February 24, 2025 • 22 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Anna Kooi, National Financial Services Industry Leader at Wipfli, discusses the results of the firm’s on Asset Management Executives survey. Bloomberg Opinion Contributor Kyla Scanlon talks about her piece Gen Z and the End of Predictable Progress.
Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News. This is Bloomberg Business
Week insight from the reporters and editors that bring you
America's most trusted business magazine, plus global business, finance and
tech news as it happens. Bloomberg Business Week with Carol
Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:27):
It is Bloomberg a business week. As Carol mentioned, and
as we've been talking about stocks taking a real turn
lower on the day today SMB five hundred down one
point seven percent, it does still put us in positive
territory for year to date. So far this year, up
two point two percent on the S and P five hundred.
Taking a look at this week, though we are down
(00:47):
two percent on the Nasdaq, the S and P five
hunderd down one point seven percent.
Speaker 3 (00:52):
All right, well, our Bloomberg Intelligence team out with a
note this week about AI and the asset management business,
Kevin Ryan and lent O Tang, writing that generative AI
is a quote game changing technology. They go on to say,
rapid progress over the past year means generative AI looks
like it must have tool for all asset managers. Generative AI, Yeah, exactly,
(01:12):
it can now be embedded in all an asset manager's workflows,
enabling most internal processes to be automated. It can also
be more widely personalized for use in investment selection. So
it sounds like a huge help.
Speaker 2 (01:26):
Do you even need people?
Speaker 3 (01:27):
Well, we always need people.
Speaker 2 (01:28):
We always I'm going to hold on. I wouldn't you
better be careful what you said? Curious what Anikoy thinks
about this. She's partner and national financial services leader at
the accounting firm Whipfly. She joins us from Chicago. We're
asking you because whip Flies just out with the survey
of asset managers where I know AI and the new
technology came up. We're going to go there, but first
we saw quite a sell off today. I know you
talked to a lot of clients given the volatility that
(01:51):
we've seen of late, the concern around the economic outlook.
What are you hearing from your clients right now?
Speaker 4 (01:58):
Yeah? Interestingly, enough of our survey, we did ask the
industry what they felt the outlook was for twenty twenty five.
About ninety percent of them are projecting that they're going
to still grow in twenty twenty five, with the majority
of them saying five percent or higher. So I think
we were seeing a sell off today, but many believe
(02:19):
that we're going to see a turnaround for the remainder
of the year.
Speaker 3 (02:22):
So not nervous. So like if you had to say,
you know, more nervous but confident or is that how you.
Speaker 4 (02:28):
See I say, I would say nerves but confident. Yes, Carol,
that's a good way to say it.
Speaker 3 (02:33):
All right, Love that, Love that. Having said that, you know,
what is top of mind for them? You know, we
did a nice you know, kind of lead up to
you in terms of AI. What is top of mind
for asset managers though? Is it the environment? Is it
having the tools that they need? Is it trying to
figure out how to use AI? What is top of
mind for them?
Speaker 4 (02:52):
Yeah? I think many of them right now are trying
to figure out an id eight around what technology is
going to play for them in the future. Sure, whether
it is AI, a lot of data and analytics, looking
to streamline the efficiencies, as well as continuing to advise
and focus more on those client relationships.
Speaker 2 (03:13):
So where where does this show up in sort of
the chain of the services that they offer? Does it
show up on the side of Okay, well, we've got
AI to help automate and you know, increase our margins,
so we're going to make more money or do they
become better at managing our assets? Do we make more
money having put money with them?
Speaker 4 (03:34):
I think you're going to see it in both spots, Tim,
I think you're going to see them using it to
automate and how they're engaging with their clients as well
as around some of the regulatory compliance. But then you're
also going to see it in how they're doing investment
strategies and which then does lead into the consumer making
more money as well?
Speaker 3 (03:54):
And is it a situation where the folks that have
a lot of money to put to work, they're still
going to get, you know, person to person kind of
care and then those who maybe don't have as much money.
Speaker 2 (04:06):
But how much do you need to get a phone call, Carol?
That's what I want to know exactly, or.
Speaker 3 (04:10):
Like I have a concern about my portfolio versus.
Speaker 2 (04:12):
How much you have to have for them to pick
up the phone.
Speaker 3 (04:15):
Can you answer that?
Speaker 4 (04:17):
I don't think they've determined that yet, but I do
think it's going to be a hybrid of both. Right,
folks aren't gonna only want to have the AI doing
their investing. They're still going to want to have that relationship,
but I think you're going to see AI continuing to
help them to do it in a more personalized way
as well as more efficient.
Speaker 3 (04:38):
Do you feel comfortable? Would you feel comfortable?
Speaker 2 (04:40):
What feel comfortable with was.
Speaker 3 (04:41):
Essentially like with a chat butt like kind of planning
around with your investments or something.
Speaker 5 (04:45):
You know.
Speaker 2 (04:46):
It's a very good question because I think the rise
of the robo advisor predates the fact that people are,
you know, thinking about using AI and these workflows robo
advisors just set it and forget it. That's at allocation
is there based on you know, years of modern portfolios
you think of like a wealth front or a better
mint Schwab as the intelligent portfolio. So yeah, I think version.
(05:10):
But you're not going to get I mean, look, jump
on in here, an you're not going to get the
same service that the asset managers you speak to are.
Are you know that you're going to get with like
one of these automated investment FORFIA, You're.
Speaker 4 (05:22):
Not going to don't want to have your advisor talking
to you about what your strategies are, where you're at
in your family life cycle all of those future endeavors, right,
but we all know and study has shown sometimes emotions
being part of our investment decisions, you know, don't always
make money for us. Many times they lose money for us.
(05:43):
So taking that out and having it be more automated
can be a good strategy.
Speaker 3 (05:49):
How are they accessing AI?
Speaker 2 (05:50):
That's That's exactly what I was going to.
Speaker 3 (05:52):
Ask you and I. It's my melt.
Speaker 2 (05:54):
Well, so maybe we won't be really we're just.
Speaker 3 (05:57):
An AI robot because you know, Tim and I are
increasingly having these conversations with their own in house tech
folks who follow AI, and it's just there's different models.
We keep hearing about maybe commoditization of AI. So just
trying to figure out where they're going for it.
Speaker 4 (06:16):
Yeah, I think there's going to be some struggles around
the data and the quality, around being able to implement
some of the architecture that's going to be needed, data
privacy and security concerns. You know, what are we going
to see around regulatory scrutiny?
Speaker 3 (06:33):
No, but I mean is it like open AI? Is
it chatchypt is a Gemini? Like? Where do where are
they're going to see?
Speaker 4 (06:38):
Yeah, you're going to see some identic AI, yes, but
I think you're also going to see on the front side.
But you're also going to see AI being used on
the back as well.
Speaker 3 (06:50):
M what does that mean?
Speaker 5 (06:51):
Wait?
Speaker 3 (06:51):
What do you mean? Then? So so there, so they're
layering obviously, like software and stuff on all of this.
So I mean, is there a model that seems to
dominate at this point or an LM that seems to
dominate at least for the asset management world?
Speaker 4 (07:08):
Not currently, but there's many of them that are being explored,
exploratory and ideated, and I think we'll see maybe one
coming out as the leader, but nothing currently.
Speaker 2 (07:21):
Okay, that's interesting to hear. Hey, something that I've been
watching closely in this world is thinking about the rise
of ETFs and the way active versus passive is really
dominated the conversation over the last few years. Our asset managers,
in your view, still bringing value to their clients when
(07:42):
portfolios that have really just hugged the benchmarks of the
S and P have performed so well over the past decade.
Speaker 4 (07:51):
I mean, are you asking if the ETFs are going
to continue to outperform?
Speaker 2 (07:56):
No, I'm asking if people are still seeing value in
asset managers, given that passive investing has done so well,
kind of the.
Speaker 3 (08:02):
Active versus passive argument that we've talked about it.
Speaker 4 (08:05):
Yeah, well, I think you don't have one hundred percent
of your population that's you know, willing to go the
passive route, right, and many want that advisor to be
there to really have that relationship, understand where they're at
in their family, in their in their life cycle, and
help guide them into some of those decisions. That's where
(08:28):
I think the difference is going to be when when
we talk you know, robo advising versus continuing to have
the hybrid. It's a trust factor. Yeah, and you guys,
you guys mentioned it earlier, right, if you trust only
having AI do it one hundred percent, I mean that's
where you're going to continue to see the advisor play
a significant role going forward.
Speaker 3 (08:48):
Yeah.
Speaker 2 (08:49):
I asked a doctor friend of mine if AI is
going to take his job, and he replied, would you
be comfortable getting on an airplane that is only flown
on autopilot?
Speaker 3 (09:00):
Sometimes? Yes?
Speaker 2 (09:02):
And I said, well, you're not a radiologist, but I
do think radiology is totally is is a field in
medicine that is right for disruption for he h. But
she did surgery, so.
Speaker 3 (09:12):
Yeah, yeah, but you gotta have a robot like robotic surgery,
right like you think about I don't know. Hey, listen, Anna,
thanks so much. It's a little bit of a wacky Friday,
and we appreciate you joining us on day.
Speaker 2 (09:23):
What are you talking about?
Speaker 3 (09:26):
And of course she's partner at National Financial Services, leader
at Whipfly, joining us from Chicago. This is Bloomberg.
Speaker 2 (09:32):
Well, as soon as I started reading this substack post
earlier this week from Kyla Scanlan, I knew we had
to get her on Bloomberg Business Week to talk about it.
You all know Kyla. She's a former associate at Capitol Group.
She's now a TikTok star. She's a financial educator and commentator.
She's a blogger. She contributes to Bloomberg Opinion. She's the
author of the fantastic book In This Economy, How Money
and Markets Really Work. We spoke to her last spring
(09:54):
when that book came out.
Speaker 3 (09:55):
And I have to say Tim's been talking about having
her on and about a post that got his tension.
It was entitled gen Z in the End of Predictable Progress,
How AI volatility and changing institutions are shaping young people's
economic reality. You're going to want to sit down and listen,
because I think many would agree that this is a
lot of what's going on in society today.
Speaker 2 (10:15):
Kyli, welcome back. You spend a lot of time on
the road over the last eight months traveling around the US.
You talked with economists, you spoke at universities. The essay
really a reflection on that. Are the kids all right?
Speaker 6 (10:29):
Yeah, the kids are all right. I think they're concerned.
Speaker 5 (10:32):
So I traveled to over twenty states over the past
eight months, you know, talking about my book. And when
I have the opportunity to talk about my book, I
also have the opportunity to talk to students, to talk
to people and the audience.
Speaker 6 (10:44):
Just wherever I'm going, I.
Speaker 5 (10:45):
Have an opportunity to talk to people about how they're
experiencing the economy.
Speaker 6 (10:50):
And there's a lot of uncertainty.
Speaker 5 (10:51):
People are really worried that the concept of a career
is going to go away entirely because of AI, and
then that's all being compounded by political certain right now,
and so I think there's just a lot of fear
in the economy at the moment.
Speaker 3 (11:04):
Kyla, you talk to an old person, they're going to say, yeah,
we've heard this before. You know, go during you know,
the Vietnam War or grandparents, go back to World War Two,
like that was a time of you know, there was
times of uncertainty. Nobody even knew if, like, you know,
we were going to survive it through. You know, So
what is what do you say to that, and what
is potentially different this time around?
Speaker 5 (11:27):
Yeah, of course every generation has had to deal with
their own uncertainty, and the fact that younger people are
dealing with uncertainty too doesn't negate to the uncertainty that
came before the very particular experiences that they're having. I
think right now, we have a very quick moving technological
revolution that's happening with AI. Nobody really knows how that's
going to impact the workforce. There's been talks of changing
(11:49):
social constructs. Jobs have been replaced, there's questions of if
jobs will just be augmented. There's just a lot of
uncertainty right there. And then I think with the new administration,
there's just a lot of switch ups, and so I
think you have that political uncertainty happening at the same
time that you have potential economic destabilization because of AI
and what it could do. Hopefully it does just good things,
(12:10):
but nobody knows, right, and so I think there's always
been uncertainty, but right now it's a very very present
for a lot of people.
Speaker 2 (12:16):
You argue that there are three different groups within gen Z.
Certainly no generation is a monolith. But who are the
three different groups and how have their experiences varied?
Speaker 6 (12:28):
Yeah, of course I think generational grouping.
Speaker 5 (12:30):
You know, everybody knows it's fraught with error, but I
think that the very particular experience of gen Z. So
I'm an old gen Z. There's the Bridge generation, which
is the gen Z one point zero that I'm a
part of. So I remember a world where there wasn't
smartphones like I remember a world where everything wasn't online
all of the time. And I graduated into the workforce
during the pandemic. People who are part of gen Z
(12:53):
one and a half, they're the COVID cohort. They were
in high school, they were in college during the pandemic.
That totally shaped how they interact with technol It's totally
shaped to how they interact with the economy. And then
there's gen Z two point zero, which are the digital natives.
And what I wrote in the article, which I think
might be a little bit true, where digital reality is
just another layer of reality. There's no actual separation. Everything
(13:16):
is completely intertwined for this younger generation. And of course
these are all very broad generalizations. It doesn't apply to
every single person, but I think that's the thematic that
we're seeing across these three cohorts.
Speaker 3 (13:28):
Kind of like, you know, you can't let the genie,
you know, what's the genie's out of the box. It's
out of the box. But having said that, if social
media wasn't so pervasive in our world, would we be
maybe having a different conversation about the younger generation.
Speaker 6 (13:43):
I think so.
Speaker 5 (13:43):
There's been a lot of really good research from a
lot of really really smart people on how social media
is impacting young people. I think that there definitely is
a lot of issues with comparison, a lot of issues
with kind of creating an idea that maybe the traditional
path isn't the best way to go because you could.
Speaker 6 (13:59):
Just do a mean coin.
Speaker 5 (14:01):
And there's all of these really influential TikTokers who portray
this lifestyle that I think people look at on social media.
Sir comparing themselves. So I think social media has definitely
complicated the reality that we live in and of course
has provided massive benefits as well, but it's definitely made
things more complex.
Speaker 2 (14:19):
What's the way to figure out a way to survive
in this economy though, or not just survive, to thrive
in this economy because it is one of creative destruction.
I mean, you write about or technological creative destruction. You
write about this idea that, Okay, on one hand, you
have this shortage of folks in the trades and there's
a real push to get you know, this idea of
a tool belt generation. On the other end of this,
(14:41):
you know, you see people who are making an entire
year's salary with one social media post, like, what's the
way to actually live and thrive in this economy?
Speaker 5 (14:53):
Yeah, a lot of people are living and thriving in
the economy. There's definitely a middle path. Like when in
the article, I make it so clear that I'm generalizing
that I'm not being very nuanced just for the sake
of making a point. I think there's a lot of
younger people who are looking at AI as a tool,
and so what they're doing is being really adaptable. They're saying, Okay,
I'm going to learn how this tool works, I'm going
to figure out if it can help my work, and
(15:15):
I'm just going to keep up with all of the
trends that are happening, so hopefully I can stay on
top of anything that might be disruptive to the career
path that I want to go down.
Speaker 6 (15:23):
And so I think that's a.
Speaker 5 (15:24):
Big thing that I've learned from a lot of people
over the past couple of months is everybody's just trying
to be adaptable. They're trying to pick up new skills
and new tools all of the time because you know,
in the age of uncertainty, that's just what you have
to do.
Speaker 6 (15:37):
You have to be a learner, not a learned.
Speaker 3 (15:40):
Yeah, you know, it's interesting and I think about in
the political environment we are, which is so divisive, and
I think some would argue that, you know, so many
of the lawmakers down in Washington are a lot older,
and you do wonder whether you know they are on
top of what needs to be in terms of policy
(16:01):
to meet what's needed for the younger generation. And I'm
just curious how you kind of roll that into it.
Speaker 5 (16:08):
Yeah, there's a lot of good research on that as well.
I mean, I think the main thing that a lot
of younger people are facing right now is a housing crisis,
which I feel like lawmakers maybe aren't able to internalize.
There was a chart today from out of Apollo that
was talking about the median age of buying a home,
I believe is fifty six years old in twenty twenty four.
(16:29):
In nineteen eighty one, the median age of home buyers
was thirty one years old. And so I think that's
just like a big thing that policymakers, for whatever reason,
haven't been able to act on. And I think that
would be a really quick way to solving some of
the economic issues that some people are facing in terms
of mobility, in terms of building wealth, and so I
do think maybe age could get in the way of
(16:52):
what understanding that issue.
Speaker 2 (16:54):
You guys say also touches on politics a little bit,
and given the number cun that we've seen since the election,
a lot of hay has been made about this move
right word among young people, a more conservative move among
young people. Is that what you found anecdotally, I.
Speaker 5 (17:13):
Think a lot of people from the States that I
visited did vote for Trump, who maybe wouldn't have voted
for him before. There's been a lot of good research
on this as well. John Burn Murdock, Derek Thompson at
from the Atlantic just recently wrote about this. But what
I found anecdotally, and the data actually supports this vote
cast data, is that most people were just concerned about
(17:33):
the economy. They were looking for some sort of solution.
They want prices to go down, and so I think
that's what a lot of young people put their hopes
in with Donald Trump. Whether or not that will happen,
who knows, But that's what I noticed. It wasn't a
sense of malice. It was just like, we really want
prices to be lower.
Speaker 3 (17:51):
So it's not that they're necessarissarily now conservatives. It's just
a case of looking at how far their money goes.
Speaker 5 (17:59):
Right exactly like a lot of these younger voters. If
you look at the AP vote cast data, you know,
they were more so concerned about the economy than concerned
about immigration. They were more so concerned about healthcare, student
debt rather than anything else. And so it's kind of
these big bucket items that I think they wanted fast
and different solutions on, and so they voted a different way.
Speaker 6 (18:20):
Because of that, you.
Speaker 2 (18:22):
Have a section of the essay that is called our
Fiscal Reality. What is the fiscal reality that we face
right now that these young people face.
Speaker 5 (18:31):
I think a lot of I mean, it's what everybody's facing,
right I think it's a little hard to escape in
terms of the news cycle and just sort of the
dismantling that we're seeing happening at the governmental level with
things like DOGE, where there's mass firings and you know,
subsequent rehirings in some cases. There's all sorts of lawsuits happening.
(18:53):
There's tariffs happening. We got consumer sentiment data today showing
that people are quite concerned about tariffs and the inflationary
impact that those could have. And then of course there's
the geopolitics, where it's now quite confusing to figure out
how the United States is positioning itself in terms of
the geopolitical stage.
Speaker 6 (19:09):
And so I think there's as always, you know, there's.
Speaker 5 (19:12):
More questions and answers for young people and pretty much
everybody as we're watching what's unfolding.
Speaker 3 (19:18):
What's fascinating too, and listening to you and your post
is that you know, we're talking about a younger generation,
younger folks that are across the United States that you've
been talking to. And yet we have an aging population
right where more and more folks are older, which which
is problematic. Right, we talk about it here in terms
of a really healthy, thriving economy. You know, whether we
(19:41):
talk about then Japan, what had happened there, and you know,
we're just watching it happen around the developed world. But
you tap into that a little bit as well.
Speaker 5 (19:50):
Yeah, No, the demographic crisis is definitely one of the
biggest issues that the United States is facing. I have
a different newsletter on that specific topic, particularly around the
idea of the demographic crisis in dating apps and you know,
the fertility rates and replacement rates and how we really
you need to figure that out. But in terms of
the aging population, you know, a large part of government spending,
(20:10):
as you will know, social Security and Medicare, and I
have a chart in the newsletter. You know, social Security
is twenty nine percent of spending growth from twenty twenty
four to twenty thirty four, Medicare is twenty five percent,
and then interest is in another twenty three percent. So
the government paying interest on that debt load and so
I think when you look at things like that, people
(20:32):
have to pay into Social Security, and if you have
an aging population and you don't have enough young people
paying into that program, you have all sorts of problems
coming around. And so I think that's the biggest concern
that a lot of people have been pointing out, is
you know, the scale is tipping in a way that
it might not be sustainable to have these programs in
the future.
Speaker 2 (20:52):
Do you think we will? And this is a little
out of out of the lane of your most recent post,
and you said you're working on a post about this,
but do you think we're going to face a demographic
crisis in the US because there is so much concern
about the cost of raising kids right now?
Speaker 5 (21:09):
Yeah, I mean, if you think about the Sandwich generation, right,
so the Gen xers, a lot of them in older millennials,
they're dealing with elder care, which is extraordinarily expensive, and
they're dealing with childcare, which is also extraordinarily expensive. And
so you have this group of people that's being squeezed
on both ends, and other people are watching that happen,
and childcare has just gone through the roof in terms
(21:31):
of cost. And I think it's pretty unaffordable for most people,
and so I think if that continues, it could absolutely
deter people from having children and absolutely exacerbate the demographic crisis.
And then if you think about the policy around immigration,
and that's going to exacerbate our demographic crisis as well
because we won't have.
Speaker 6 (21:51):
Those new inflows of younger people.
Speaker 5 (21:54):
And so there's kind of that dual force happening that
could put more pressure on our demographic situation for sure.
Speaker 3 (22:01):
All Right, we're going to leave it there, Kayla, Kyla,
thank you so much. Kyla Scanalon, contributor of Bloomberg Opinion,
her book of Course In This Economy, How Money and
Markets Really Work. Really appreciate all this time that you
gave us on this Friday.
Speaker 2 (22:12):
Yeah, check out her substack
Bloomberg Audio Studios, Podcasts, Radio News. This is Bloomberg Business
Week insight from the reporters and editors that bring you
America's most trusted business magazine, plus global business, finance and
tech news as it happens. Bloomberg Business Week with Carol
Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:27):
It is Bloomberg a business week. As Carol mentioned, and
as we've been talking about stocks taking a real turn
lower on the day today SMB five hundred down one
point seven percent, it does still put us in positive
territory for year to date. So far this year, up
two point two percent on the S and P five hundred.
Taking a look at this week, though we are down
(00:47):
two percent on the Nasdaq, the S and P five
hunderd down one point seven percent.
Speaker 3 (00:52):
All right, well, our Bloomberg Intelligence team out with a
note this week about AI and the asset management business,
Kevin Ryan and lent O Tang, writing that generative AI
is a quote game changing technology. They go on to say,
rapid progress over the past year means generative AI looks
like it must have tool for all asset managers. Generative AI, Yeah, exactly,
(01:12):
it can now be embedded in all an asset manager's workflows,
enabling most internal processes to be automated. It can also
be more widely personalized for use in investment selection. So
it sounds like a huge help.
Speaker 2 (01:26):
Do you even need people?
Speaker 3 (01:27):
Well, we always need people.
Speaker 2 (01:28):
We always I'm going to hold on. I wouldn't you
better be careful what you said? Curious what Anikoy thinks
about this. She's partner and national financial services leader at
the accounting firm Whipfly. She joins us from Chicago. We're
asking you because whip Flies just out with the survey
of asset managers where I know AI and the new
technology came up. We're going to go there, but first
we saw quite a sell off today. I know you
talked to a lot of clients given the volatility that
(01:51):
we've seen of late, the concern around the economic outlook.
What are you hearing from your clients right now?
Speaker 4 (01:58):
Yeah? Interestingly, enough of our survey, we did ask the
industry what they felt the outlook was for twenty twenty five.
About ninety percent of them are projecting that they're going
to still grow in twenty twenty five, with the majority
of them saying five percent or higher. So I think
we were seeing a sell off today, but many believe
(02:19):
that we're going to see a turnaround for the remainder
of the year.
Speaker 3 (02:22):
So not nervous. So like if you had to say,
you know, more nervous but confident or is that how you.
Speaker 4 (02:28):
See I say, I would say nerves but confident. Yes, Carol,
that's a good way to say it.
Speaker 3 (02:33):
All right, Love that, Love that. Having said that, you know,
what is top of mind for them? You know, we
did a nice you know, kind of lead up to
you in terms of AI. What is top of mind
for asset managers though? Is it the environment? Is it
having the tools that they need? Is it trying to
figure out how to use AI? What is top of
mind for them?
Speaker 4 (02:52):
Yeah? I think many of them right now are trying
to figure out an id eight around what technology is
going to play for them in the future. Sure, whether
it is AI, a lot of data and analytics, looking
to streamline the efficiencies, as well as continuing to advise
and focus more on those client relationships.
Speaker 2 (03:13):
So where where does this show up in sort of
the chain of the services that they offer? Does it
show up on the side of Okay, well, we've got
AI to help automate and you know, increase our margins,
so we're going to make more money or do they
become better at managing our assets? Do we make more
money having put money with them?
Speaker 4 (03:34):
I think you're going to see it in both spots, Tim,
I think you're going to see them using it to
automate and how they're engaging with their clients as well
as around some of the regulatory compliance. But then you're
also going to see it in how they're doing investment
strategies and which then does lead into the consumer making
more money as well?
Speaker 3 (03:54):
And is it a situation where the folks that have
a lot of money to put to work, they're still
going to get, you know, person to person kind of
care and then those who maybe don't have as much money.
Speaker 2 (04:06):
But how much do you need to get a phone call, Carol?
That's what I want to know exactly, or.
Speaker 3 (04:10):
Like I have a concern about my portfolio versus.
Speaker 2 (04:12):
How much you have to have for them to pick
up the phone.
Speaker 3 (04:15):
Can you answer that?
Speaker 4 (04:17):
I don't think they've determined that yet, but I do
think it's going to be a hybrid of both. Right,
folks aren't gonna only want to have the AI doing
their investing. They're still going to want to have that relationship,
but I think you're going to see AI continuing to
help them to do it in a more personalized way
as well as more efficient.
Speaker 3 (04:38):
Do you feel comfortable? Would you feel comfortable?
Speaker 2 (04:40):
What feel comfortable with was.
Speaker 3 (04:41):
Essentially like with a chat butt like kind of planning
around with your investments or something.
Speaker 5 (04:45):
You know.
Speaker 2 (04:46):
It's a very good question because I think the rise
of the robo advisor predates the fact that people are,
you know, thinking about using AI and these workflows robo
advisors just set it and forget it. That's at allocation
is there based on you know, years of modern portfolios
you think of like a wealth front or a better
mint Schwab as the intelligent portfolio. So yeah, I think version.
(05:10):
But you're not going to get I mean, look, jump
on in here, an you're not going to get the
same service that the asset managers you speak to are.
Are you know that you're going to get with like
one of these automated investment FORFIA, You're.
Speaker 4 (05:22):
Not going to don't want to have your advisor talking
to you about what your strategies are, where you're at
in your family life cycle all of those future endeavors, right,
but we all know and study has shown sometimes emotions
being part of our investment decisions, you know, don't always
make money for us. Many times they lose money for us.
(05:43):
So taking that out and having it be more automated
can be a good strategy.
Speaker 3 (05:49):
How are they accessing AI?
Speaker 2 (05:50):
That's That's exactly what I was going to.
Speaker 3 (05:52):
Ask you and I. It's my melt.
Speaker 2 (05:54):
Well, so maybe we won't be really we're just.
Speaker 3 (05:57):
An AI robot because you know, Tim and I are
increasingly having these conversations with their own in house tech
folks who follow AI, and it's just there's different models.
We keep hearing about maybe commoditization of AI. So just
trying to figure out where they're going for it.
Speaker 4 (06:16):
Yeah, I think there's going to be some struggles around
the data and the quality, around being able to implement
some of the architecture that's going to be needed, data
privacy and security concerns. You know, what are we going
to see around regulatory scrutiny?
Speaker 3 (06:33):
No, but I mean is it like open AI? Is
it chatchypt is a Gemini? Like? Where do where are
they're going to see?
Speaker 4 (06:38):
Yeah, you're going to see some identic AI, yes, but
I think you're also going to see on the front side.
But you're also going to see AI being used on
the back as well.
Speaker 3 (06:50):
M what does that mean?
Speaker 5 (06:51):
Wait?
Speaker 3 (06:51):
What do you mean? Then? So so there, so they're
layering obviously, like software and stuff on all of this.
So I mean, is there a model that seems to
dominate at this point or an LM that seems to
dominate at least for the asset management world?
Speaker 4 (07:08):
Not currently, but there's many of them that are being explored,
exploratory and ideated, and I think we'll see maybe one
coming out as the leader, but nothing currently.
Speaker 2 (07:21):
Okay, that's interesting to hear. Hey, something that I've been
watching closely in this world is thinking about the rise
of ETFs and the way active versus passive is really
dominated the conversation over the last few years. Our asset managers,
in your view, still bringing value to their clients when
(07:42):
portfolios that have really just hugged the benchmarks of the
S and P have performed so well over the past decade.
Speaker 4 (07:51):
I mean, are you asking if the ETFs are going
to continue to outperform?
Speaker 2 (07:56):
No, I'm asking if people are still seeing value in
asset managers, given that passive investing has done so well,
kind of the.
Speaker 3 (08:02):
Active versus passive argument that we've talked about it.
Speaker 4 (08:05):
Yeah, well, I think you don't have one hundred percent
of your population that's you know, willing to go the
passive route, right, and many want that advisor to be
there to really have that relationship, understand where they're at
in their family, in their in their life cycle, and
help guide them into some of those decisions. That's where
(08:28):
I think the difference is going to be when when
we talk you know, robo advising versus continuing to have
the hybrid. It's a trust factor. Yeah, and you guys,
you guys mentioned it earlier, right, if you trust only
having AI do it one hundred percent, I mean that's
where you're going to continue to see the advisor play
a significant role going forward.
Speaker 3 (08:48):
Yeah.
Speaker 2 (08:49):
I asked a doctor friend of mine if AI is
going to take his job, and he replied, would you
be comfortable getting on an airplane that is only flown
on autopilot?
Speaker 3 (09:00):
Sometimes? Yes?
Speaker 2 (09:02):
And I said, well, you're not a radiologist, but I
do think radiology is totally is is a field in
medicine that is right for disruption for he h. But
she did surgery, so.
Speaker 3 (09:12):
Yeah, yeah, but you gotta have a robot like robotic surgery,
right like you think about I don't know. Hey, listen, Anna,
thanks so much. It's a little bit of a wacky Friday,
and we appreciate you joining us on day.
Speaker 2 (09:23):
What are you talking about?
Speaker 3 (09:26):
And of course she's partner at National Financial Services, leader
at Whipfly, joining us from Chicago. This is Bloomberg.
Speaker 2 (09:32):
Well, as soon as I started reading this substack post
earlier this week from Kyla Scanlan, I knew we had
to get her on Bloomberg Business Week to talk about it.
You all know Kyla. She's a former associate at Capitol Group.
She's now a TikTok star. She's a financial educator and commentator.
She's a blogger. She contributes to Bloomberg Opinion. She's the
author of the fantastic book In This Economy, How Money
and Markets Really Work. We spoke to her last spring
(09:54):
when that book came out.
Speaker 3 (09:55):
And I have to say Tim's been talking about having
her on and about a post that got his tension.
It was entitled gen Z in the End of Predictable Progress,
How AI volatility and changing institutions are shaping young people's
economic reality. You're going to want to sit down and listen,
because I think many would agree that this is a
lot of what's going on in society today.
Speaker 2 (10:15):
Kyli, welcome back. You spend a lot of time on
the road over the last eight months traveling around the US.
You talked with economists, you spoke at universities. The essay
really a reflection on that. Are the kids all right?
Speaker 6 (10:29):
Yeah, the kids are all right. I think they're concerned.
Speaker 5 (10:32):
So I traveled to over twenty states over the past
eight months, you know, talking about my book. And when
I have the opportunity to talk about my book, I
also have the opportunity to talk to students, to talk
to people and the audience.
Speaker 6 (10:44):
Just wherever I'm going, I.
Speaker 5 (10:45):
Have an opportunity to talk to people about how they're
experiencing the economy.
Speaker 6 (10:50):
And there's a lot of uncertainty.
Speaker 5 (10:51):
People are really worried that the concept of a career
is going to go away entirely because of AI, and
then that's all being compounded by political certain right now,
and so I think there's just a lot of fear
in the economy at the moment.
Speaker 3 (11:04):
Kyla, you talk to an old person, they're going to say, yeah,
we've heard this before. You know, go during you know,
the Vietnam War or grandparents, go back to World War Two,
like that was a time of you know, there was
times of uncertainty. Nobody even knew if, like, you know,
we were going to survive it through. You know, So
what is what do you say to that, and what
is potentially different this time around?
Speaker 5 (11:27):
Yeah, of course every generation has had to deal with
their own uncertainty, and the fact that younger people are
dealing with uncertainty too doesn't negate to the uncertainty that
came before the very particular experiences that they're having. I
think right now, we have a very quick moving technological
revolution that's happening with AI. Nobody really knows how that's
going to impact the workforce. There's been talks of changing
(11:49):
social constructs. Jobs have been replaced, there's questions of if
jobs will just be augmented. There's just a lot of
uncertainty right there. And then I think with the new administration,
there's just a lot of switch ups, and so I
think you have that political uncertainty happening at the same
time that you have potential economic destabilization because of AI
and what it could do. Hopefully it does just good things,
(12:10):
but nobody knows, right, and so I think there's always
been uncertainty, but right now it's a very very present
for a lot of people.
Speaker 2 (12:16):
You argue that there are three different groups within gen Z.
Certainly no generation is a monolith. But who are the
three different groups and how have their experiences varied?
Speaker 6 (12:28):
Yeah, of course I think generational grouping.
Speaker 5 (12:30):
You know, everybody knows it's fraught with error, but I
think that the very particular experience of gen Z. So
I'm an old gen Z. There's the Bridge generation, which
is the gen Z one point zero that I'm a
part of. So I remember a world where there wasn't
smartphones like I remember a world where everything wasn't online
all of the time. And I graduated into the workforce
during the pandemic. People who are part of gen Z
(12:53):
one and a half, they're the COVID cohort. They were
in high school, they were in college during the pandemic.
That totally shaped how they interact with technol It's totally
shaped to how they interact with the economy. And then
there's gen Z two point zero, which are the digital natives.
And what I wrote in the article, which I think
might be a little bit true, where digital reality is
just another layer of reality. There's no actual separation. Everything
(13:16):
is completely intertwined for this younger generation. And of course
these are all very broad generalizations. It doesn't apply to
every single person, but I think that's the thematic that
we're seeing across these three cohorts.
Speaker 3 (13:28):
Kind of like, you know, you can't let the genie,
you know, what's the genie's out of the box. It's
out of the box. But having said that, if social
media wasn't so pervasive in our world, would we be
maybe having a different conversation about the younger generation.
Speaker 6 (13:43):
I think so.
Speaker 5 (13:43):
There's been a lot of really good research from a
lot of really really smart people on how social media
is impacting young people. I think that there definitely is
a lot of issues with comparison, a lot of issues
with kind of creating an idea that maybe the traditional
path isn't the best way to go because you could.
Speaker 6 (13:59):
Just do a mean coin.
Speaker 5 (14:01):
And there's all of these really influential TikTokers who portray
this lifestyle that I think people look at on social media.
Sir comparing themselves. So I think social media has definitely
complicated the reality that we live in and of course
has provided massive benefits as well, but it's definitely made
things more complex.
Speaker 2 (14:19):
What's the way to figure out a way to survive
in this economy though, or not just survive, to thrive
in this economy because it is one of creative destruction.
I mean, you write about or technological creative destruction. You
write about this idea that, Okay, on one hand, you
have this shortage of folks in the trades and there's
a real push to get you know, this idea of
a tool belt generation. On the other end of this,
(14:41):
you know, you see people who are making an entire
year's salary with one social media post, like, what's the
way to actually live and thrive in this economy?
Speaker 5 (14:53):
Yeah, a lot of people are living and thriving in
the economy. There's definitely a middle path. Like when in
the article, I make it so clear that I'm generalizing
that I'm not being very nuanced just for the sake
of making a point. I think there's a lot of
younger people who are looking at AI as a tool,
and so what they're doing is being really adaptable. They're saying, Okay,
I'm going to learn how this tool works, I'm going
to figure out if it can help my work, and
(15:15):
I'm just going to keep up with all of the
trends that are happening, so hopefully I can stay on
top of anything that might be disruptive to the career
path that I want to go down.
Speaker 6 (15:23):
And so I think that's a.
Speaker 5 (15:24):
Big thing that I've learned from a lot of people
over the past couple of months is everybody's just trying
to be adaptable. They're trying to pick up new skills
and new tools all of the time because you know,
in the age of uncertainty, that's just what you have
to do.
Speaker 6 (15:37):
You have to be a learner, not a learned.
Speaker 3 (15:40):
Yeah, you know, it's interesting and I think about in
the political environment we are, which is so divisive, and
I think some would argue that, you know, so many
of the lawmakers down in Washington are a lot older,
and you do wonder whether you know they are on
top of what needs to be in terms of policy
(16:01):
to meet what's needed for the younger generation. And I'm
just curious how you kind of roll that into it.
Speaker 5 (16:08):
Yeah, there's a lot of good research on that as well.
I mean, I think the main thing that a lot
of younger people are facing right now is a housing crisis,
which I feel like lawmakers maybe aren't able to internalize.
There was a chart today from out of Apollo that
was talking about the median age of buying a home,
I believe is fifty six years old in twenty twenty four.
(16:29):
In nineteen eighty one, the median age of home buyers
was thirty one years old. And so I think that's
just like a big thing that policymakers, for whatever reason,
haven't been able to act on. And I think that
would be a really quick way to solving some of
the economic issues that some people are facing in terms
of mobility, in terms of building wealth, and so I
do think maybe age could get in the way of
(16:52):
what understanding that issue.
Speaker 2 (16:54):
You guys say also touches on politics a little bit,
and given the number cun that we've seen since the election,
a lot of hay has been made about this move
right word among young people, a more conservative move among
young people. Is that what you found anecdotally, I.
Speaker 5 (17:13):
Think a lot of people from the States that I
visited did vote for Trump, who maybe wouldn't have voted
for him before. There's been a lot of good research
on this as well. John Burn Murdock, Derek Thompson at
from the Atlantic just recently wrote about this. But what
I found anecdotally, and the data actually supports this vote
cast data, is that most people were just concerned about
(17:33):
the economy. They were looking for some sort of solution.
They want prices to go down, and so I think
that's what a lot of young people put their hopes
in with Donald Trump. Whether or not that will happen,
who knows, But that's what I noticed. It wasn't a
sense of malice. It was just like, we really want
prices to be lower.
Speaker 3 (17:51):
So it's not that they're necessarissarily now conservatives. It's just
a case of looking at how far their money goes.
Speaker 5 (17:59):
Right exactly like a lot of these younger voters. If
you look at the AP vote cast data, you know,
they were more so concerned about the economy than concerned
about immigration. They were more so concerned about healthcare, student
debt rather than anything else. And so it's kind of
these big bucket items that I think they wanted fast
and different solutions on, and so they voted a different way.
Speaker 6 (18:20):
Because of that, you.
Speaker 2 (18:22):
Have a section of the essay that is called our
Fiscal Reality. What is the fiscal reality that we face
right now that these young people face.
Speaker 5 (18:31):
I think a lot of I mean, it's what everybody's facing,
right I think it's a little hard to escape in
terms of the news cycle and just sort of the
dismantling that we're seeing happening at the governmental level with
things like DOGE, where there's mass firings and you know,
subsequent rehirings in some cases. There's all sorts of lawsuits happening.
(18:53):
There's tariffs happening. We got consumer sentiment data today showing
that people are quite concerned about tariffs and the inflationary
impact that those could have. And then of course there's
the geopolitics, where it's now quite confusing to figure out
how the United States is positioning itself in terms of
the geopolitical stage.
Speaker 6 (19:09):
And so I think there's as always, you know, there's.
Speaker 5 (19:12):
More questions and answers for young people and pretty much
everybody as we're watching what's unfolding.
Speaker 3 (19:18):
What's fascinating too, and listening to you and your post
is that you know, we're talking about a younger generation,
younger folks that are across the United States that you've
been talking to. And yet we have an aging population
right where more and more folks are older, which which
is problematic. Right, we talk about it here in terms
of a really healthy, thriving economy. You know, whether we
(19:41):
talk about then Japan, what had happened there, and you know,
we're just watching it happen around the developed world. But
you tap into that a little bit as well.
Speaker 5 (19:50):
Yeah, No, the demographic crisis is definitely one of the
biggest issues that the United States is facing. I have
a different newsletter on that specific topic, particularly around the
idea of the demographic crisis in dating apps and you know,
the fertility rates and replacement rates and how we really
you need to figure that out. But in terms of
the aging population, you know, a large part of government spending,
(20:10):
as you will know, social Security and Medicare, and I
have a chart in the newsletter. You know, social Security
is twenty nine percent of spending growth from twenty twenty
four to twenty thirty four, Medicare is twenty five percent,
and then interest is in another twenty three percent. So
the government paying interest on that debt load and so
I think when you look at things like that, people
(20:32):
have to pay into Social Security, and if you have
an aging population and you don't have enough young people
paying into that program, you have all sorts of problems
coming around. And so I think that's the biggest concern
that a lot of people have been pointing out, is
you know, the scale is tipping in a way that
it might not be sustainable to have these programs in
the future.
Speaker 2 (20:52):
Do you think we will? And this is a little
out of out of the lane of your most recent post,
and you said you're working on a post about this,
but do you think we're going to face a demographic
crisis in the US because there is so much concern
about the cost of raising kids right now?
Speaker 5 (21:09):
Yeah, I mean, if you think about the Sandwich generation, right,
so the Gen xers, a lot of them in older millennials,
they're dealing with elder care, which is extraordinarily expensive, and
they're dealing with childcare, which is also extraordinarily expensive. And
so you have this group of people that's being squeezed
on both ends, and other people are watching that happen,
and childcare has just gone through the roof in terms
(21:31):
of cost. And I think it's pretty unaffordable for most people,
and so I think if that continues, it could absolutely
deter people from having children and absolutely exacerbate the demographic crisis.
And then if you think about the policy around immigration,
and that's going to exacerbate our demographic crisis as well
because we won't have.
Speaker 6 (21:51):
Those new inflows of younger people.
Speaker 5 (21:54):
And so there's kind of that dual force happening that
could put more pressure on our demographic situation for sure.
Speaker 3 (22:01):
All Right, we're going to leave it there, Kayla, Kyla,
thank you so much. Kyla Scanalon, contributor of Bloomberg Opinion,
her book of Course In This Economy, How Money and
Markets Really Work. Really appreciate all this time that you
gave us on this Friday.
Speaker 2 (22:12):
Yeah, check out her substack
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