Challenging The Titans of Asset Management with Jason Wenk

27:42It's a little bit of an oligopoly of Schwab, which is now Schwab TD combined, Fidelity, Pershing Bank in New York. Everybody kind of looked at them and said, there's no way we're going up against those behemoths. You're one of the first companies to say we're going to take on the custodians because their legacy platforms just can't do the things that we can do at scale. How do you think about the challenges of going up against what is Fidelity? 18 trillion and Schwab is 12 trillion. Like these are monster. My bank in New York, Pershing is the oldest bank. That's Hamilton's bank, literally. Like these are not, oh, I think I could disrupt Nokia with a better product.

28:31Now, keys are just the most entrenched, well-thought-of partners for advisors. What gave you the confidence to say, we can beat them at their own game? Yeah, I think a big part of the confidence came from that early advisor reaction. But the truth is that these companies don't have high NPS. These aren't loved by their customers. Net promoter score. Net promoter, okay. Yeah, we do one of the surveys every year. I know that's become super popular everywhere the past 20 years. You don't have to look very far and wide or have too many conversations to hear wealth managers gripe about their custodians.

29:18I mean, again, I was running one of the largest. I think when I stepped down from Formula Flows at the time, it was the fastest growing RIA in the history of the entire industry. You know, we were growing at 16 ,000%, you know, had a three-year growth rate. So it was a true rocket ship, you know, in the sense of like, you know, the RIA space. And I felt tremendous pain. My biggest pain point was my custodian, onboarding new clients. Again, they were making you download forms from a form library, populate the forms by hand, send them out via DocuSign at best, sometimes requiring wedding signatures or medallion stamp signature guarantees.

29:55It was literally going backwards in time 20 years. Meanwhile, you had companies like Robinhood that you could download an app on your phone at 18 years old, have your account open in 30 seconds, fund it with$100, and buy fractional shares of Berkshire Hathaway stock commission-free. I mean, it was so obvious to me that the old way that custodians have been operating, they were still charging commissions using paper. This was definitely not the right way to do things. And if you started looking at the impact to clients, so what is the impact of forcing people to use whole shares? Like why would the big custodians force you to use whole shares versus fractional shares?

30:32Fractional share trading had been around for over 20 years. It's just math. It's not that difficult to execute. Correct. And this is even like hard geometric algebra. It's arithmetic. We're not even talking about exponential algos or anything like that. Precisely. But a lot of it is you just start kind of going, okay, maybe this is a good tinfoil hat theory here. But I'd say, what would the benefit to them be by not enabling fractional shares? Maybe that means more cash will be in client accounts. Maybe they make half of their revenue from the cash spread, right, the net interest income on cash that sits idle in client accounts.

31:06Maybe it also forces you, if you do want to use fractional shares, the only vehicle you can use that trades in fractional shares, in other words, you can do notional dollar-based buying, are mutual funds. And these mutual funds pay tremendous fees for distribution through these brokerage platforms. What if they are not allowing fractional shares because they really don't want to disintermediate packaged products in general, right? So make things like direct securities more accessible to more people. I mean, I just went down this rabbit hole, but the end result is it costs investors a ton of money.

31:42You end up limiting the amount of tax benefits. you end up increasing the average client account size. So if you really want to have great efficacy kind of investment outcomes, you'd have to have tens of millions of dollars. And if you had fractional shares as just one example, all of a sudden, a ton of that entrenched kind of history goes away completely. Everybody can get access to the same type of investment strategies, individually managed accounts, lot level tax trading, so you can get the best possible after tax outcomes. You can compress cash down to the lowest amount. So you're reducing cash drag.

32:17This increases outcomes. So I think in the end, if you put yourself on the right side of the client and you have time on your side, you will absolutely win. I think one of the best examples of that in our industry is Vanguard. What they did, they were laughed at. For decades. A long time. And they didn't even really reach massive scale for 25, 30 years into their journey. But I think, again, if you just put yourself on the right side of the client, the end client, hey, we're going to do things that objectively and obviously produce better outcomes on an after fee, after tax, after cash drag basis.

32:54We're going to provide delightful experiences with a true partnership with our advisor clients. These things will work. And, again, I think you have to have a certain amount of craziness. One of our early investors, you might know, Omani Carson, formerly known as Ron Carson. I was going to say, Omani is his post-retirement name. And I love him dearly. But I remember I met him very early in building Altruist. And we met for coffee in Venice, California, where the company was started. And Omani looks at me after I explain the company. And he's like, pardon my French, but he's like, this is the craziest effing idea I've ever heard.

33:35I'm in. How do I give you part of it? I think there's a certain number of people who just, like, we've been doing this a long time. you eventually become numb to the status quo. The status quo was totally shitty, right? It was not good for anybody. Right. Except for the custodians themselves. There was one party that really was happy with the status quo, right? And so I think as soon as we shed a little bit of light, now there's a ton of challenges you have to overcome, but again, there's no doubt in my mind this is going to work when I started. You mentioned Robinhood and zero commission, which I want to say was 2014 or 2015.

34:05And then Schwab rolled out commission-free trading in 2019. What did that shift in cost structure do to the relationship between investors and custodians, advisors and custodians? Did that change the way everybody looked at this or was this just, OK, I guess this is an even lower margin business? Yes, I think that's it. I think it's a huge misconception. So what's interesting is that I wrote this piece in 2018, and we had one of our designers kind of draw an infographic kind of behind it, and it was the classic sort of tip of the iceberg where we showed what you see above the waterline and then what exists below the waterline.

34:52I just did one of those two weeks ago. Great metaphor. It really is just so perfect to like, hey, here's what you're focusing on, but you got to look at the things that matter even more. So we did this for custodians, right? And the thing people saw was the commission. So there was this belief, and advisors even didn't know the facts. They would go to clients and say, hey, when you work with us and our independent third-party custodian, here's how they get paid. They get paid$7 if you do a trade. It's a pretty cheap price. What about spreads? What about payment for order flow? Correct. I mean, the big money is, the commission is just a break-even.

35:30100 percent right if you look at the big public companies that were in the space they were making maybe five to ten percent of the revenue is from uh from transactions and commissions were maybe half of the transaction revenue right that's before we get to the float which everybody loves so there's there's a ton of like on you know things that had i'd say historically been um ignored or unknown the biggest revelation when everybody went commission free was people started asking the question, well, how the heck do you make money? Like, how does this business actually work if you're giving away everything for free?

36:03Only then did people start to go, oh, wait a minute. Like that wasn't even how you made money. That was literally like just a complete smoke in mirrors way to fool me into believing you only made$7 to trade when the reality was all of the real money was made by paying me 0.01 % interest on my idle cash, making me trade whole shares, which makes me have more cash in my account than I really should, making me buy these different funds that all have a bunch of conflicts of interest through all of their various forms of 12B1 and 15C3 revenue sharing agreements. I mean, just very esoteric stuff that very few people ever talk about.

36:41And to your point on float and liquidity through PFOF, payment for order flow, I mean, it really opened everyone's eyes into the fact that the clearing and custody business, Turns out it wasn't a high scale, low margin business at all. In fact, it was a very high, you know, margin business. And that was just one kind of irrelevant piece that, you know, confused people into believing that was the full price of admission. I recall a couple of years ago, it was after Schwab went free commission, zero commission, free trading. I don't remember if it was TD or Schwab that one of the public companies in quarterly earnings, 57 % of their gross came from the float, came from what they got paid.

37:34The difference between what they were paying investors,.0 whatever, and the actual rate that they could generate internally. How does altruists deal with that? So I think the key is doing whatever you're doing transparently and whenever you can, giving as much of the economics to the client. So I'm a big believer in the flywheel kind of made popular by Good to Great, one of my favorite books. And our flywheel is that the first spoke is invest in innovation that drives better outcomes for advisors. The second is invest innovation that drives better outcomes for end consumers, the end client. If we do those two things, it will drive the highest satisfaction amongst our user base.

38:22This will increase the amount of assets on our platform, which gives us the scale to invest more in innovation, right? So which drives better outcomes for advisors, better outcomes for clients. if you're going to do that you have to earn revenue like of course but in our case we built a very integrated wealth platform so yes we have custody and clearing revenue we make money on net interest income the float if you will we make some revenue on payment for order flow but we built what's called the wheel order routing system it's 100 % optimized to drive the best possible execution for every single client transaction If we happen to get a better execution through Citadel or Jane Street or whomever, we might make a tiny amount, like literally measured in fractions of basis points, mills.

39:09It's the lowest amount of revenue we earn, but there is something there. We do earn money, again, on float, but we offer fractional shares. So we have the lowest cash holdings in the entire industry. People can hold virtually nothing. We also have some earnings from things like mutual funds, but we have the lowest amount of mutual funds in the entire industry because we offer fractional shares. So people can buy ETFs. They can buy individual securities. So we have very, very little in way of rev share through fund companies. But there's definitely money that is made at that clearing layer. Where we've really innovated is that we also do all of the software layer for advisors.

39:45We offer an asset management layer for advisors. So each kind of component of the Altruist business is generally going to be 60 % to 80 % cheaper than if these things were bought individually. So you may recall when I shared the story about how you go to a custodian and say, why can't you do my fee billing? That makes no sense. You have to buy a third-party software. We built all of these things natively, and most of them are either free or very low cost because we have this sort of benefit, if you will, of stacking the various forms of services that advisors and their clients need. On a modern platform.

40:16Correct. And we do it with, I'd say, fairly insane amounts of automation. So the kind of knock I made on using PDFs, like there's no PDFs necessary at all. You're not exporting CSVs and then having to upload it to Claude to get an ROI on your quarter or year? 100%. Yeah. You can open an entire family's accounts, do all of their account transfers, link all their bank accounts, do the whole thing in under two minutes. the accounts are being real-time validated. The transfers are being real-time validated. 98 plus percent of these workflows, there's no human being ever involved in them. So every time we build a new innovation or automation, we're able to operate with a much higher amount of operating leverage than anyone else in the industry.

41:01This allows us to invest back into more innovation, which allows us to offer more services at lower price points. So look, we earn revenue, just like everyone else does. I think one interesting tidbit we don't talk a lot about, but it's the fact that on the aggregate, Altruist earns more revenue than I believe any other RA custodian on a per dollar basis, means per dollar on our platform, we earn more revenue than the big players. And it's not because we charge more. In fact, we have the lowest fee schedule in the entire industry. But it's because we do more for those advisors than just provide custody and clearing.

41:35We're offering software and services, AI products, asset management services, automations around things like tax management and tax loss harvesting. So because people use more surface area, we end up having in more and more diverse revenue as a business. And we have much better operating leverage because we have so much automation that we don't have to hire a lot of people to actually offer this at scale. So these are a lot of the benefits to modern, right? You do it this way in this day and age, you're not going to build the same way you would if you did it 50 years ago. You're earning more revenue as the custodian per dollar on the platform, yet at the same time, the advisor is paying less costs per dollar on the platform.

42:17Of course, they're not working with five or 10 third-party add-ons. It's just one turnkey solution. Correct. Yeah, it's material. And consumers, you know, consumers, if using the platform correctly, are getting better results as well. So because they don't have things like cash drag, because they can be more fully invested, because they can reduce the need for third-party investment products, they can hold securities directly on the platform, reducing expense ratios. Because we have automation around tax management, they can drive down the tax consequences of investing materially. So again, it's one of these things where it almost sounds too good to be true, right?

42:55But like, yes, advisors should be able to run more efficient, better businesses. we can have a great business and consumers can win too. Like that is very much a real possibility. There doesn't have to be a loser. It's a win-win. Let's talk about AI and automation and your platform, Hazel. I know my team loves it. Everybody is super, super positive about it. Is Hazel a standalone AI bet? Is it part of the long-term vision? Is it planning and custodyship and other services as one seamless workflow on a single platform? Tell us all about Hazel. Yeah. So the basic thought, so first to answer your question, it's very tightly integrated with Altruist, but it's available totally separate.

43:44So really any wealth manager can use it. We have people using it all over the world in many different industries. So we have large CPA firms that are using Hazel and obviously large financial advisory firms. So part of the thinking here is that the altruist business will eventually be a very large scaled business with trillions of dollars in assets. But the total size of our industry is going to be tenfold that. So we don't want to limit the power of AI to just the whatever percentage of market share that altruist has. we want everybody to benefit from these innovations. And so the things that are really cool with Hazel is that, again, it can be used by any financial advisor or really a lot of different segments of financial services.

44:31It's been a ton of fun to build. And a lot of what we're doing is just taking the hardest, most laborious, non-glamorous, but important work that used to really be hard to get if you didn't have tens of millions of dollars. And we're just bringing the unit cost down to like three to five dollars. So you can do like incredibly complex tax planning and do it for, again, effectively like a dollar to five dollars. This makes it accessible to everybody. And AI, you know, people have their fears about, you know, what could go wrong. But we like to think this is a lot of the what can go right. Coming up, we continue our conversation with Jason Wenk, founder and CEO of Altruist, discussing how he built the firm to compete with the big guys.

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46:47$40 price includes$5 a month auto pay discount. After 40 gigabytes of premium high-speed data, speeds will be lowered. Coverage not available everywhere. Visit store or boostmobile.com for details. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My guest this week is Jason Wenk, founder and CEO of the new custodian Altruist. I've seen some crazy numbers as to what advisors manage. I don't want to talk about mutual funds. I want to talk about straight up RIAs who are your prime clients as a custodian, 10, 12, 20 trillion dollars. Just crazy numbers out there. What is the total addressable market there and how much does the oligopoly, the big three, have of that total market?

47:39So the approximate number is$10 trillion today. It's about 35 ,000 firms. These firms are roughly half are SEC registered investment advisors. Meaning more than 100 million. More than 100 million. And then the other half are state registered firms that are sub 100 million. Some of those are just new entrants. Like they're just firms that are first registration. They'll probably mature into the SEC within a year or two. And others just, you know, they operate small, independent, you know, businesses serving a loyal but small group of clients. The, yeah, the top of the market, you know, I think it's Pershing gets oftentimes lumped into the big three.

48:18They don't have much market share of the RIA segment. It's a bit muddy, but the reason is they support all of the big broker dealers that usually they have a companion corporate RIA. And so that's kind of how they get in here. But true standalone RIAs, I mean, 85 % of the assets are with just two companies, Schwab being the largest. They're north of 50 % market share and then Fidelity being the second largest. So it's your very classic, you know, disruption. Like if you were to just kind of say, hey, what would be the recipe for disruption? You'd say big, fast-growing market dominated by old companies using old infrastructure with generally low NPS, like low customer satisfaction.

48:59That is exactly the market that we are in today. Really, really fascinating. So given the fact that you got to build a clean sheet custodian, you're not built on this legacy hardware that can't do all these things fast and easy. What's the biggest take up from advisors? Where are they still inefficient? Is it just paperwork and portfolio management? Is it tax? Is it compliance? Is it client service and disbursements? Like, where are the biggest advantages? Or is it just the whole thing? Yeah. So we break this down into two elements. So with Altruist, we have our core wealth business. This is the custody and related software to custody.

49:43We started there. It's a super big, hairy build. It just takes a long time, just hundreds of thousands of engineering hours. There's no shortcuts. Very expensive, time-consuming. Was that a BHAG reference? Oh, absolutely. I mean, this is as big and hairy as they get, right? And there's just, again, there's no shortcuts, but that infrastructure is so critical because what it allows you to do if it's done the right way is it allows you to tackle all the other work, right? So I'll start with this work, right? The custody part, you can open accounts super fast, do all of the automation around onboarding clients.

50:19This is great, but you only onboard a client once, ideally. And so if you serve a client for 30 years, the custody part is really a pretty small part of the picture. It was a huge kind of friction point because it was oftentimes one of the first experiences that a client would have with their advisor. And if it was a bad experience, like – As it often is. Yeah, it's usually not fast. Like it's – you don't have a lot of clarity like, hey, when is my transfer going to be done? Like why did this thing get rejected? Why am I redoing this paperwork? So we solved a lot of the infrastructure. Now, with our AI products, Hazel, we're tackling like the rest of the 30 years, right?

50:58So maybe there's, again, a 5 % or less of a client relationship that's really connected to custodian. You know, you're onboarding the client, you're setting up rules around trading and rebalancing and tax management. But a lot of the work really is all of the one-to-one hard-to-scale work. So you meet a new client. They're a prospect at this point. You need to uncover a bunch of data that they have. You need to then analyze that, build a financial plan, create a proposal. Once they agree to it, then you do that onboarding. And now you have to serve that client for decades. And there's going to be all of these life events that happen, all of these emotions that kind of these folks will live through with you.

51:38So it could be massive changes in macro conditions. It could be changes to their family, whether it's death, divorce, new children. I mean, there's so many things that happen. And advisors have to be able to react, ideally be proactive, but react to all these things and make sure your money is aligned at all times. And this is where AI is incredibly powerful, where you can take a ton of that work that used to be heavily compromised. And compromise is interesting because every advisor, whether they want to admit it or not, historically has been making compromises for the clients. And so kind of one of two directions.

52:16Like one compromise is I want to save the world. I've got a hero complex. I'm going to take every client under the sun. If I do that, the compromise is I can't possibly give the highest level of quality care and service to every client. It's just not possible. You can't earn enough money and revenue from the lower end of your client base. The other compromise might be, I am not willing to compromise in the quality and service and attention, but as a result, I can only serve 50 families. And so my minimum is going to have to be$10 million or something like that, whereas the compromise is I can't actually give my advice to as many people as I'd like to.

52:52AI is this great equalizer where we think about all the infrastructure we built on Altruist and you then layer all of the agents that can do things like gather data for you, build financial plans, build tax plans, help you be incredibly responsive to client emails and questions, to build a level of intelligence across your client base that no human being could ever possibly attain. So it's very easy to have incredibly precise and highly personalized perspective on every unique client that you serve. So these are the things that we're building. I mean, I think in the end, the clearing and custody business will end up becoming very agentic.

53:34Like these agents will be the ones who are probably logging on, if you will, and they'll be performing functions that today humans have to log in and do. But it's a pretty exciting time to build. Really interesting. I recall a couple of years ago, and I don't want to put words into anyone's mouth, but it was the CEO of either BlackRock or Vanguard or somebody that size was asked, what keeps you up at night? And the answer was cybersecurity and fraud. How do you make sure? And I totally understand no one wants to wake up one day and a billion dollars is missing. How do you integrate that into altruist?

54:17How do you think about the human element, you know, deep fakes and synthetic identity and voice fraud and cloning and all that stuff? What can the modern custodial platforms do that, hey, some of the big guys don't have the integration with technology to engage in this arms race against the bad guys? I mean, I think the biggest reason they'd have that paranoia is that if you're working on a 50-year-old tech stack, and we see this with the latest Anthropic model, these kind of mythos connected models where they sit on top of some legacy infrastructure and they'll find hundreds of critical vulnerabilities that no human being could have ever identified because the code base is essentially one giant monolithic code base.

55:10It's just like this huge albatross that these companies have been dealing with for decades. And replatforming is really hard. If you're already big and you're scaled and you've got tens of trillions of dollars, it is nearly impossible to replatform and go from physical mainframe-based technology into a cloud-based infrastructure using smaller, more manageable microservices. So, yeah, it's a huge risk. If I was running a giant old bank or brokerage, I would have the same probably primary paranoia. If you're building today, you know, the best defense is oftentimes a strong offense. So why not just build, again, in first principles, a bunch of protocols to make it much harder for bad actors to even get in the door?

55:53And this is like overstating the obvious, but just having like modern multi-factor authentication and requirement of security keys. even eliminating some of the highest risk, like for example, like phone calls are a lot easier to dupe, ironically, than is a properly built multi-factor authentication program. So, you know, I think there's a lot that will change. We don't, you know, rest on like the fact that, oh, we're a tech company, therefore we're impenetrable. Like, of course, we get, you know, we have bad actors trying to come after our clients all the time. And I think that if you're not building, especially AI that can help identify other AI and other bad actors, you're in a bit of a quandary.

56:39And it's really hard to do that. If your core platform, again, has tens of millions of lines of code written in languages that, you know, honestly, nobody uses and hasn't used for decades. That is a major problem with financial services. So you've raised a decent amount of venture capital money. I want to say the 2025 Series F gave you just under$2 billion valuation. I think I'm in the Series F, E, I don't remember, last year. Discuss the need for capital to build out. And we're not talking about the hyperscalers that are spending, you know, ungodly amounts of hundreds of billions of dollars. This is just a nice little startup that's taken on a couple of big entrenched companies and working off a clean sheet.

57:25What has the capital spend been like on the technology side? Yeah, so we've raised a little over$600 million in capital over the last seven years. Yeah, I don't think we'll need any additional capital going forward. Like we still have a lot of cash unbalance sheet. You're cashflow positive now. You're actually... Our broker-dealer has been profitable for about three years. Profitable. I wasn't even talking profitable. I'm just like at least holding your head above it. Yeah. Well, look, in our industry, every broker-dealer's financial records are public. So, you know, you can go look up our balance sheet.

58:00It's not hard to find, you know. And then, but we still use cash on balance sheet for R &D investments to keep building, you know, more tools. But you can imagine if we backed off from, you know, our aggressive building of products and features, yeah, it wouldn't be a hard business to run standalone for decades. But yeah, there's a serious cost to start a custodian. So beyond the cost of building all of the technology, there's also the regulatory requirements and the capital requirements. So when you run a brokerage business, every time you add a new client, a new dollar to your platform, you have to have reserve capital on your broker-dealer.

58:40And so there's no shortcut. Like this is something where I tell people every now and again, they'll ask me like, hey, you know, what would it take for someone to compete? And I say, well, it'll take about five years and at least$250 million just to have a shot, just to have any shot in the dark of making it. That assumes, of course, you do it right and what you build is somehow substantially better than anything else in the market. And you can get enough clients to run it on. But just to give yourself a shot, it's like, again, non-trivial. And just to pick up, because you made a comment about these sort of hyperscalers building these foundation models.

59:12And I'm not so sure that when we look back in 20 years and say, okay, well, or maybe 30 years, 40 years, 50 years, but some amount of time in the future, we look back at what were the most impactful companies that made the biggest difference on society. I'm not so sure those are the ones that we'll be talking about. I think it'll be businesses like Altruist that we'll be talking about and going, wow, like they have managed to unlock trillions of dollars for consumers. And that is not something that any of us can be convinced is possible with foundation models yet. At this point, all they are are money guzzling machines that have yet to figure out how to turn, you know, sort of inference into profits.

59:51In other words, their costs are higher than what they're reselling their products and services for. I'm as big a fan and believer and user of AI products as anybody. but when we really start measuring impact, like what changes the world, that's very possible, but there's nothing proven about it. What we're doing is very proven. You can very objectively say, if we give every single client, I don't know, 1 % back in economic advantage and you scale that across trillions of dollars for decades, you can start measuring your impact in hundreds of billions of dollars. That's to me more than like a small startup.

1:00:27That's incredibly ambitious, but it's like incredibly good for humanity. I hope more people do this type of stuff. That's Eric Balchunas' column, which became a book, The Vanguard Effect. I want to say it was like 2016, 2018. Vanguard has saved$2 trillion in fees for clients. I mean, that's an insane, insane number. Yeah. And you guys are looking to push into the same space. I want to be respectful of your time before I jump to my favorite questions. I just have to ask one other question. You've built multiple businesses in the wealth management and fintech space. What's the repeatable lesson that carries over from one to another?

1:01:09Or is each one a completely different animal? I mean, these are all pretty connected businesses. If someone looks at like the evolution arc of my career, it's sort of like each time I find a problem, you know, again, metaphorically. go on to the next one. Yeah, you kind of go, okay, well, that was an interesting problem, but this is an even bigger problem, and this is an even bigger problem. Yeah, I'm curious now, I think there's going to be, you know, reasonably good need for a highly specialized LLM, specifically narrowly trained for our industry. I'm not sure the big LLM, so maybe we'll do that at some point in the future.

1:01:42But the point is, is like, there's always something that has the potential to make a bigger impact. And, you know, one thing that I'll say, you know, for me, again, I don't spend a ton of time trying to compare what I do compared to other entrepreneurs. So I can't really say like if there's a lesson to be learned, you know, broadly. But with each venture that I've been involved with, I've started with a pretty simple North Star, which is I want to help people. These are all mission driven organizations. I'm very passionate about that. This allows you to attract other people that are also mission driven.

1:02:17These are your more missionaries versus mercenaries. and we have some of the most incredible people that I could never even dream of assembling a team like what we have at Altruist, but it's because they share that same kind of core ethos of serving clients, driving better outcomes, being on the right side of the customer, doing things that really matter. So given that, I was going to say, so given that, look out five to 10 years, where is Altruist? What are you doing? How big is Altruist at that point? Yeah, it's hard to predict with precision just how big, but I suspect we'll be very large. If we look at the trajectory of the business today, again, we don't talk a lot about our numbers publicly, so people have to sort of like, well, take Jason's word for it.

1:03:04But in our first five years of operating, from when we opened our first account through five years, We had more assets on our platform than Robinhood, Betterment, Wealthfront, Public, Stash, M1, Acorns combined. So when people wonder, is this working? It's scaling very, very rapidly. It's growing at a really, really fast pace. People, I think, sometimes don't understand the sort of network effect you get when you serve advisors. And those advisors are growing fast. Firms like yours are growing super fast. The clients are adding deposits to their existing accounts. The market tailwind is pretty material.

1:03:4115 % a year the past 15 years. And it's better for advisor clients than it's for self-directed clients. So these are all things that create enormous tailwinds for businesses like ours. So I think in 10 years out, we'll be multiple trillions in assets serving many millions of end clients. And likely we'll be doing as kind of capped out at 100 or 125 or 150. Like those things, these laws of physics will sort of be removed. And I think that's a net great thing. All right. I want to be respectful of your time, and I'm going to jump to our speed round. We're going to do these really quickly. Sure. Starting with who are your mentors who helped shape your career?

1:04:18Yeah, so Nick Byme was our first investor at Altruist. He was also a big supporter of me at my last company. He's a partner at Venrock, and he's just awesome. What are your favorite books? What are you reading currently? So right now I'm reading Life 3.0 by Max Tegmark. It's like a book from 2016, 2017. He's a professor at MIT and one of the real early thought leaders in AI. And so there's three phases of AI. And I'd say we're in Life 2.0 right now, still human powered. And read the book, you'll find out with 3.0. It's a good one. Oh, that's interesting. You mentioned good to great. Anything else you want to mention?

1:05:00Yeah, I mean, look, these are a little bit cornier, but some of the most important books for me, I'm a total math nerd, so I can live in a Max Tegmark book forever. I had to learn a lot of soft skills to be a better entrepreneur. I learned a lot of those from reading Seth Godin's books, like one of my favorite. Amazing books, great blog as well. Let's talk about what you're listening to, streaming or watching, what's keeping you entertained on these cross-country flights. Yeah. So I don't watch much TV, although I did watch your Knicks. Congratulations. That was talking about perfect timing and a fairly easy path.

1:05:35Yeah. Perfect storm. Avoided my Pistons. I'm a Detroit Pistons fan. So yeah, I don't watch a lot of TV. I do listen to a lot of podcasts, so listen to yours. I listen to a big fan of Henry Stebbings, so 20VC is a good one. I listen to you quite a bit. and then I listen to Lenny's podcast if you're a tech person everyone who Lenny is is a product person that goes into deep on like how different tech companies are being built especially kind of product-led companies so those are some things I listen to a lot really interesting final two questions what sort of advice would you give to a recent college grad interested in a career in fill in the blank entrepreneurship fintech or even financial services yeah I think in any career I would become the most AI forward person in your field that you could possibly be.

1:06:25So it does not matter if you're working in sales, if you're working in tech, if you're working in financial services. I mean, if you can become the person when you walk into the room, you are the absolute master of Claude for your kind of job function. I think that's one of the most important things for any person. I think young people have an actual advantage there, and it's one they should definitely be leveraging. You're not going to be replaced by AI. You're going to be replaced by someone who uses AI better than you do. And it's, it's, uh, it's getting cliche, but it's very true. And our final question, what do you know about the world of technology, entrepreneurship, uh, or financial, uh, technology today that would have been helpful back in the 2000s when you were first ramping up?

1:07:09I mean, I don't know that there's necessarily some innovation that I wish I knew. I just, I wish I would have spent more time getting proximate to really high caliber people. Now that I'm older and I've done a few things, I've got the chance to meet some just outstanding people. If you can get close to those people early in your career, it's just going to be such a massive accelerant because your way of thinking is going to be so much better and sharper and inspired. That's what I do. Thank you, Jason, for being so generous with your time. We have been speaking with Jason Wanks. He is founder and CEO of Fast Rising Custodian Altruist.

1:07:49If you enjoy this conversation, well, check out any of the previous 648 we've done over the past 12 years. You can find those at iTunes, Spotify, Bloomberg, YouTube, wherever you get your favorite podcasts. I would be remiss if I didn't thank the crack team that helps put these conversations together each week. Alexis Noriega is my video producer. Anna Luke is my podcast producer. Sean Russo is my head of research. I'm Barry Ritalz. You've been listening to Masters in Business on Bloomberg Radio.

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