Samir Vasavada, Vise: Automating Wealth Management

Welcome to the Investors First Podcast, a service of CFA Society Orlando. We're here to educate investors, advisors, and consultants through conversations with some of the top finance and investment professionals from around the world. Learn more about us at cfasociety.org/orlando.

Our guest today is Samir Vasavada. Co-founder and CEO of Vise. Samir came up with the idea for Vise when him and Roonik, his fellow co-founder, were teenagers. Samir is responsible for operations, business development, and managing a team of engineers and PhD AI and quantitative finance researchers at Vise. Vise is a venture-backed fintech startup using artificial intelligence to revolutionize portfolio construction and management for financial advisors. Vise has raised enough capital to be considered a fintech unicorn with a valuation greater than $1 billion and is backed by Sequoia Capital, Founders Fund, and the Wharton School of Business, among other investors. Samir is one of the youngest fintech founders I have ever met and was named in the 2021 Forbes list for Top 30 Under 30. In today's episode, we go back to Samir's time in high school and how he met his business partner, Samir Vasavada and fellow co-founder, Roonik. We discuss what Vise is, what is unique about them, and the venture-backed fundraising process. We also talk about the all-in cost of advice for investors, the future of wealth management, and much more. It is worth noting that this episode was recorded a short time ago, but the market environment and Vise's strategy have shifted substantially since recording this episode. That said, it'll be exciting to watch what Samir and Vise do next as they attempt to shape the future of investment management. Our host today is myself, Steve Curley, current board member and most recent president of CFA Society Orlando. Please enjoy the episode and follow us on Twitter and LinkedIn. Samir, welcome to the show.

Yeah, thank you so much for having me, Steve.

So Given you're such a talented entrepreneur and you started the company so early in life, can you take us back to high school and how this idea started?

Yeah. I was just sitting in English class one day and thinking, like, RIAs need better software. No, that wasn't actually what happened. So it actually goes back to middle school. My co-founder, Roonik, and I met at a summer program in 8th grade, Our parents were like, "You can't go to traditional summer camp. You need to do college courses." And there was a college program at Northwestern that was accepting gifted children. And his dorm was right across from mine. And we're both from the Midwest. I was from Cleveland, he was from Detroit. We're like, "We have a lot of time on our hands. Let's make some money. Let's build apps for small businesses." We started building apps for small and medium-sized businesses. We learned how to code and we made some money off of it. But Rudiak is this math prodigy, comes from this math background. He'd been doing math research since he was like 7th grade and getting pretty advanced math research. And this professor from MIT reached out to him to do some AI research, and he took up the opportunity and realized that AI research was like the thing he wanted to spend his time on. And we were realizing that all these apps we were building for these small businesses could be automated. We could build this platform to use AI basically to automate app developments. We built that first startup as our foray into the tech world. Basically a platform where you could type in your app idea. We would use low/no-code and use AI to build the app. Turned out to be a very difficult technical challenge. One of our advisors at the time was this investment banker and he's like, you guys know so much about AI and machine learning. There are all these consulting opportunities with large investment banks and you guys consult with them on AI and machine learning. So we started doing this and we consulted with all the big firms. MassMutual, JP Morgan, UBS, massive institutions on how AI works, and then further how AI fits into finance. We were learning a lot of it as we went, but we understood all the core principles. One thing we realized as we were talking to these firms was that the wealth management departments, most of these institutions were massive. It was like their golden goose. It was like the stable business most of these firms were built on that distributes all their products. These firms are all trying to figure out how can we use AI, how can we use frontier technology to basically further enable these relationship managers to win more business, to more efficiently run their business, all that kind of stuff. Meanwhile, a lot of these relationship managers and these advisors at these large wealth managers were starting to see the writing on the wall, which was that they could go start their own firms. They could leave, they could break away from these massive institutions, Merrill Lynch and Goldman Sachs, leaving all the big wirehouses to go start their own shops. And there was this massive exodus basically from these large institutions to the independent RIA space. So we noticed it. We also noticed that no one had built the operating system for independent advisors. I think I was probably a sophomore or junior or something in high school at the time, and we saw this trend and we were like, "Well, we should build a company to do this." That's when we originally got into it.

Trey Lockerbie And as you think about these advisors that have gone independent, As you said, the relationship managers. Do you think they're leaving large wirehouses because of red tape or to own equity, or is it for some other reason why they're leaving and why the independent space has flourished so much?

[Speaker:SAMIR_VASAVADA] So I think there's a couple reasons. I think the most interesting reason is if you look post-2008, especially with the younger generation and the younger advisor set, and I think a lot of people went to these firms to actually learn how to become an advisor, kind of like their college program. It used to be the notion that you had to go to this big institution because that's where the trusted money was. You could trust leaving your money with this big financial institution. But post-2008, a lot of people lost trust in those big financial institutions, and they realized that the trust was really built with the advisor, with the relationship person, not with the actual institution. I think a lot of people picked onto that. So they realized that why would I give 30%, 50% of my revenue up to this big institution if I can manage the relationships on my own and the clients are really there because they trust me, not because they trust the big institution. And I think that the fundamental shift was probably the Great Recession.

[Speaker:TREY_LOCKERBIE] As you think about the independent space in distribution, it used to be a nightmare for people in the wealth tech space to distribute technology to independent wealth management firms. There were a bunch of really small players and there weren't a lot of gateways into these firms. As you've seen Vise grow since 2016, has distributing to these financial advisors gotten easier?

[Speaker:Samir Vasavada] It has gotten easier than it was in 2016. In 2016, people said, "This is going to be impossible. This is a death wish. Independent advisors aren't the way to go." I think there was an even bigger narrative No one was willing to fund us at the time. No investor would give us money. Part of it was because we were 16. The other part of it was there was this narrative in Silicon Valley that advisors would be replaced, that the robo-advisors would replace human financial advisors and they wouldn't be a thing in 10 years, and everyone would be managing money on their own. We didn't believe that. The primary reason we didn't believe that is because We knew growing up in the Midwest that everyone trusted their financial advisor so nearly and dearly as if they were part of the family, and that relationship was never going to be broken. So it was about more, how do you build tools and technology to service these advisors as opposed to replace them? And that was the bet that we took, that human relationships wouldn't be broken by tech. You had to enable them. The second bet was there would be more advisors that were independent than before. Those advisors would need technology. For a long time, advisors weren't willing to adopt technology, but certain things opened up the gateways for them to start adopting technology. Advisors using Salesforce, advisors using email, advisors using financial planning software, which people had seen success and adoption with. It was only time for advisors to start using technology for how they invest their money. We had seen that personalization was the future of investment management. Every client was seeing personalization in every other part of their life in terms of how they consume content and how they take transportation or education, whatever it was. They were seeing personalization in those parts of their life driven by technology. It was only time for them to see it take place in how they invest their money. And the only way to conduct large-scale personalization was through some kind of software platform. So if you take the idea that there's more financial advisors, they're adopting technology in other places, and there's a need for personalization. The macro bet was distribution will get a lot easier over time.

That's very interesting. When I speak to folks that are your age, most of them are interested in crypto. Why not a sexier business such as DeFi, crypto? Why in this space and why now?

So it's funny because I was actually at the edge of the crypto boom, in 2017, 2018, I left school, moved to San Francisco, and I was living with a lot of the frontier crypto founders, the people that were building Ethereum and Augur and some of the early crypto projects. I had seen that whole boom and sort of survived that wave. What I realized was the smartest people at the time weren't building crypto. It was very much driven by greed at the time. It was so far out as far as its viability versus the way we thought about it was, if we're successful with the investment management space and we're able to build this platform, call it the Amazon of investment management, the platform that services all investors and all asset classes in a highly personalized and scalable way, kind of the rails of the asset management industry, we would be able to leverage all of these technologies as they start to mature with our scale, and create something really spectacular versus starting with how do we create this frontier technology, this really complicated concept, DeFi or blockchain, and incorporate something at a mass scale without really any kind of proven concept that it works.

[Speaker:TREY_LOCKERBIE] Yeah. So Samir, as far as Vise, we know the inception date was 2016. How many employees do you have now? Clients, AUM, just details about the business for those who aren't familiar.

[Speaker:SAMIR_VASAVADA] So we're in excess of 100 employees now. We really went through our hyperscale phase over the last 2 years. So I'd say the first 3 years or so of the business was just Radek, myself, and a couple researchers building the first version of the product. It was very much learning about the space and understanding what are the possibilities in the space. Whereas the last 2 years, how we've managed to scale it. But at this point, we've raised over $125 million in funding from some of the top VCs, managed in excess of $500 million in assets, scaling very quickly, and are servicing all kinds of different types of advisors. So small independents all the way up to larger higher net worth.

[Speaker:TREY_LOCKERBIE] So if your target client's an independent advisor, what exactly does Vise offer to them and how could that help their business?

Vise helps them do a couple of things. I always think about it with three pillars of the business. We help them deliver highly personalized investment advice. So considering all of their clients' needs, their existing net worth, their financial planning goals, their risk tolerance, their existing positions and tax constraints, everything about the client to build a highly personalized portfolio of individual stocks, bonds, other assets, uniquely personalized to that client's needs. We then provide all the tools to manage that portfolio. So tax loss harvesting, active rebalancing, cash management. And then the last thing is the intelligence layer to explain the portfolio. So the talking points, the justifications, how do we effectively explain why this portfolio was selected and then the ongoing insights and notifications around it. So the advisor can focus on their relationship, Everything else is done by Vise.

[Speaker:TREY_LOCKERBIE] I would assume that Silicon Valley and large venture investors are really intrigued with AI and machine learning aspect of your business. I think that is a big differentiator for you guys versus the incumbent direct indexing platforms that still do it on a piece of paper as recent as in the last year, 2 years, people still filling out a portfolio and emailing it. And Canvas was the first one that I saw come across with O'Shaughnessy with a clickable client experience that engaged the end client and you could do it right in front of them. And then you could actually submit the trades on the backend. So there was no going back to your desk and entering your notes and uploading the paper. Can you talk to the listeners a little bit about how you use AI and machine learning and what is truly unique about you and that you're not just another direct indexer?

[Speaker:IAN_CASSEL] So I think we go far beyond just direct indexing. We're allowing advisors both to incorporate their own strategies into the portfolio, as well as tilt value and tilt growth. So they can kind of customize the way they manage their portfolio. If they want market-level exposure, they want to just passive portfolio, we can give them that. But the way I would think about it is it's a fully automated platform. So as you talked about the traditional players in the space, you're going back and forth with a portfolio manager. It's a clunky process. They're making mistakes. You don't have this opportunity for maybe a brand new prospect to sit right in front of you to enter in some details about this is when they want to send their kid to college and this is when they want to start to think about retiring. And these are the existing positions, maybe they were an executive at Pepsi and they have an embedded gain with Pepsi and they don't want to sell their Pepsi stock and they want to build their portfolio around that. For an advisor to be able to build that portfolio in real time, right in front of them and show them, this is what it's going to be like to work with me, has never been seen in this industry before. And we're providing them that ability and doing it all in one fully automated platform. The idea here is automation end to end.

[Speaker:TREY_LOCKERBIE] In fact, it was quite the opposite, right? 5+ years ago, you would implement a customized direct portfolio and it turned into a client service battle where you would be notifying the custodian to stop sending paper notifications for the 300 to 600 names you just bought versus the 1,100 to 1,500 ETFs and mutual funds you were buying before. I think the custodians have done a good job solving for that if you structure your firm correctly. They were sort of the first phase. Then the next phase teed up, and I've heard you say this on another podcast that the gentleman referred to, Walmart was set up after the interstate system. Robinhood was set up after phones were put in place. That was their interstate system. The custodians are really your interstate system and going fractional with stocks and no transaction fees. It really is the perfect time for direct indexing, but also for something like this, given that The custodians are ready to receive what you're about to offer because you can be a portfolio as small as $100,000 now and get the same portfolio that was previously only available $25 million and up back in the mid-early 2000s.

Samir Vasavada One of our investors is this hedge fund billionaire, Glen Dubin. He sold his company to Highbridge to JP Morgan. He's like, for us to have been able to provide an SMA to JP Morgan, you'd have to have a $60 million account back in 2008. Like Glenn, we can provide an SMA with direct individual equities for as low as $10,000, and hopefully with fractional trading, even lower. So I think that there's going to be this mass democratization of the best investment advice that the most sophisticated investors used to get to everyone, and a platform like Vise is going to be able to make that possible. And it's funny that you mentioned the interstate system because in many ways Robinhood helped unlock zero-commission trading for everyone. And I think that's going to have much broader implications than just self-directed accounts.

Trey Lockerbie One of the aspects of another guest we've had on the show, the CEO of a large asset manager, was that their human capital is one of their sources of alpha. What makes your human capital unique? You've gone on a hiring spree. This fresh round of capital, what were you looking for? How did you find difference makers to really add alpha from the human capital side? I know it's a tough time to find good employees and executive talent.

[Speaker:SAMIR_VASAVADA] It's an incredibly tough market because everyone else is competing for talent too. I would say that the way we felt about it is how can we find the best and brightest in tech? So the smartest engineers at Google, the smartest engineers at Stripe, the smartest engineers at Citadel, and then couple them with the best investment strategists, the best investment strategists at BlackRock and DFA and the others to create a radically new way to think about how to manage money, but at the same time informed by traditional expertise. How do you couple great technology with great investment strategy? Because we believe that you can't fundamentally build something brand new without some kind of reflection from what's worked in the past. But at the same time, bringing people that are incredibly smart, that have a new perspective is how you build something that can transform an industry. So we didn't want to overly rely on the industry at the same time as couple them with great technologists.

[Speaker:TREY_LOCKERBIE] You mentioned reflecting on what's worked in the past, and you mentioned a lot of great names in the industry. In the wealth tech space, one company that was built without any prior knowledge of the industry is RightCapital. They're in the financial planning segment. Sometimes this is a good thing, sometimes it could be bad, coming in with this fresh perspective without any anchors on past what worked or what didn't. Do you think you have an advantage starting your company early in life without any knowledge of incumbents, or has that worked as a disadvantage at any times?

[Speaker:SAMIR_VASAVADA] It's been both. It's been an advantage in the sense that we could think through What do we believe the future of the space is going to look like? Where do we believe how money is going to be managed in the next 10 years? And the funny story I have is when we first started the company, I think it was 2016, probably about 8 months in, 9 months in, we went to go pitch to a big bank. It was just Frédéric and I at the time. And we presented them, this is what Vise is going to be, this is the big vision, this is our big opportunity. And they're like, no, that's never going to work. There's ETFs and mutual funds for a reason. People don't want individual stocks. Technology is just too hard for advisors to use. And we're just like, we don't believe this is how it should be. We don't believe this is the future. And if you've been in the industry doing the same thing for the last 20 years, you're probably going to think incrementally better on the same thing is what's going to be the future versus something radically. So I think that new perspective really benefited us as far as thinking through what we believe the future of the space would look like. I think the fallback is there are certain things relative to distribution and relative to nuances as to how the advisor thinks. So you can only really know if you've been in the space for a long time. So for us, it's been about how do we couple the two together? How can we get new perspective and a new view on the space combined with the traditional expertise of investment strategy of the advisor, bringing together people who have sold to advisors over the last 20-something years?

Samir, we recently had Matt Brown of Kason, who was the founder and CEO of that entity. And after, I think it was 12 years, he launched it just after the financial crisis, they hit unicorn status. You guys have done this in roughly 5 years, which is incredible. And I just want to commend you for that. And you have quite the group of investors that have validated your business model. Can you talk to listeners a little bit about the fundraising process, expectations that come with it and the add value that you receive from some of these notable investors?

[Speaker:SAMIR_VASAVADA] Yeah, of course. So the full fundraising process, it was definitely a brutal process when we started, but we managed to bring on some of the best investors in the world and Founders Fund and Sequoia and Ribbit and Bling and Bond, Allen Company, some really great people. It's interesting because people think given this latest round you had, At this high price of $1 billion, you must have incredibly high expectations on you as a business. And yes, we do. But the difference is the way the investors thought about this was much more of a macro bet. Mickey had said to us, I'm investing for 10 years or longer. I'm investing for what this business can become in this belief that you guys can go out and build the next BlackRock, and it's going to take time to get there. But we're in an incredibly, as you alluded to earlier, an incredibly competitive market in the sense that it's really hard to attract talent. All the best talent is joining unicorn companies, billion-dollar-plus companies, and talent is expensive. You've got to be able to pay for them. So if you want to be able to build a company that is of the scale to the company that we want to build over a 10-year period, you need the capital, you need the partners, you need the backers to help get you there. We realized that early on in the process, and our investors saw this as this long-term bet that this is the way asset management is moving and Vise has a chance to be the trailblazer in the space.

And Samir, do you have an example of some of the add value that some of these big name investors have brought to the table?

Yeah, for sure. So Sequoia in the early days had been very helpful for recruiting all of our early executive talent and recruiting even IC engineers. So Sean from Sequoia, who led our seed round and our Series A round, personally got on the phone with almost every engineer we were trying to close and convince them to join. Because if you're an engineer and you're working at a top tech company and we're asking you to take a smaller salary and a big risk on joining this new startup, it's a tall order. And to have someone like Sean be able to close an engineer like that was a huge area of value add for us. I think they were also really helpful from a business strategy perspective, because a lot of these investors can pattern match to all these other great companies they've seen, Stripe and Coinbase and Robinhood, how they've managed to scale their businesses, how they've built product. And there's a lot of really great lessons that we could port over to how we built Vise.

Preston Pysh Samir, I want to jump into the all-in fees of advice. There's really three costs. There is the advisory fee, which is the largest cost for the client. And then there's, in a sense, implementation fees, the custodian, the cost of a transaction fee, the cost of payment for order flow, and there's some other things without going too far down that hole. And then the third would essentially be the cost of the acquired fund fees. This would be how you implement the investment, whether it's through direct indexing, ETFs, mutual funds, or however you're implementing. So the cost of all three have, in a sense, come down, but the cost of the advisory fee has not come down that much. That's been well guarded. They've added lots of additional services to sort of guard that premium fee. Let's call it 1%. For our listeners, of assets under management. So from the standpoint of these overall fees, I'm starting to see advisory firms eat the cost of investments, and that wasn't the case 10 years ago. Are you seeing this trend too? And where do you think the all-in fees of advice will go? Because Robinhood obviously nudged custodians to go to zero or close to zero and derive revenue from other sources. So the passive investment movement have a sense pushed a lot of the expense ratios down, but the 1% fee is still holding at some level. Where do you see the all-in fees of advice going? Do you see a trend of advisors starting to pay as really a line item of cost of goods sold for the implementation, whereas previously the clients paid that fee?

[Speaker:SAMIR_VASAVADA] That's interesting. More advisors we're seeing are paying for implementation. More advisors are just chalking it into one all-in-one fee, 1% all in for investment management plus the actual advice. I think fees are coming down dramatically as a whole and will over the next 10 years for kind of mainstream advice, passive, and even active strategies like public markets. I think where fees are going to go up, but there's going to be more democratization, are going to be around alternative assets. I think that There's going to be more access to alternative assets like venture capital, private equity, real estate. Hopefully, Vise can help unlock that in giving mainstream access to these alternative assets to everyone over the long term. I think that there's going to probably be steady-state fees there. I don't think fees are going to change all too much in that area. Fees are going to continue to get dragged down. I don't think that there's any other way to put it. I think technology is going to push them down. I think part of the reason why they were able to stay up so high is because the manual costs around hiring your portfolio managers and your analysts and the back and forth, all that costs money. But when you've got technology, you've got basically zero cost. So there's nowhere else for the fees to go other than down. I think it's going to drive a lot of the traditional incumbents out of business.

Trey Lockerbie And I love that you brought up where Vise could end up helping an advisor with, which is alternatives. But with that said, Can we jump back and do a top-down investment philosophy from Vyse for our listeners as far as what do you believe in and what is your highest and best ideas for implementing an investment portfolio for an advisor that just turns it over to you and says, "I want your best thinking." [Speaker:DR_LYN ALDEN] I'm sure you've talked to Dave, our VP of investment strategy.

You've probably talked about this in much more depth.

[Speaker:TREY_LOCKERBIE] Yeah, I have. I would say that was a Fantastic hire, and he's an even better person. I had a chance to catch up with him in October in LA and learned about the VISE model and really enjoyed that time. I think you made a great decision, and perhaps he could have jumped on to answer this question, but I'd love to hear it from you as well.

[Speaker:DR_LYDIA_GRAY] We believe very similarly to, in some ways, the DFA methodology. Tilting value and allowing advisors to choose how far they tilt is a strong value proposition the advisors can take. I don't think that long-term though, we want to be a highly opinionated investor. I think we want to provide our investment strategy for advisors to be able to opt into if they believe it aligns with their investment strategy, but then subsequently include their own views, their own capital markets assumptions, their own potential strategies, and allow Vise to basically systematize and automate. Those strategies. But I think providing the advisor kind of a start based on traditional value investing is a great place for advisors to start with their clients, given that it's something that they already know.

[Speaker:TREY_LOCKERBIE] So if you have essentially a passive base, then you could drag a toggle of sorts to value and small cap the way DFA would glide an investor, and DFA is a great group, If somebody had beta taken care of, how do they add alternatives or harness your platform to add alternatives? And also, how does machine learning and AI play a role in your investment philosophy, if any?

[Speaker:SAMIR_VASAVADA] It played a much bigger role in our investment philosophy before, and we actually decoupled it to figure out how can we optimize our investment strategy using it. I'll get into a specific example in a sec. But previously our model was primarily a black box. So it was really hard. We had this clustering approach. We defined stocks that basically similarly correlated with each other and represented a client's risk criteria. Those portfolios tend to perform pretty well as well, but it was really hard for advisors to be able to explain, "Here's what we are investing you in, and here's the process, the strategy in which we've gone to actually invest you in this end portfolio." So we figured if we had some kind of explainable investment strategy, it would be much easier for the advisors to kind of grasp their minds around how do I effectively explain this, and then how can we use machine learning to optimize it? So for example, we could look at company sentiment and say, okay, we don't know if company sentiment is a leading or a lagging indicator in the client's portfolio, but we know that it will have some effect on the stock, so we should avoid investing in this particular security and find something with a similar volatility, but not as much volatility from a sentiment perspective. Or from the intelligence perspective, how do we create the talking points, the justifications, the storyline to explain why this stock was included in this portfolio or why these set of decisions were made for the advisor to be able to effectively explain that to the end client? Because so much of what an advisor has to do is storytell with their client. And provide rationale behind why they've made the decisions they've made. So we want to be able to provide those talking points, those justifications, those storylines so they can effectively explain that.

Trey Lockerbie So if we isolate beta, meaning implementation of stock portfolio to market cap weighted or factor or smart beta, we mentioned Case earlier. There's other alternative platforms out there. There's also other wealth tech players that could enhance your client's experience. I know integrations are a key part of many wealth tech firms with other services that complement. How much of it can you guys do in-house and vertically integrate versus partnering with a case and saying, "This is how we transition you to the 10% that you elected to do in alternatives. This is the implementation vehicle." for integrating with Kase, for example?

[Speaker:SAMIR_VASAVADA] Yeah, I see it much more as the Amazon approach in the sense that we can partner with Kase and iCapital and Adipar and Carta and all of these alternative providers at some point and be able to provide all kinds of different opportunities. And the unique kind of the special sauce behind Vise is the asset allocation. So we'll be able to understand, given your small cap tech exposure, here's how much exposure you should take to early stage venture. And then here are the set of funds provided by Kase or provided by iCapital, provided by whomever, that you should be able to invest in. I think over time we can offer our own products as well, but it's really difficult for a company to focus on creating a great personalization engine at the same time as building great investment products. I think you've got to build the scale with the engine before you can truly start to offer your own products.

[Speaker:TREY_LOCKERBIE] Yeah, I think it would be really interesting with some of the heavy-duty, high-powered investors that you have, getting access to some of their deal flow as a synergy for alternative investments. I think that would be very interesting. Is there areas of financial planning that you think cannot be decoupled from an investment philosophy, an area where you'll have to go in the sense that you just can't integrate with the incumbents out there?

[Speaker:TREY_LOCKERBIE] Yeah. I mean, I think it's going to be a little bit of both. If you've noticed me through the whole Conversation so far, I've talked about things like when you send your kid to college or when you buy that first house, because your financial planning is inherently coupled with how you manage your investments. And I think that there's this decoupling in some sense with financial planning software and investment methodology. We don't believe that should be the case. I think that there should be a complete convergence between financial planning and investment management, and more of it's going to take place on the Vize platform. So when we know when you want to buy your first house or when you want to send your kid to college or when you want to retire, we can make better investment decisions and create it as one timeline in which you manage your portfolio. So I think the long story short is it's going to be a combination of integration with existing kind of financial planning tools so we can understand that data with a deeper set of questions to understand the client's long-term financial aspirations that we can include into their portfolio approach.

[Speaker:TREY_LOCKERBIE] So two things I wanted to add to your recent thought is I had Jason Zweig on our podcast, who I think is a legendary Wall Street Journal writer in our business. He writes the Intelligent Investor column. There's others that listen to our podcast that said, "I've never heard of this guy." Anyways, one question I asked him was, why are younger investors not considering their human capital in their investment approach. I think it's one reason why younger investors have not seen the value in wealth management services. It's mainly their father that's still a client of the wealth management firm, and the 25, 30, 35, 40-year-old is not a client. I think there's a blue ocean of opportunity with these younger investors, especially equity builders. A company I invested in, Harness Wealth, has done a great job of going after that group of clients. So as I think about this, how can human capital be incorporated and should it be incorporated? I obviously think it should. I'm curious your thoughts.

[Speaker:SAMIR_VASAVADA] Yeah, I 100% think it should. I think there's a place for all of the personal financial management, the robo-advisors and such. I think it's a great place to get started. But over time, regardless of age, you need a human to help you manage your money. Because so much of this is an emotional decision. So much of the role advisors play is being their client's marriage counselor or therapist or that closest outside advisor to their client's families. And there's financial implications to all those decisions. And only a human can really help with those emotional decisions. You're not screaming at your screen to help you decide when you want to buy that first house. I think that it's not that younger investors aren't interested in human capital, so to speak. It's that they want a different type of experience with their advisor. They want a young advisor that represents the same values they have, that works the same way they do, and represents the interests that they have. They maybe work at a WeWork and specialize in just clients that fit their similar archetype. So I think it's just going to be a different type of advisor.

Trey Lockerbie So let's take you, for example, on human capital. Most tech founders that I meet invest in all venture. So there's a very high correlation with the investment that they're a founder of, that they're on the cap table of, and all of the venture investments they made in Silicon Valley. A lot of Silicon Valley people I meet, they end up just investing in other venture deals. If you were advising yourself using the Vise tech, What would you be excluding? Obviously, there's a financial services bent in there. There's a growth bent in being part of tech. So tech and financial services. And then there's also stocks that behave like those two things that you might not be thinking of in other sectors. How would you build that portfolio around you as a tech entrepreneur that has a lot of their net worth tied up in this company?

[Speaker:SAMIR_VASAVADA] I would be excluding everything related to financial services. So part of the Vise platform is you can exclude not only securities that you believe you might either be holding existing exposure to or have some career risk tied in with or whatever it might be, but also ESG. So if you don't want to invest in oil and gas companies or sin stocks, we can help personalize around all of those different types of things very specifically. I would look at it in like a twofold. I would think about it as, what do I believe in and how do I reflect my portfolio beliefs in my public markets portfolio? And how do I make sure that I'm not overexposed to one particular area or another? So for example, I've invested in a handful of companies, ironically, in the Web3 space and in the crypto DeFi space. I think that there are certain public markets companies that have heavy exposure there. So if you look at a company like Block, Square, or Facebook, Meta now, I guess that's what it's called. I would try to think about what are the companies that are most closely representative of— What are the public market companies that are most closely representative of private market companies that I have a significant amount of personal, maybe angel investments or venture exposure to, that I should decouple myself from? Or maybe not using myself as an example, but if I think about another investor, maybe they work in banking, They shouldn't be investing in banking stocks because there's a chance that they get laid off or something happens and there's career risk with their banking job. And then they also see their banking stocks take a hit as a result, or travel stocks in the pandemic. Maybe you're a pilot and you've got heavy exposure to the travel transportation space and then COVID-19 hits and your travel stocks are down and you've gotten laid off. It's a lot of risk to take. So I would always say de-risk yourself from your career and then de-risk yourself from from other places you might have a lot of risk because of a venture, like a private market asset that you might hold or some kind of venture deal or spousal risk, whatever it might be.

Trey Lockerbie So Samir, we've talked about investment philosophy. We've talked about other tech stacks that could help you. What is success for you and Vise at this point looking forward?

Samir Vasavada Yeah, that's a great question. I think that success for us looks like being the default platform where all assets are managed in a way where we can provide all investors regardless of age or net worth access to personalized investment advice in a highly automated and scalable way. We are the place where all investors are able to manage their money. And I think that the implication of that is if you look at on a more broad level, there's this great idea of kind of an accessibility gap as far as what the super rich have versus the rest of us. I think we want to close that gap. I think we want to almost democratize access to the best investment advice and use technology to do so.

Trey Lockerbie Yeah, that's fantastic. Forecasting out 10 years from now, what could that assets under management number be? I know that the incumbent in this industry, Parametric, that was a big reason why Morgan Stanley bought Eaton Vance. They were roughly 350 plus of the $500 billion. In that asset manager. Then Appirio went to BlackRock. So the sea has sort of been parted for you guys to sort of drive right through it. What is that AUM number? Is the success number $500 billion or is it something much greater than that?

[Speaker:KATHY_WOOD] I don't even think about it as an AUM number. I used to think about it as an AUM number. I used to think about it as, I think it would be great to build the next BlackRock, the next big asset manager, the next big place where all assets are managed. But I think that the way I think about it now is I want to see that every single year we're helping tens of thousands, hundreds of thousands of people, I don't know what the number will be, reach their financial goals, unlock financial freedom in some sense, however they might define it. I want to see that Vise is a critical part in us helping do that. So some way to measuring that, is how I would see success even more than the financial implications of what we're doing. I think that if we can prove that we've made a real difference in the lives of hundreds of thousands, millions of people, I think I would pat myself on the back and I'd be really happy with what we've built.

[Speaker:TREY_LOCKERBIE] Well, Samir, I can't thank you enough for how generous you've been with your time, and working with your team has been a great experience on my side. How can people find you? Learn more about you and Vise?

[Speaker:SAMIR_VASAVADA] Yeah, you can find us at our website, vise.com, V-I-S-E.com, and sign up for a demo, learn more about the product. I'm available at just samir@vise.com if you want to reach out directly.

[Speaker:TREY_LOCKERBIE] Yeah, I always commend people that are willing to offer their email and actually reply. I know Anthony Zhang from Vinovest offered it and actually delivered to several people that I know that reached out to him. I think that's great. So the end of show question, if you could interview anyone dead or alive, who would it be and why?

I would say probably Nikola Tesla. The reason why is because I think he was one of the greatest inventors of all time, but I think he was very much overshadowed by Edison or some of these business people that took a lot of the credit for it. I think that it would be really interesting to kind of hear it from his perspective looking back.

Yeah. No, that's interesting. As you said that, I thought about brilliant people like you skipping college. My 8 and 4-year-old, are they going to need college or can they go straight to the pros?

[Speaker:SAMIR_VASAVADA] I think they can go straight to the pros. College is a great place to meet a lot of smart people and build a lot of great relationships, and I think there's nothing that can really replace that. But I think from a knowledge perspective, knowledge is being democratized, and I think it's only going to get further democratized with tech and and there's gonna be less and less of a need for it.

I agree with you. I love that answer. I think that's a great stopping point. Thank you, Samir.

I really appreciate it. Thank you so much, Steve.

You've been listening to the Investors First Podcast, a service of CFA Society Orlando. If you haven't yet, go ahead and subscribe to this podcast so you never miss an episode. You can also learn more about each episode and the society itself at cfasociety.org. Orlando/podcast. Thank you, and we'll see you next time on the Investors First Podcast. All opinions expressed by podcast participants are solely their own and do not reflect the opinion of their firm. This podcast is not intended to provide expert advice on topics covered and should not be relied upon as a basis for investment decisions. If you need tax, accounting, or legal advice, please consult a professional.