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The wealth management industry is changing fast, but many financial advisors are still using the same old playbook. Join hosts Sean Allocca and John Manganaro, along with leading industry expert guests, as they break down the trends shaping your business.
Each week, we'll cover critical topics while also having a little fun. It's all on the table, from retirement income planning and Social Security to the behavioral side of investing and what clients are hearing elsewhere. We've created The Advisor Upside Show because staying informed isn’t enough anymore. You need to stay ahead.
New episodes every Wednesday.
#FinancialAdvisor #WealthManagement #FinancialPlanning
Sean Allocca (00:00)
Independence, it's your
Fidelity's unbiased expertise helps you understand all your options.
works with many types of wealth managers so you can select the business model that best fits your future.
Their consultative approach helps you choose how much control you want and how much support you need, everything on your terms.
After all, isn't that why you want independence? Explore new possibilities for independence at i.fidelity.com slash your move.
John (00:28)
how we talk about annuities and even just the basic way we frame them.
can have a huge impact on people's decision
Hello everyone and welcome to another episode of the Advisor Upside Show. This is your co host, John Manganero, and I'm joined once again by my colleague Sean Aloka.
a fun and busy time here at the Daily Upside, I would say. We've got some new team members coming on board. We're getting ready to publish some special edition newsletters, a little bit of a teaser there. And and the summer's just getting started. So,
Sean Allocca (01:01)
we got a lot planned for the next half of the year. I'm not sure how much of it I'm supposed to we should talk about on on the pod, but yeah, definitely some new additions coming out to towards the end of the year. They're gonna be more of a of a monthly deeper dive into some topics. We got ⁓ definitely have like a like a more of a live webinar event thing we're gonna do
John (01:06)
Ha.
Sean Allocca (01:19)
think next month or in July. So yeah, a lot of interesting stuff coming up and and yeah, keep keep checking us out. We're we're here to to get you great.
It's been fun so far.
John (01:28)
Yeah, for sure. So for this episode, it's gonna be a little more informal. And Sean and I are gonna be discussing some of the recent stories we've been working on for the newsletters and and offering up a little bit of additional perspective and context. ⁓ I love having the podcast for this to complement the newsletters because we have to be pretty selective and strategic about what information to include in the the prime real estate of advisor upside, ETF upside, and retirement upside. ⁓ quick plug if you haven't signed up for
any of those three B2B newsletters, you know, head head over to the website and and get signed up. but the first topic I wanted to talk with you about, Sean, is the the evolution that we've seen in advisor industry conferences. ⁓ first a a question for you. Can can you remember the first industry conference that you attended and and what was your experience
Sean Allocca (02:16)
Well, the first one I ever attended w wasn't really in wealth management space.
I think I went to like a Ray J women's event that they had
in Boca. And I just it it was great. It was like a two, three day thing. ⁓ but I knew like last minute and my editor at the time was like, You want you wanna go? And I'm like, sure, I'll I'll go. I'd never been
To one before, but I got to meet a lot of great folks, people that I actually still in contact today, some great PR people. And yeah, I don't remember all all of the content or who was there, 'cause man, that was that was a few moons ago. But ⁓ yeah, it's that was a great one. And there's been plenty, plenty since.
John (02:48)
Ha ha.
Sean Allocca (02:52)
Trying not to date
John (02:52)
For me, it
Sean Allocca (02:53)
How about you, John? What was your
John (02:53)
Didn't didn't mean to put you
It was the National Association of Plan Advisors Conference back in New Orleans in what must have been 2012 or 2013. And would the kind of the point that I wanted to bring up was that honestly it was pretty overwhelming because there were, you know, thousands and thousands of advisors there. At at that point I was still
Pretty much brand new to the wealth management industry. I, you know, I'd had several journalism jobs before that, but this whole world of of financial services was something completely new to me. And it really kind of blew me away being there on the ground and and seeing all these very passionate, you know, super smart, educated people. And honestly, as a journalist, I felt a little bit on the back foot. But, you know, through the years, attending many, many more conferences, reporting many stories, I I feel like I've I've learned a lot. And and now it sounds a bit funny to say, but
I feel like I belong at those events more than I felt like at the very beginning. I I don't know if you've if if you've experienced that, Sean. I mean, it's pretty fun these days to go to an event.
Sean Allocca (03:44)
Mm-hmm.
I don't know how we got mixed.
For sure. I don't know how we got we got mixed up in wealth management. Me and you, but we do. I never I never saw that coming. But yeah, I think the best part is going to the conferences. I mean, they you can't get a sense of a better sense of
advisor is looking for, wealth managers looking for than sitting in a room with five hundred of them, ⁓ you know, then listening to a keynote and the questions they're asking afterwards. I mean, that's the best way to know this this business. And I think like
Maybe the the only way really is just to go talk to advisors, get boots on the ground, so yeah, it's it's awesome to come come and hang out with with people and meet people and just learn the industry.
John (04:23)
Yeah, for sure. And for the advisor listeners out there, I mean, that's it's an encouragement to send your junior folks to these events. I mean, it it can be expensive. It's it's not always easy logistically to get people to these events. They have to leave the office and and spend time. But, you know, to Sean's point, I mean it it's the best way, I think, to get to know the industry and especially if you go to various events. You know, you mentioned the Ray J event. It's obviously if you're affiliated with a a platform, going to their event is is very valuable. But we've also seen some really interesting
events put on by service providers. Like I've been to Orion's event, Investnet. I mean, those are great too. I I would suggest mixing it up and and don't be afraid to send your junior people. They'll they'll learn a lot and and hopefully come back, you know, rearing a go.
Sean, I wanted to ask you about your experiences at the Futureproof events. we we had the chance to go to Futureproof earlier this year in Miami Beach. It's a super impressive event, but what's really w cool about that is sort of the festive festivalization.
Of of the events and and I think advisors really enjoy it. I mean, we're not here to plug future proof, but that's been a bit of a an interesting
Sean Allocca (05:27)
I've been to every single show so far that they've had open to journalists since since the beginning. So it's probably one of the right person to ask that. I remember when it was in Huntington and it was, you know, a thousand people or so, or it's fifteen hundred maybe. Now I think it's more than five thousand after I guess this will be their sixth year perhaps. And then they launched the Miami Beach ones. and I've been going to every every single one
They've been great. I mean, they the you see the trajectory that they've been on. And I think to your point of the festivation of it, I always thought it was interesting because we would go to Miami or would go to, you know, somewhere in California, Newport, and you could see the beach, but you were in a conference hall, like freezing, like in a suit, and you couldn't actually get on the beach. So I think that was an interesting natural kind of progression of, hey, let's just let's get it on the beach. You know, like I would go let's go on a boat next time out in the water, like kayak or something. Like let's just
John (06:06)
Mm-hmm.
Sean Allocca (06:18)
Keep keep moving out of the normal spaces. but yeah, my MBA was really, really interesting. We I know we both had the chance to get up and and moderate panels. I I learned a lot from from those and just sitting in and listening. I think they do a great job with with the content and just letting journalists in the industry get up and and ask important questions to important people. And and again, I think that's one of the the most valuable things that you can take away from these conferences.
How about you, John?
John (06:40)
Yep. Yep.
Yeah, well, I I agree completely. It I like to joke that the only time I've ever been sunburned while moderating a panel was at future proof. The first year I I you know, it was in in March or whatever in Miami Beach and you you come from New York, still snow on the ground and you're not thinking about putting suntan lotion on. So I got quite the sunburn while moderating a panel. So that that kind of tells you a lot about the event. But yeah, really, really interesting. ⁓
Sean Allocca (06:48)
Yeah.
John (07:07)
really they've doubled down on the topic of artificial intelligence and it will be interesting to see how that plays out in the future. It's it's an incredibly important topic and and they're really staking the flag and trying to be the AI conference. And I'll be interested to see how that develops in in the future, whether other events, you know, try to try to do the same thing, whether the, you know, fut AI is sort of future proof's thing. We'll we'll see. But
Just more recently I attended a what could probably could not have been a more different event, which was the Horizons event put on by the American College of Financial Services. Very small for you know, I think there were between four and five hundred people there and they they purposely set a limit and they sold out. And so there were people who who wanted to go to the conference and and couldn't. And there, you know, I know Jared Truxler, their head of marketing and and services quite well. And and he told me that.
Yeah, we're we're not trying to be future-proof. We're we're trying to do something very different. We're trying to create a small community of in of like-minded sort of ⁓ professionals. This was about retirement planning in particular, which is which is my beat, which is why it was really great to be there. But I was just really struck by the it was a very successful event, but in a very different way to future proof. And and I my sense of how advisor conferences are going to play out in the future is almost a barbell where we're gonna have these huge events put on by
future proof on the beach. We're, you know, we're going to continue to have huge events put on by the likes of Orion and Investnet, these big tamps that serve huge communities of advisors. That's going to be the one end of the advisor conference industry. And then we're going to have these other, you know, very small, more intimate events. And I I think that's I think that's awesome. You know, the there's opportunities to learn and and sort of thrive in in both environments. But I I was very impressed with with the second year of Horizons and, you know, look look forward to going back next year.
⁓ Sean, I wanted to get your thoughts on this too, because in in the wake of both of those events, I I spoke with Sean Walters, who's the CEO of the Investments and Wealth Institute, which is, you know, one of the main accreditation bodies, ⁓ you know, in the wealth management industry today.
he was very candid about the the challenge that it, you know, that it takes to to bring people to these events, to keep them engaged. You have to continue to innovate.
Especially in a world where, you know, people can go to a future proof and sit on the beach and learn. And you have to really innovate. And and Sean told me something that really opened my eyes, which was that in twenty twenty nineteen, thirty-two percent of industry CE credit was earned at live events. That fell to eleven percent as of twenty twenty four. And and Sean didn't didn't have more recent data than that, but he thinks it's it's very possible that it's gone down. So I mean, that's the challenge, right? Getting people to getting people to travel, you know, getting people to to leave the office in a world where you can get.
C E credit and great education from home. So I I don't know if you have any thoughts about that.
Sean Allocca (09:53)
Sean's got a great first name. ⁓ and I met him yeah,
John (09:55)
Yeah.
I think it's spelled the same.
Sean Allocca (09:58)
I know they're building out events. There's events, I mean we forgot to mention on the barbell side, I you have Schwab that's gonna be in Boston this year, Morningstar, I mean a lot of big ones. Wealth Management Edge, which is gonna be down in in Boca again, which which I'm gonna head to and do some things there. So
there's a full kind of menu of where do you want to be? There's regional shows, there's national shows, there's all different sorts of of nich niches. And I think, yeah, what is the value prop for for spending the the time really to get there? Obviously, there's the flight to hotels. I mean, I know sometimes advisors go for free, so it's not the money, but you know, three, four days out of the office is is expensive for a lot of folks. So yeah, what is the value that you're going to be providing and
to your point, if it's not CE credits, that's been dwindling on the live events and I'm sure it's getting picked up in on on the online circuits and the webinars and things like that. So what is going to be the value? And then how do you kind of break into a very, very challenging market, a very ⁓ dense, you know, condensed market on in in terms of competition. So we'll see, it'd be interesting how it plays out.
yeah, I I mean how do they kind of pull out their, like I said, their value prop to advisors? And I think finding those useful or or the the providers too, finding those useful ones. I actually went to one in in New York last week and there was a there was an attendee who said, Look, I've been using your I'm not gonna say the name, but I've been using your tool for t ten years. Like I don't want an AI.
vague AI stuff. I want how do I maximize my tool, you know, the tools that I'm using with you in this session. Like I don't want
overarching themes. I can get that anywhere else, ⁓ to your point about AI, which I would say is probably not just future proof. I mean, I think everywhere you go, it's all it's almost all AI at this point. There's you can't get out of it. it was interesting like you pointed to that Miami Beach was just predominantly about AI. They just kind of leaned really hard into that. But yeah, I think maybe the providers have the
The advantage of we you're using my tool. Here's how you can get better at it. Here's how you can make more money for your firm or for yourself. ⁓ whereas I think, yeah, some of the C and the and the educational ones also can lean into those educational ones. And then you also have the big barbell incumbent ones that we've we've had for years. So interesting to see where it's all gonna play out.
John (12:06)
Yeah. Well, I think to your point about, you know, the value proposition of an event like this, the the the providers of tools, I think they have an inherent, you know, opportunity to continue to attract people. On the one hand, you would think that a lot of that training can be delivered effectively online and and it is being delivered online without question. But for example, at the Orion event, the last time I went, it was really cool because they had like these training modules where, you know, people were, you know,
using the tools. There was a person from Orion standing right next to them. They were talking and interacting in a very or organic way that just is very hard to replace online. I mean, online training is great, but there is there is something to be said about sort of the the classroom environment. People are a little more relaxed or willing to kind of joke around and and kind of have fun while you're learning. And I think that that's that sticks with people. And and that's the thing, you know, and this is one of the points that Sean
Walter's made to me and and that I've, you know, heard about in other interviews that, you know, that that's the thing that's really hard to replicate online is is sort of the human the human element, the the sort of jovial fun atmosphere that that really complements and accelerates learning, in my opinion. So I think, you know, that that will continue to be very very interesting. So anyway, any other thoughts on industry events? I know it's kind of a niche topic, Sean, but we go to a lot. And so it I I've just had a lot of thoughts about how it's yeah.
Sean Allocca (13:23)
Yeah, we've been to a lot of yeah. maybe
too many, you could argue we we've been to. no, I mean I think you're right. I think you're right on all on on all of it pretty much.
it's extremely competitive and hard to get advisors, like you said, and it's hard to continue to to have the revenue streams come in, you know. So w will we see other ones kind of start to take the lead? There's it's always been kind of an up and down on who has the biggest show over what years and who you know, which ones are kind of
in decline. So we'll continue to see it. But th it's great for the industry. It's great for the advisors and and frankly it's great for us. So we get a chance to meet them and and learn about the industry in in ways we wouldn't be able to otherwise.
John (13:56)
Yeah, yeah, for
So Sean, something else I wanted to ask you about and and thinking about maybe advisors, novice advisors who may be listening to this podcast who are maybe going to their first or second industry event, who maybe, you know, are feeling nervous or even a bit overwhelmed. You know, as I mentioned when I went to my first conference, I I felt very overwhelmed and and wish I would have had a bit more guidance and an understanding of what I was what I was getting into. So
what what comes to mind for you, Sean? I mean, networking is is powerful.
Sean Allocca (14:22)
Well, I think
Yeah, the networking is is something that you can't do online. I think you should kind of identify what what you're going there to do and what your takeaways are, what what would makes it successful. You know, I've seen some people like they just want to get in front of X person or they wanna, you know, depending on what kind of firm you are, or if you're so you know, if you're a provider of and you want to get in front of a big broker dealer, you know, ahead of a BD or something like that. So what the takeaways are. I think in general though, if you're just going
To to be there and experience it would be like, don't skip the the meals, don't skip the the happy hour, even if you're not like a drinker or something. Like just make sure you're going to those areas where it's off the cuff interactions. And obviously the panels are huge and make sure you meet the people you need to meet. But there's so many like off the I don't know, just serendipitous occasions where you meet someone, they're like, ⁓ I didn't know that was you. Or, you know, you're just in the lunch line and you drop your fork and they
someone picks it up and then you start talking and suddenly you have, you know, a connection that you could have never met other than attending that event. So I think those areas are things you want to kind of prioritize. To your point, there's so much going on. So like, you know, you have to make sure you hit all those different things. But one area is like the the communal things like the the mealtime or, you know, just the fun community thing that they
make sure you spend some time for those things too because
One it's a nice break, you know, you need, but two, that's really where those things happen that aren't happening anywhere else and those sometimes almost always become the most valuable.
John (15:51)
Yep.
you can make some fantastic connections that way. And especially if you kind of are on the s on the circuit if you're going to these conferences, because you'd be surprised. These events feel gigantic and intimidating. But if you go to two or three or four and then you go back the next year, you will see familiar faces and all of a sudden you'll you'll feel like you're part of this.
community and and you know feel like you you belong at this in this space it that that that can be very intimidating. And my other tip, and you know, this is from personal experience, I can say a little bit, is yes, you're going to this event as a representative of your company. You're there to learn in a way that will benefit the firm and and to, you know, really increase your own expertise. But you're also there to build your own personal brand and and to, you know, make connections, to sort of think about the long-term future. You'll discover, you know,
different companies that are doing cool stuff that you've never heard about before. And maybe you'll decide, I'd love to work for them one day. It's it's these sort and to your point, Sean, like those are sort of the the things you come to realize while you're sitting around a dinner table working with people or while you're you're doing some of the extracurricular activities. It you know, just keep in keep in mind your own personal opportunity to grow from from these conferences. And and I would also say, you know, ⁓ don't be afraid of public speaking. It it's something that a lot of people have
fear of and you know very early on in my career, Sean, I was sort of asked to start moderating panels. And at the very beginning it was so stressful and worrying. And it was something that I felt like was important to do. And I gritted my teeth and got through it. And I'm so glad that I did
you know, these events they're looking for advisors to be on panels, even if it's not something that you
you know, are really drawn to, I would say give it a try. You know, tr try to participate in a panel and you you may be surprised by how much you enjoy it and and how much opportunity flows from it.
Sean Allocca (17:40)
I remember my first one. It was I was I couldn't sleep for mul multiple multiple nights, ⁓ worrying about it. But yeah,
there is a definitely a kind of
euphoria afterwards where this is over and that, but it but it's fun being up there and you and you get to you get to like it. And people honestly I I I usually tell people like no one wants no one's there to like heckle or make fun. Like everyone wants to have a fun like experience. So just be yourself, speak. You be prepared. You know, that's the big one. ⁓ make sure you feel good about it. And then just kind of just have fun with it. And and people really tend to enjoy it. And and it is great for for building your own brand and marketing yourself, but marketing the company as well.
John (18:07)
Yeah. Yeah.
Sean Allocca (18:18)
So there's a ton of great opportunities you can take away from these events.
John (18:22)
Independence, it's your move. Fidelity's unbiased expertise helps you understand all your options. Fidelity works with many types of wealth managers, so you can select the business model that best fits your future. Their consultative approach helps you choose how much control you want and how much support you need, everything on your terms. After all, isn't that why you want independence? Explore new possibilities for independence at i.fidelity.com slash your
Sean Allocca (18:50)
All right, so for our next topic, we're gonna let John nerd out a little bit on annuity sales tactics, which might not be top of mind, but it's actually very interesting. And John, I know you wrote a a recent story on it, and I know I was I was adnate looking looking at it as well. I learned a lot about how important annuities are to retirees and to, you know, just advisors in general, trying to get their clients to a successful retirement
John (19:04)
Yeah.
Sean Allocca (19:12)
there there are also some kind of ways to think about annuities that might not you know be
They're a little counterintuitive, let's put it that way. So John, we'll let you jump
John (19:20)
Yeah.
sure, for sure. So I I went to a conference recently and and saw a really fascinating presentation by Jump AI, kind of put on in collaboration with the American College of Financial Services. There's a researcher there, Eric Ludwig, who I'm pretty good friends with at this point, and and I really respect his work. but what they were looking at is whether sort of behavioral psychology tactics that work in many other contexts in financial planning, whether they function, you know, as it pertains to the sale and service of annuities and
What they found is that really it doesn't. So ⁓ there was a study in 2008 by Robert ⁓ Caladini, I think it said, and they looked at this idea of social framing, which which basically is when you give people subtle hints about what other people do in a given circumstance or what's the expected behavior, that normally that does have a big effect on people's ⁓ behavior and choices. So the classic study, they put placards up in hotel bathrooms and said,
Basically, the majority of guests in this room hang up their towels and reuse them. And they found that s merely putting that message in, you know, in a hotel bathroom resulted in, you know, significantly higher reusage of towels. What didn't work was messaging like
you know, reusing towels saves water. So
kind of what Eric thought was to bring this into the retirement realm and and see, you know, whether this social framing effect works for the sale of annuities. What they found is the exact opposite. ⁓
Social proof framing actually reduced the acceptance rate of annuity purchases by about 20%. And the only greater negative effect that occurred and when in terms of framing annuities was talking about them in terms of longevity protection. That that actually reduced acceptance by about 20%. So admittedly, very nerdy, but I think it's a very important takeaway, which is that
how we talk about annuities and even just the basic way we frame them.
can have a huge impact on people's decision
And and to me that's just a a fascinating finding. I I think Sean, annuities are one topic where, you know, people's behavioral psychology is is front and center. They're they're afraid of giving up their money to to to an insurance company.
Sean Allocca (21:25)
for sure. And
having that revenue stream is so important to folks too. And how do they weigh that? But I guess so the takeaway for advisors would be don't frame it like everyone's doing it. ⁓ and also pick up your towels when you're in the hotel bathroom.
John (21:40)
Yes, exactly. And and what Eric actually found is that there are ways to increase acceptance with other framing techniques. So one that's often studied in behavioral finance is called default bias framing, which involves suggesting to people that a certain course of action is the expected course for people in that circumstance. So for example, a message would be something like, people like you who have saved a million dollars for retirement normally buy an annuity.
That strategy
purchase recommendation acceptance by 27%. So a big tick in the other direction. Another strategy is called consistency framing. And I think this is the most relevant for financial planners.
consistency framing involves is reminding people of repeated receptive conversations about a given action or decision. So for example, a financial planner throughout recurring meetings can talk to their
Talk to their clients about the value of ⁓ guaranteed income. And you know, if those conversations are positive and and people, as they tend to do, say they're receptive to this idea of purchasing annuities and guaranteeing more income. If you have those conversations throughout a period of years, and then you later remind people that you've had those conversations and that they've repeatedly offered sort of ⁓ acceptance and interest in these annuities, merely by reminding them of of those conversations.
you can accept increase annuity acceptance. And in this study, it was up over 20%.
what was really cool about this study is that they jump, they took jump data and what jump does is basically record and transcribe conversations between advisors and clients. ⁓ And they actually looked at conversations, they looked at annuity purchase recommendations and they looked at the acceptance of those recommendations.
So this is actual, you know, data that of people's real behavior. This this isn't theoretical. So again, realizing I'm nerding out here, but the the point is that, you know, there are framing techniques that can can improve acceptance of annuities and and there are framing techniques that can improve, you know, acceptance of other recommendations. So the advisors out there who haven't spent a lot of time kind of reading the latest in behavioral psychology, I would would definitely recommend it. Thanks for letting me nerd out, Sean.
Sean Allocca (23:49)
I
never thought I'd be that interested in selling annuities, but here here I am learning something new every day. So
John (23:56)
Sean, something else that we've sort of been talking about in the newsroom and as especially obviously for the ETF upside newsletter is the emergence of some some really interesting categories of exchange traded funds. ⁓ obviously the emergence of spot Bitcoin ETFs has been really kind of interesting to see, very, very fast growing. ⁓ we've also seen this emergence and and they're still fairly very novel, but
this emergence of prediction market ETFs. And this is really building off the whole saga of Calci and polymarket and and really just this emergence of sort of a ⁓ bringing a a betting mindset to the investment markets. I'm not sure if you have any high level thoughts, Sean, but to me, you know, these these products are very interesting, potentially useful, but I I just wonder whether, you know, the users of these products are kind of drifting away from the the tried and true investment processes and practices that we know can get people
you know, to a decent to a decent retirement that can help people accumulate assets and save. So I don't know what what you think about them. They're are they just gambling or are they more than that?
Sean Allocca (25:01)
the age old question, right? I mean, what what are the use cases for these? I mean, I will say the the filings have came out so far. I think there's like I'm not sure how many to be honest, about a dozen pr maybe. yeah, so they're out there. The SEC just brought it to a public, you know, comment period. So it's gonna be a few months, probably at least, and people are gonna be able to weigh in and and see what they want to do with these prediction markets. I think the larger ⁓ idea of just prediction markets in general.
John (25:11)
Yeah, a couple of dozen, I think.
Sean Allocca (25:27)
You know, those those two things.
if it is being allowed in in the investment world, like ETFs are going to go and and the the the massive innovation that we've seen in ETFs is going to to come ⁓ and and wrap up these prediction type investments in in in an easy to use,
tax advantage ETF. So that I think is gonna happen. Is it gambling or not to your question? I think that on the surface it feels a lot.
I mean, let's be let's be honest. I mean, it's gambling that's somehow on, you know, an exchange and it's being, you know, used as an investment. ⁓ there's some pretty fun ones though. I I I wrote a story about it like a year or two ago. There was ones on the existence of certain exoplanets. ⁓ like the obvious you can do it on on on p p political races. I even saw you could do one like will a certain
natural disaster hit a certain city within like a time frame and obviously you put up your money. If it's yes, you win. If it's not, then you have zero. So I'm not in love with them. But I also think I also try and push back what people always say it's gambling, gambling, gambling. I mean it's it's not investing for the long term. And I don't think anyone would I I don't you know, I don't think a lot of people are using these as retirement vehicles. I mean that would be in I don't think anyone would would do that in their right mind. But do people want to just have fun on on a race or
John (26:44)
Yeah.
Sean Allocca (26:48)
Or just t testing public ⁓ you know, sentiment on things when you see who's gonna win the race, you know, mayoral race in Chicago or something, and you see where all these bets are, it kind of gives you an idea of what the public sentiment is. So there I think it's value and just kind of almost like social listening to a certain extent. Is it a great investment? Obviously not. Are there other types of investments out there that probably aren't aren't amazing for the long term? Absolutely. So that's this is just in that category. You you know, you wouldn't use it for retirement.
John (27:15)
Yeah.
Sean Allocca (27:17)
Will it end up in an ETF and will the SEC allow it? I think almost definitely.
John (27:22)
Yeah, I I think so. That that's where that's where it's heading. Certainly under the the current the current SEC that we have, they're they're very receptive to innovation, we could say, and and they're they're willing to let investors try new products. And at the end of the day, I mean who who are we to sit here and and wag a finger, right? If people go into any sort of investment opportunity with your eyes wide open, that that's what's important, I think, is the takeaway here, Sean, is that folks understand what they're getting into and if if they want to participate, then more power to
Sean Allocca (27:44)
Yeah.
Yeah, I don't think it's like the SEC or regulators really placed to kind of put, you know, bumpers, you know, like on the bowling alley on and anywhere and allowing people to kind of
want to do what they want to do with their money and it's their own money at the end of the day. If there's appetite for then the industry's gonna gonna create them and whether we like it or not. So yeah, I do think to your point on on education, making sure that there's, you know, like they have done to their credit, ⁓ with the with the leverage products, like I talked about, the two and I think there was up to four X.
John (28:09)
Yeah.
Sean Allocca (28:19)
leverage but on on the per sector is like in big bold letters like usually it's they're fine print and you need a magnifying glass like in these it says do not hold this longer than you know 24 whatever the period is so having those disclosures yes it's not ideal because who's always looking at the disclosures but at least there is some kind of credibility to getting the proper information out to investors before they get you know in take on some of these I guess more more volatile or risky products.
John (28:47)
Yeah. The one thing I have two questions for you, Sean. But the one the one thing I worry about is the propensity for insider trading to occur in prediction markets. We we've seen that reported elsewhere. It's it's a risk that that I think the the regulators do need to get their do need to get their arms around. ⁓ but second, I'm curious for your perspective as a fellow journalist, Sean. I mean, I I actually am very intrigued by this idea of these prediction markets being, you know, social listening devices and and potentially indicators of
what may come to pass. And I I think there's a lot of truth to that. So like as as distasteful as it may be to see people placing bets on with disasters happening or, you know, wars occurring, it it people, you know, when they put their money behind their vote, you know, that there's a certain amount of conviction there. Whereas I think we deal with, you know, in the financial services industry, we read survey after survey after survey where people are kind of talking about how they feel or talking about
Sean Allocca (29:31)
Yeah. Yeah.
John (29:42)
how they you know, what they want or what they expect for the future. And a lot of time it's just a very theoretical exercise. Whereas I think these prediction markets, when you're when you're forcing people to sort of put their money up to to put a position, they're they're perhaps going to be more honest. And maybe the the public, you maybe the future is a little more clear. But I know it's a big question, but as I think as a journalist it's interesting to see these things unfolding as well.
Sean Allocca (30:04)
the political kind of race races point of view, ⁓ first of all I thought that that wasn't allowed under under the current rules. I I thought that you can't make any kind of bets or put up money on political on political races. So I I I I I was confused when we started
John (30:13)
Yeah.
I think that actually
is illegal here, but people can use a VPN essentially and and sort of go to offshore platforms.
Sean Allocca (30:28)
Yeah, I don't know. I'm I'm
I do think in that case with the with the political races that might be a useful use use case.
Because yeah, you have the exiting polls, the exit polls, and you have all this data and stuff to your point. But when you're putting up money on it and you see the odds of who's gonna win, you know, like I say, mayor or you know, race in whatever county or whatever city, like that it probably is a better identifier. And when you extrapolate that to like other things like I don't know a good example, but but you can you can sort of use those like asset managers can kind of sort of use this data to see what what may or may not happen and maybe even package some of those into some new products like coming down.
You know, d use that data in certain ways that they can then, you know, package products a little bit more appropriately for what they're seeing by using this social listening. Obviously, you can use prediction markets for like anything. I actually just talked to someone who's like has an app that's gonna, you know, just let anyone make their own prediction bet with their friends. It's like a social like prediction bet, like crowdsourced almost. There's no
John (31:25)
Well. Hm.
Sean Allocca (31:31)
exchange or anything. It's just, you know, and it's like a gentleman, you have to pay the guy and he has to pay you or the woman or something. So I yeah. So I think we're gonna see a lot more of it, not less of it. ⁓ so I think to your point too, the regulators getting a handle on some of those insider trading things like you did see. We we saw one CO, I forget what company was from, but he said a random word in his in his earnings call. And because there was a prediction bet on would he say that one word,
John (31:35)
We'll have to get a poll going in the newsroom with
Sean Allocca (32:00)
He likes swung it and he did it on purpose and used it as a an example of what can happen with these with these markets. But you see, even I think even Schwab, who at first I mean, their CEO Rick Worcester was talking at Schwab Impact in Denver of this last year about I don't want to say the dangers, but what's happening in the pro proliferation of these kind of non-traditional investment ⁓ products. but then they're also
John (32:04)
I saw that. Yep.
Sean Allocca (32:25)
considering using some of them and allowing their clients to use some of these prediction markets only around financial events. I think that's what I read. So you see it just becoming very pervasive in our society right now. So again, I think we're gonna see more than less, but better. ⁓ I'm I'm happy the SEC has it a public comment period so can get their heads around some of these issues.
John (32:42)
Yeah.
Well the the takeaway for our advisor listeners, I think, is
they're here to stay. There's going to be more of them in the future. So, you know, your clients are probably going to be asking you about them. Some some may be very enthusiastic about using them and you need to kind of have a have your position, you know, whether you support obviously you can't tell clients what to do, but you know, this is something that's out there. It's it's it's something that we need to be be aware of. ⁓
Definitely keep up with ETF upside. We're we're doing our best to keep up with all the listings and and really sort of cover what's what's new and exciting. So anyway, that thanks for talking through that, Sean. I thought that was interesting.
Sean Allocca (33:18)
Sure anytime.
All right, everyone. Well, that's our episode for this week. Thanks for listening. We appreciate it. We want to remind you guys to also check out our newsletters. We have three of them now. We have advisor upside, ETF upside, and also retirement upside, which is what John runs for us here at the Daily Upside. In addition to obviously the Daily Upside, which is our flagship newsletter with ⁓ about a million subscribers. So plenty of content we come out every week. As we alluded to as well at the top of the show, we have plenty more products coming out.
So you hopefully you won't get sick of us, but we have some new newsletters coming out towards the end of the year. They're going to be monthly and have special topics aligned to them. So look out for that. We have like a live kind of webinar that we're going to be doing also in a month or two, which will be fun. It'll be our first time that we're doing that. We also have a bunch of videos and some other multimedia stuff coming up in addition to our new broadcast. So we're keeping busy. We're having fun. We hope you're enjoying it. And thanks again, John. I'll kick it over to you. So any final thoughts?
John (34:15)
Yeah,
please go ahead and subscribe to the Advisor Upside Show on your preferred podcast platform. If you're only listening ⁓ to the show, ⁓ please be aware that we're also on YouTube. You can you can see Sean and I and our our guests each week. if you have feedback or questions, please get in touch. You can email us at podcast at the daily upside dot com. Again, that's podcast at the daily upside dot com.
my information and Sean's information is also available on the website. So if you have a a news tip or want to get involved in any of our newsletters, reach out. We we really want to create a community here and and make this a two way street. So I think with that, Sean, we can close the episode. Hope everybody has a good one.
Sean Allocca (34:55)
Thanks everybody.