you don't have to do anything to get it. You basically have to agree that you will look to get that. So, Michael, example, you sign up for this.

19:07You get a free ticket. You get up to$750 travel reimbursement. You now go and fill out a profile in Breakthrough. At that point, you're met with over 250 solution providers that, in theory, you might want to meet with. You select companies that you are interested in based on what they say in terms of their products and services being offered. Let's say in the rare chance that there is zero companies that you care to meet with there, you're not forced to take a meeting. You now still could use Breakthrough to meet with other folks like other advisors. Maybe you're looking to grow. Maybe you're looking to acquire businesses, what have you.

19:47Several different use cases there. So I could use Breakthrough just as a meeting spot to meet somebody else? Yes, that is really what it's for. It's to make your time on site more efficient, allow you to discover people that aren't in your group of people, and technology is a solution. Now, am I going to be under the sun? Do I need extra sunscreen? Or what does this look like? No. So we have a full acre long area dedicated to space, as I mentioned. We're fully covered, fully fanned and cooled. So we're going to have, I mean, imagine this, literally a carnival style tent where 800 tables are sitting under and every 15 minutes over the course of three daily segments, you have your meetings.

20:36And I mean, quite literally, we have a shot clock. Yeah, we have a shot clock. So like on that 15th minute, that shot clock rings, the alarm goes off and you have 90 seconds to get to your next table. And so it's, I don't want to say speed dating. Well, it's speed dating where you select the date. It is. Yes, it's highly qualified speed dating, if you will. So there's no quotas, but I think we should highly recommend people have to buy an Animal Spirits Tropical Brothers shirt if they want to go. Yes, for sure. That's fair. Did you guys sell out already? I was going to actually buy mine when I saw it on Instagram.

21:09We sold out once, and now we got a new shipment. Better get them fast because they're going quick again. We did restock. We have to have a future-proof capsule. I know, yes. Yes, that would be nice. Anything else that we missed that we wanted to talk about? I think one of my favorite parts about conferences is honestly, Michael and I have been to a number of them in the past year or so, and I think one of the funniest parts about conferences is that you know that there's a handful of people that literally go to every single one of them, right? That these people, this is like part of their job, or they just love it, and they have like the conference circuit down.

21:44They know how to schmooze with people. They know what bars and restaurants to go to. They know where to get drinks. What's the first thing that somebody says to somebody else at a conference? Oh, every, the icebreaker that everyone always says, I always laugh at this is, is when did you get in? Right? You have to ask someone that at a conference and no one cares what the answer is. Right? Yes. Everyone asks that at a conference. So when did you get in? Oh, I got in at 3 a.m. Oh, how's your fly? That's, that's the typical conference icebreaker. Here's what we did not mention that I, I think I sold this short for the first year.

22:15the live music, we had Big Boy on and I was like, oh, cool. I like OutKast. Holy moly. That was so much fun. And this year we've got Method Man and Red Man. And I got to be honest, my knowledge of their music is not where, I mean, I remember OutKast was enormous. I knew all the hits. I got to polish up on my Method Man and Red Man stuff. I don't even know what to expect. I don't know their biggest hits. Yeah, I got to be honest, too. I mean, I had a similar view last year. Like, oh, that would be fun. Yeah, like John handles the music. And so when we went out at the festival. Shout out to Swalls, by the way.

22:54Yeah, absolutely. So when we went out with the festival model, I was like, you handle the music. And obviously, he works close with Josh on that. And so even when they started setting up on that Tuesday, I was like, holy shit, this is like a real concert. So it shocked me as well. But yeah, it was amazing. I think Methamad and Redman are going to be pretty legendary if you think about the age dynamics of our audience. And surprisingly, we ask every single person at registration, what is your favorite genre of music? What type of booze? But the age thing is important, too, because this has to be easily the youngest conference attendees that I've ever been to in terms of average or median age.

23:40It has to be. You know what's interesting? I think last year, it definitely felt that way. Well, look, the average age in our industry is 57. The average age of the event attendee was not 57 last year. It's got to be closer to 45-ish, whatever it is. It's mid-30s to late 40s, I would say, is our sweet spot. I think we're seeing a lot more mature, if that's the right way to say it, mature folks in our space. now be aware of it. I think with the colors, the festival name, how we were very loud with our promotions before experience, it probably turned off a lot of those more conservative or reserved folks.

24:22But now it's something that you just can't miss each and every year. Well, that's such a good point. Listen, we have a ton of fun at the event, but it's not just a party. People don't take time out of their very busy week away from their family, fly across the country for no reason. They're getting something out of it. And it's not just fun. These are forward-thinking advisors that want to stay on top of the latest and greatest and want to stay engaged. And that's who's in the audience. Yeah. I mean, the one critique I think we got last year from media and others, which couldn't be further from the truth, was it's a younger junior audience.

25:01That's not true. And younger is true, but junior is completely wrong. Looking at the numbers now, we'll have over 3 ,000 people there. Right now, we have 60 % are C-level executives at these firms. So these are the decision makers. It's an impressive group of people, yeah. Yeah, they're just not the gray-haired folks that may have started that firm. And what you're thinking about and what we're trying to solve here with Future Proof, Right. There's the festival, the music and the cultural moments, which get a lot of the attention, rightfully so. But at the core, what are we trying to do? We're trying to solve for advisors issues around growth, recruitment, retention and optics.

25:43And I want to spend just one second on optics because most people and most events are very insulated. Right. You bring, you know, groups of people focused either on like investment or practice management or technology. And what we did is said, let's break down all those barriers and let's create an event that very much feels like a consumer-focused event. The reason being is because we want to help with industry optics. When you look across all these surveys, whether you validate them or not, most of these surveys from a trust standpoint, financial services, investment managers, financial planners, right?