Serial Innovation in FinTech with Purpose Unlimited CEO Som Seif

Barry sits down with Som Seif, founder and CEO at Purpose Unlimited. They discuss Som's journey from engineering to investment banking. They also discuss his early push into ETFs in Canada and the creation of the first bitcoin ETF. Finally, Som discusses his history as a serial entrepreneur and the importance of endurance when building business in today's ever changing markets. See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

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• 1:53Barry Ritholtz?

  This week on the podcast, yet another banger. Sam Saif is founder and CEO of Purpose Unlimited. One of their holdings is Purpose Investments, about 40 billion Canadian. He is a serial entrepreneur and financial innovator. He created the world's first Bitcoin ETF in Canada long before the US came up with one. He built one of the larger ETF firms in Canada, sold it to BlackRock. On and on the conversation goes about all these fascinating things. I thought the conversation was really, really intriguing, and I think you will also, with

• 2:31Barry Ritholtz?

  no further ado, my conversation with Purpose Investments, Sam Seif. Sam Seif, welcome to Bloomberg.

• 2:49Speaker 05

  Barry, it's great to be here, and thank you for that kind introduction.

• 2:52Barry Ritholtz?

  So I'm kind of fascinated by your background, your career, the whole multiple innovation, serial entrepreneurship. But let's roll back to the early days. You wanted to be an architect, and then you went for a bachelor's in industrial and systems engineering from the University of Toronto. What was the original career plan?

• 3:16Speaker 05

  Yeah, I mean, since, as long as I can remember, architecture was my kind of goal. And that fundamentally was something that just inspired me. I loved the mix of the creative side of my brain and, call it, systems and structural, mathematical side of my brain and bringing them together. And just design was always something exciting. The interesting thing was that, you know, so now you're faced with this decision, you apply to, you know, school for architecture and for engineering. And then in my, you know, I went and spoke to a couple of architects, and every single one of them said, this is a stupid career choice, you won't be doing anything that you will, you think you'll be doing, it'll be grunt work, you won't enjoy it, and there's

• 4:01Speaker 05

  no money in it. And I, you know, of course, said, whoa, what am I signing up for? So I, I said, okay, I'm going to go do engineering with the idea that maybe I'll switch. And fundamentally, that was not going to happen. And, you know, I was in first year of engineering and said, okay, what is my second choice? What else? And, you know, I really loved the concept of strategy and finance. I didn't know anything about finance and hadn't been learning anything about it, but I got excited about investment banking and things like that. And so, you know, ultimately, I decided that was the path I was going to pursue. And coming out of an engineering degree, I ended up, luckily, just a timing really uniquely

• 4:41Speaker 05

  at the end of 1998, got an opportunity to join the biggest bank in Canada, RBC, in their investment banking division. And so, engineering was a really interesting path towards it. And, you know, at the time, the tech bubble was happening, and I guess someone in investment banking said, hey, we need more engineers in here to tell us, you know, how to think. And the learning curve was pretty amazing in terms of starting with nothing and basically learning on the go.

• 5:09Barry Ritholtz?

  So you spent six years at RBC, helping them build out their structured products group. Tell us about that experience. What did you learn?

• 5:17Speaker 05

  So investment banking is one of the amazing early learning experiences. And I've always been in sort of pursuit of, you know, learning and call it pushing myself to certain limits. And, you know, investment banking today is very hard. Investment banking 25 years ago was even harder. And, you know, young analyst, young individual, you're ultimately working on, you know, amazing things, but at the same time, you are, you know, being, you know, you're working like a dog, like 80 to 100 hour weeks. That said, there is no better place as a 22-year-old, 23-year-old, 25-year-old to ultimately have immersive learning. Like, and so it was amazing for me. When I, when I went into it, it's funny, I had, as a young individual, always, you

• 6:01Speaker 05

  know, I was an immigrant to Canada, you know, I didn't, you know, my family was a good, middle-class family, but we didn't, you know, have stuff. So I always dreamed about this idea of all the riches and goals and things like that. And, you know, investment banking, kind of one of the things that kind of excited me was this idea of, you know, hey, you're going to make lots of money. And, and, you know, the interesting thing was, during the tenure, you know, first few years, you know, you start making good money for a young individual, and then you kind of realize, wait a minute, this isn't actually motivating me. I remember succinctly, I came home, I was 25 years old, it was 3:00 in the morning or 2:00 in the morning, and, and I just sat down and kind of wept because I said, you know, I'm working like a dog, and, and I'm pursuing this goal, but I'm not happy.

• 6:43Speaker 05

  And I had to actually go through a deep-rooted perspective of like, okay, what is the thing that actually drives me? What is the thing that actually motivates me to wake up on Monday morning and skip to work because I'm still enjoying what I'm doing? And what I realized was that the thing that actually I was in pursuit of was the idea of seeing my ideas progress, seeing the things that I was doing have real, tangible outcome. And I go back to that principle of what was it that excited me about architecture or design? It was this very simple principle of, you know, when you build something or you design something, you can actually see it in front of you afterwards. And so I actually correlate that really specifically around what was the thing that was my intrinsic motivation.

• 7:28Speaker 05

  So at that point, I just said, look, I'm still learning, I'm having an amazing time, but am I going to ultimately achieve what I want here? And, and I said, I won't. So I kind of gave myself a put, I call it. I was 25 years old, and I said, okay, I am still here learning, I'm going to build my networks, I'm going to do all this stuff, but if I am in seat on my 30th birthday, I'm going to resign on that day. And, and that kind of wake, woke up my mind to what else is out there? And over the next number of years, I started thinking about what was it that was going to be the next for me? And that ultimately came when I was 28 and started Claymore.

• 8:03Barry Ritholtz?

  So let's talk about Claymore. You, you launched this in 2005. Globally, ETFs were a thing, but not the giant thing they were today. They certainly were a tiny niche product in Canada back then. What did you see that all the other banks and all the other finance bros completely missed?

• 8:23Speaker 05

  So you're absolutely right. So in Canada specifically, there were 14 ETFs listed on the Toronto Stock Exchange, basically all by Barclays I units at the time, I shares. And in the United States, you know, of course, ETFs were starting to become popular, specifically in the institutional crowd, retail crowd, you had, I think, firms like WisdomTree had just sort of entered the business and players like that. And so it was a, it was not an area that was logical or call it clear. That said, I had, one of the things I had to benefit of, I'd actually covered some management firms globally during my time at RBC. And I'd actually got the opportunity to cover Barclays and got to know the leadership of

• 9:06Speaker 05

  the organization, helped them raise some capital, but more importantly, was supported and understood what they were doing on the indexing ETF side. And it got me really excited. I started to see the trends. But what I struggled with was the fundamental principle of, you know, passive indexing. I really did. I actually love the principles of what indexing did. And at the time, ETFs were deemed as indexing, right? That was the concept, right? It was actually anything you did outside of pure indexing was a no-no. The industry players would say, well, this isn't an index. And so I got really excited about, you know, the idea of, you know, what an ETF does.

• 9:47Speaker 05

  It's low cost, great product in terms of wrapper and structure, transparent, disciplined in its approach, using an index. However, I just hated the fundamental principle of what market cap indexing did, which is basically buy high and sell low, right? So in around the time that I left RBC to start Claymore, I had actually read a research paper, just serendipitously came out around the same time in 2004 by Rob Arnaud and Jason Su. We'll spend some time on Rob, who's a really important person in my life. And they had published this article around non-market cap weighted indexes.

• 10:23Barry Ritholtz?

  Smart data.

• 10:24Speaker 05

  Yes. And it was, I, I read this article, and I'm an engineer, so I love these technical things. And I just got excited and basically a couple of months later, I reached out, we went down and spent time with Rob in Pasadena and he was a big thing. I remember Rob was a pretty big deal, but he took the time, he spent half a day with me and I walked out of that office just having clarity on the future of what I was going to build and more importantly, the future of where the industry opportunity was. And that was the principal starting point of the vision for building Claymore and you know, the future of what I felt was going to be a really amazing thing around indexing and the future of indexing

• 11:08Speaker 05

  around and we used, of course, we launched the first public investment fund on fundamental indexing, the Raffi indexes.

• 11:16Barry Ritholtz?

  Really interesting. So you grow this to 34 ETFs and a couple of closed-end funds and about $8 billion Canadian, I think, or 6 billion US. What was the hardest part of building that sort of asset manager, considering all the other products were giant bank owned?

• 11:37Speaker 05

  Well, you know, Canada, of course, has many structural, I mean, it's an amazing region for opportunity and financial services. That said, it is also, you know, highly concentrated with the big banks and the control that they have with their distribution. And so it's a very challenging market for independents, as you can imagine. That said, you know, what I, I really, I go back to the period, we had a really amazing product. No one knew what it was. I remember we'd go out in 2005, 2006, 2007, we'd sit down and talk to advisors across the country and, you know, I'd walk into a room and I'd have a sign-in sheet and saying, you know, name and email, but then I'd ask the question, how many of you

• 12:18Speaker 05

  use ETFs? And back then, it was one out of 10 would say yes. Most people were like, what's an ETF? It's what EFTs, you know, like this was the time, right? And, but I fundamentally believe what we were doing is important. And it was, you know, we grew in Canada, of course, remember we're about one tenth the size of the American market. So, you know, 8 billion aggregate would be like 80 billion in that timeframe. But we actually in the first couple of years grew to about a billion dollars. So at the beginning of 08, we got to about 800 million, which is a great, great outcome early on in, you know, from nothing. And then in the real thing happened in 2008, you know, and it's, you know, it was a really great wake-up call and called learning for me. We went through 2008 and every single

• 13:03Speaker 05

  month in 08, we grew positive, we had the net positive sales. I think we were the

• 13:07Barry Ritholtz?

  Despite the ongoing turmoil.

• 13:09Speaker 05

  Despite the market environment. And in September and October specifically, we had positive net sales. And I think we were the only firm in the country that had that. The principle was that disruption was critical for us at a time when we were trying to build a challenger idea and tell a really strong narrative. We needed the complacency of our investor base, of the advisor community, of institutions to wake up and say, hey, wait a minute, you know, what should I be thinking about next? And that was a really important point. So coming out of 2000, we ended up in 2008, growing from 800 million to 1.1 billion despite the headwind of the markets. And then in 2009, we went from 1.1 billion to 4.4 billion.

• 13:49Barry Ritholtz?

  Wow.

• 13:50Speaker 05

  So just an accelerant coming out of the financial crisis. The next year, we went from 4.4 to 5.7 and then to 6.8 and then ultimately, two months later, when we closed the deal with BlackRock to sell it, it was 8 billion. And the momentum was just so unbelievably strong. And the reason was because when people, the financial crisis occurred, people left the market and they were going to cash. And then when they were re-entering the market, they were asking themselves, now what? Where do I go? What's the best investment vehicles? And all of a sudden, ETFs became something that they were learning about, understanding, and we were right there. And it was amazing. At the same time, we also saw the acceleration towards the trends that were happening in advice. As you know, the movement towards

• 14:35Speaker 05

  discretionary portfolio management, you know, the historical mindset towards commission-oriented new issue type business, that became challenged because of the market and the banks and the broker dealers wanted more stability. So advisors started to transition their practices towards more discretionary investment processes and model portfolios. And ETFs, of course, you know, fit extremely well. In the US, we've of course seen the RIA movement coming out of that. And those were an amazing backdrop of trend that, that just drove the market and in parallel, the ETF industry alongside of it. And it's been an unbelievable number of years for everyone.

• 15:12Barry Ritholtz?

  Really interesting. So, so the sale to BlackRock, what motivated the exit? What was the process like and how hard was it to let go of this thing that you had built?

• 15:24Speaker 05

  Very hard. So there's a, my, my financial partner in the latter years was a firm called Guggenheim Partners.

• 15:31Barry Ritholtz?

  Oh, sure.

• 15:32Speaker 05

  And an amazing partner, an organization, worked really well with them and, you know, really proud of the relationship we built there. And the interesting thing was, of course, I, I had sort of approached them and said, let's, let's sort of, you know, let me buy you out. You know, we, they'd had a great outcome and it was a wonderful outcome, but, but, you know, we just sort of couldn't get to a price that made sense. So we decided to go through a process. And I at the time felt, okay, we'll run a process, but I'm going to also be a buyer at the process. And I agree, we agreed to that. At the end of the day though, the process was very robust. BlackRock was a leading partner at that. And I remember pivoting multiple times as the price kept going up on who my partner

• 16:16Speaker 05

  was going to be to finance my buyout. And then at the end, I remember on, in December of 2011, I was, it was my daughter's birthday, I was on the phone with one of my strategic partners around the purchase. And we were having conversation about strategy, execution, plan. And then I got off the phone, walked down to my wife and I said, I'm holding on too much. The price has gotten well above what my target price was. I'm being too emotional. I think that the right thing to do is to sell. So I called the bankers. I said, I'll put my name behind the BlackRock bid. I flew down to New York on January 2nd. We spent a few days in a room negotiating the purchase sale agreement and we announced the deal, I think on January 11th and closed the deal on March 2nd. And that was, it was a really

• 17:00Speaker 05

  difficult period for me. I had a chip on my shoulder. I'd built this thing. You used the word serial entrepreneur earlier. And I actually have never believed I'm a serial entrepreneur. I don't build businesses to build businesses. I build businesses because I truly love what I do. I'm in pursuit of really building things that have endurance, have great value to our customers, that really think about changing the industry. And, and so this was a moment where I felt like something was being ripped out of me. And so I had a chip on my shoulder. We closed the transaction and I said, I need to take the time. I actually ended up building the, the business plan for what I was going to do next, which ultimately was purpose and while simple, within 30 days. But I said to myself, if I start today, I'm

• 17:45Speaker 05

  going to fail because I'm not doing it for the right motivation. I'm doing it for the wrong reasons. I want to do it because I'm in pursuit of getting back in the business. And so I ended up consulting for the regulator for a couple of weeks and then I ultimately went to, with my wife for three months overseas to Southeast Asia. And I detached. I, back then, we had BlackBerries. I still probably have BlackBerry. People famously know I love BlackBerries. But I had a BlackBerry and I turned it off and no one could get a hold of me. We went throughout Southeast Asia and it was the greatest thing. And I said to myself, if I come back and I have the energy and excitement around this business plan, then I'm going to do it. And of course, we came back and, you know, I, once we landed

• 18:27Speaker 05

  in, in North America, you get all the texts and all the news and, and my energy just started to really powerfully go up. And I said, okay, let's go. And I registered purpose and started the business plan.

• 18:36Barry Ritholtz?

  So we're going to talk in a little bit about why I think you're a serial entrepreneur. But you said something that I'm kind of fascinated by, and it requires a degree of, of self-awareness that many people in our industry sometimes don't have. I don't want to say always don't have. We all have blind spots. You said you became aware that you were too emotional, too self-involved, too, you were holding too tightly.

• 19:10Barry Ritholtz?

  How did you come to that realization? You know, listeners are bored of hearing me talk about my early days on a trading desk, but I became very aware that, oh, this is just way too much fun. You're trading for the dopamine hit, not for P and L. You either have to become more disciplined or shift your career. What was that insight that led you to say, oh, I'm gripping this way too tightly?

• 19:38Speaker 05

  So I think self-reflection is one of the great virtues that we all should have. It's one of the things I think often people don't have enough of. And I actually think, you know, it's something that requires anchoring to sort of early on to the kind of goals and the things that matter to you. So you're disciplined around what you're self reflecting around. And it's hard as humans. We're not trained, our mental state is not trained this way. So it's just something that I feel very confident in my ability to constantly be asking myself, am I on the right track? Am I doing the right things? Am I pursuing the right goals? Am I going to achieve the things that I want to achieve on the path I'm on? And that, I think it's a critical learning.

• 20:21Speaker 05

  And, you know, the growth mindset that comes with that curiosity and willingness to be vulnerable is critical as a human. So this is, I think, a really important thing. I think our industry can always use that because, you know, I like, I love the financial services industry. One, because it starts with a really amazing mission. We are here in service of individuals to help them ultimately achieve their outcomes, their goals. It is such an unbelievably high mission industry, and we don't do enough to talk about that. Instead, we talk too much about ourselves. We're self-centered. We talk about, you know, hey, let me tell you about me. And now that I'm done talking about me, let me talk to you more about me. And you go to someone's website, it's always about me, me, me. It's never about the customer.

• 21:04Speaker 05

  And so there's this amazing opportunity as an industry to step back, reflect, and say, why are we here? What's the actual job that we're here to do? And it is ultimately in service of individuals and their outcomes, 100%. And we complicate that so much. And so I think self-reflection on that as an industry is a big opportunity. And those who get it are those who stand out and differentiate more than anybody else.

• 21:29Barry Ritholtz?

  Really, really fascinating. Coming up, we continue our conversation with Sam Saif, founder and CEO of Purpose Investments, discussing financial innovation. I'm Barry Ritholtz, you're listening to Masters in Business on Bloomberg Radio.

• 21:46Speaker 00

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• 22:23Speaker 01

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• 24:06Barry Ritholtz?

  I'm Barry Ritholtz, you're listening to Masters in Business on Bloomberg Radio. I'm speaking with Sam Saif. He is the founder and CEO of Purpose Investments. So we were talking earlier, you sold Claymore to BlackRock, and instead of taking a couple of years off, a month or two later, you essentially start Purpose as well as co-founding Wealth Simple. So many people take a breather after an exit. Why go straight back in and why two companies at once?

• 24:40Speaker 05

  So I had, as I said earlier, I had a very clear eye on what I wanted to do next. I was really excited about where the industry was going, what we were doing, what the momentum we were seeing. And it felt, actually now I had this amazing gift. I was blessed with a blank piece of paper. And so when you have a blank piece of paper, so oftentimes businesses want to keep evolving, you want to, but you have to kind of deal with your legacy, you know, and technical debts and things like that. And so I felt blank piece of paper, I can get to do, how would I start from scratch? And so I had this great energy, but I looked at both the continued evolution of modernization of investment management, but I also saw a bigger picture opportunity in wealth management. I said, the opportunity is not just, you know, let's build asset management products.

• 25:22Speaker 05

  Because when I started Claymore, I came from it from a technical engineering perspective. And I said, when I look at all the billboards and I look at all the advertising, all it says is, hey, we beat the market, we did this. And I said, okay, well, the job to be done is to beat the markets. And I thought that's what we were supposed to do. So I was in pursuit of building a product and a business that ultimately solve for helping people beat the markets. What I realized, and one of my great stories around this was, the first product we launched was the Canadian Raffi Fundamental Index. And we launched that, and it was amazing, but it hit its five-year numbers in 2010, just early 2011. And of course, five years, you start to see real track record.

• 26:05Speaker 05

  And at the time, it was the number two Canadian equity fund. It beat every active fund, all the, like, the main index, it outperformed by 200 basis points, and that's a great accolade. Of course, in our industry, that's what, you know, you are really excited about. And I felt, wait a minute, I actually don't know if we actually did anything because it went down in 2008, just like the main index, 35% or whatever it was. And I also looked at the journey, and I said, if someone had bought it on day one when we launched it and held it all through that five years, they would have received that return. But the reality of what human nature was, is that they were buying it at different times, when they got fearful, they were selling it. And, you know, their return was very different than the fund's return.

• 26:48Speaker 05

  And I asked myself, I said, did we actually change the industry? Did we do anything? Yes, we did something great technically, the product was excellent, we were moving the needle of how the industry operates, but we weren't changing the way the client and the customer was experiencing what we did. And so that informed me. And at the same time, I told you about Guggenheim was our partners, and they had been working on their wealth part of the business with Danny Kahneman. And I had this wonderful gift, again, to have the opportunity to learn and understand how the, Danny was brought in to help them understand how to help billionaires and wealthy families, and call it patriarchs and matriarchs, to understand the transition from wealth creation to wealth management.

• 27:31Speaker 05

  And it was so powerful, and the principles of what Danny talked about really resonated with me. I became a student of behavioral science. And that sort of became really paramount, to my view, of what a modern asset management firm needs to think about, which is not just beat the markets, but develop investment products that actually have outcomes and goal orientation towards them. How do you help advisors and investors, you know, ultimately communicate together and work collaboratively around the actual goal the customers are asking us to do, which is help them meet their goals? And so I just felt the asset management industry, wealth industry, both could ultimately optimize around that. And that was what Purpose's mission was going to be around, is outcome-oriented, modern investment management, optimizing for all the inputs and how we manage money, not being

• 28:16Speaker 05

  active, not being passive. And then second is, how do we help restructure the way wealth management could ultimately be oriented towards the customer journey, as opposed to, hey, we're just going to give you a 60/40 portfolio?

• 28:28Barry Ritholtz?

  Really, really fascinating. Tell us a little bit about Wealth Simple, which I described earlier as the default investing app for a young generation of Canadians. What did you see before apps like Robinhood were big and successful that was a thing that young people wanted?

• 28:48Speaker 05

  Yeah, so the principal insight that I sort of had was You know, if you looked at the way that the industry was operating, one of the big negatives that was that because the industry made so much money, the margins were so good, we actually relied in a lazy way on what we call average economics. So what does that mean? Where do you see that? It comes out as, on average, you know, I like to run money for bigger customers. On average, my bigger customers make me more money. And on average, my smaller customers don't make many money. And how does that show up? You know, smaller customers get treated poorly, get high fees, get relegated to low-quality services, and larger investors ultimately get all the value. And people are gravitating towards, hey, minimums and big fees for big,

• 29:33Speaker 05

  big services for high net worth and ultra-high net worth. And I just felt that was stupid. The only economics class I took in engineering was something called ABC economics. And what that is, is actually activity-based economics. And so the idea of unit economics. And I said, what we need to understand in this industry is that I actually disagree that small accounts don't make you money. I just think that the systems, the principles of the infrastructure of the industry are poorly designed to serve smaller clients. And so what I felt my whole wealth model was, how do we restructure the infrastructure of the industry? How do we think about it from a unit economics, using technology and structure and pipes

• 30:16Speaker 05

  that would ultimately allow for that? And then what you do is bifurcate the value for the different segments of customers, small, early-stage customers, middle, mass-affluent, all the way to ultra-high net worth, based on a service-level offering. And the service-level offering would change and increase based on the needs of those customers. So that was the principle. And I said, at the earliest stage, if you're 20 years old, 25 years old, this is the most amazing period to build for. But the industry was treating them awful. So I said, let's go build this. And so we started with the technology, the infrastructure. And what WellSimple has done is really unbelievable. It has become, in Canada, the most competitive platform in financial services against the big six Canadian banks. Canada has never

• 31:01Speaker 05

  seen anything like this before. And it all is rooted on serving customers where they're needing us to serve them, right when they're getting started, or along the earliest stage of their journey, and then helping them compound not only their wealth, but also the overall financial experience as they grow from 25, 30, 35, 40. It has been an amazing experience. And, you know, today, WellSimple, I mean, I think we're, we run about 150 billion, but we're doing more in net deposits than the biggest bank in Canada, RBC. That is an unbelievable statistics. I'm proud of what that team and what the organization is doing to challenge the industry and change the way Canadians are served.

• 31:42Barry Ritholtz?

  So let's stay with Wealth Simple a minute, because initially, I assumed this was kind of a Robin Hood-like app with free trading and gamification and, you know, up to but not quite sports betting, like that sort of, hey, this isn't going to get anybody to their goals. It's fun, entertaining stuff during the lockdown of the pandemic. Tell us about Wealth Simple in terms of the differences with an app like Robin Hood.

• 32:12Speaker 05

  Yeah, so the starting point actually is, you start with the customer where they need you the most, right? When you're 25 or 30, you know, you're either just getting started, you might have 5, 10, 20, 30,000 dollars. And the principle of it is, you want to help them ultimately get going. So building a discipline, a structure. So we have the managed money programs, which are, you open an account very simply and clearly, you basically build your portfolio, and your portfolio is basically a glide path on the markets and such. And then you surround that with, you know, the types of services and solutions. So direct trading accounts, you know, cash management, credit cards, you know, all the crypto, things like that, that are really important. So my principle is, there's always

• 32:53Speaker 05

  a view of attention of these things. I come from a different way of it, which is, these are things that people are going to be in pursuit of. And what you want as an organization is not to duck your head in the sand at any stage. If you're an advisor, you know, saying, hey, I don't do crypto, is actually a wrong message, or because your customers are going to be in pursuit of it. We know that 60, 70% of high-net-worth individuals have a direct account, and many of them are curious and engaged in buying interesting areas like that. So I think an advisor firm, or any firm, a financial service firm, has to find a way to balance the foundations of what is good long-term, you know, call it disciplined investing, along with satiating the needs and the desires of what an individual wants,

• 33:35Speaker 05

  so that they don't always, you know, turn their head to, I need something different. And that actually comes from the mindset of, find a safe and secure way to do those types of things on behalf of the customers, and educate them, and size it effectively. So, you know, like, for example, WellSimple recently got approval to do prediction markets. And this is a really high-tension area. It's, you know, people have a, you know, binary view of this. And my view is, if customers are going to be doing it, you want them to do it with you in a safe and secure way than to do it elsewhere. And that's how you have to ultimately be building around. But at the same time, the whole business is oriented around helping someone where they need it the most around their financial journey, so they can ultimately achieve their goals. That's it.

• 34:19Barry Ritholtz?

  So I, this discussion about whether or not you're a serial entrepreneur, I have to click through a bunch of things that you've built that are fascinating, starting with the world's first spot Bitcoin ETF back in 2021, long years before the US approved one. It crossed a billion dollars in the first month. How did you get the Canadian regulators to approve this? How'd you make them comfortable three years before the SEC was comfortable?

• 34:53Speaker 05

  So first off, I have had a deep thesis on crypto for a long time. And that's the starting point is, I wasn't doing it because, hey, cool, this is your idea, let's launch this and throw something against the wall. I had, you know, in 2016, just like most people, you know, I'd been like, you know, been asked about Bitcoin, and I was like, I don't know, it looks like a sort of scammy thing. And then I sort of self-reflected and said, wait a minute, people are actually asking my opinion on this. I should go and do some research. So I spent the time learning and understanding the space. I actually, the best way to do that is make an investment. And, you know, over the next 12 months, I just became this student of what was happening. And, you know, what really excited me was,

• 35:33Speaker 05

  of course, Ethereum, which is this, call it sister, technology that was really around taking what Bitcoin had done and really expanding the capabilities of it around smart crypto and all the rest.

• 35:46Barry Ritholtz?

  Smart contracts?

• 35:47Speaker 05

  Exactly. And so I got very excited about that. And so what I said was, we're so early in this, the infrastructure's not there, the fraud risks, all of it, for investors is going to be so high. So I actually launched the first publicly traded vehicle on Ethereum, called Ether Capital, partnered with a group of people. And I said, we're going to raise the money, we're going to buy Ether on the balance sheet. Effectively, you know, we've seen these now become more popular in the last number of years, but it was the first one. And we did this in 2018. And I'll tell you, it was an amazing thing. And my message was, we're going to find a safe and secure way for people to co-invest alongside of us on this really great journey, because of the asymmetric opportunity of this bet. That informed me on so much. And then at some point, and we used to do self-custody in

• 36:31Speaker 05

  that corporation and all the rest of it. And then at some point, we started to see the infrastructure change. And that's when we went into the regulator and said, look, there's an opportunity here. The infrastructure's changing around how you can custody and fit this into a liquid ETF structure. We worked with them for nine months and ultimately got them comfortable. And this is a really important principle that I believe. We, as a registrant, as a money manager, we have great ideas, great innovation. And as long as our ideas are aligned with where the regulator wants the future to go, it's really important to engage with the regulator and have that dual relationship, that idea of helping them, educating them on where we need to get to. And so that was the kind of work we've done

• 37:14Speaker 05

  all throughout my career. And we did that on crypto. And frankly, we were really excited that we got the opportunity to launch it. And that, that model, what we did, actually ultimately informed the series of products that launched in the US a couple of years later, on how ultimately to structure ETFs in the crypto space. And of course, the industry has grown. And we've moved an asset from the fringe all the way to the core, which is what ultimately my thesis was in a deep way.

• 37:39Barry Ritholtz?

  And ETH Capital today is in what structure?

• 37:42Speaker 05

  We actually converted it from that corporation to an ETF once that was available. And again, there, we built staking into it. And those things weren't, again, available in an ETF form, or call it doable, until they were. And when they were, we ultimately moved to the most efficient vehicle, which is the ETF structure.

• 37:59Barry Ritholtz?

  Let's talk about longevity pension funds, launched in 2021, the world's first income-for-life mutual funds, which uses longevity risk pooling to pay lifetime income like a defined benefit pension. Investors include Allianz and Omer's. How is this different from what in the US we think of as traditional annuities?

• 38:24Speaker 05

  So this is actually, so first off, this was my original thesis on purpose, which was, you know, the industry was all solving for the accumulation phase. Let's build them investment products to, call it, solve for how we save money. But no one was really solving within the asset management industry around the challenges of decumulation. And it was kind of left to the insurers, you know, with annuities and with defined benefit pensions and such. And I just felt there was this gap there that was really critical. And you need to deeply understand the, sort of, the principles of, you know, how longevity and structure and all the rest of it were going to be critically in there. And so I asked the team, I said, we need to solve for decumulation. And we were in pursuit of

• 39:08Speaker 05

  it. We were spending a lot of time working on it. Ultimately, we came across a structure. And I just got really excited. And the principles, we had to go to the regulator again and say, there are some exemptions we need to make this work. If I step back for a moment, the greatest financial product ever created in our business or in the financial industry is the defined benefit pension plan. And frankly, if you go back to what that represented, it was such an amazing bargain. You join a company, the company says, we will, in an institutional way, organize to have a savings program alongside of your career. And it will not only solve for your savings needs while you're working, but once you retire,

• 39:50Speaker 05

  it will also solve for your income longevity for as long as you live and in some cases, your spouse. That is like, if you think about the journey of a customer, it is the most unbelievably comforting and principal thing that we've done. And the industry has done everything over the last forty years to break that down.

• 40:08Barry Ritholtz?

  Kill it, yeah.

• 40:09Speaker 05

  And on, on, with the concept of, hey, we're giving you choice. And that has been so bad for people. So I always believed that we needed to get back to bringing the system back. If every Canadian, every American had access to a defined benefit pension plan, ninety-five percent of them would be unbelievably better off. The reality is, it's not good for the industry. The fragmentation allows for agency to increase. And so what I've always said is, how do we bring this back into the structure? And so longevity pension plan was designed on how do we build a pension plan for all? How do we do that in a mutual fund structure, which is accessible? The annuity structure that is, of course, it works similarly.

• 40:50Speaker 05

  The problem is, it has, it has the structure of you have to go off book for an advisor, so advisors don't really like them. Investors have to ultimately go through an insurance structure and it's individualized. Whereas the defined pension plan is a pool. And so when you get longevity risk pooling like that, which is done in a defined benefit pension plan, why couldn't you do that in a mutual fund? And that was our principle. And so we designed that. It's the first fund to really incorporate longevity risk pooling, so putting lives together with a mutual goal of, I'm putting money at work to ultimately solve for my lifetime comfort that I'm going to have income for life. And if I die early, I'm ultimately supporting the cohort, but I'm getting what I needed from it.

• 41:31Barry Ritholtz?

  So I want to click through four other innovative products, but I don't want to spend all week on it. Let's, let's click through these four quickly, starting with cash management ETFs.

• 41:43Speaker 05

  Yeah, so cash is something I think that, of course, everybody needs access to. So we had launched the first money market ETF in, when I was running Claymore. When I came back with Purpose, we saw the movement towards deposit rates were much higher than money markets. So we actually went in, the unique thing we did there was, we went and built a ETF that linked to a deposit account. So it's not to a security. So it's actually one of the first of its kind. And, and that was a hugely important thing back in twenty fourteen. And of course, the cash management industry has grown dramatically. We haven't seen this in the United States yet. So we haven't seen deposit-based cash ETFs. We've seen money market-based ETFs, but we haven't seen deposit-based. So it's, you know, based on the buck, you know, it increases based on the, on the value,

• 42:27Speaker 05

  doesn't fluctuate, and it goes right into the bank deposits of, you know, several banks. And you get therefore a higher rate. So we were really, really proud of that innovation. It has, it goes to show the kind of principle, first, or the first principle mindset that our organization always thinks about is solving problems. Because many advisors, moving to discretionary, were saying like, I want to bulk trade cash, but it's, my organization isn't making it easy.

• 42:50Barry Ritholtz?

  You have to sweep it in from the custodian at night into, it really is, is, it should be capable of being automated and maximizing yield without increasing risk, but there are just a million impediments in the way.

• 43:05Speaker 05

  I sell QQQs and I want to go into cash in my balance of my model. I, my administrative assistant has to go and do all the, basically account by account. Now, with the ETF, you're able to go from, from, you know, QQQs to cash and then back to QQQs or whatever you were doing in just a simple, single trade.

• 43:23Barry Ritholtz?

  Let's, let's talk about option-based income products. I've never been a fan of this as a brokerage product. It just felt like there was so much cost, so much commission built into it. It really, when, when you're dealing with relatively tight margins, it's a challenge as a retail investor to derive any value out of it, real value. It's certainly great for generating fees. How do you, how do you manage a, an option-based income product that works for the retail investor?

• 43:55Speaker 05

  So let's start with the principle why, right? I believe that options and derivatives actually play a really important role for management of portfolios and return stream. So it goes back to that principle of can you design outcomes and the trade-offs that come with options, because that's ultimately what you're doing, whether it's call options or put options. And so for an investment return stream that you're designing, options can be really powerful. That said, that, to your point, they're high friction. For an advisor, very hard to execute and, and, you know, across your business. But two, for individuals, it's very hard and very expensive to, you know, the spreads and the costs and the sizing. But it's excellent. It's actually what option structures are really designed for ETFs and institutional money management in a great way, because you can do at scale really amazing programs.

• 44:38Speaker 05

  So we've been doing these for twenty-five years. You know, back when I was at RBC, we used to help firms build them at, at Claymore, I'd built them, and then at, at Purpose, we've done it. And I find that they are so designed, it's so perfectly designed for the structural outcome that you want to ultimately create and manipulate in your return stream. But they do come with trade-offs. I'll give you a great example. One of the first things when I was in my, you know, starting in my career, in talking to advisors, the, the thing that they, the old school advisor would say, oh, I write put options or call options for a couple of my clients on their, on their, you know, large names, but I can't do it for all my clients. And I'd say, why do you do that? Well, because, you know, I'm owning this stock and, you know, if I'm going to own it for the next ten years, why not generate some income along the way?

• 45:22Speaker 05

  And that, that was a really important mindset that people had, but they couldn't do it across their business. And I said, well, if I own a name like JP Morgan, and I'm going to own, I love JP Morgan. The actual optimal way to own JP Morgan is to have eighty percent long at JP Morgan and twenty percent covered call overlay JP Morgan, so that you're generating the long-term beta of JP Morgan, plus you're generating some ongoing return from the option income as volatility is there and you're taking advantage of the volatility to generate a return stream. And that's the best way optimally from a risk-adjusted basis to generally own most stocks. So how do you do that? And so if you design product, we designed something called the yield shares, which was designed specifically around single name stocks that we, people most love, and then

• 46:07Speaker 05

  you write options against them to generate the option income so that it complements a long-only position in that stock.

• 46:12Barry Ritholtz?

  How do you avoid getting called away when the stock has a sudden surge? And all, the problem isn't merely, hey, you can always go out and rebuy it, but now you have a giant capital gains hit. You have to pay when the stock gets called.

• 46:26Speaker 05

  So in, in, one thing in Canada is, we don't actually have the difference between short and long-term capital gains. Yeah, so it's a really nice thing. You know, you can buy and sell something in a day and ultimately get capital gains treatment at the lowest rate. Our rate is a little higher, but, but still it's a.

• 46:39Barry Ritholtz?

  We're twenty-three percent short-term, thirty percent long-term.

• 46:42Speaker 05

  Yeah, so our long-term is twenty-five, twenty-seven percent. The, the principle mindset though is, this is what institutional programs are really great at. You don't write one option on one strike price on one position.

• 46:55Barry Ritholtz?

  You stack them across.

• 46:56Speaker 05

  So you might have, if you own.

• 46:57Barry Ritholtz?

  It's a whole matrix.

• 46:58Speaker 05

  Exactly.

• 46:59Barry Ritholtz?

  Different strikes, different dates.

• 47:00Speaker 05

  And then with technology today, you can optimize all the structural elements of, do you roll it for tax efficiency? Do you ultimately buy it back? Do you, do you wear it along the curve in the option? Do you basically roll the capital into at any point? So you're constantly in this, call it, vintage-ing of your portfolio overlay, which is really important. That's what institutional money management needs to do. If you're just singularly buying one option on one strike price, that's actually a very low-quality execution.

• 47:26Barry Ritholtz?

  Yeah, we used to see a lot of that on the brokerage side. So the single stock yield shares, how many different versions of this are there or are they all tossed into one ETF?

• 47:35Speaker 05

  No, we, we have, uh, single names, so I, I think we might be at like twenty-something, twenty-five, I don't know the exact number, but it's north of twenty. Canadian and US names, and they've been very popular. You know, they've been very popular with both advisors and direct investors.

• 47:50Barry Ritholtz?

  Huh, really interesting. Coming up, we continue our conversation with Tom Safe, CEO and founder of Purpose Investments, discussing why he built Purpose Unlimited. I'm Barry Ritholtz, you're listening to Masters in Business on Bloomberg Radio.

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• 50:18Barry Ritholtz?

  I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Sam Saif. He is the founder and CEO of Purpose Unlimited, which also owns Purpose Investments. He has founded and sold a variety of different companies over the past, let's call it 20, almost 25 years. So Purpose is now about 31, 32 billion Canadian or about 22 billion US across ETFs, cash, alternatives, private assets, et cetera. Tell us the problem that Purpose is trying to solve for your clients.

• 51:02Speaker 05

  Sure. So total of Purpose actually run around 40 billion now.

• 51:06Barry Ritholtz?

  Forty billion.

• 51:07Speaker 05

  Yeah, on the platform. So on the asset management side, just over 30, and on the wealth side now just around 10, and growing quite fast. And the principal mindset has always been, so on the asset management side was, you know, let's build a modernization of investment management and products and services to meet clients where they need to be. How do you help advisors and investors build more resilient portfolios? Not just long-only equities and long-only bonds, but how do you optimize for the types of return streams that support a world where potentially bonds aren't your protective asset? How do you optimize for the types of return streams that ultimately are designed around an outcome as opposed to just a return of a beta? And so those are the first start. And we have the inputs of, we care about not only the quality of our investment product

• 51:51Speaker 05

  that we manufacture, but also the, call it artisan, quality of our investment input. So the team, the capabilities, the process for investment strategy, using both quantitative methods, active methods, and each of the different categories. I think the second component was then, we have this big picture that goes back to this system. And I, you know, I use the reference to the defined benefit pension plan as a phenomenal product. How do we redesign the way advice and investment management work together on ultimately achieving a client's goal? And so we've designed this whole infrastructure around the wealth management to support, one, the movement towards independent wealth management. So as, you know, in the United States, you've seen the US RIA segment.

• 52:35Speaker 05

  Canada has a nascent segment there, and, you know, we saw this really important movement towards and a need for that. So we built the infrastructure to support a movement towards independent wealth management. But then also the services and the tools and the capabilities over and above that to support advisors in basically driving their businesses towards more planning-based, portfolio, outcome-oriented investment management and wealth management and experiences as opposed to, you know, I pick better stocks than the next guy, I'm better at delivering better returns, more around how do we help customers ultimately achieve their goals? And so we've built all of this technology and systems around that outcome.

• 53:11Barry Ritholtz?

  So I like the idea of emphasizing outcomes over benchmarks, but, you know, we have half a century, maybe longer, of organizing portfolios around those benchmarks and trying to beat the index. Explain what's wrong with that approach.

• 53:30Speaker 05

  Well, it goes back to the behavioral science part, that's first. And second was, it's also a structural thing. If you go back to the last, the last 10 years or so, when I looked at the space, I felt that the industry had become a little bit complacent towards this idea that the, call it, the best and optimal portfolio was a 60-40 portfolio. And the reason was, if you actually span yourself out and looked at the returns of the 60-40 portfolio going back, you know, 100, 110 years, which we did the research on, it actually only, you know, met its long-term goal of 7% in five of, call it 11 or so decades. And this is, you know, a couple of years ago, we did that research.

• 54:13Speaker 05

  And those, of those five, three of them were in the period of 1980 to 2020. And, and so I felt that that had created this bias, an anchoring bias in, call it the industry. You know, Barry, the one thing you realize about our industry is that very few people have a historical experience beyond 1980. Most people's career spans are from 1980 onwards. And so, you know, you get biased towards what you know, what you see. What do you see? When interest rates go up, they pretty rapidly go back down. When you look at any three or four-year cycle, the 60-40 portfolio generally was giving you positive returns. And so that meant, hey, that's an optimal way to invest. I looked at it and said, wait a minute, if you actually look at periods where interest

• 54:58Speaker 05

  rates actually not just go up a little bit and then come back down, but actually go up and stay up, how does that affect bond portfolios? How does that affect the overall balanced portfolio? And so I said that we needed to be prepared for that, and that was the starting point. The second, though, was this behavioral component. And I just said, look, at the end of the day, you know, we've kind of lost touch with what the customer actually is asking us to do. And the customer wakes up and says, look, I, what I care about is I want to know when I wake up, I'm going to be okay. And you need to be in the business of serving me on helping me solve that question. Am I going to be okay? And like a pension plan, you should have a liability, a goal, and you should have an input, which is your portfolio, your savings program and your portfolio, all designed

• 55:43Speaker 05

  around, are you going to be okay? And I felt that, you know, the idea that, you know, we should wake up and say, hey, we're here to beat the S and P 500, or we're here to beat some benchmark, was a silly concept. All that matters to a customer is, am I going to be okay? And everything we do every day should be in service of that. And so that's how I always looked at it. And the principle of the design of an investment firm should be around the kinds of programs and asset strategies that help an advisor build better portfolios to answer the question of, am I going to be okay with their customers?

• 56:14Barry Ritholtz?

  So I have so many different ways to go with this that I'm very enthusiastic about. Maybe we'll put a pin in the whole idea of out-of-sample testing, because everybody is so framed by, it's not just their own hindsight bias, but the recency bias of what they just experienced.

• 56:33Speaker 05

  Entirely.

• 56:34Barry Ritholtz?

  Has such a big issue. But let's stick with the concept of behavioral finance and the 60-40. I have gotten a lot of pushback for saying, if you're in your 20s, 30s, 40s, do you really need bonds? If you're not going to retire for, well, a 20-something-year-old may not retire for 50 years, yeah, there's some emotional salve from some ballast that's uncorrelated and doesn't have the volatility of equities. But if I go back in time, forget what the market did. If I was 20 today, I wouldn't own a single bond. And if I was 75 today, I would own a whole lot more tax-free munis.

• 57:19Barry Ritholtz?

  So raises the question, 60-40, does that make sense for, forget 20-year-old, for anybody under 50?

• 57:26Speaker 05

  It's actually a really important question. And in many cases, the answer is no, you don't need bonds. And, you know, the reality of it is that if you look at the last five, six years, bonds wouldn't have done you any good. And so, you know, especially if you're in an environment like we're in right now, where, you know, the greatest risk right now to a portfolio oftentimes is the volatility, the uncertainty in interest rates and inflation. And so I think it actually, the return, this was logical in 2018, 2019.

• 57:54Barry Ritholtz?

  Well, to be fair.

• 57:55Speaker 05

  When interest rates were zero, right?

• 57:56Barry Ritholtz?

  You go from 1980 to 2020, you have 40 years of bonds appreciated.

• 57:59Speaker 05

  The novel.

• 58:00Barry Ritholtz?

  That's a unique era.

• 58:03Speaker 05

  But the thing that was, the thing that was the big driving force was the movement between the 70s to the 80s, when interest rates spiked into the teens. That was the thing that set up, of course, the next 40 years of declining interest rates. And so you have to step back and have that context. It's just like timing the market. The reality is, is that if you'd bought in the mid-70s, you would have had a horrible experience.

• 58:24Barry Ritholtz?

  Right.

• 58:25Speaker 05

  With that portfolio structure.

• 58:26Barry Ritholtz?

  There's pre and post Paul Volcker.

• 58:27Speaker 05

  Exactly.

• 58:28Barry Ritholtz?

  And that's the defining element.

• 58:29Speaker 05

  But it's actually different. It's pre and post the economic situation that was happening that led to an inflationary spike that we ultimately had to address. And that was what you were dealing with. But, but to your point, recency bias drove people to believe that this was the optimal way to invest. I think for an individual, again, it goes back to, okay, yes, equity is a hope-based strategy. Investing is a hope-based strategy. And when you're in your 20s and 30s and 40s, and even potentially, you know, 50s, because, you know, I'd say, call it 20 years before retirement. Call it like a pension plan. T minus 20 years. Anything between minus 20 years plus is a lot of, you have a lot of room for hope. Hope is a wonderful thing that you should take advantage of, because, you know, ultimately you want strength and momentum, and you have the time to get it right.

• 59:13Speaker 05

  But once you get into that T minus 20 period, that's the period where you better have some structure and discipline to what you're ultimately achieving to get to T. Because the one good thing is you can move T. T can move. That's the time of, you know, retirement. That can move. You could say it's 65, but if you really needed to, and your advisor said, hey, it's a bad time, you need to move to 67, you can move to 67. Hey, it's going really well, we can move to 63. But, but T minus 20 is a really important window where structure, discipline, and your portfolio has to be designed. Everything before that, absolutely. You can take as much hope as you want, you can take as much risk as you want, because you haven't entered that window. That's how I look at it.

• 59:48Barry Ritholtz?

  Really interesting. As someone who's...

• 59:53Barry Ritholtz?

  Partial to the math and science half of my brain. I'm curious how you reconcile the rigorous, structured environment of being an engineer. Like, there is an internal logic and a set of hard mathematical principles that govern that. How do you reconcile that with the squishy, emotional side of all of the economist's teachings, which is, hey, this is just how we are built. We weren't made for this sort of decision making.

• 1:00:31Speaker 05

  Yeah, I think the beauty of when you marry the first principles, you know, call it linear kind of thinking around what engineering can do, and then you apply that with the non-linearity of human behaviors. It's actually a phenomenal, we call it a mixture of thinking. And that's what you want. You want those multiple inputs to basically change your mental model of how to design and think. What I love about engineering in general is it is a reverse engineering mindset. It is going back to the hypothesis, it's a scientific method, right? Which is, I have an idea of what the answer will be, but I'm going to do everything I can to prove that. So if you apply that to any problem, which is, hey, I'd like to solve for this problem. I have an idea of how to solve it. And then you reverse engineer how to ultimately get there, or you build around the scientific method of it.

• 1:01:14Speaker 05

  It's a wonderful way to approach problem solving in general. And then if you bring in the input, so one of the things we did at Purpose is we've actually brought on behavioral scientists to actually support the organization in our, the way we think about product design, the way we think about marketing and all those things we do, because it actually helps influence the mental models and the way that we make decisions. Those are really powerful. So I, I just believe it's, it goes back to that original comment around the creative mind and the, call it structured discipline and mind. I think you bring those two together, it's a very powerful mixture to, to build with.

• 1:01:48Barry Ritholtz?

  Really, really interesting. So, so we've been speaking for an hour and artificial intelligence has not come up, which I think is a first this year. How do you think about AI from a managerial perspective? How do you think about it from an investment perspective? What do you see the impact of this going forward? Especially, I'm, I appreciate the opportunity to ask someone who's an engineer about this because essentially, this is software engineering at, at the highest level.

• 1:02:22Speaker 05

  So I've never been more excited in my career. I feel a sense of energy in the last nine months, specifically coming into 2026, that I've just been excited about because of what this new technology is enabling us. And, and more importantly, it's not just how do we build features or, you know, solve some problems or create a little bit of incremental productivity. It is about the grassroots, you know, go to first principles of how should we ultimately design the way we work, the way we optimize our business in and around a technology replatforming. You know, it would be so different than in 2000 if you were going through this period and the internet was now becoming real and scalable.

• 1:03:04Speaker 05

  And you were sitting there as a retailer or any other business saying, if I just think about the historical way to run a business and I've got this new thing, I think you lost. Whereas if you actually said, no, no, I need to redesign the way I work to this new platform. Mobile era, which was a different one, same thing. I need to redesign the way we work. And AI is the same thing. So we've been at, at Purpose have been really deeply embedded in the way we operate the company. The, the first thing is we are effectively driving forward deploy engineering, data science and product across the whole organization. We are driving into smaller teams and squads. We are rolling that out across everything. And we're driving the company with this mindset that what we, what a modern organization

• 1:03:48Speaker 05

  needs to design around is vulnerability, the ability to have this innovation and intelligence moving through the organization constantly and data flowing and communication. You know, and this is on top of, of course, leadership strength. In the past, the organization was all driven by leadership strength. How good was the leadership? And my view is vulnerability and communication are going to be the things that really drive. And AI enables for that in a really amazing way. What, what that is, is a system of way you work. So we are doing that in a great way. The same time though, you know, when I look at the industry, we are still stuck in this idea of AI as a feature set. So I'm going to design features. I'm going to design a, something I used to do to, that I, that took me an hour, I can

• 1:04:33Speaker 05

  do it now in five minutes. Those are really cool, but that's no different than what Excel did for us. You know, you know, the accounting industry, you can imagine, you know, when Excel came, was a little nervous, but then actually adopted it and wanted to do it, it created great value. But what this actually allows for is a way to change the way we operate. And that's what I hope that the industry really leans into more deeply.

• 1:04:52Barry Ritholtz?

  Really, really fascinating. All right, I only have you for a couple of more minutes. Let's jump into our favorite questions that we ask all of our guests, starting with, who were your early mentors? Who helped shape your career?

• 1:05:06Speaker 05

  So I talked about Rob Arnott, and, and Rob is someone that I care so deeply about. He not only introduced me to his own way of thinking. Rob has a special thing, and you've spent time with him. Rob is, you know, unbelievably intelligent that can go toe to toe with any Nobel Prize laureate, you know, from an academic perspective. But at the same time, actually is an excellent communicator and marketer. That's a very unique-

• 1:05:32Barry Ritholtz?

  Rare combination.

• 1:05:33Speaker 05

  Rare combination. And he taught me that in such a deep way. So much of, of who I am was during that formative years of working alongside and seeing him in motion. So he's been an amazing person in my life. He also introduced me to his advisory group, which were people like Harry Markowitz, Peter Bernstein, Rick Roll, you know, Keith Ambeckshire, some of the most amazing, deep thinkers that I got this immersive opportunity to spend time with that just informed so much of my principal thinking at a time when I was very raw and really open to that curiosity. It was exciting.

• 1:06:07Barry Ritholtz?

  Really, really interesting. I have some hilarious Rob Arnott stories that I will share with you off air. Let's talk about books. What are some of your favorites? What are you reading right now?

• 1:06:18Speaker 05

  So I, I love books and autobiographies are one of the things. I actually think, you know, people always say learn from failure. I love to talk about learn from success. So how do you learn from people's, you know, careers and lifetimes, successes? So what, so some of my favorite books, An Education of an American Dreamer by Peter G. Peterson, I don't know if you've read that one. A phenomenal, great story about an individual who of course ended up co-founding Blackstone later in life, but just an unbelievable journey about an immigrant family who just basically moved, he just did unbelievable things and the, the evolution of a career that's so fascinating. Creativity, Inc., you know, we were just talking about that.

• 1:06:58Barry Ritholtz?

  I literally just got it delivered two days ago.

• 1:07:01Speaker 05

  I love that because when I finished that book, I said to myself, the, if I was ever write an autobiography about my career, I hope it would sound like this. It was the, the creativity of what Ed Catmull did, but, but more importantly, the relationship of how he explained his partnership with Steve Jobs and the love he had for Steve and the way he was so intricate about that. It was just so inspiring for me. I loved it. And then, you know, I, I look at some of the, of course, recent books that have just really inspired me around unreasonable hospitality. I think one of the greatest business books-

• 1:07:32Barry Ritholtz?

  Fabulous.

• 1:07:33Speaker 05

  One of the best business books that has been written in the last couple of years. If you haven't read it, it's a critical book. And then I recently finished, a couple of years ago, the Never Split the Difference by Chris Voss. And it is unbelievably strong. And in fact, yesterday, we had the team from Chris Voss's group come in and train our people on how to apply that type of negotiation scale into our daily way we work. It's an unbelievable way to think about the concept of being comfortable with the word no. We're so afraid to hear no in life and in business, but actually allowing no to become something that lets you get to yes is really important. Whereas it's so counter to all the things that people have learned through the Harvard programs around getting to yes, it's, it's actually an unbelievable way to think about negotiation and marketing.

• 1:08:18Barry Ritholtz?

  One of the people I work with just recommended that book, Never Split the Difference, and it's sitting on a pile. I'm holding my hand up this high. And I was like, all right, I'll get around to it one day. I'm going to have to move that up to the, a little higher in the pile. Let's talk about streaming. What are you either watching or listening to? Either Netflix or podcasts or whatever?

• 1:08:40Speaker 05

  We have four kids at home, so, you know, my wife and I are always trying to find that hour to, to stream. The one show that, you know, has really touched me is the show Shrinking, of course, on Apple TV. And it, it's just the way that the writer Brett Goldstein talks about emotions and, you know, communicate, it's just such a touching, I, I finish every episode and I think I'm teary eyed every single time. That's been amazing thing. But my wife and I, we love, you know, lots of different shows. We just don't get to, we have like seven different series that we are in the middle of watching right now. And, but, but we try to find that time and it's an important time for both of us.

• 1:09:19Barry Ritholtz?

  You, you mentioned unreasonable hospitality. We just finished the final season of The Bear. And throughout that show, you can see some of the ideas right from that book.

• 1:09:31Speaker 05

  You see it in, in season two, you really see it.

• 1:09:33Barry Ritholtz?

  Very much, yeah.

• 1:09:34Speaker 05

  That's when it really becomes prevalent, and they of course-

• 1:09:36Barry Ritholtz?

  The little hot dogs and all the stuff they do to go over, over and above the Call of Duty. It's impressive.

• 1:09:45Speaker 05

  It really is.

• 1:09:46Barry Ritholtz?

  So our final two questions. What sort of advice would you give to a recent college grad interested in a career in either investing or financial innovation?

• 1:09:58Speaker 05

  So, you know, I'd say there's two answers to this that are important because we're, you know, you got the tension of what's happening with AI around this industry. I'll start with the foundations. We, this is a wonderful industry to be in. And if you look at the sort of trajectory, financial services as an industry will continue to grow meaningfully. If you're in the wealth industry, it will double, and the asset management industry will double just in the next 10 years by virtue of savings and market appreciation. So, you know, as an industry participant, the size of the pie is growing continuously. So that's a really good thing. Two, you've got an aging demographic of individuals in the space, you know, advisors have constantly aging, and so there's a huge opportunity for younger talent to come in. And so that's an awesome setup to be in the business.

• 1:10:42Speaker 05

  The principle I go back to is it's an amazing place that has high mission, but I want young people, if I was to come into it, to really focus on how do I achieve this to help the customer truly win, as opposed to the historical mindset of I'm here to basically manage money and do all these things. And I think there's a really amazing opportunity to do that in a great way and approach it. If I take the tension of AI, you know, there's always this question of like, what's it going to do to the advisor industry or the investment industry? And I look at it as only enabling. If you think about the opportunity for a young person today, this is going to be an unbelievable period. The way I would approach this, though, is recognize as a young person that a career

• 1:11:24Speaker 05

  in any financial service or any career is not a sort of a set of stairs. It actually looks more like a J curve. And you're going to have to go through very difficult periods that look very uncomfortable, where you look like you're not doing great, to ultimately see this great outcome. And that comes from curiosity, learning, and immersing yourself to ultimately take risks and do really important things. It's an unbelievable time right now, I think, as an individual and a young person coming into the space.

• 1:11:50Barry Ritholtz?

  Good answer. And let's jump to our final question. What do you know about the world of investing, of ETFs, of again, of financial innovation today, might have been useful 25 years ago when you were really ramping up?

• 1:12:04Speaker 05

  Well, I mean, I think that I go back to the constant learning of, you know, how behaviors and emotions really drive outcome. And I wish, you know, I'd learned that earlier. I wish I'd kind of been exposed to it. I think the most important thing, though, is it is this idea of how do we help truly solve problems along the journey of a customer? How do we put the customer and their moment of need at any point, whether they're 25, 45, 65, or 85, and ultimately help them with the types of services and solutions that drive that? If I had had that principle mindset 20-plus years ago, I think I would have built even more powerful businesses back then. It's really fun to do what we're doing, but I wish we had done this even earlier.

• 1:12:49Barry Ritholtz?

  Sam, I am so glad we finally got to do this. We've tried to set this up a couple of times, and the dates just kept getting crossed. I'm thrilled you came in to do this. We have been speaking with Sam Seif, founder and CEO of Purpose Investments. If you enjoy this conversation, well, be sure and check out any of the 650 discussions we've had over the past 12 years. You can find those at iTunes, Spotify, Bloomberg, YouTube, wherever you get your favorite podcasts. I would be remiss if I didn't thank the crack team that helps put these conversations together each week. Alexis Noriega is my video producer.

• 1:13:33Barry Ritholtz?

  Sean Russo is my researcher. Anna Luke is my podcast producer. I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio.

• 1:13:49Speaker 10

  AI is entering its most consequential phase where scale, safety, and sovereignty will determine who leads and who lags. Join Bloomberg Tech in London on November 2nd and 3rd as global leaders across business, finance, and policy examine the defining trade-offs shaping the future of AI. Thank you to our presenting sponsor Salesforce and supporting sponsors IDA Ireland and Schneider Electric. Learn more at Bloomberglive.com/techlondon.