Bloomberg Businessweek Weekend: November 7th, 2025

25:28What I would watch for that may be interesting is we could have a situation where if some of the mega cap names, some of the leadership names, continue to have some sort of pullback phase, watch what the rest of the market does. I don't think it's going to be extreme as late 2022, but what was interesting about that low in October of 2022 relative to the low prior to that in June of 2022 is that when you had the real crush, there was greater participation under the surface. That's what you want to look for. That's Schwab Chief Investment Strategist, Lizanne Saunders. We turn now to our conversation with Schwab's Jelena Kerr, head of advisor experience and wealth solutions.

26:11My world is responsible for all things digital and investment products, banking solutions, and how you harness those together and help advisors extend them into their client base, especially the ultra high net worth clients. Who demand a lot of that. A lot. I was shocked to see you've been at Schwab for more than 30 years. I'm an old timer. You were on the advisor services trading desks. The role of an advisor 30 years ago versus now, I mean, those are like two different jobs. Vastly different. Yeah. What are the expectations right now versus what they were 30 years ago? The expectations are frankly a little overwhelming due to the complexity of AI, technology, trying to figure out how to scale your business and still serve your clients.

26:54Those two things don't always just flow together seamlessly. Right. And so the demands on advisors to really understand all the solutions that are out there, I think, can get overwhelming. And it gets overwhelming for me, and I do it every day in my day-to-day job. So I think just their ability to think and learn on their feet as they're talking to different clients who have different needs, because that customization trend is no joke either. Does AI help with customization or does AI help you in your world at all? AI does help us in our world. We are taking it more from an internal view right now.

27:30So think about our service professionals trying to enable them, making sure they serve advisors. We've got a knowledge assistant that's powered by AI. Note taking, those sorts of basic tasks we are using in-house. And we are working with advisors to make sure they know what's out there and how they can take advantage of it in a safe way. You want to measure twice, cut once when it comes to AI. Yeah, we're still finding our way. What about alternatives? This is not a world that 30 years ago, people were thinking about private credits, venture capital, private equity in their portfolios. Now it's like, what?

28:05That's table stakes. It's no longer high yield as being like kind of something out there. It's very different. It is. And alts are a huge part of that. I think some of the complexity, though, is how do you connect the alts to the rest of the portfolio? If you've got a 60-40, alts have a role to play there, but it's not very seamless or operationally sound at this point. What do they want in terms of alternatives? I mean, when we think about alternatives, we think about real estate. We think about some hard assets. I'm just curious, though, in a world where crypto is a bigger part of investing, the private markets world, it seems like nonstop that people have talked about for the last few years.

28:42What do they want in terms of alternatives? It really runs the gamut. I mean, I don't want to give you an answer that's not an answer, but in a way, when you think about some advisors who are just really wanting to start inserting it, but they want to do it in a very well-known name way, then you've got all the way to the other end of the spectrum, advisors who are creating their own alts and weaving that into the platform. But what we're most hearing is they want model flexibility and scale. So they want to be able to pull the alts into the model, do all the management and construction of all of those things in an automated way.

29:16And with illiquid securities, that's a bit of a challenge. But we're all working through it. There's some great leadership at some of our partners. But that's so important for your clients because those are sticky. Those are what cause clients not to move to a different RIA. That's right. Because you can't just get out of them. No. No, you cannot. And I think that's why advisors are at their heart, right? Their fiduciary responsibility is to make sure their clients know they are illiquid. You're going to be in this for a while. And they want to make sure they're educating their clients so that they're not hitting a point where the client's like, oh, yeah, give me all that money.

29:51Sorry, I can't. Can't do it right now. So advisors have always been careful and cautious. But given the fact that these have now gone from like a traditional 5 % component of the allocation to 10 to 20, like it's growing and it's out there. Jelena, just got about 25, 30 seconds. As you walk the floor, what are you hearing from advisors that you're just picking up on in terms of trends or themes? And just quickly, if you could. Yeah, really quickly, automation, which does tie back to the AI thing. But automation of those tasks, construction, management, transactional things that are not adding value and using API connectivity to do that.

30:27It's table stakes, yet people need help implementing them. That's Jelena Kerr, Schwab's Head of Advisor Experience and Wealth Solutions. Coming up, more from Schwab Impact 2025 held earlier this past week. Up next, we move on from equities to fixed income and hear from Schwab's Kathy Jones. This is Bloomberg.

30:49Support for the show comes from Public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S &P 500. Or, if my cash balance goes above$20 ,000, move the excess into my direct index. You approve of the workflow, and your agent handles the rest. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined.

31:28An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures.

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33:00At Venture Global, we think about what can be done, not what's usually done. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy. Whether you're planning a big tech event, launching a new campaign, or just stocking up on team gear, finding the right promotional products makes all the difference. 4imprint offers thousands of options, from on-trend apparel and premium drinkware, to tech, totes, and giveaways, so you can find the right fit for any audience, purpose, or budget.

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34:31Let's get back to some of our conversations that were this past week at the Schwab Impact 2025 event. It was held in Denver, Colorado. We turn now to our conversation on fixed income with Schwab's chief fixed income strategist, Kathy Jones. You know, in general, the economy seems to be chugging along. Right. Okay. It's not great for everybody, but in aggregate, it's good enough. Inflation is stuck at 3 % and kind of edging higher. Where do we go from here? If you've got inflation at 3%, maybe moving up at a 4 % 10-year yield, you know, that's equilibrium right now. We need something to change.

35:12Do you think it's going to change? I think in 2026 we'll probably get enough slowing growth and some easing and inflation that we'll see yields come down. But I think the market was just way over its skis, expecting the Fed to cut over and over again. And it is very difficult to forecast all the time. But now between Tarasoft, no data, policy shut down, policy making shut down, you know, I think the market's just kind of, the bond market's kind of just going, whoa, we're pretty well priced. Let's just sit here and wait for things to happen. Well, so then does that increase the chances, Kathy, you think of the Fed having a policy misstep here?

35:59It's certainly a possibility, but I think my impression that I get from Paul and from many of the other members is, look, we're back to this navigating on a cloudy night thing, right? We don't have information. The path ahead isn't clear. And we've taken a couple of steps. We're not restrictive anymore. So now we pause and we wait and see what happens. We go slow. I'm a sailor, and I've navigated at night, and it can be kind of not so great. you can hit a rock or you could hit something because you just don't read something correctly or things can be smooth sailing. So is there a chance though that I don't like, I think so many people are shocked at that the economy is still growing and we're kind of doing all right.

36:46And the market continues, the equity market to hit highs. Not necessarily what everybody was predicting a few months ago, but I just do wonder what's the thing we could be missing. Well, right now financial conditions have been very supportive. Yeah. And I think that's another reason the Fed can kind of wait. They're saying, well, there's no evidence that the level of interest rates is holding back the economy. People can borrow as much as they want. Except for housing still. Yeah, maybe. But, I mean, you know, even housing is starting to kind of recover because prices are adjusting. So, you know, what is the thing that gets us?

37:24It's never the thing you're looking at in your face, right? It's the thing you don't know. I'm worried about the buildup of debt behind the scenes and the shadow banking system. Private credit? Yeah, to some extent. We know that the quality isn't great there, and we know that some firms are struggling. How would a crisis like that in private credit manifest? You know, I think the issue is who's lending to the private credit folks. Don't the banks lend to the private credit folks? Yeah. So what's their exposure? Well, we don't know. You know, because private credit is private, you know, it's hard to know the quality of the assets on any given day.

38:11Your face is really telling. Are you concerned that the exposure by the banks is a lot more than we know? I think the banks, you know, no. I think the banks are the major banks are fine because against their will they've been forced to hold a lot of capital since the Basel rules and I so I think the banks are okay, but it does get to be sort of a cascade Right, you know one thing leads to another leads to another and a lot of Interwoven lending takes place and there's hidden leverage and that's where you worry about things starting to change I don't have any particular - I didn't mean to put you on the spot.

38:52No, I don't have any particular, like, this guy's going to blow up story to tell. These are the ways in the past we've run into trouble. Somebody gets over-leveraged, asset prices get out of whack, people are overconfident, and then things change. So it kind of brings us back to the Fed and how the Fed works in an environment such as this, in an environment where it's not getting much data. We did hear from Lisa Cook this week. She said she sees the risk of further labor market weaknesses greater than the risk of inflation will pick up. Chicago Fed President Austin Goolsby said he was more nervous about inflation.

39:26Who's right? Yeah, we'll find out. We'll find out when we reach our destination. Yeah, you know, I'm more in Goolsby's camp right now. Although the labor market has clearly softened, some of that is supply side, right? So we got the ADP numbers today as a positive number. Or who's to say that that number isn't consistent with equilibrium in the labor market? So are these numbers accurate now? Well, ADP is as accurate as we can get. Right now. Yeah, at the moment. But when we used to get government data, we used to get the ADP numbers on the day before, a couple days before. Right. Day before? I don't even remember.

40:05It was the same way. Wednesday, right? Yeah, we'd get them a few days earlier. Yeah. And then we'd get the numbers from the government and they would oftentimes not even be close to one another. Yeah. Yeah, and that's true. I think part of that is ADP is private sector only. They didn't include government workers, so there's that discrepancy. And yeah, their surveys are different, but it's all we've got to go on. So it looks like that they're picking back up a little bit. And that's good news. The ISM figures, the manufacturing figures were okay today, with prices paid continuing to climb. That's Schwab's chief fixed income strategist, Kathy Jones.

40:44Return now to our conversation with Sam Kang, head of family office and premier wealth group. So you've got, it's interesting because you've got a small number of clients, but a lot of assets. I mean, we're talking 100 clients and$200 billion in assets under management. Talk about these relationships because are you working directly with the ultra high net worth individuals or are their family offices serving as a conduit to you? Yeah, well, we work with both. So updated numbers, we're actually now at about 140 relationships. We've now grown to$260 billion just within the family office. So 30 % growth just this year.

41:20In terms of assets, we've grown by 50 % year over year. So there is a huge demand. To your question, we work directly with single family offices as well as professionally managed multifamily offices. What is the definition right now of a high net worth individual? Yeah, so typically there's a wide range, but typically what we see is$20 million in investable assets, which really is about$30 million in net worth. You know, is it often the case of just managing everything and anything and then the path of that generational wealth? Give us an idea of what this all entails because it's a lot of moving pieces, if we correct.

41:59Absolutely. It's a lot of moving pieces. It is beyond just financial planning and investments. It gets into reporting, but it goes far beyond that. It gets into family dynamics, family constitutions. Philanthropy that you just spoke about is a key factor in terms of that estate planning. You said family constitutions, meaning what? So creating the core values of a family to identify how you want to spend that money down and how you want to pass that wealth down to generations. So this is really critical, especially with the wealth transfer that's happening. Latest reports, roughly about$124 trillion will be changing hands over the next two to three decades.

42:40That's roughly about$2 to$3 trillion per year for the next decade or so. So what we see is a huge demand, especially in the ultra-high net worth, to create these family constitutions so that they have a plan of how they will pass on the wealth. You know, it's fascinating because we always, I think when we talked about the passing on of generational wealth, we talked about your offspring, right? Your kids, basically. But we've also had a lot of conversations about the wife going. Or your kids' ex-spouses, depending on the prenup rule agreement. Anyway, go ahead. Make them tight. No, but passing on to women who tend to live longer and maybe their spouse, their husband dies.

43:17So talk to us about the specifics. Is a lot of it big families, lots of family members? Is a lot of it thinking about maybe the husband passing it off to the wife? Give us an idea. So first of all, typically people just think it's a passing down to the second and third generation. What's going to happen first is the immediate passing down to the spouse. So as you're saying, roughly about 45 % of that wealth is going to go to that spouse first. Right. And then it will get into the second and third generation. So there's multiple families that will be involved in this conversation. We also see, you know, when we think about the transfer of wealth, there is a lot of conversations about how you create the overall plan in terms of not just the investments, how you think about that investments over two to three decades, but what you want to do with that money.

44:09And do you want to use it for philanthropy? Do you want to create other businesses? So there's a lot of conversations along that line. Okay. Let's cut to the chase here. Death, divorce, taxes. Those are the things that are, you know, those are the things that are like on the radar our family offices. We know that. But I've also heard stories of like, all right, we need the head of our family office to find a new yacht captain right now. Our yacht is in Bermuda. What's the craziest story? There are people who do that. Oh yeah. Move it around. So that is an actual example. We've heard stories where a family fired their entire crew one day, they come to the family office and they say, I need a new crew by tomorrow.

44:50So this is the key distinction there are a lot of independent RIAs that want to get into the family office space. What it really is it's that very first call that these families make. So you not only need to be there for their financial planning, their investments, but you really need to be thorough about all the capabilities that you need to be able to support a whole family. So who are the people support that do that? So are we talking lawyers? Like give us an idea of who has to be all involved in that. Yeah so at the center think of it as a hub and spoke model. So if a center is that trusted advisor, we call that more of an expert generalist.

45:27That person then would reach out to lawyers, estate planners. It could be aviation loans. It could be bill pay, lifestyle, concierge services, health care concierge. So it really goes the complete spectrum. Hey, last question. Our team reporting that at least a fifth of the world's 500 richest people now have a family office helping preserve fortunes totaling more than$4 trillion. That's according to the Bloomberg Billionaires Index. That was surprising to me. Why don't they all have family offices? Only a fifth of them do. Well, I think there's more and more interest in creating that family office.

46:04So along that lines, it's estimated that$17 trillion is within that ultra-high net worth market, but only about$5 to$6 trillion is managed by a family office. So I do think that there is a growing trend for these services. That's Sam Kang, Schwab's head of family office and premier wealth group. That does it for this hour of the special edition of Bloomberg Businessweek, looking at some of our favorite conversations from Schwab Impact 2025 in Denver, Colorado. We're not done yet. Still to come, more on markets with Schwab's head of macro research and strategy. We're talking about Kevin Gordon.

46:38Plus, Fred Kanor, Managing Director of Relationship Management for DAF Giving 360. We'll discuss the growth of charitable giving and use of donor advised funds. You're listening to Bloomberg Businessweek. I'm Tim Stenebeck. And I'm Carol Masser. Stay with us. Today's top stories and global business headlines are coming up right now.

47:01Support for the show comes from Public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge. On Public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English, like if the VIX hits 25, buy a put option on the S &P 500. Or if my cash balance goes above$20 ,000, move the excess into my direct index. You approve of the workflow and your agent handles the rest. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined.

47:39An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., Member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures. WISE is the smart way to manage the currencies you need around the globe. If you've ever sent money internationally using a traditional bank, there's a good chance you've paid more than you realized.

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49:00Join millions saving billions. Be smart. Get Wise. Visit Wise.com or download the Wise app today. T's and C's apply.

49:12At Venture Global, we think about what can be done, not what's usually done. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.

50:07And if you're really watching the bottom line, you'll find standout choices at every price point so you can make a real impact while staying on budget. Plus, you'll get expert help, fast turnaround times, and their 360-degree guarantee. So you can be 4imprint certain your order will arrive on time and look exactly right. Whatever your goal, 4imprint makes it easy to find your perfect promo match. Explore the possibilities today at 4imprint.com. 4imprint. 4certain. This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy.

50:48Plus, global business, finance and tech news as it happens. Bloomberg Business Week Daily with Carol Masser and Tim Stenevek on Bloomberg Radio. We're back on a special edition of Bloomberg Business Week. It's all about some of our conversations from the Schwab Impact 2025 event held this past week in Denver, Colorado. Now, this event held every year is all about bringing together registered investment advisors, financial advisors from across the United States and those in the industry that support them with services and tools. We begin with our conversation this hour with Schwab's head of macro research and strategy, Kevin Gordon.

51:26There's kind of this internal turmoil right now in terms of the environment. Is it inflation we have to worry about? We saw that companies announced the most job cuts for any October in more than two decades. This from Challenger Gray and Christmas, and they did talk about an AI component to it. I can't figure out where we are. What do you think? Where are we? It's like the flavor changes almost literally every day. I mean, it was much more labor-driven. You had the Challenger data you mentioned, but you also had data from Rebellio Labs, which has become much more important to look at in terms of private sector providers and what they're looking at for job growth.

52:02And what they showed for October was the decline of$9 ,000 for payrolls. But for me, the labor market stuff is almost this hall of mirrors because all of the different indicators tell you completely different things as to what's going on in the labor market. If you look at claims data, which we're not getting at the national level, but if you aggregate everything at the state level, it still looks relatively healthy. It's stayed relatively low and stable. If you look at ADP for October, surprise to the upside. If you look at something like Rebellio, though, weak. If you look at something like Challenger, also weak.

52:32The interesting thing with Challenger is, and we always try to make this important distinction and emphasis for investors, they're layoff announcements. They're not exactly cuts themselves. So there is a little bit of a lag there in terms of what you can expect. Yeah, oftentimes 90 days. Right. Plus, I think the one thing that is, I will say, maybe a little bit more worrisome with the one for October relative to what we saw earlier this year, because there was a huge pickup in challenger job cut announcements earlier this year, but most of that was at the federal level that was focused on what everything was going on regarding Doge.

53:02This one's a little bit more broad-based. As you mentioned with the AI overlay, the concentration for the sectors was mostly in tech and warehousing. So clearly there's an AI. Like there's cost-cutting going on by companies. Yeah, absolutely. Which is never a good feeling. No, and I think what's been interesting so far, it's been relatively methodical, where it's gone sector by sector. It hasn't been broad based across the economy, which I know I've talked about this with you guys a lot, and Lizanne, who I work with closely on this, are sort of this concept and thesis of rolling recessions in the economy.

53:28You're still experiencing that to some extent, where it's not filtering up to the surface, and it's not aggregating together to give you a full-blown traditional recession, but it's still happening in pockets. We know her as Lizanne. We all call her Lizanne Saunders, too. That's the lasagna you're referring to. So Kevin, going from the corporate world and thinking about, okay, what are companies doing with employees? How are they hiring? How are they firing? How are they announcing this? To consumer spending because the consumer powers this economy. We're getting some troubling anecdotes. What do you see?

54:00You know what's interesting is that when you look at, I mean, this is where the labor market is so crucial to understand the differences between the stock and the flow. So the stock of labor is still relatively healthy. I mean, you look at a mostly fully employed America, and that's where we're at. Any of the layoff activity we've seen is just at the margin relatively minimal. So if you see relatively low layoffs, despite a very low hiring rate, which we're basically at cycle lows, the fact that the stock of labor is strong means that the aggregate income growth month to month, assuming you stay employed, is relatively strong.

54:28So that's why real spending is still positive. But to your point about some of these anecdotes and some of these cracks under the surface, they are starting to widen a little bit more, especially if you look at that bottom half of what everybody calls now the K-shaped economy. How do economists look at that bottom rung? You could break it down by wealth level. I like the Fed data and looking at percentile levels of wealth. But in terms of overall economic growth and what the Fed, how do you think about... This is the tough part because when you look at... There's a social answer and then there's like...

54:57Well, the multiplier effect up the wealth and the income spectrum is just much stronger. That's just the math. And when you look at how well asset markets have done over the past couple of years, Even this year, the bounce from the April lows, if you're benefiting from that as an asset owner, we have household exposure to equities at an all-time high, beyond where we were just slightly, but still beyond where we were at the peak in 2000. So the wealth effect and the power of the market in terms of an economic driver has become quite strong and quite potent. So I think when you add that together with what is traditionally an economy that has become more, or I shouldn't say traditionally, but over time has become more powered by that wealthy cohort, then you've got a pretty strong effect.

55:35When you say full employment, how do you define that? And how does the Fed define that? Looking at a relatively low unemployment rate to history, compared to history. There has been a little bit of an uptick, but you look at that and you look at overall payrolls, and we're still right around all-time highs. But does it mean the person who has the computer science undergraduate degree is working in computer science or working at Chipotle? Oh, yeah, exactly. Fully employed, just sort of in nominal terms, looking at it face value, a job being a job. whether that job is perfectly matched with what the person is doing.

56:05That's a little bit of a different story. How do we measure that? Because that seems like a concern right now. Well, that, I think, is going to probably start to show up a lot more within the next year in a lot of the labor flows that we're going to get. Because one of the longer-term concerns I have for the labor market is what's happening right now in some of the churn with the pretty significant decline in immigration, but also not sort of the lack of replacement of a lot of those jobs. We're just not seeing that happen. And you see that happening in youth unemployment, black unemployment. of it, it's really starting to spread in some of those pockets.

56:33So the areas that were supposed to benefit throughout this year, as you had more of a domestic strengthening in the native-born labor force, it's not yet happening. So it's a little bit lagged. I hope it's delayed and not completely derailed. But I think in the next year, figuring out replacements for a lot of those lost jobs, that's going to be key. And the reason I brought up the Chipotle computer science example - Well, no, always hungry. But that was what was cited in that New York Times article back in August, computer science degrees having trouble finding those computer science jobs. It's kind of this interesting environment we are when we look at the labor force.

57:04Hey, one of the things I wanted to ask you, your team shared with us that you believe Tina is back. And it's not the Tina that we think about. There is no alternative in terms of like U.S. equities. Yeah. But it's something we started off with about U.S. government data. It is important. There's no alternative. I mean, the depth and the breadth of the government data, you just can't match it. And I think, you know, so far, thank goodness, the markets have been sort of maybe in a negative way whistling sort of past the graveyard of no government data. But, you know, they've been able to manage through with corporate earnings.

57:33I think that's been a nice bridge to get us to when the shutdown ends. I think, though, you know, the longer this goes on, I think what we have to keep in mind and what we've really been emphasizing to our clients is that, you know, when you don't collect this data, yes, you can go back and retroactively get it. But it's not going to be clean. So you're going basically almost a quarter without this really key data. So you're going to have a delayed third quarter GDP report. You're going to have missing data in a way for the fourth quarter. And then you have benchmark revisions coming in February, which kind of throws another wrench into this.

58:05That's Kevin Gordon, Schwab's head of macro research and strategy on site at Schwab Impact 2025. We turn now to our conversation with Schwab's Lisa Salvi, head of business consulting and education. We held the Bloomberg AI finance summit. It was just last month. We asked attendees in financial services, which area do you believe agentic AI holds the greatest potential to impact? And, of course, agentic AI, we're talking about AI systems that can autonomously, and maybe sounds a little scary, but autonomously plan and execute multi-step tasks with minimal human oversight. Yes, that's a definition.

58:39Sounds great. I know, I know. Take over my world. I'm ready for it. So here's what the folks at that summit said, the findings. 62 % Tim said the greatest potential would be in automating repetitive complex tasks and workflows. 23 % said generating alpha through faster, deeper insights. 11 % supporting strategic decision-making across the enterprise. And then 4%, Carol, personalizing client experiences at scale. All right. So let's see what our next guest has to say. She works with independent advisors and their firms. Lisa Salvi is head of business consulting and education at Schwab Advisor Services.

59:10What did you think about those results? They're interesting to me. I lead a benchmarking study here for RAs specifically. It's an industry-leading amount of data. We had about 1 ,300 firms participate this year. 68 % of our firms are using AI in some form. 2025, obviously, that was the year of the note-taker, right? So that's kind of the story. On like a basic level, they're using it? It depends. So basic is just note-taking, right? And then now we're seeing more integration into the CRM system. So we're starting to see that and it's starting to populate tasks and next steps. So a lot of firms are saying that's saving them 30 minutes per client meeting.

59:52So that's a real ROI we're seeing, which you don't always see with AI all the time. Up to, you know, I had one firm last week tell me two and a half hours of time savings. So that's kind of the year, what we've seen this year. I think next year is going to be more of a two pillar type of year where you're going to see a lot of bottoms up type of projects. and kind of citizen programming with the AI tools that are available within firms. But we're also going to start to see looking at larger scale projects that can actually build a transformative change or time savings in the organization that will be approached more like a project.

1:00:31Agentic agents and agentic, that's kind of, we're just stepping into that. So you're starting to play with that? Some firms have it. Yeah. It's still very rare. I think what I would like to see firms do is really start to focus on, well, two things, the boring one, the data. You got to get that data really good because AI doesn't fix bad data. It just amplifies it. Oh, we know. Yeah, I know. Well, what about the finding alpha part of this? Because that surprised me. That's interesting. I don't hear that very much from registered investment advisors. I don't hear as much on the investment side.

1:01:07I hear it more on reading research reports, giving them something to react to and on the portfolio management side. I will say one advisor came up to us and was talking about actually something I had done at a different event where somebody showed a demo and then got into like AI in a big way and said it did a lot of things like computations, different things, tasks, and he was able to create better performance for his investors because it just happened quicker and there are things he wouldn't normally maybe do or spend the time on because he just couldn't and that he did. And then it did create some outperformance.

1:01:45It's interesting. It's where are you comfortable? So a lot of advisors are not wanting it to hit the client yet. So that's going to be where we see some progression. But you can create really comprehensive plans and advisors need to be prepared too. Their clients are going to start doing it and come in with something and that they're going to have to react to. When do you think we start talking about AI? Like we don't talk about the internet today. The idea that it's just this layer of technology that we're all using. I think it's still changing so rapidly. We're still seeing so many changes that we're going to be talking about it for a little while, especially as we get to that authentic layer.

1:02:27So first we're going to have projects. Then we're going to have agents that just do things like one-off tasks, It's like read a research report on its own and email it to you without you asking it to do it. Then we get to what you guys were talking about at the beginning, the agentic layer. We have a whole bunch of these bots that are doing things on their own and making decisions. We have a ways to go. That's Schwab's Lisa Salvi, head of business consulting and education. Coming up, more from our conversations at the Schwab Impact 2025 event in Denver, Colorado. Up next, we hear from Omar Aguilar.

1:02:59He is the CEO of Schwab Asset Management. it. That's next. This is Bloomberg.

1:03:08Support for the show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions, buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English, like if the VIX hits 25, buy a put option on the S &P 500. Or if my cash balance goes above$20 ,000, move the excess into my direct index. You approve the workflow and your agent handles the rest. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined.

1:03:47An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures. Wise is the smart way to manage the currencies you need around the globe. If you've ever sent money internationally using a traditional bank, there's a good chance you've paid more than you realized.

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1:05:07Join millions, saving billions. Be smart. Get Wise. Visit Wise.com or download the Wise app today. T's and C's apply.

1:05:19At Venture Global, we think about what can be done, not what's usually done. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.

1:06:15And if you're really watching the bottom line, you'll find standout choices at every price point so you can make a real impact while staying on budget. Plus, you'll get expert help, fast turnaround times, and their 360-degree guarantee. So you can be 4imprint certain your order will arrive on time and look exactly right. Whatever your goal, 4imprint makes it easy to find your perfect promo match. Explore the possibilities today at 4imprint.com. 4imprint. 4certain. This is Bloomberg Business Week Daily with Carol Nasser and Tim Stenevek on Bloomberg Radio. Back here on Bloomberg Business Week Daily, looking at some of our favorite conversations and highlights from the Schwab Impact 2025 event.

1:06:58It was held, Tim, this past week, of course, in Denver, Colorado. It was a little chilly out there. Well, it was, yeah. It's Colorado. I know, I know. You're the foothills of the Rockies. That's so true. Yeah. 300 days of sunshine a year, though, so that's not bad. No, it was nice to be out West. We turn now to our conversation with Omar Aguilar, CEO of Schwab Asset Management. Well, let's talk about this year because as we were chatting ahead of this interview, you made the joke, I wish we could just end the year right here. Because it's been a good year. It's been a good year. But what does that portend for the next two months?

1:07:30It's been great for investors. It's been great for investors. You actually see this. I would probably say there were many points throughout the year where we all wish things were actually going to be different. And I don't think anybody anticipated, you know, that we're going to be at this stage, you know, so far into this year. You know, from the beginning of the year, the uncertainty around administration to Liberation Day to recovery to, you know, the rise of AI to the economy, the consumer, all the way to where we are now. It's such been a ride that I think investors have taken advantage of.

1:08:01You know, I was thinking about your background, and I just want to lay it out. What you've got, 25 years of investment management experience in equity markets. You've seen a lot of cycles. And I know I think I often reach out to you guys to ask you about this. What do you make of some of the recent stress that we've seen, Omar, whether it was concerns about credit, some of the regional bank issues again? We've heard different stories about whether or not credit concerns are something that might linger for a little bit. And then there's the private credit market. So how do you see it? And do you see it at all impacting kind of the tone of trade and activity on your platforms?

1:08:34Yes, it is interesting because, yes, I have seen a lot of cycles. I have too. So we're just like a good bottle of wine. My gray hairs, I'm taking pride of it. But yes, it is interesting because what I have seen historically is you actually go through the source of what is actually maybe the reason why something cracks. There will always be in every single cycle areas of rest that are what we call idiosyncratic. idiosyncratic. That's just a fancy word. But what that means is that there will always going to be things that will happen that will make people nervous. And we just need to understand whether it's systemic or it's just isolated to a certain area.

1:09:15Interesting enough, you mentioned about the particular credit market. The credit market has been incredibly resilient since 2008. And I think when you look at the current, even the high yield market, it's not as junky as it used to be. I remember back in 2005, 2006, or 2001 and 2002, those were periods where you will really feel that there was a lot of delinquencies, there was a lot of rest, there was a lot of uncertainty around them. When you look at it today, the delinquencies are growing, but not outside of the norm that you will have in this part of the cycle. Why do you think that's not happening?

1:09:50Well, a lot of that has to do with corporate America. Their balance sheets are fairly, fairly strong. And the amount of leverage that you see in corporate America is basically to the lowest in many decades. So what that actually means is that, yes, companies that are taking excess leverage at risk and they're more risky in the way they manage their business, they're clearly more at the risk end. But the majority of America, it's actually pretty solid in terms of how they manage their balance sheets. And in fact, a lot of the reasons we were talking about in other forums about the reasons why tires have not been having the impact as big as it has been, is because profit margins have been very, very benign and have not been affected as much.

1:10:31So does that mean that it's only a matter of time before we actually see inflation as a result of these tariffs when these companies say, we're not going to pad the impact anymore with our healthy profit margins? We're ready to pass these on? Well, we're already seeing some of that. We're already seeing two things. One is we're already seeing companies that are, they're not going to have a choice but actually pass through those increasing prices to the consumers. You know, we have seen those companies that have the biggest, you know, opportunities and the biggest, widest margins. They're already good, but they're ones that are getting squeezed and squeezed.

1:11:05We already see some of that already in the early parts of this earning season. The second part that we're observing is consumption. You know, consumers and the demand destruction starting to happen. You're starting to see a little bit in terms of like, you know, airlines and the tickets. And, you know, you see that actually on my way here for the first time, the plane was not full. That was unique because, you know, for the entire year, you know, you always go there and it's actually a big chunk of it. So you can see a little bit of that consumption starting to just get affected by it. This happened to us last month on our way back from Los Angeles.

1:11:38The person at the gate said, this is crazy. It's been full pretty much until now. The flight was empty heading back. Again, it's an anecdote. We're not hearing it from airlines yet. But airlines have been so smart about keeping those planes packed, right? And so to me, it seems like a clear indicator. I know I said you've seen a lot of cycles, but I think about your background, Lehman Brothers, Merrill Lynch. These are firms that are no longer around, you know, post-GFC, the great financial crisis. So I guess I always try to think, you know, what are we missing in an environment where so many people are like, it's okay, it's okay, it's okay.

1:12:11And I'm like, what are the possible risks, do you think, for investors in this environment? Well, we have seen, and actually we saw this in the last six weeks, if you look at the performance of those companies that did not have positive earnings, negative earnings companies in small and mid-cap sectors, they outperform by almost 20 % in a short period of time. So what is called the junk rat. And in many cases, the concern is that this component of excess goes into areas that goes like that. And that volatility is not healthy. Omar, thank you always. Always appreciated. Omar Aguilar, he's CEO and CIO of Schwab Asset Management.

1:12:49All right, so let's share some numbers with you. Check this out. 16 ,000 independent advisory firms,$5 trillion, Tim, in assets under management. That's the business that John Beatty oversees. He's Managing Director and Head of Schwab Advisory Services. He joins us on-site here at Schwab Impact 2025 in Denver, Colorado. John, you've been at Schwab for close to 30 years. Let's say 28, just so I can't get myself too much. But it's been a great run. 28. 28 years. You've been a member of the advisor services team for 16 years. That's correct. An RIA today versus what it was 16 years ago. They want different things.

1:13:22Well, it's amazing. When I first joined Schwab 28 years ago in the advisor business, we custodyed$100 billion for assets. Now it's$5 trillion. Where is that in market share? So advisor services, Charles Schwab has about a 44 % market share of independent advisors, double the nearest competitor. So we were first to this space back then, almost 38 years ago, and have really focused in on it and made it a main priority here at Schwab. And we've been rewarded by our clients with their growth. You know, my in-laws were talking about their financial advisor. And I was telling them about this conference that I was coming to.

1:14:02And they said, we had a choice when we signed up with this financial advisor who we wanted as a custodian. We could choose Schwab. We could choose another company. That was surprising to me. I didn't know that RIAs had relationships with different custodians. Yes, RA industry is the industry of independent advisors, and independence means that they have choices who their providers are, whether that's custodian or asset management, fintech providers in their back office. I think that is actually the secret sauce of the RIA space in that everybody has to be at their best every day to maintain their seat at the table, whether it's us as a custodian against our competitors or a fintech provider in the back office, an asset manager.

1:14:45So everybody's at their best. That means consumers are getting a great experience. Keeps everybody lean and mean and competitive. So what do investment advisors really need from you guys today? So really where the hallmark is or the foundation and relationship is our custody experience, which means opening accounts, moving money, doing trades, the basics that advisors want to be brilliant in how they serve their clients. So easy, secure, what? Easy, secure, accurate. All of those things are important. That matters. And the last thing an advisor wants to do is have their custodian or any of their providers embarrass them in front of their clients.

1:15:20Right. So we have to be at a 99 % accuracy rate in everything that we do for advisors. And that's why we're winning in the marketplace is those brilliant experiences that we provide. What's the toughest thing in making sure that you guys are hitting on all those things, the accuracy, the security, all of it? Yeah, it's really the move from paper to digital. And that's a change management thing in our industry. So we've made great progress in the last five years on that. Now, for example, moving money, wires, ACH transactions, we're 93%. What's ACH? It's the ability to move money overnight without a wire.

1:15:54Got it. Okay, forgive me. Yeah, it's an industry acronym. Sorry about that. But we're at a 93 % rate there, where just five years ago that was less than 50%. So what digital brings is it brings faster, more accurate, less errors in the ecosystem. New accounts, we're opening on a digital platform at about a 50%, 60 % rate. We'd love to get that in the 80 % to 90s. So that brings modern experiences for the investor as well as the advisor. I was talking to one of the independent advisors before our program started, and he was telling me, he's like, okay, I've got this whole machine that runs Linux that just runs my Bloomberg terminal.

1:16:30Separate machine, separate keyboard. Then I've got my other two monitors. So two monitors over there. Then I've got my other two monitors with basically the Schwab dashboard and everything that Schwab offers that I can then offer to clients. What is that? What is that tool? What is that dashboard? So our website is the place where we serve advisors digitally, schwabadvisorcenter.com. In that tool, you'll find all the logistics of custody, moving money, opening accounts. We have trading capabilities on that website and a lot of other features that advisors can dig in. You know, the industry has changed over the years, and now we have our iRebal capability, which is an automated rebalancing tool.

1:17:13We have Model Market Center where advisors can tap into pre-built portfolios. So advisors are really looking to outsource some of the things that you used to do in-house so that they can use their time in other ways with investors around planning, estate, tax, those value-added places. How much in terms of advisors, from what you guys are seeing, how much are they doing face-to-face or phone calls or actual conversations versus so much that they can do either digitally? I'm just curious what that mix is. Well, it has to be a combination. Because if they want to free up time to do it, yes. Yes, and there's nothing that replaces being in person with your client.

1:17:50And we had Kesley talking about the need for social interaction. So what really advisors are trying to bring is a recipe of digital experiences that take the less value activities, moving money and transactional work, so that they can use their in-time person with clients on more of the intellectual, psychological aspects of investing. AI, very briefly. Yes, going to be really important as we go forward. Not yet? Well, we see advisors, about 50 % of advisors are already using AI-enabled tools in their back office. These are things like recording meetings with clients and taking notes. We see them using tools to read contracts and give summaries.

1:18:32And so it's basic AI, but it's a beginning. And, you know, this is an entrepreneurial community, and so they're leaning into these types of services. How much back and forth is there with advisors and you guys about what we need in terms of AI? It's about our ecosystem. We want to AI enable them on the custody side, and then they need to AI enable their experience with their clients related to the portfolio and other aspects. So it's going to play a big role in this industry as we go forward. John, thanks so much for joining us. Is there a chat bot that's like, hey, Chuck, how do I do this? Yeah, we have a knowledge center tool that our service reps use that is AI enabled that makes us smarter on the phones with advisors.

1:19:10We'll turn that on to advisors at some point. Okay, not yet. Once the learning is done, right? All right. John Beatty, thank you so much. Really appreciate it. Managing Director, Head of Advisor Services at Schwab. Coming up, more from our conversations at the Schwab Impact 2025 event in Denver, Colorado. Coming up, Fred Kanor, Managing Director of Relationship Management for DAF Giving 360, talking about the growth of charitable giving and the use of donor-advised funds. That's coming up next. This is Bloomberg.

1:19:43Support for the show comes from Public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge. On Public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S &P 500. or if my cash balance goes above$20 ,000, move the excess into my direct index. You approve the workflow and your agent handles the rest. Monitoring the market, watching for your conditions and executing your strategies exactly as defined.

1:20:21An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., member FINRA, and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures. Wise is the smart way to manage the currencies you need around the globe. If you've ever sent money internationally using a traditional bank, there's a good chance you've paid more than you realized.

1:21:03hidden fees exchange rate markups and extra charges can quietly add up before your money even arrives there's a better way try wise wise uses the exchange rate you'd usually find on google helping you avoid the unwelcome surprises that often come with international transfers whether you're sending money to family overseas spending while on your holiday abroad or paying bills across borders wise makes moving money simple transparent and straightforward wise offers 24-7 customer service and runs over 7 million daily checks to spot and stop fraud. And most transfers happen in under 20 seconds, which means your money arrives in less time than you've been listening to me.

1:21:41Join millions, saving billions. Be smart. Get wise. Visit wise.com or download the Wise app today. T's and C's apply.

1:21:54Adventure Global. We think about what can be done, not what's usually done. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy. Whether you're planning a big tech event, launching a new campaign, or just stocking up on team gear, finding the right promotional products makes all the difference. 4imprint offers thousands of options, from on-trend apparel and premium drinkware to tech, totes, and giveaways, so you can find the right fit for any audience, purpose, or budget.

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1:23:25We're back here on Bloomberg Business Week looking at some of our favorite conversations. It was all happening at Schwab Impact 2025, the event held in Denver, Colorado this past week. We turn now to our conversation with Fred Kainor, Managing Director of Relationship Management for DAF Giving 360. We talked about a lot, specifically the growth of charitable giving and the use of so-called donor advised funds. A donor advised fund is essentially an account set up to facilitate charitable giving. A donor advised fund is comprised of three different components, contribute, invest and grant. So a donor with the support of its advisor, his advisor or her advisor contributes cash, securities, appreciated assets, including real estate, collectibles, private business interests and the like.

1:24:12We accept those contributions. We liquidate them if they're appreciated assets. We deposit them into the account. They invest those assets for growth while they're in the account. And then when they're ready to grant them to the charity of choice, they can do so in a matter of a couple of days. And the beauty of the account is, from a contributions perspective, it affords the donor an immediate fair market value tax deduction at the time that the contribution is made. and they potentially avoid capital gains tax that they would otherwise pay if they were to sell those assets first and donate the proceeds into the account thereafter.

1:24:43Should everybody be considering donor advised funds or do you need to have a certain level of wealth for it to make sense? He's going to say yes. Yes. Really though? Really? Yes. No, it's a good question. A lot of people think that a donor advised fund account is set up for the ultra high net worth and the ultra wealthy. And the answer is no, it's not. There's no minimum to open an account. You can have an account with, in fact, a zero balance. Many people open an account for testamentary purposes. They will fund it upon their passing to fulfill their charitable legacy. When you're young, you don't necessarily have a lot of assets to give to charity.

1:25:13So you don't have to give$5 ,000,$10 ,000 to open an account. You can open it with a zero balance, and you can fund it over time when you have the assets ready to give. But why open it early if you don't really have anything to contribute to it? It's a great question, and they do it for a variety of different reasons. Like I said, one is when it's used for testamentary purposes, when a person is planning their legacy, when they're planning sort of they're trying to think about what they want their legacy, charitable legacy to be beyond their lifetime. They would fund upon their passing. The donor advice fund account would be named as an officiary of their trust or their estate.

1:25:42And an amount would be put into that with the understanding of exactly how and where they want that to be distributed to charities of choice. So that's what I want to talk about is control here. How much control does the person who put the assets in there, who had the assets, who donated the assets, have where those assets go or where that money goes? That's a great question. So technically, when the assets are put into the donor-advised fund account, they relinquish control of those assets because those assets, we are, as you said at the beginning, we are a 501c3 nonprofit. They are effectively making a contribution to a nonprofit organization, and at that time, they relinquish the control of those assets.

1:26:15However, they are the ones that recommend the investment strategy when the assets are in the account because we want to make sure that they're invested in a manner that's consistent with their personal goals and objectives. and they recommend grants when they choose to have grants go to the charities that they choose to support. So in other words, it's not them making the grant. They are recommending to us as the, if you will, owners of those assets where they want those grants to be made and how. And so while they relinquish the control for a variety of reasons when they actually make the contribution, they make the recommendations on how to invest and where, and they make the recommendations on where to grant and when.

1:26:50So two questions. Where are folks often saying, here's where we want those assets invested? And then where are they saying they want to donate to? That's a great question. And there are a number of different investment options. And it really is up to ultimately the donor and the advisor supporting the donor on how they choose to balance their portfolio in terms of an investment strategy. Because I wonder if it's about growth or it's just about maintaining the principle or a little bit of both. Yes, it's both. Mostly it's both. People want to do a variety of different things. They want to maintain the balance.

1:27:21They want to grow it over time. And an interesting statistic is we have seen almost$4 billion in growth, in incremental growth as a result of utilizing a very effective and prudent investment approach while the assets are in the account. So above and beyond what they've contributed as a result of really effective and thoughtful investment of those assets, we've seen about$4 billion additional ultimately made available to go to charities. So I interrupted you. So where are folks investing and then where are they donating? So they're investing in a variety of ways. Some people want to invest around impact investing, for example.

1:27:53They want to do things with SRIESG. Actually, that's even growing. Impact is an evolving term, and it means different things to different people. But, yeah, that's a big thing. Others are investing in sort of much more conservative investment options where they're much more focused on maintaining the balance and making sure that it's not subject to the same investment volatility as others. So it really, the answer to your question is that they're investing in whatever way they feel most comfortable investing those assets, if it's for impact. And that impact has, you know, a social return in addition to financial return.

1:28:26And in other cases, it's just really maintaining the balance, making sure that they have those assets there to be able to grant to charity whenever they choose. And then ultimately, where does that money go? So, yeah. So then the third component is granting. So we allow grants to any organization that is a 501c3 nonprofit in good standing with the IRS. Our database, we rely on the IRS database that is about 2 million strong right now. So really it's up to, and it's in the flexibility of the solution. It goes to wherever they choose to support it. It could be their house of worship. It could be their alma mater.

1:28:57It could be providing grants to disaster relief organizations when floods occur in Texas or fires occur in California. So it's really incredibly flexible in terms of where and how they're granted. Any place that they cannot donate? Just real quickly. It's not really. As long as it's a 501c3, a nonprofit organization in good standing with the IRS, generally speaking, we fulfill those grant recommendations. All right. So appreciate it. This was really fun. Fred, thank you so much. Thank you guys very much for the time. He is Managing Director of Relationship Management for DAF Giving 360, an independent 501c3 public charity, formerly known as Schwab Charitable.

1:29:35Tim and I here at Schwab Impact 2025. Now, you might recall over the summer, it was in August, President Trump signing an executive order directing the Labor Department to reevaluate guidance to fiduciaries to get them more comfortable with including private credit, digital assets, and other alternative assets in their retirement plans. Now, the SEC may also issue some new rules or guidance to change the definition of accredited investor or qualified purchasers. There's a lot going on that could open up a lot of different types of assets to retail investors. It's something that we've gotten into with the Schwab CEO.

1:30:07And kind of on pause right now, at least at the SEC level because of the government shutdown. Yes. But still, this seems to be the direction that things are moving. All right. We have a great guest to get into on all of this. with some thoughts here at Denver, in Denver at Schwab Impact 2025, Kayla Culver. She's head of risk and controls for Schwab Advisor Services. Good to have you here. There's a lot going on that could change, or there's a lot that is going on that means we won't see changes. How are you assessing kind of the regulatory environment and things that could change, what investors can be investing in?

1:30:39So I feel like for advisors, it's a lot of whiplash right now. If we look at the prior administration and SEC Chair Gensler, there was constantly new rules coming out, and it was just like regulation overload for people. And now under Paul Atkins, we're expecting to see a reduced pace of regulation. So we see it as a good opportunity for advisors to really focus on getting back to basics, making sure that their compliance programs are up to date, that all of their ADVs are accurate. What are ADVs? their disclosure documents that they have to file with the SEC. Really just making sure that their house is in order because we're not under a constant flood of new things coming out.

1:31:22And then we heard you talking about the executive order related to 401Ks and being able to hold alternatives, different things in 401K accounts. That's something that some advisors have interest in for their clients, and it's going to really depend on the plan. Like, is this something that the plan chooses to allow for that client or, you know, for their plan participants? Or does the plan not want to allow that? What direction do you see that moving in? If it does get approved, if it happens, if the SEC says, okay, this is totally fine, is it going to be like us having stocks and bonds in our 401k?

1:31:57I don't think it will be for everybody. I think that we see a good— But will everybody have the option? Well, it's going to be up to the plan administrator. So who's ever sponsoring that plan, they're the fiduciary. they've got the ability to say you're allowed to invest in X or you're allowed to invest in not allowed. So would that be at the company level for a certain company and its employees? Or would it be at whoever they decide is the plan administrator, like an empower, for example? It's really like the plan sponsor who's choosing that. So why would a plan sponsor say no? Why would a plan sponsor say yes?

1:32:32I think they would say yes if they wanted to give their participants additional choices. Some plan sponsors may say no. We see it on the Schwab side where we've got some plan sponsors that have opted in to our personal choice retirement account offering where you can basically have your 401k and self-direct it, invest in stocks and bonds and things that are outside of the plan allocation. It just really depends on their comfort level. Like from a conservative perspective, you might say we want to stick more with these funds that we've chosen. Is it a good thing? I think it's, you know, choice is always a good thing.

1:33:18So more freedom of choice. But as long as people are doing it smartly with the advice of an investment advisor, I think it's a smart decision. But I think there's always additional risk there. Well, the risks are, right, in terms of all the assets. Some things are not as liquid as others. And you need to understand that if you need to be able to get out of something, it's not liquid like stocks and bonds. Exactly. In many ways. And that's why I think doing things with the advice of a professional versus just, you know, your friend told you this was a good investment, it makes more sense that way.

1:33:55On the regulatory front, having advisors have less regulation right now, does more fall on them in terms of making sure that they're doing what's right? Because those regulations aren't necessarily in place. And I know it's kind of a judgment for me to say, you know, equate regulations with right. That's not what I'm going to do. But we know the DNA that Paul Atkins has, the SEC chair, when it comes to this stuff. And he's much more laissez-faire than other SEC chairs in the past. Yeah, so what we keep reminding advisors of is just because there's all this noise about deregulation and less new regulations, you still have to follow the fiduciary duty.

1:34:37You still have, you know, there's still regulations on the books. There's still rules. You still have to do all the things and be making sure you're in the best interest of your client. So just because it's a more like laissez-faire kind of environment doesn't mean you still don't have principles that you have to adhere to. That's Schwab's Kayla Culver, head of risk and controls over at Schwab Advisor Services. And that does it for this special edition of Bloomberg Business Week featuring some of our conversations and the highlights from the Schwab Impact 2025 from the Schwab Impact 2025 event in Denver, Colorado this past week.

1:35:13For all of them, be sure to check it out at Bloomberg.com and wherever you get your podcasts. Hey, and also be sure to tune in to Bloomberg Businessweek Daily, Monday through Friday, starting at 2 p.m. Wall Street time on Bloomberg TV, Bloomberg Radio, and on Sirius XM channel 121. And you can listen to us on Apple CarPlay and Android Auto. It's free in the Apple App Store or on Google Play. You can also watch our daily broadcast on YouTube. Just search Bloomberg Podcasts. And we're simulcast on Bloomberg Originals, available at Bloomberg.com slash originals and streaming platforms like Roku, Amazon Fire TV, Samsung TV Plus, and more.

1:35:49Find our Bloomberg Business Week daily podcast at Bloomberg.com, Apple, or wherever you get your podcasts. And the latest edition of the magazine, it is available on newsstands now at Bloomberg.com and always, always on the Bloomberg Terminal. I'm Carol Masser. And I'm Tim Stenevec. Have a good and safe weekend, everyone. Stay with us. Today's top stories and global business headlines are coming up right now.

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