August 7, 2025 • 27 mins
In my first episode hosting Lead-Lag Live, I sit down with Richard McWhorter, Managing Partner at SRM Private Wealth, to unpack how he’s advising high-net-worth clients through today’s volatile market.
We talk valuation risk, tariffs, and intergenerational wealth strategy — and why Richard is focused on preservation over prediction in a market full of noise.
In this episode:
- Why today’s stock multiples don’t add up
- The long-term impact of U.S. tariffs and trade deals
- How SRM helps clients navigate macro uncertainty
- What younger generations can learn about risk
- How to protect and grow wealth across generations
Lead-Lag Live brings you straight into conversations with top financial minds shaping markets in real time.
Subscribe for more interviews, insights, and raw takes that go deeper than headlines.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The tariffs are something that you know.
Obviously not obviously willmost likely create higher
revenue for the United States.
For example, we've looked atmusic publishing recently and
that's buying music and thenreceiving the income that comes
in from that.
We've looked at media rightsand investing in those types of
(00:23):
things.
Speaker 2 (00:33):
Hello and welcome to LeadLeg Live.
I'm Melanie Schaefer, the newhead of media strategy and
business development at LeadLegMedia and your new host.
As of today, I'm taking overfrom Michael Guyad, the founder
of Leadleg Media, who you allknow so well, which, of course,
means I have some big shoes tofill, but I'm thrilled to carry
(00:54):
forward the kind of insightfuland no-nonsense conversations
that matter to investors.
Joining me today is RichardMcWhorter, managing Partner and
Private Wealth Advisor at SRMPrivate Wealth, a firm that spun
out from Merrill Lynch witharound $1.9 billion in client
assets under management.
(01:16):
Richard, thank you so much forbeing here today.
Speaker 1 (01:19):
Melanie, nice to see you and thank you for having me.
Speaker 2 (01:21):
Now, before we get into some broader topics, I want
to start with SRM's originstory.
Your team spun out from MerrillLynch to launch SRM under the
Summit platform.
What drove that move and howhas your business evolved since
making that leap?
Speaker 1 (01:36):
Yeah, so I was at Merrill for 16 years prior to
establishing SRM.
Prior to that, I was at SmithBarney for 16 years and actually
I was at Smith Barney since1989.
So I actually was an intern anda receptionist and became a
(01:58):
sales assistant at that time,anyway, and then in 1992, became
a financial advisor.
Um, anyway, uh, and then in1992, became a financial advisor
.
So to answer your questiondirectly, is that I, uh, about a
year ago, I had a difference ofopinion with Merrill Lynch's
management in regards to how Iwanted to service my clients.
(02:18):
They thought I should staywithin the scope of Merrill
Lynch, and I said that, uh, that, because I thought I was
over-servicing my clients andthat idea didn't make much sense
to me, and so I wanted to moveout on my own and advise clients
without any what I perceived asinherent conflicts of interest.
(02:41):
And so, therefore, we set upSRM and discuss this with the
clients afterwards and explainthe reasoning, and we were
fortunate enough that theclients followed and we've been
in business for just over a yearnow.
Speaker 2 (02:59):
So just a little more about that.
You work with high net worthclients across finance, real
estate and, I think, evenentertainment, and is this kind
of environment, macrouncertainty, election noise rate
cut always just out of reach?
And how are clients expecting ashift and how do you stay ahead
with them.
Speaker 1 (03:17):
There's a lot to that question.
So, on the political front aswell as the investment front,
what we do is that life andthings that they may own and
those types of items Are there avoice or an advisor that helps
(04:03):
them once again critically thinkthrough a lot of these
different ideas and topics andtry and come up with some type
of solution that would make thebest sense for that client.
Speaker 2 (04:17):
Okay, so I just want to switch now a little bit to
talk about the markets moregenerally.
We're in the midst of a hugeearnings season and Oppenheimer
raised its year-end S&P 500target to 7,100, up from 5,950,
citing AI momentum, strongearnings revisions and easing
(04:37):
policy risks.
How are you thinking aboutequity positioning in this kind
of environment?
Speaker 1 (04:42):
Yeah, equity position is really difficult for me
right now.
I you know the one thing that Iknow these guys keep raising
their price targets and thoseitems.
I really have a hard time withthe multiples that we're trading
at and I don't think that'sdiscussed enough.
I think you know as much aswe're looking at forward
(05:04):
earnings for the next one, two,three years, things that are
trading at historically highmultiples for the components of,
let's say, the S&P 500, thedifferent equities that are
within that, I don't see howwe're getting to these much
higher levels or how we're justgoing to continue to expand
(05:26):
multiples to attain these pricetargets.
Personally, we you know we staywithin our discipline of
looking at historical multiplesfor each one of the equities
that we follow and then adviseaccordingly whether or not it's
a buy, whether or not it'swithin the range that we've
(05:47):
created, or maybe even a sell ifit's exceeded that range.
Speaker 2 (05:51):
So are you asking investors or thinking that
investors should be coming moredefensive, or is that something
that people can put off for?
Speaker 1 (05:59):
Yeah, I don't think it's an all none question.
I think.
You know, I think a lot of thatstuff has to do with you know
we use dollar cost averaging toget into stocks and we use
dollar cost averaging to get outof stocks.
You know, the the idea ofunderstanding that things that I
believe are overvalued couldnot get more overvalued would be
(06:22):
ridiculous on my part.
Could not get more overvaluedwould be ridiculous on my part.
And the same on the on, on,when we're buying things, to
think that I'm getting it at thevery bottom.
You know, we just don't have,no one has that clarity.
So we spend a lot of timeworking our way into positions
over a period of time and youknow, I I listen.
(06:47):
I always tell clients I'm a,I'm a singles and doubles hitter
all day long.
That's what I do for these guys.
Uh, most of the people that wedeal with happen to be, uh, have
significant wealth and um, arenot looking for someone to be
hitting home runs, um, so I justcontinue to hit my singles and
doubles and dollar cost averagein and, uh, you know, we kind of
(07:07):
just stay in our lane.
Speaker 2 (07:08):
Yeah.
So, and one of the biggestheadlines this week was the U?
S and EU just reached a majortrade agreement.
The U?
S will cap tariffs at 15% onmost EU imports, while the EU
agreed to buy up to 750 billionin U S energy and invest another
600 billion in infrastructure.
That's sort of a huge shift inUS energy and invest another
$600 billion in infrastructure.
That's sort of a huge shift intone.
How do you see that impactingportfolios, especially for
(07:29):
clients with, maybe, globalexposure?
Speaker 1 (07:31):
Yeah, well, you know we'll see.
You know we've heard a lot of.
We've had some spits and startsthrough this whole thing, and
you know we'll see whether ornot the there is, what kind of
impact, first of all, thetariffs have.
Right, we don't have thatVision yet.
You know, one thing that peoplehave to understand is is that
(07:56):
it takes time for these thingsto be implemented.
It takes time for these thingsto be reflected in the markets,
to be reflected in prices.
It takes time for these thingsto be reflected in the markets,
to be reflected in prices, andso, when we're starting to
potentially come together withsome type of tariff on different
products, you know it's goingto take months for us to
actually see those thingsreflected in the prices, and
(08:21):
then we have to see what theimpact of that is.
Those are going to be uh on.
The second part of that is isthat you know the 750 billion,
or if that's uh?
I don't know exactly if that'sthe number, um, I'm assuming.
So the $750 billion, though, isum, you know, uh, we'll see if
they spend that kind of money,um, you know, you know these are
all um ideas of what they'regoing to do and how they're
(08:45):
going to do things.
We'll see what actually getsimplemented and then what the
effect of that is.
When you, you know, when youcritically think through these
things, I think you have to lookat what happens.
You know what happens if westart to see inflation?
What's what happens if we startto see this money being spent
and then vice versa?
(09:05):
What happens if we start to seeno?
What happens if we start to seethis money being spent and then
vice versa?
What happens if we start to seeno inflation?
Maybe the companies will takethe hit in their profit margins.
We don't have that idea.
I'm sorry.
We don't have that vision as ofyet.
Speaker 2 (09:17):
So you're taking on more of a wait and see approach
instead of predicting whetheryou see like a longer term.
Do you see a trade agreement asa stabilizer or a disruptor?
Speaker 1 (09:27):
yeah, I think.
I think it depends on thewhat's in, what's within the
trade agreements.
Um, you know the, the tariffsspecifically.
Uh, the tariffs are somethingthat you know, know, obviously
not, obviously will most likelycreate higher revenue for the
(09:49):
United States.
But what's the end goal?
Is the end goal to open uptrading with other partners so
that we can start to sell moreof our products to these other
countries without reciprocaltariffs or tariffs of their own?
Or is it to bring back jobs tothe United States?
(10:10):
You know, I don't know what the,what the administration's end
goal is in all this thing, ormaybe it's all the above.
So, when you're looking at, youknow if you're trying to bring
back jobs to the United States,as a 15% tariff on the EU or a
30% tariff on China, enough, sothat jobs will be, you know,
(10:35):
come back to the United States.
So you know, you have to gothrough each one of these things
individually to kind of try andfigure out what that end goal
is in going through this.
Maybe it's just to increaserevenue, right?
Maybe it's that simple.
Speaker 2 (10:51):
Yeah.
So if we switch just for acouple of minutes to wealth
strategy, there's so much sortof in flux right now around
taxes and broader policyproposals the midterms coming up
how is SRM helping clientsnavigate that uncertainty when
it comes to tax efficiency, say,or wealth preservation?
Speaker 1 (11:09):
Yeah, you know, listen, there's a lot of things
in the toolbox that we have thatare great for preservation, you
know.
The question is is that where dowe place that money?
For example, if I'm going intofixed income to have some money
that's safe and secure and justgoing to pay me a dividend or an
(11:33):
interest payment of some sort,I would say to you that we are
more likely to be investing inthe bond market than we are the
stock market currently, whetheror not that's buying short-term
bonds.
If the Fed decides that they'regoing to start dropping
interest rates, then I probablydon't want to have a lot in
(11:56):
short-term bonds.
And then the question, by theway, in that respect, is does
interest rates on the two to30-year bonds, do they start to
come down, or are those going togo up like they did the last
time that the Fed droppedinterest rates?
And we have to kind of playwith that game a little bit.
Where do I place money?
On the yield curve?
And and then in stocks.
(12:18):
You know, you know we're goingto be looking for those stocks
that are trading at reasonablemultiples for that particular
stock, and that's what we'realways on the search for?
Speaker 2 (12:32):
Yeah, Richard, and something that's central to your
firm is multigenerationalwealth planning when markets are
volatile.
So I have a couple of questionsabout this.
When markets are volatile, howdo you help your?
Speaker 1 (12:45):
clients stay focused on long-term goals.
Let's start with that.
Yeah, listen, I happen to dealin a market that the long-term
goals is to maintain theirwealth and have it there for, in
most situations, for the nextgenerations.
I do have some that are notinterested in what happens there
, but primarily, most people areinterested in leaving money for
(13:06):
the next generation.
So you know we are, we'realways advising these clients
and each one's different rightEach one behaviorally is is
different in this and and wehave we advise them accordingly.
Everything is very customizedfor what we do because
everybody's different.
In that respect, there is nomodel that we use necessarily,
(13:33):
because you know people tell mewhat they're looking for and
what they're expecting and wesee whether or not we can fill
that need.
Speaker 2 (13:42):
So are you seeing my next question?
Are you seeing, as I mean,there's going to be the greatest
wealth transfer of all time,and so we have millennials
coming up who will be inheritingthat wealth, and then even Gen
Z?
Are you seeing them looking fora different way to invest it?
Do they have the patience tolook way out, or how are you
(14:02):
managing?
Managing the differentgenerations?
Speaker 1 (14:05):
Yeah, no, it's a.
It's a great question.
You know the generations areall different as well, right, I
mean there's different.
You know, in our businessthere's a question that everyone
gets asked and that is what'syour risk level?
And and this next generationsays I want to make as much
money as I possibly can, and soon and so on.
The reality is that's greatwhen things are going well.
(14:26):
When things are going poorly,then you start to see how
they're truly, or what theirtrue risk level is.
From my perspective and and Ithink you we get involved with
these kids and the grandkids,and now some of the great
grandkids we get involved withthem very early on, so we start
(14:46):
explaining the way that we dothings.
They come to meetings.
You start to get to know themas human beings as well,
especially as they've grown andI've been in this business for
30 years.
You've seen these kids growfrom very young to more mature
adults.
So each one of them, just likethe parents or the grandparents,
(15:11):
each one of them is sodifferent in the way that they
can handle things of them go inthere pretty aggressive and and
uh they.
They changed their tune prettyquickly when they uh, when they
have a difficult moment, or orthey think that they have
figured out how to invest in inuh uh, you know higher beta
stocks.
Speaker 2 (15:32):
Have you had to change your philosophy for those
generations or is it?
Is it a learning curve for themwhere they come in and and, as
you said, they realize quitequickly when we go into a, a
bear cycle.
Yeah, and, and, as you said,they realize quite quickly when
we go into a bear cycle.
Speaker 1 (15:44):
Yeah, and, and you know, to answer your question,
this is yes, we have.
We have not changed.
We do not change the way thatwe do things.
I'm going to tell them the sameway.
The question is is that what'sthe allocation to equities
versus bonds?
Or maybe there's no bonds andthat's a hundred% equity?
And you know, all those typesof things are things that we
(16:05):
work with them on, especially aswe get to know them over a
period of time.
So, you know, as I haveconversations with them, as they
call me up, asking questions,whatever that looks like,
depending on the relationship,you know we work on those types
of things, once again, with eachone of them differently.
Speaker 2 (16:26):
Yeah, so I mean, richard, you've given me and the
viewers a good idea of yourfirm's philosophy.
What else sets you apart fromthe competitors, maybe in your
area?
Speaker 1 (16:36):
Yeah, I think you know one of the things that we
pride ourselves on is theability not to, or is to, advise
always in the best interest,right, and we don't.
You know, when I, when Istarted SRM, one of the things I
wanted to get away from was anyinherent conflicts of interest.
(16:56):
So when you're at a larger firmI'm not going to specifically
name names but when you're at alarger firm of any sort, you
have certain products that youcan sell.
Outside of those products it'scalled selling away, and so what
(17:24):
we tried to do when we startedSRM was have none of those
conflicts.
I didn't want us to bepigeonholed into a certain
product lineup but literally belooking all around with our
different contacts andrelationships, for different
investments that clients areinterested in or asking for.
You know we've looked at, forexample, we've looked at music
publishing recently and that'sbuying music and then receiving
(17:47):
the income that comes in fromthat.
We've looked at media rightsand investing in those types of
things.
So you know we've been able tolook at different things now
that I wasn't able to look atwhen I was at Merrill and advise
accordingly when I was atMerrill and advise accordingly.
So we are always out theretrying to find different ways
(18:10):
that or to fill the client'sneeds.
Speaker 2 (18:13):
That's really interesting.
So one of the last questionsthat I want to ask you is not
stock picks and maybe not bonds,since you've already talked
about that, but what would bethree places where you think is
the best place to put your moneyright now for the mid to long
term.
Speaker 1 (18:30):
Once again, it's going to be very individualized,
but I do think that all of thethings that you just mentioned,
I also think that looking atsome alternative investments I
think that you know, looking atsome alternative investments
hedge funds, private equity,private credit you know I come
up with hypotheses all the timein regards to what I think is
(18:51):
going to happen in the future,and for various reasons, and so
I have to understand that.
You know, what if I'm right?
What if I'm wrong?
Right, I have to go throughthat thought process in my head,
and so when we're looking fordifferent things to advise with
clients, we are, I always havethat in the back of my mind of
(19:18):
how does, how, does that fillthat gap, in case it does, and
then, if it, if my hypothesisdoesn't play itself out, then
how does that look like?
Or how's the client affected bythose by that investment?
So that I don't know if thatanswered the question directly,
but that's, that's kind of howwe look at things.
Speaker 2 (19:35):
Yeah, and and sort of .
The last thing I want to talkabout is the current US
administration.
How do you see Trump being thepresident affecting portfolios
over the rest of his term, andare there certain things that
your firm is doing to preparefor what you think might come
(19:56):
next or what might happen next,and even with the midterms
coming up?
Speaker 1 (20:00):
Yeah, no, it's once again.
It's probably the most thebiggest thing on my mind these
days.
Listen, I will tell you that,intellectually, there has been
no better time in my career thanunder President Trump's
administration, and a reason forthat is is that he's doing so
(20:22):
much so quickly that trying tofigure out the ramifications
from those things is what Ispend most of my time doing.
And so tariffs, right, I mean,we don't know if tariffs are
going to be impact or what kindof impact that that's going to
have.
We don't know if we're going tostart to see higher prices or
(20:43):
the companies are going to startto eat in the profit margins.
We don't know any of that stuffas of yet, as much as we want
certainty today.
And you can go through each oneof the different policies, or
each one of the proposedpolicies that have come out in
the last six months, andultimately, each one of them has
a ramification to it.
(21:04):
You know, listen, if I look atillegal immigration, for example
, right, which is a hot topic,go through the process of let's
get, let's deport every singleillegal immigrant in the country
.
Let's go through the process,and if you do that, what's the
ramifications to our economy ifwe were to do that Is it
(21:27):
positive or negative?
And obviously there's going tobe bias on that but
understanding what theramifications are and I think
we've seen some of that, if welook at what happened recently
was President Trump came out andsaid that you know, we need to
keep some of the workers for thefarmers because they've been
(21:49):
with them for 20 years, and soon.
Well, that was a ramificationthat we didn't have workers that
were going to go in there anddo those jobs.
You know, I was talking tosomeone the other day and
they're like well, why don't wejust make them all legal and
then we can start collectingtaxes and that will help?
And I said you know, as selfishas this is as a country is, is
(22:11):
that we would then have to paylegal wages to, which is going
to be higher than what we'repaying today for illegal wages.
So you have to deal with theramifications of that Right.
And and are we ready for thatRight?
If we put one hundred and fortyeight percent tariff on China,
which was right Are are we goingto hurt our economy by putting
(22:38):
that tariff on, having thoseprices increase and then hoping
that they're going to move jobsback to the United States to
then onshore those jobs, whichwill then increase our economy,
and in the meantime, we'recollecting all these tariffs.
The reality behind that was thatI think Apple Computer's
(23:00):
response was the best rightwhich was not the best, but the
clearest was that they basicallysaid well, we're just going to
move our jobs over to India andspend $2 billion and create
150,000 jobs Don't quote me onthat, but I think that's correct
and once again, we have to dealwith the ramifications of each
(23:23):
one of these policies.
So, for me, what I do most daysnow is understand, or trying to
understand, what thoseramifications are.
And, by the way, there is noanswer to any of this stuff
because everything's verytheoretical.
There is no answer to any ofthis stuff because everything's
(23:44):
very theoretical.
And so, anyway, that's what Ispend my day, my days, or a good
part of my days, doing thesedays.
Speaker 2 (23:50):
I mean, it's something that I think a lot of
people are thinking about allthe time, even if it's not in
terms of financial advising.
Richard, this has been afantastic conversation and I
really appreciate the time andinsight today.
Before we wrap up, can you letthe viewers know where's the
best place for them to learnabout you and SRM Private Wealth
?
Speaker 1 (24:08):
Yeah, so I'm on LinkedIn and my website is SRM,
as in Sam Robert Maryprivatewealthcom, and you can
reach out or see what's on ourwebsite and we'll go from there.
Speaker 2 (24:21):
Well, thanks again, Richard, and thanks to all of
you for watching Again.
I'm Melanie Schaefer and we'llsee you next time on Lead Lag
Live.
The tariffs are something that you know.
Obviously not obviously willmost likely create higher
revenue for the United States.
For example, we've looked atmusic publishing recently and
that's buying music and thenreceiving the income that comes
in from that.
We've looked at media rightsand investing in those types of
(00:23):
things.
Speaker 2 (00:33):
Hello and welcome to LeadLeg Live.
I'm Melanie Schaefer, the newhead of media strategy and
business development at LeadLegMedia and your new host.
As of today, I'm taking overfrom Michael Guyad, the founder
of Leadleg Media, who you allknow so well, which, of course,
means I have some big shoes tofill, but I'm thrilled to carry
(00:54):
forward the kind of insightfuland no-nonsense conversations
that matter to investors.
Joining me today is RichardMcWhorter, managing Partner and
Private Wealth Advisor at SRMPrivate Wealth, a firm that spun
out from Merrill Lynch witharound $1.9 billion in client
assets under management.
(01:16):
Richard, thank you so much forbeing here today.
Speaker 1 (01:19):
Melanie, nice to see you and thank you for having me.
Speaker 2 (01:21):
Now, before we get into some broader topics, I want
to start with SRM's originstory.
Your team spun out from MerrillLynch to launch SRM under the
Summit platform.
What drove that move and howhas your business evolved since
making that leap?
Speaker 1 (01:36):
Yeah, so I was at Merrill for 16 years prior to
establishing SRM.
Prior to that, I was at SmithBarney for 16 years and actually
I was at Smith Barney since1989.
So I actually was an intern anda receptionist and became a
(01:58):
sales assistant at that time,anyway, and then in 1992, became
a financial advisor.
Um, anyway, uh, and then in1992, became a financial advisor
.
So to answer your questiondirectly, is that I, uh, about a
year ago, I had a difference ofopinion with Merrill Lynch's
management in regards to how Iwanted to service my clients.
(02:18):
They thought I should staywithin the scope of Merrill
Lynch, and I said that, uh, that, because I thought I was
over-servicing my clients andthat idea didn't make much sense
to me, and so I wanted to moveout on my own and advise clients
without any what I perceived asinherent conflicts of interest.
(02:41):
And so, therefore, we set upSRM and discuss this with the
clients afterwards and explainthe reasoning, and we were
fortunate enough that theclients followed and we've been
in business for just over a yearnow.
Speaker 2 (02:59):
So just a little more about that.
You work with high net worthclients across finance, real
estate and, I think, evenentertainment, and is this kind
of environment, macrouncertainty, election noise rate
cut always just out of reach?
And how are clients expecting ashift and how do you stay ahead
with them.
Speaker 1 (03:17):
There's a lot to that question.
So, on the political front aswell as the investment front,
what we do is that life andthings that they may own and
those types of items Are there avoice or an advisor that helps
(04:03):
them once again critically thinkthrough a lot of these
different ideas and topics andtry and come up with some type
of solution that would make thebest sense for that client.
Speaker 2 (04:17):
Okay, so I just want to switch now a little bit to
talk about the markets moregenerally.
We're in the midst of a hugeearnings season and Oppenheimer
raised its year-end S&P 500target to 7,100, up from 5,950,
citing AI momentum, strongearnings revisions and easing
(04:37):
policy risks.
How are you thinking aboutequity positioning in this kind
of environment?
Speaker 1 (04:42):
Yeah, equity position is really difficult for me
right now.
I you know the one thing that Iknow these guys keep raising
their price targets and thoseitems.
I really have a hard time withthe multiples that we're trading
at and I don't think that'sdiscussed enough.
I think you know as much aswe're looking at forward
(05:04):
earnings for the next one, two,three years, things that are
trading at historically highmultiples for the components of,
let's say, the S&P 500, thedifferent equities that are
within that, I don't see howwe're getting to these much
higher levels or how we're justgoing to continue to expand
(05:26):
multiples to attain these pricetargets.
Personally, we you know we staywithin our discipline of
looking at historical multiplesfor each one of the equities
that we follow and then adviseaccordingly whether or not it's
a buy, whether or not it'swithin the range that we've
(05:47):
created, or maybe even a sell ifit's exceeded that range.
Speaker 2 (05:51):
So are you asking investors or thinking that
investors should be coming moredefensive, or is that something
that people can put off for?
Speaker 1 (05:59):
Yeah, I don't think it's an all none question.
I think.
You know, I think a lot of thatstuff has to do with you know
we use dollar cost averaging toget into stocks and we use
dollar cost averaging to get outof stocks.
You know, the the idea ofunderstanding that things that I
believe are overvalued couldnot get more overvalued would be
(06:22):
ridiculous on my part.
Could not get more overvaluedwould be ridiculous on my part.
And the same on the on, on,when we're buying things, to
think that I'm getting it at thevery bottom.
You know, we just don't have,no one has that clarity.
So we spend a lot of timeworking our way into positions
over a period of time and youknow, I I listen.
(06:47):
I always tell clients I'm a,I'm a singles and doubles hitter
all day long.
That's what I do for these guys.
Uh, most of the people that wedeal with happen to be, uh, have
significant wealth and um, arenot looking for someone to be
hitting home runs, um, so I justcontinue to hit my singles and
doubles and dollar cost averagein and, uh, you know, we kind of
(07:07):
just stay in our lane.
Speaker 2 (07:08):
Yeah.
So, and one of the biggestheadlines this week was the U?
S and EU just reached a majortrade agreement.
The U?
S will cap tariffs at 15% onmost EU imports, while the EU
agreed to buy up to 750 billionin U S energy and invest another
600 billion in infrastructure.
That's sort of a huge shift inUS energy and invest another
$600 billion in infrastructure.
That's sort of a huge shift intone.
How do you see that impactingportfolios, especially for
(07:29):
clients with, maybe, globalexposure?
Speaker 1 (07:31):
Yeah, well, you know we'll see.
You know we've heard a lot of.
We've had some spits and startsthrough this whole thing, and
you know we'll see whether ornot the there is, what kind of
impact, first of all, thetariffs have.
Right, we don't have thatVision yet.
You know, one thing that peoplehave to understand is is that
(07:56):
it takes time for these thingsto be implemented.
It takes time for these thingsto be reflected in the markets,
to be reflected in prices.
It takes time for these thingsto be reflected in the markets,
to be reflected in prices, andso, when we're starting to
potentially come together withsome type of tariff on different
products, you know it's goingto take months for us to
actually see those thingsreflected in the prices, and
(08:21):
then we have to see what theimpact of that is.
Those are going to be uh on.
The second part of that is isthat you know the 750 billion,
or if that's uh?
I don't know exactly if that'sthe number, um, I'm assuming.
So the $750 billion, though, isum, you know, uh, we'll see if
they spend that kind of money,um, you know, you know these are
all um ideas of what they'regoing to do and how they're
(08:45):
going to do things.
We'll see what actually getsimplemented and then what the
effect of that is.
When you, you know, when youcritically think through these
things, I think you have to lookat what happens.
You know what happens if westart to see inflation?
What's what happens if we startto see this money being spent
and then vice versa?
(09:05):
What happens if we start to seeno?
What happens if we start to seethis money being spent and then
vice versa?
What happens if we start to seeno inflation?
Maybe the companies will takethe hit in their profit margins.
We don't have that idea.
I'm sorry.
We don't have that vision as ofyet.
Speaker 2 (09:17):
So you're taking on more of a wait and see approach
instead of predicting whetheryou see like a longer term.
Do you see a trade agreement asa stabilizer or a disruptor?
Speaker 1 (09:27):
yeah, I think.
I think it depends on thewhat's in, what's within the
trade agreements.
Um, you know the, the tariffsspecifically.
Uh, the tariffs are somethingthat you know, know, obviously
not, obviously will most likelycreate higher revenue for the
(09:49):
United States.
But what's the end goal?
Is the end goal to open uptrading with other partners so
that we can start to sell moreof our products to these other
countries without reciprocaltariffs or tariffs of their own?
Or is it to bring back jobs tothe United States?
(10:10):
You know, I don't know what the,what the administration's end
goal is in all this thing, ormaybe it's all the above.
So, when you're looking at, youknow if you're trying to bring
back jobs to the United States,as a 15% tariff on the EU or a
30% tariff on China, enough, sothat jobs will be, you know,
(10:35):
come back to the United States.
So you know, you have to gothrough each one of these things
individually to kind of try andfigure out what that end goal
is in going through this.
Maybe it's just to increaserevenue, right?
Maybe it's that simple.
Speaker 2 (10:51):
Yeah.
So if we switch just for acouple of minutes to wealth
strategy, there's so much sortof in flux right now around
taxes and broader policyproposals the midterms coming up
how is SRM helping clientsnavigate that uncertainty when
it comes to tax efficiency, say,or wealth preservation?
Speaker 1 (11:09):
Yeah, you know, listen, there's a lot of things
in the toolbox that we have thatare great for preservation, you
know.
The question is is that where dowe place that money?
For example, if I'm going intofixed income to have some money
that's safe and secure and justgoing to pay me a dividend or an
(11:33):
interest payment of some sort,I would say to you that we are
more likely to be investing inthe bond market than we are the
stock market currently, whetheror not that's buying short-term
bonds.
If the Fed decides that they'regoing to start dropping
interest rates, then I probablydon't want to have a lot in
(11:56):
short-term bonds.
And then the question, by theway, in that respect, is does
interest rates on the two to30-year bonds, do they start to
come down, or are those going togo up like they did the last
time that the Fed droppedinterest rates?
And we have to kind of playwith that game a little bit.
Where do I place money?
On the yield curve?
And and then in stocks.
(12:18):
You know, you know we're goingto be looking for those stocks
that are trading at reasonablemultiples for that particular
stock, and that's what we'realways on the search for?
Speaker 2 (12:32):
Yeah, Richard, and something that's central to your
firm is multigenerationalwealth planning when markets are
volatile.
So I have a couple of questionsabout this.
When markets are volatile, howdo you help your?
Speaker 1 (12:45):
clients stay focused on long-term goals.
Let's start with that.
Yeah, listen, I happen to dealin a market that the long-term
goals is to maintain theirwealth and have it there for, in
most situations, for the nextgenerations.
I do have some that are notinterested in what happens there
, but primarily, most people areinterested in leaving money for
(13:06):
the next generation.
So you know we are, we'realways advising these clients
and each one's different rightEach one behaviorally is is
different in this and and wehave we advise them accordingly.
Everything is very customizedfor what we do because
everybody's different.
In that respect, there is nomodel that we use necessarily,
(13:33):
because you know people tell mewhat they're looking for and
what they're expecting and wesee whether or not we can fill
that need.
Speaker 2 (13:42):
So are you seeing my next question?
Are you seeing, as I mean,there's going to be the greatest
wealth transfer of all time,and so we have millennials
coming up who will be inheritingthat wealth, and then even Gen
Z?
Are you seeing them looking fora different way to invest it?
Do they have the patience tolook way out, or how are you
(14:02):
managing?
Managing the differentgenerations?
Speaker 1 (14:05):
Yeah, no, it's a.
It's a great question.
You know the generations areall different as well, right, I
mean there's different.
You know, in our businessthere's a question that everyone
gets asked and that is what'syour risk level?
And and this next generationsays I want to make as much
money as I possibly can, and soon and so on.
The reality is that's greatwhen things are going well.
(14:26):
When things are going poorly,then you start to see how
they're truly, or what theirtrue risk level is.
From my perspective and and Ithink you we get involved with
these kids and the grandkids,and now some of the great
grandkids we get involved withthem very early on, so we start
(14:46):
explaining the way that we dothings.
They come to meetings.
You start to get to know themas human beings as well,
especially as they've grown andI've been in this business for
30 years.
You've seen these kids growfrom very young to more mature
adults.
So each one of them, just likethe parents or the grandparents,
(15:11):
each one of them is sodifferent in the way that they
can handle things of them go inthere pretty aggressive and and
uh they.
They changed their tune prettyquickly when they uh, when they
have a difficult moment, or orthey think that they have
figured out how to invest in inuh uh, you know higher beta
stocks.
Speaker 2 (15:32):
Have you had to change your philosophy for those
generations or is it?
Is it a learning curve for themwhere they come in and and, as
you said, they realize quitequickly when we go into a, a
bear cycle.
Yeah, and, and, as you said,they realize quite quickly when
we go into a bear cycle.
Speaker 1 (15:44):
Yeah, and, and you know, to answer your question,
this is yes, we have.
We have not changed.
We do not change the way thatwe do things.
I'm going to tell them the sameway.
The question is is that what'sthe allocation to equities
versus bonds?
Or maybe there's no bonds andthat's a hundred% equity?
And you know, all those typesof things are things that we
(16:05):
work with them on, especially aswe get to know them over a
period of time.
So, you know, as I haveconversations with them, as they
call me up, asking questions,whatever that looks like,
depending on the relationship,you know we work on those types
of things, once again, with eachone of them differently.
Speaker 2 (16:26):
Yeah, so I mean, richard, you've given me and the
viewers a good idea of yourfirm's philosophy.
What else sets you apart fromthe competitors, maybe in your
area?
Speaker 1 (16:36):
Yeah, I think you know one of the things that we
pride ourselves on is theability not to, or is to, advise
always in the best interest,right, and we don't.
You know, when I, when Istarted SRM, one of the things I
wanted to get away from was anyinherent conflicts of interest.
(16:56):
So when you're at a larger firmI'm not going to specifically
name names but when you're at alarger firm of any sort, you
have certain products that youcan sell.
Outside of those products it'scalled selling away, and so what
(17:24):
we tried to do when we startedSRM was have none of those
conflicts.
I didn't want us to bepigeonholed into a certain
product lineup but literally belooking all around with our
different contacts andrelationships, for different
investments that clients areinterested in or asking for.
You know we've looked at, forexample, we've looked at music
publishing recently and that'sbuying music and then receiving
(17:47):
the income that comes in fromthat.
We've looked at media rightsand investing in those types of
things.
So you know we've been able tolook at different things now
that I wasn't able to look atwhen I was at Merrill and advise
accordingly when I was atMerrill and advise accordingly.
So we are always out theretrying to find different ways
(18:10):
that or to fill the client'sneeds.
Speaker 2 (18:13):
That's really interesting.
So one of the last questionsthat I want to ask you is not
stock picks and maybe not bonds,since you've already talked
about that, but what would bethree places where you think is
the best place to put your moneyright now for the mid to long
term.
Speaker 1 (18:30):
Once again, it's going to be very individualized,
but I do think that all of thethings that you just mentioned,
I also think that looking atsome alternative investments I
think that you know, looking atsome alternative investments
hedge funds, private equity,private credit you know I come
up with hypotheses all the timein regards to what I think is
(18:51):
going to happen in the future,and for various reasons, and so
I have to understand that.
You know, what if I'm right?
What if I'm wrong?
Right, I have to go throughthat thought process in my head,
and so when we're looking fordifferent things to advise with
clients, we are, I always havethat in the back of my mind of
(19:18):
how does, how, does that fillthat gap, in case it does, and
then, if it, if my hypothesisdoesn't play itself out, then
how does that look like?
Or how's the client affected bythose by that investment?
So that I don't know if thatanswered the question directly,
but that's, that's kind of howwe look at things.
Speaker 2 (19:35):
Yeah, and and sort of .
The last thing I want to talkabout is the current US
administration.
How do you see Trump being thepresident affecting portfolios
over the rest of his term, andare there certain things that
your firm is doing to preparefor what you think might come
(19:56):
next or what might happen next,and even with the midterms
coming up?
Speaker 1 (20:00):
Yeah, no, it's once again.
It's probably the most thebiggest thing on my mind these
days.
Listen, I will tell you that,intellectually, there has been
no better time in my career thanunder President Trump's
administration, and a reason forthat is is that he's doing so
(20:22):
much so quickly that trying tofigure out the ramifications
from those things is what Ispend most of my time doing.
And so tariffs, right, I mean,we don't know if tariffs are
going to be impact or what kindof impact that that's going to
have.
We don't know if we're going tostart to see higher prices or
(20:43):
the companies are going to startto eat in the profit margins.
We don't know any of that stuffas of yet, as much as we want
certainty today.
And you can go through each oneof the different policies, or
each one of the proposedpolicies that have come out in
the last six months, andultimately, each one of them has
a ramification to it.
(21:04):
You know, listen, if I look atillegal immigration, for example
, right, which is a hot topic,go through the process of let's
get, let's deport every singleillegal immigrant in the country
.
Let's go through the process,and if you do that, what's the
ramifications to our economy ifwe were to do that Is it
(21:27):
positive or negative?
And obviously there's going tobe bias on that but
understanding what theramifications are and I think
we've seen some of that, if welook at what happened recently
was President Trump came out andsaid that you know, we need to
keep some of the workers for thefarmers because they've been
(21:49):
with them for 20 years, and soon.
Well, that was a ramificationthat we didn't have workers that
were going to go in there anddo those jobs.
You know, I was talking tosomeone the other day and
they're like well, why don't wejust make them all legal and
then we can start collectingtaxes and that will help?
And I said you know, as selfishas this is as a country is, is
(22:11):
that we would then have to paylegal wages to, which is going
to be higher than what we'repaying today for illegal wages.
So you have to deal with theramifications of that Right.
And and are we ready for thatRight?
If we put one hundred and fortyeight percent tariff on China,
which was right Are are we goingto hurt our economy by putting
(22:38):
that tariff on, having thoseprices increase and then hoping
that they're going to move jobsback to the United States to
then onshore those jobs, whichwill then increase our economy,
and in the meantime, we'recollecting all these tariffs.
The reality behind that was thatI think Apple Computer's
(23:00):
response was the best rightwhich was not the best, but the
clearest was that they basicallysaid well, we're just going to
move our jobs over to India andspend $2 billion and create
150,000 jobs Don't quote me onthat, but I think that's correct
and once again, we have to dealwith the ramifications of each
(23:23):
one of these policies.
So, for me, what I do most daysnow is understand, or trying to
understand, what thoseramifications are.
And, by the way, there is noanswer to any of this stuff
because everything's verytheoretical.
There is no answer to any ofthis stuff because everything's
(23:44):
very theoretical.
And so, anyway, that's what Ispend my day, my days, or a good
part of my days, doing thesedays.
Speaker 2 (23:50):
I mean, it's something that I think a lot of
people are thinking about allthe time, even if it's not in
terms of financial advising.
Richard, this has been afantastic conversation and I
really appreciate the time andinsight today.
Before we wrap up, can you letthe viewers know where's the
best place for them to learnabout you and SRM Private Wealth
?
Speaker 1 (24:08):
Yeah, so I'm on LinkedIn and my website is SRM,
as in Sam Robert Maryprivatewealthcom, and you can
reach out or see what's on ourwebsite and we'll go from there.
Speaker 2 (24:21):
Well, thanks again, Richard, and thanks to all of
you for watching Again.
I'm Melanie Schaefer and we'llsee you next time on Lead Lag
Live.
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