Finding Stability in Investing: Masters in Business with Seth Bernstein

Barry speaks with Seth Bernstein, Chief Executive Officer of AllianceBernstein. They discuss his tenure at JPMorgan Chase where he was managing director and global head of Managed Solutions & Strategy at J. P. Morgan Asset Management. They also discuss understanding the private credit industry and the future of mutual funds as ETFs grow in popularity. Plus, Seth shares his thoughts on the importance of in-person collaboration, as well as how to invest for retirement. 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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• 1:57Barry Ritholtz?

  This week on the podcast, we have an extra special guest. Seth Bernstein is the CEO of Alliance Bernstein, as well as Head of Asset Management for Equitable Holdings. The firm manages $905-plus billion in clients. He's been CEO since 2017, joining the firm after 32 years of JP Morgan, Chase, and predecessors. I thought this conversation was really fascinating, and I think you will too. If you're interested in how a firm adapts to changing conditions, you're going to find this to be really a fascinating discussion. With no further ado, my discussion with Alliance Bernstein's CEO, Seth Bernstein.

• 2:49Barry Ritholtz?

  Seth Bernstein, welcome to Bloomberg.

• 2:51Speaker 05

  Barry, thank you very much. I'm delighted to be here.

• 2:53Barry Ritholtz?

  I'm delighted to have you. So before we start talking about A B, let's delve a little bit into your background. You study political science and economics at Haverford. What was the original career plan? Was it always investment management?

• 3:09Speaker 05

  No, I had no idea what investment management was. I didn't have anyone in my family who was in the financial services business. The original plan was for me to be an architect.

• 3:17Barry Ritholtz?

  Oh, really?

• 3:18Speaker 05

  But I came up against two sort of immovable objects. One, I wasn't terribly talented. Two, I didn't have enough dough. So I discovered that no one makes money in architecture.

• 3:30Barry Ritholtz?

  Is that true?

• 3:31Speaker 05

  No, I'm sure someone does, but not many do.

• 3:33Barry Ritholtz?

  Fat head, long tail. That seems to be the winner-take-all story everywhere. All right, so you come out of Haverford, '84, somewhere around there. And your first gig was at JP Morgan Chase?

• 3:45Speaker 05

  Morgan Guarantee Trust Company.

• 3:47Barry Ritholtz?

  Morgan Guarantee. How long were you there for?

• 3:50Speaker 05

  Well, Morgan ultimately was sold to Chase.

• 3:53Barry Ritholtz?

  So I said this wrong, and I actually had a note to myself. Your first gig after college was at JP Morgan Chase or one of its 1980s predecessor?

• 4:05Speaker 05

  That's correct.

• 4:06Barry Ritholtz?

  Okay, I do my homework, and I literally had to put that into a parentheses, and I forgot to say it. So 1984, you start at a predecessor firm to JP Morgan Chase. Tell us about Morgan Guarantee. What were you doing there?

• 4:21Speaker 05

  I was lucky enough to get into a year-long training program where this firm irrationally was willing to train liberal arts majors like me in accounting, in corporate finance, and, you know, higher-level math topics and other areas in order to build bankers and traders. That was the goal.

• 4:48Barry Ritholtz?

  So I understand poly sci as liberal arts, but did the economics major help at all?

• 4:54Speaker 05

  I went to a Quaker college.

• 4:56Barry Ritholtz?

  So no. All right, so you're at Morgan Guarantee. Tell us a little bit about the roll-up process and where that ended. How did you end up?

• 5:07Speaker 05

  Still employed.

• 5:08Barry Ritholtz?

  At JP Morgan Chase. The reason I ask this is around the same time I got married, and our bank accounts are JP Morgan Chase, but that's not where it started, like nine banks ago.

• 5:21Speaker 05

  Right.

• 5:21Barry Ritholtz?

  And we never changed banks. They would just send, oh, all right, manufacturer's hat and over is now DIME, is now this, is now that, and eventually it became Chase.

• 5:30Speaker 05

  We were at the end of that merger trail, basically. And JP Morgan had been an independent entity until 1958 or '99, when they merged at the Guarantee Trust Company, and that was Morgan Guaranteed. The holding company was JP Morgan and Company. A wonderful bank, overvalued people, almost never went outside to recruit anybody. So it was a fantastic place to have a career, because whenever they go into a new business, whether it was bond underwriting, because they were prohibited under Glass-Steagall, they would essentially retrain people who were already there. So you got opportunities that weren't necessarily available elsewhere.

• 6:13Barry Ritholtz?

  Promote from within, not a bad strategy.

• 6:15Speaker 05

  It worked for a long time, until it didn't.

• 6:17Barry Ritholtz?

  So, and Glass-Steagall went away late '99, something like that?

• 6:22Speaker 05

  Glass-Steagall effectively went... JP Morgan was really the first that granted powers. JP Morgan got equity powers in 1991 or '92, and I was moved to Equity Capital Markets, a new group. And I went there and then ended up running high yield. And then I was responsible for debt capital markets, loan syndications. And then, at the time of the merger, I was in media and telecom, because that's what you do with people who get bored of doing bond underwriting. You make them bankers, whether they're good or not.

• 6:58Barry Ritholtz?

  You did more than just bond writing. You eventually became the global head of fixed income and currency.

• 7:03Speaker 05

  So after the merger with Chase, I was kind of thinking about what I want to do. JP Morgan Chase thought it was a good idea to keep me around, so they gave me incentive to stick around. I figured that would be a great opportunity to look around for a year and figure it out. If you'll recall, markets began to taper off, you know, at the beginning of 2000, with the whole fear on the internet, the whole issue around building dark fiber. So the high-yield market was going to hell in a handbasket. And so I decided maybe it would be a good idea to move. And one of my friends said, why don't you come over to investment management and private banking?

• 7:47Speaker 05

  Be a CFO, figure out what to do. And then he said you should run fixed income. And I looked in them, and I'd been in fixed income for most of my career. And I said, but I've never managed anyone's money. And he said, don't worry, they don't look like they're doing either, so come on board. And so that's what I did.

• 8:03Barry Ritholtz?

  That's unbelievable. CFO, so you were global head of fixed income and currency for 10 years, but then CFO of investment management and private banking?

• 8:13Speaker 05

  That was before that.

• 8:14Barry Ritholtz?

  That was prior, so I'm working backwards. And then, so was fixed income and currency the final spot? Or was it global head of managed solutions?

• 8:23Speaker 05

  Global head of managed solutions. I ultimately was asked to go over and run the multi-asset businesses of both. Investment management, JP Morgan Asset Management and the portfolios for the private bank of JP Morgan, which was hard to do because they, one was a distributor, one was a manufacturer, and we ultimately split it up because we had to. And I then ran all the discretionary money for the private bank and Chase Wealth Management.

• 8:50Barry Ritholtz?

  All right. So from there, 32 years, essentially, many, many different jobs, but ultimately in the same organization, you decide, all right, I've been doing this for three-plus decades. Let's look around and see what's out there. What led you to take the top job at Alliance Bernstein? And that was 2017?

• 9:14Speaker 05

  Correct. Well, they asked, so, but...

• 9:17Barry Ritholtz?

  How did they find you? There, obviously, when you take on a position like that, they're looking for, from a variety of different applicants. How did they find you?

• 9:30Speaker 05

  They found me through a person who worked, AXA was the ultimate owner, majority owner of Alliance Bernstein, and it was the owner of Equitable. Alliance Bernstein was part of Equitable prior to AXA purchasing Equitable in 1990-ish. If you'll recall, back then, that was right after Drexel collapsed, high yield collapsed, real estate collapsed, Equitable got caught up in that. And so, Equitable was acquired by AXA, the French insurer, and they made a lot of money with it. They had bought it at a pretty knockdown price. And

• 10:13Speaker 05

  by, by 2017, AXA had decided to go in a different direction. They wanted to get out of the life insurance business. And so, they decided that they needed to sell Equitable in a way that facilitate that sale was to bring Alliance Bernstein and Equitable back together. And so, they were looking for a new head of Alliance Bernstein to do that. And so, a person I knew from my time at JP Morgan was at AXA, and she introduced me to a number of the senior people there, and the rest is sort of history.

• 10:45Barry Ritholtz?

  So you've been CEO since 2017.

• 10:47Speaker 05

  Right.

• 10:48Barry Ritholtz?

  At the time you joined, Alliance Bernstein has $500 billion. This is significantly higher, coming up on a trillion here. But when you were joining, you're fighting some pretty substantial headwinds. There was a big investor shift going on, really since the financial crisis, from active to passive. Fee compression was everywhere. Institutional sales training, I remember when that was 20, 25 cents a share. It went to pennies and then fractions of a penny. What did you find when you joined the company? Anything surprising? Was it what you were expecting?

• 11:26Speaker 05

  No, I don't think you have any idea.

• 11:28Barry Ritholtz?

  Oh, really?

• 11:29Speaker 05

  When you go from one company after 30, nearly 33 years into another company. I knew a lot of people. I had been a private wealth client, believe it or not, of Bernstein for, at that time, 16, 15, 16 years. I competed against them in fixed income. I knew a lot of people worked there, but I had no idea what was going on. What I found was a company that had had a very tough financial crisis. Their own investment performance and value and in growth, if you'll recall, Alliance Bernstein is a merger of a growth manager alliance with a value manager in Bernstein. And the stock had soared, and AUM, the combined

• 12:09Speaker 05

  entity, had reached intra-quarter, almost $900 billion. By 2012, they were $380 billion. And what was 70% equities roughly in 2006 was 30% equities in 2012.

• 12:26Barry Ritholtz?

  So bonds kind of held their own and equities collapsed?

• 12:28Speaker 05

  Bond performance was pretty good, but equity performance collapsed. We faced a lot of redemptions. My predecessor did a very good job restructuring it, a guy they had recruited out of Goldman. And he had brought in some new teams, and the firm began to develop some really interesting investment performance and equities, which allowed us to buck the trend and have net flows and active equities, which was an important growth. He also started the firm's evolution into private credit, which I've taken a lot further. And, and the firm was listing, but doing better from a performance perspective, not gaining much assets, and then really began to take off.

• 13:09Barry Ritholtz?

  So what do you learn after 32 years at an institution that eventually becomes JP Morgan Chase about how great financial institutions are built? What was your takeaway that you brought to AB?

• 13:25Speaker 05

  What I think I brought to AB was a different perspective, more global than they had. They were very US-centric, although they had a great Asian business. I think I brought an appreciation of how investment processes worked and understanding that you can have the smartest people in the world with the most impressive process deliver appalling returns. It's serendipitous why it works when it does work, so be careful mucking around in it. I think I brought an understanding that the way they had rebuilt Alliance Bernstein was to strip resources from everything but the investment teams, because they had nothing

• 14:05Speaker 05

  to sell. They did it. They did a very good job at it. And I began to focus on distribution, whether it's in private wealth and institutional, and most importantly, in retail. And we decided to go full focus on the insurance business, because we saw that as a really important source of growth, both for our private credit business, but also our fixed income business.

• 14:27Barry Ritholtz?

  What do you think big institutions get wrong? Like, it sounds like post-GFC, Alliance Bernstein, before your predecessor really took the reins, kind of was stumbling. Yeah, it's a little bit of hindsight that we know all the things that were going wrong with large active managers. But generally speaking, what is it about big institutions that they're sometimes, you know, just don't see these things coming and stumble into the dark on these issues that clearly you identified as problematic?

• 15:04Speaker 05

  Look, I think when the good Lord created business models, asset management was really blessed, right? You have, you have no need for capital or a de minimis need for capital, working capital in the business. Your whole revenue stream is structured on add valour and pricing, so even when you destroy value and markets go up, you make more money, kind of a wonderful thing.

• 15:31Barry Ritholtz?

  Right. 10% tailwind never hurts, right?

• 15:33Speaker 05

  Never hurts. And we've certainly benefited, as is the industry as a whole, from that consequence. Thirdly, you get to work with some of the most interesting, if weirdest, people in the world.

• 15:44Barry Ritholtz?

  Absolutely true.

• 15:45Speaker 05

  And frankly, particularly when you have an RIA, and you have to be focused on wealth management, you better become a really good fiduciary. Because if you're not putting your clients' interests first, you're going to lose them. Because all you have is their confidence in you. Because your business, Barry, is a word-of-mouth business. People don't come to you, I don't, I suspect, not because I've heard you on, on your show. They come to you because you have clients who say, this guy protected us.

• 16:11Barry Ritholtz?

  Yeah, there's, there's an aspect of being a fiduciary that it seems so obvious today, but, you know, 15 years ago, the fiduciaries were a small minority. It took a, and I've been saying this for 30 years, and it's taken me, of being wrong for decades before the industry caught up.

• 16:32Speaker 05

  I'm not sure the industry's there yet.

• 16:34Barry Ritholtz?

  You look at the big brokerage firms, at the very least, they've all become hybrid RIABDs.

• 16:39Speaker 05

  That's fair.

• 16:40Barry Ritholtz?

  And the dominant fee structure is no longer transactional commission.

• 16:45Speaker 05

  That's right.

• 16:46Barry Ritholtz?

  It's pretty much fee-based. But when I discovered this in the 1990s, I'm like, oh, this can't, this has to change right away. I don't see how this, and it took literally 25 years before the industry and the financial crisis.

• 17:00Speaker 05

  Right.

• 17:01Barry Ritholtz?

  Certainly helped.

• 17:01Speaker 05

  Well, but the industry hasn't done itself any favors about it either. I mean, while I don't particularly care for it, for, for...

• 17:12Speaker 05

  abusive and overly raw legislation. The changes that they were trying to make with regard to forcing a higher fiduciary orientation was not a bad idea and concept.

• 17:25Barry Ritholtz?

  No, it's a great idea.

• 17:26Speaker 05

  But the industry fought it pretty hard.

• 17:28Barry Ritholtz?

  Well, because it meant they couldn't spin these accounts around.

• 17:31Speaker 05

  That's right.

• 17:32Barry Ritholtz?

  And generate much higher fees. I mean, look, either it's a fiduciary standard or it's not. You could.

• 17:39Speaker 05

  It is that black and white.

• 17:40Barry Ritholtz?

  Right. You could play with suitable suitability. You know, I used to say, what does suitable mean? Don't sell IPOs to grandma. That's suitability. But that isn't the same as being legally obligated to put the client's interest first. That's a very... And the crazy thing is, and I don't want to go on a rant on this here because this is about you, not me, but shouldn't your relationship with your, the person handling your finance be more like your doctor, lawyer, accountant, and less like the guy selling you a used Honda or BMW? That just doesn't make any sense to me.

• 18:17Speaker 05

  You see, to me, that's what the key issue that I think the industry has gotten wrong, because I would dismiss the accountant and the attorney.

• 18:24Barry Ritholtz?

  Mm hmm.

• 18:25Speaker 05

  There is no one you put more trust in than your healthcare advisor.

• 18:28Barry Ritholtz?

  Uh huh.

• 18:30Speaker 05

  After that, who's the next?

• 18:32Barry Ritholtz?

  You would think it would be the person handling your money.

• 18:34Speaker 05

  It's your future. It's your kid's education.

• 18:37Barry Ritholtz?

  Right.

• 18:37Speaker 05

  It's your charitable intent.

• 18:38Barry Ritholtz?

  Your retirement.

• 18:39Speaker 05

  It's your retirement. Yeah, I think it's really important, and I think we ignore that to our detriment.

• 18:46Barry Ritholtz?

  Coming up, we continue our conversation with Seth Bernstein, discussing the turnaround at Alliance Bernstein since he's become CEO. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio.

• 18:59Speaker 00

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• 21:14Barry Ritholtz?

  I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Seth Bernstein. He is the CEO of Alliance Bernstein, a firm which is managing over $905 billion and is majority owned by Equitable Holdings. About 31% is publicly traded. Is that about right?

• 21:38Speaker 05

  Right.

• 21:39Barry Ritholtz?

  So let's talk a little bit about what was going on when you took over and just how this turnaround came to pass. Persistent outflows, an active management model, a lot of written-off research department, like so many other research departments, were having difficulty justifying a lot of the expenses. What was the immediate short-term plan? What were your first few months on the job?

• 22:07Speaker 05

  Yeah, so let's talk about it. When you run into trouble before the markets turn, it is a silver lining and a blessing. And the firm had begun to take actions and was very much focused on costs. And by the time I arrived, the firm was looking at the merits of moving its headquarters out of New York, because as the industry commoditized, as active sales were declining broadly, the firm's leases were coming up, and they really had a soul-searching discussion of can we afford to continue in New York, or do we have to diversify our bets? By the... No decisions had been made by the time I had arrived. They briefed me on what was going on, and it seemed pretty clear to me that there was

• 22:48Speaker 05

  a compelling case to reduce our footprint here in New York and go find a place where we could find really talented people who we wouldn't have otherwise seen, because they either couldn't afford to live in New York, or, for example, people who were really tech-savvy. Were we going to be high enough on the food chain that they'd look for us to hire them here in New York when you had Google at the time searching for everybody north and south?

• 23:14Barry Ritholtz?

  Hoovering everyone up and paying big salaries.

• 23:16Speaker 05

  And exactly right. We do pretty well finding investors and keeping them. We know how to manage them. They have very fruitful careers. But outside of that, it's a more challenging career development issue. And so we looked around. We looked at a number of cities. Our firm is overstocked with former consultants, and so we overanalyzed everything, and we came down to five cities, one of which was Nashville. And we announced later in 2017 that we were going to relocate to Tennessee, and we are now eight years into it.

• 23:53Barry Ritholtz?

  Thousand people moved down there, right?

• 23:55Speaker 05

  Ultimately, we have 1,100-plus jobs there.

• 23:58Barry Ritholtz?

  So let me guess the other cities you were looking at.

• 24:01Speaker 05

  Okay. Are you ready?

• 24:03Barry Ritholtz?

  Yeah, so...

• 24:03Speaker 05

  It was 15 originally, but I'm only expecting the five.

• 24:05Barry Ritholtz?

  I'm going to give you three off the top of my head.

• 24:08Speaker 05

  Right.

• 24:09Barry Ritholtz?

  Charlotte.

• 24:10Speaker 05

  That was one of the five.

• 24:11Barry Ritholtz?

  Because there's so many big banks there, and there's a lot of talent. Chicago.

• 24:14Speaker 05

  No.

• 24:15Barry Ritholtz?

  Really? Lot of finance talent, half the price in New York. Tampa.

• 24:19Speaker 05

  Nope.

• 24:20Barry Ritholtz?

  Really? Okay.

• 24:22Speaker 05

  So you're not doing so good.

• 24:23Barry Ritholtz?

  All right. I'm one for three. Give me some.

• 24:25Speaker 05

  Dallas.

• 24:26Barry Ritholtz?

  Okay.

• 24:27Speaker 05

  Austin, where we already have a great operation.

• 24:29Barry Ritholtz?

  Well, Austin was actually number five in my head. DFA is there. There's a few other people there.

• 24:34Speaker 05

  Schwab's there.

• 24:35Barry Ritholtz?

  Mm hmm. There's still big presence in San Francisco.

• 24:38Speaker 05

  Yeah, yeah, but they have a big operation. And Denver.

• 24:42Barry Ritholtz?

  Denver. Oh, that's really interesting.

• 24:44Speaker 05

  Right.

• 24:44Barry Ritholtz?

  So why, the obvious question, why Nashville?

• 24:48Speaker 05

  We wanted to be a big fish in a small pond, which we couldn't have been in Charlotte. I mean, Charlotte's a very compelling place.

• 24:54Barry Ritholtz?

  Or Dallas.

• 24:56Speaker 05

  Or definitely not Dallas, although what a dynamic economy.

• 24:59Barry Ritholtz?

  Tremendous economy, a ton of hedge funds, a ton of finance.

• 25:03Speaker 05

  Lot of talent there, a lot of people moving over here, good demographics. Austin...

• 25:08Barry Ritholtz?

  And by the way, Dallas is a very livable city.

• 25:11Speaker 05

  It is. I agree.

• 25:12Barry Ritholtz?

  Without, you know, Houston is just humid swamp, but it's located near all of the oil areas.

• 25:21Speaker 05

  But great art scene and really good food.

• 25:23Barry Ritholtz?

  Fantastic food in Houston. Absolutely. You know, people, Texas is filled with all these lovely.

• 25:28Speaker 05

  Really fun stuff.

• 25:30Barry Ritholtz?

  Things. Dallas is, Dallas, I haven't been to Dallas in a few months, a few years. I'm going to be there in the fall. It's just a delightful city.

• 25:37Speaker 05

  Denver's at Austin, sorry, I mentioned Austin, but Austin's tough to get to for our people who are in Asia and in, you know, Europe.

• 25:46Barry Ritholtz?

  There's that nerd bird, they used to call it, back and forth from Silicon Valley to Austin.

• 25:51Speaker 05

  Right.

• 25:51Barry Ritholtz?

  Decades ago, in the 90s, because even then, the tech companies were moving back office to cheaper Texas, cheaper land, cheaper.

• 26:01Speaker 05

  Yeah, but it's no longer back office.

• 26:03Barry Ritholtz?

  Well, that's been the big change. Although, post-pandemic, a lot of Wall Street moved to Miami, and then a bunch of them kind of boomeranged back. It's kind of interesting. We are wildly off-topic. Let me bring this back to your first six months at Alliance Bernstein.

• 26:22Speaker 05

  So we decided to move to Nashville. That was worth roughly $85 million bucks a year to us recurring.

• 26:29Barry Ritholtz?

  Really?

• 26:29Speaker 05

  Yeah.

• 26:30Barry Ritholtz?

  Oh, my goodness. That's a massive savings.

• 26:33Speaker 05

  Oh, my goodness. It was a huge savings. Part of it was real estate, part of it was people, and it's worked real well for us.

• 26:40Barry Ritholtz?

  Wow, almost $100 million a year. That's...

• 26:42Speaker 05

  And here's just another part of it. We didn't force any of our investors to move, because we're price takers of that talent.

• 26:48Barry Ritholtz?

  Right.

• 26:49Speaker 05

  We, I think now, and I may be wrong, I think we have nearly 100 investors who have elected to move down there.

• 26:55Barry Ritholtz?

  When you say investors.

• 26:57Speaker 05

  Money managers.

• 26:58Barry Ritholtz?

  Who picked up and left New York and went.

• 27:01Speaker 05

  Or elsewhere.

• 27:01Barry Ritholtz?

  Or wherever.

• 27:02Speaker 05

  Correct.

• 27:02Barry Ritholtz?

  Uh huh. I mean, don't get me wrong, Nashville is a spectacular, super fun town.

• 27:07Speaker 05

  It's a great town.

• 27:08Barry Ritholtz?

  Just not what you think of when you think of as finance.

• 27:11Speaker 05

  Well, you know, ironically, it was like the financial center for the Upper South for many, many years.

• 27:17Barry Ritholtz?

  Oh, really? I had no idea. That's really interesting. All right. So you have this strategic and financial savings by moving there. What were some of the challenges? What was... Oh, gee, we didn't anticipate this happening.

• 27:34Speaker 05

  Look, you mean in moving. Look, I think the most notable challenge is it's a domestically-focused city from an industrial, from a private sector employment perspective. It's the healthcare services capital of the US. But guess what? Hard-to-find international tax accountants locally, people with those kind of exposures, and people who had, you know, more traditional Wall Street-like training, whether from an operations or a technology side. What was a delightful surprise is we got over the wall lots of...

• 28:08Speaker 05

  Resumes from people in Atlanta, Chicago, New York, Boston, Chicago, and the West Coast. You're saying, hey, you know, I'm from there, or my spouse is from there, or really like the lifestyle, was there for a bachelorette party, dot, dot, dot, you know, so, but it worked. And so it's been pretty good for us.

• 28:25Barry Ritholtz?

  So as for the international tax accountants, do they have to physically be located in Nashville? If we learned anything during the pandemic, hey, if you have a computer and an internet connection, you can pretty much be anywhere.

• 28:38Speaker 05

  You know, ultimately, I'm a big believer in people working together collaboratively within the office. We recognize we got to be flexible, and we're never going back to five days a week. But we want people as close as we can rent. But yes, we have people all over the country. We do all over the world. We have functions which operate in multiple locations simultaneously. So of course, we can do it, but we want a critical mass there.

• 29:06Barry Ritholtz?

  So, so let's stay with that idea of corporate culture, having everybody in the office together when you can. When you arrived at Alliance Bernstein, what really struck you about part of the culture that need, needed to be preserved? What was like, hey, this is really something?

• 29:22Speaker 05

  Deep fiduciary culture, really, really putting clients first, whether it's in our private wealth business or our investment teams. I think both Alliance and Bernstein did that beautifully. And I think that continues to thrive, I hope. That's one of the most important things for me about the institution. We had, as you pointed out, a very well-regarded sell-side research business, which I decided to see if we could reduce our exposure to for exactly the reasons you said. It is a, it is an accident of history why a buy-side firm had a sell-side money management, I'm sorry, sell-side research business to start with. But almost everyone cross-subsidizes those businesses, whether they're equity

• 30:05Speaker 05

  capital markets business, or a prime brokerage business. We didn't have any of those cross subsidies to provide to them. And so we entered into a joint venture with StockGen, Societe Generale, which has proven to be pretty successful. And their quality of the research is, is, remains very strong, and they have a much stronger partner with deep markets capabilities that they are really, I think, doing a good job commercializing.

• 30:34Barry Ritholtz?

  And all those other banking relationships that, that make sense to have a research department with, eventually, they take over the research group, or is it always going to be a joint venture?

• 30:44Speaker 05

  No, ultimately, it'll transition to them. And that was always the intention. We were quite clear about it. They were very concerned about the culture and not damaging it. It's a large French institution, and these were a bunch of Americans and Brits. And so we need to make sure we took stuff very, very mindfully, step by step. We're still midway through that period. We, we have five year, five years from the anniversary. We have a, an arrangement, which, you know, we, we talk about from time to time, but that's the plan.

• 31:16Barry Ritholtz?

  And in 2022, AB buys CarVal, which is a specialist in, in private market credit and debt issuance. The combined private market platform between Bernstein and CarVal is 91, almost $100 billion.

• 31:33Speaker 05

  Right. It was roughly 35 before we bought them. They were another-

• 31:37Barry Ritholtz?

  So 3X.

• 31:38Speaker 05

  Right. But they were another 16 billion, so call it 50. So we're nearly double what we were when we acquired them.

• 31:45Barry Ritholtz?

  So I'm really curious, how does, what's essentially an equity and fixed income shop like Alliance Bernstein, how do you go about kicking the tires of an alternatives business? There has to be a ton of challenges there. How do you, how do you conceptualize those risks?

• 32:02Speaker 05

  Look, I grew up lending. I ran the leveraged finance business at JP Morgan. It's a business I knew. I'm certainly no current expert on, on the intricacies of it today. But we had built, prior to me arriving, AB had built quite a successful private credit business. When Lehman collapsed, we took a team out of Lehman to build the middle market lending business. They're with us today, based in Austin, and been remarkably successful, private real estate debt business. And we had a natural client base. We have, in addition to Equitable and now Corbridge, when that merger occurs, we have 60 insurance companies as clients who we manage money for.

• 32:47Barry Ritholtz?

  So you guys are uniquely situated to sell into the insurance market. Obviously, having a majority owner that's an insurer provides one aspect, but, but given that history, what has it been like looking into that market, which I don't hear a lot of other large shops being aggressive sellers into the world of insurance?

• 33:10Speaker 05

  Sellers or buyers into the world of insurance?

• 33:12Barry Ritholtz?

  Either, either or both. Well, you're, you're, you're selling your product to them and taking their assets in, as well as the parent company. Now, we'll talk about that merger later, but you're on, I don't say both sides of the trade, but you're selling into that marketplace and have a deep understanding of what the insurance business is like.

• 33:34Speaker 05

  We've been managing insurance money forever. I mean, Alliance was started by a life insurer, effectively. And the skills are very different. The client service model is totally different, highly customized, very relationship dependent. The expertise around subject matters, whether it's regulatory accounting, whether it's asset liability matching, really are critical parts of that sale. We do that very well, and we continue to invest in it. And frankly, it's the largest pool of institutional capital there is in fixed income. And it's growing. It's growing at a pretty rapid rate.

• 34:16Barry Ritholtz?

  Yeah, you guys and this other kid named Warren Buffett at Berkshire figured out, hey, there's a tremendous amount of stable assets-

• 34:26Speaker 05

  What a great funding source.

• 34:28Barry Ritholtz?

  Right? I mean, how is it that nobody else really seems to have figured this out?

• 34:32Speaker 05

  Other people, other people have thought about that. Mark Rowan thought about it.

• 34:34Barry Ritholtz?

  Yeah.

• 34:35Speaker 05

  And I think he's done pretty well.

• 34:36Barry Ritholtz?

  Apollo?

• 34:37Speaker 05

  Apollo's done very well on it. KKR has figured that out. Guggenheim figured that out. A lot of firms have figured it out.

• 34:43Barry Ritholtz?

  Really, really interesting. And-

• 34:45Speaker 05

  Prudential being a good example?

• 34:47Barry Ritholtz?

  Well, that, right, they started. But they started on the insurance side, not on the asset management side. But very fair examples. I have to ask about the ETF business. It was effectively non-existent when you joined. Is that, is that a fair statement?

• 35:04Speaker 05

  That's correct.

• 35:04Barry Ritholtz?

  31 strategies, $21 billion, pretty rapidly-

• 35:08Speaker 05

  All active?

• 35:08Barry Ritholtz?

  Actively managed.

• 35:09Speaker 05

  Almost all, yes.

• 35:10Barry Ritholtz?

  Very, very little in terms of just passive indexing. These are-

• 35:13Speaker 05

  Very little in terms, and more importantly, almost all of them are new strategies. So they aren't cannibalizing existing strategies. It's not a new wrapper for the vast majority of that.

• 35:23Barry Ritholtz?

  So, so what led you to the ETF business, and how did this ramp up?

• 35:27Speaker 05

  I hired an incredibly talented guy named Onur Ozan from McKinsey, who is now president of Alliance Bernstein. And he absolutely banged the table, pounded the table, that we got to ramp up our active ETF business. And, and I think he was right, and we, and we backed it. And it's been a big story for us here. It's a growing story for us in Asia, where we really punch above our weight. And we're excited to see what we can do in Europe.

• 35:53Barry Ritholtz?

  Where, where do you think the ETF business can go for AB? How, how big can this get?

• 36:00Speaker 05

  I'm pretty confident, absent some weird regulatory or legal reason, you know, for example, 401K plans have a difficult time owning ETFs. Department of Labor can change that. But we're not going to launch another mutual fund in the US.

• 36:17Barry Ritholtz?

  Really?

• 36:18Speaker 05

  I think it'll all be ETFs, unless the asset class doesn't suit it for the liquidity constituency of it. But I think it will be the vehicle of choice, along with separately managed accounts. I think those will be the two wrappers we really focus on. For an individual who, who's a client of yours, if you can deliver most of that in SMA form, he or she is paying a lot less tax, because you can tax manage it much more effectively. You can avoid wash sales. You can have a less overly diversified portfolio, because remember, you have lots of unintended bets when you have a multi-manager portfolio.

• 36:56Barry Ritholtz?

  Right. Really interesting. Coming up, we continue our conversation with Seth Bernstein, CEO of Alliance Bernstein, discussing the current environment for asset management. I'm Barry. We're also listening to Masters in Business on Bloomberg Radio.

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• 39:23Barry Ritholtz?

  I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My extra special guest is Seth Bernstein. He is the CEO of Alliance Bernstein and Head of Asset Management at Equitable Holdings. Alliance Bernstein manages over $900 billion in client assets. I have to ask you a funny question. Many years ago, I worked with the guy who, by dumb coincidence, had the same last name as one of the names on the door of the firm.

• 39:57Speaker 05

  Alliance?

• 39:58Barry Ritholtz?

  No, no, no, totally different company, but similar concept to you. And whenever a prospective client would ask, he had this terribly amusing non-answer, something along the lines of, "Look, I'm trying to create my own reputation and brand separate from the family wealth and, you know, I just wish you would treat me as an independent," never saying, "No, I'm completely unrelated to the family." It was, I called it the non-denial denial. "I'm curious, your last name is Bernstein of Alliance Bernstein, does anyone ever say to you, 'Hey, are you the ...'"

• 40:40Speaker 05

  All the time.

• 40:41Barry Ritholtz?

  All the time. Not just a, "Obviously, you haven't been there since the beginning."

• 40:45Speaker 05

  The more insulting question is, "Are you the founder?" And I said, "No, I'd be over 100 years old."

• 40:52Barry Ritholtz?

  Right. 1960, when was it founded?

• 40:55Speaker 05

  1967.

• 40:58Barry Ritholtz?

  Okay. So, when you were done playing with blocks, you didn't have to go into the office that morning?

• 41:05Speaker 05

  No, not that day.

• 41:06Barry Ritholtz?

  Not that day. But this really comes, legitimately comes up?

• 41:10Speaker 05

  Regularly, particularly in the private wealth business, but where it's really important to make it clear is in Asia.

• 41:16Barry Ritholtz?

  Because they just assume.

• 41:18Speaker 05

  Everyone assumes because most of their businesses are family-oriented. But just so you know, in the final moments of whether I was going to get this job or not, I did offer to change my first name to Alliance.

• 41:31Barry Ritholtz?

  That's really amazing. And the fascinating thing about that is if there's any industry that's a meritocracy, it feels like Wall Street has evolved. You live and die on your, forget annual performance, like what your numbers last quarter, last month, last week. It really is performance-driven and not, you know, necessarily your last name. I had to ask if that came up. That's really fascinating. So, let's talk a little bit about the current environment. There is a merger that was approved by shareholders of Equitable and Corbridge. I know the deal hasn't closed, and so you probably can't really say a whole

• 42:16Barry Ritholtz?

  lot about it. But this is going to create about $100 billion of Corbridge assets that are going to ultimately end up, I assume, move over to A.B. Does anything change for you guys with the soon merger of Equitable and Corbridge?

• 42:36Speaker 05

  Other than the assets, I'm not aware of anything changing. And they very much value the identity that A.B. has. And, you know, we are thrilled by the merger and the opportunities that will bring. But no, no changes anticipated.

• 42:56Barry Ritholtz?

  So, let's talk a little bit about some of the assets that you guys have been growing. Private credit, at least up until this year, has been a house of fire. What do you think about the future of private credit? What's going on there?

• 43:13Speaker 05

  Banks are constrained in their ability to continue to service through loans their clients. They've been that way structurally certainly since the financial crisis. And even before that, it was hard to hold these assets on balance sheet. J.P. Morgan spent enormous amount of time and money trying to securitize their loan book. In fact, that's where credit derivatives started, and I worked in the groups that helped formulate that, although I certainly was in no way the father, the engineer around that. But it was critically important to reduce that exposure on most bank balance sheets. I believe

• 43:53Speaker 05

  that trend continues. Banks are levered players. They're funded short. They're not natural holders of long-lived, particularly fixed rate assets. Insurers are a much better home for that, and frankly, so are funds, because funds don't offer true liquidity options for you. There's no run on a fund. Now, what we've seen recently, and one of the reasons private credit has been in the news, is vehicles structured for wealthier clients did have some very limited liquidity options for them. But ultimately, there is no maturity transformation

• 44:33Speaker 05

  in credit. You got what you got. And frankly, I think there shouldn't be any liquidity other than the payment of interest and repayment of the debt itself.

• 44:44Barry Ritholtz?

  I'm glad you say that because I frequently have this conversation with peers elsewhere. Which part of seven-year lockup did you find confusing? Like, the liquidity premium exists because it's illiquid. If you want liquidity, well, here's $100 trillion in the public fixed income markets have at it. Am I being too harsh, or is that a fair statement?

• 45:08Speaker 05

  Look, I think people want to get the stuff sold, and so they try to do what they can. But frankly, I think giving any expectation, and frankly, I think the documents were pretty clear that liquidity isn't there. But I think better that we go through this now before there's any significant credit deterioration. I mean, clearly, there's some deterioration out there.

• 45:31Barry Ritholtz?

  It's relatively. For anyone who lived through GFC, this is...

• 45:35Speaker 05

  It's nothing. So, the truth of the matter is, while there will be loans that go bad, I think most of these funds will be pretty fine at the end of the day. And ultimately, there's a role for it to play. But it's really, our focus is much more institutionally focused.

• 45:51Barry Ritholtz?

  Than what we've seen some of the areas in it. And just so people understand, there's a, depending on the funds, 2%, 3%, 4% default expectation built into these models. It's not like, "Oh, my God, something defaulted." That's just what happens in the normal course of events.

• 46:12Speaker 05

  That's just the nature of lending money, and that's absolutely true. Now, we have private credit in our private wealth businesses as well. And I think properly structured does a role for you, particularly if you have a tax-advantaged location to put it.

• 46:24Barry Ritholtz?

  So, let's talk a little bit about private credit. I think the big issue from earlier this year, and hold aside the specific companies that kind of ran into trouble, but, you know, when you look at what's going on, there's a wide dispersion of underwriting quality. There's some variance in how often and how precisely these marks happen in these non-traded things. And then, again, we come back to the redemptions in non-traded vehicles always kind of shocked me. What does this industry need to do to get past the sort of difficult first half of the year we saw in 2026?

• 47:08Speaker 05

  Post-numbers, which show that maybe there's a deterioration, but it's not meaningful. Educate clients on what's going on by providing them more transparency in the sense of clarifying, you know, how many names are on your watch list, how many have gone non-acrual.

• 47:28Barry Ritholtz?

  There's no obligation to do that currently.

• 47:31Speaker 05

  There is, and they do it for accounting and reporting reasons. But ultimately, regular periodic updating of your client probably makes them more comfortable of what's going on. You should be over-communicating during periods like this.

• 47:44Barry Ritholtz?

  That's really, during periods like this or always?

• 47:48Speaker 05

  Well, I think always, because ultimately, they're trusting that you're giving them a balanced view of what's going on.

• 47:54Barry Ritholtz?

  And to be fair, the headlines are not about the whole industry. It's about a small handful of companies that have run into modest issues, not, you know, terribly. Again, we're not in GFC territory.

• 48:08Speaker 05

  And there's always been fraud. I mean, and that's what we've seen come out from time to time.

• 48:13Barry Ritholtz?

  In a couple of places.

• 48:14Speaker 05

  In a couple of places. But the truth of the matter is, there's been an enormous amount of money that's focused on this segment. And so, I think you're absolutely right. Structuring terms and pricing got out of whack. But frankly, it's a much better time to be investing today, post that event.

• 48:31Barry Ritholtz?

  So, let's talk a little bit about where this space is going. For most of my career, private credit has been pretty much all institutional. Over the past few years, we've seen a big take-up from wealth management side, RIAs, et cetera. And then, a lot of conversations about this being available for retirement accounts or 401Ks. Tell us your thoughts. What do you think happens with private credit? And how do we do this the right way so we don't run into these problems?

• 49:03Speaker 05

  I think actually, target date funds, 401Ks generally might be a perfectly appropriate place for it. Highly predictable needs. You have...

• 49:17Speaker 05

  Professional management making those decisions, usually separate from the people managing the money themselves, the sponsors of those 401K plans. They're pretty sophisticated investors in their own right. Private credit, particularly for individuals who need the income that those portfolios will generate, might have a very welcome spot in it. And in fact, we are. We think leaders in working with other private asset managers in developing vehicles to utilize side by side with your target date funds in order to build a highly diversified

• 50:02Speaker 05

  private credit, private equity, private real estate exposures for the beneficiaries of those plans. To me, that's an institutional purchase because there's someone intermediating that decision.

• 50:14Barry Ritholtz?

  So let's talk about that group. It's Alliance Bernstein, Brookfield, and Carlyle working together. How did this come together and where do you think this goes?

• 50:25Speaker 05

  Well, I think it came together as we were talking to other firms about what we thought. We've been a pioneer in the 401K business in building particularly custom glide paths and target dates for big sophisticated plan sponsors, state plans, corporate plans. And there was clearly a desire to get a higher return built in over time into these portfolios, given the aging population, the need for diversification and different sources of return. And so we went and polled a number of different firms and we ended up finding we had really

• 51:07Speaker 05

  compatible philosophies and capabilities with Carlyle. We engaged with a number of firms and trying to understand who would be a natural complement to us. And we, from a private or real asset side, we thought Brookfield would be a very strong partner. And from a private equity side, we thought Carlyle brought a lot to the table. So we ultimately formed it, and it's very early days. I think the industry has been too enthusiastic about how quickly all of this will be adopted. Plan sponsors tend to be a pretty conservative group of people at the end of the day, and it's going to take years for this really to develop. But 10 years from now, will that be part of most of the large plans? I suspect it will be.

• 51:52Barry Ritholtz?

  How do you address some of the criticism? Anytime we see a new 401K plan come along or a sponsor come along, I always am raising my eyebrows about how much the industry, and to some degree, you can blame BlackRock and Vanguard for this, has driven fees down generally, but even more so in 401Ks. In the old days, I would look over a 401K and be aghast at, why are you paying 2% for an S and P 500 fund? This doesn't make any sense. Now I look across some of the 401Ks that I see, they're very inexpensive.

• 52:33Barry Ritholtz?

  Can privates find their way into 401Ks at a competitive price point?

• 52:38Speaker 05

  Yes, I think for two reasons. One, these are institutional investors in their own right, so they're going to negotiate hard to get lower fees. Insurers don't pay huge fees for private credit because the cost of funds matters enormously to them. Secondly, it's a very small portion of the title portfolio and frankly, the cost of administering the overall plan. So between their competitive power as buyers, institutional buyers, and the small component of the total target date portfolio that they're going to constitute, it's a pretty small part of the fee burden that a client is going to be carrying.

• 53:20Speaker 05

  And frankly, it should be fairly easy to outperform net of fees.

• 53:25Barry Ritholtz?

  And that's all anyone really cares about.

• 53:27Speaker 05

  And that's really all that people care about.

• 53:29Barry Ritholtz?

  Right. Especially, we've been in a low rate environment for so long, the expectation is, maybe it's higher for longer, but not 10 years. So we'll be back to a lower interest rate, not zero, but lower interest rate environment, and people want some yield. That's really the driving thinking here?

• 53:46Speaker 05

  I think that's exactly what the thing is. Look, if you look at the supers in Australia, which are really interesting innovations, the super attenuation funds in Australia have been intellectual leaders in how to think about retirement. And one of the really interesting things they do is they structure glide paths through retirement rather than to retirement. The last thing you need, most people at age 65, is to be predominantly in short-term fixed income and cash. You need to be invested.

• 54:18Barry Ritholtz?

  On the assumption you have another 20, 25 years to go.

• 54:22Speaker 05

  Even 10 years to go, yes. You need, you need, most people don't have enough money to retire, right? So a lot of people defer their ultimate retirement and get supplemental income elsewhere. So planning into retirement, I think, is a pretty prudent thing to do. Ultimately, if you're able to tie that to purchasing annuities at a pretty low cost, so not purchasing them necessarily upfront, but maybe planning your target dates to end with a pool of liquidity to turn around and buy annuities at age 75, for example, you could really reduce the cost of that and give people income protection for a longer period in their life. I think the really interesting things that are going to continue to evolve in the target date space.

• 55:05Barry Ritholtz?

  Really, really interesting. Since you mentioned 65, I have to ask, you're coming up on a decade as CEO. Do you think about succession planning? Have you, have you thought about who follows you when you decide to take your retirement?

• 55:24Speaker 05

  You see, I think that's one of my most basic obligations, and we spend a lot of time on succession planning, not just for me, but for all the senior leadership of our firm. And yes, we have plans in place and I don't, I don't expect to be there forever. So, yes.

• 55:47Barry Ritholtz?

  So, so given that you're there in a few months, 10 years, what are you most proud of? What decisions did you make, would you wish you could undo, and what of the long-term plan remains unfinished at Alliance Bernstein?

• 56:04Speaker 05

  Oh, good question. What should I have done and do? I should have put my own people in quicker. I, just as a learning to me in any new CEO, you need people you really trust can execute a transition and are bought into it, and change is a good thing. It's not necessarily a bad thing. Secondly, I'm particularly proud of what we've done in our private credit space. I'm really proud of what we've done in the insurance space. I think those are winners. We have built a market-leading SMA platform for munis. We are growing really rapidly. We've automated the investment process.

• 56:49Speaker 05

  We give people choice. We give people, we give people information and we give people client service that they don't get at other firms. And it's been growing like a weed for a while now. I'm very proud of what our fixed income team has done there. I think our private wealth business remains a gem. We have incredibly loyal clients, and I'd love to grow that business more rapidly than we have. We are growing at a good rate, but we, we grow organically. We haven't grown inorganically, frankly, because valuations for our IAs are hard to justify.

• 57:31Speaker 05

  Also, we're very sensitive to cultural implications of big mergers. They just don't have a great track record of working, either in the wealth management place or space, or the investment management space.

• 57:43Barry Ritholtz?

  So, so last question, which I have to, before I get to my favorites, which I have to ask you as both the current CEO and former CFO, the AB stock price has been fairly stable. Your dividends are pretty beefy, something like 9% or 10%. Is that something that is by design, or is it just the nature of you guys throw off a lot of free cash flow?

• 58:09Speaker 05

  The industry throws off an enormous amount of free cash flow, and in a mature business, you should probably be distributing it. In our case, it's by design. We're about the last publicly traded partnership. And so...

• 58:22Barry Ritholtz?

  Which is an unusual structure in itself.

• 58:24Speaker 05

  Very unusual. The only place people used to see them were really in MLPs and stuff, you know, in the energy sector in particular, in real estate.

• 58:34Barry Ritholtz?

  And the dreaded K1s that would generate.

• 58:36Speaker 05

  And we, we issued K1s. So that's a hassle, which limits institutional interest in the stock. But that's who we are. That's what we have.

• 58:47Barry Ritholtz?

  And I find that such a fascinating quirky thing, and yet, I guess, I guess it's the institutional allergy to K1s. Otherwise, I would imagine there'd be broader ownership of a coupon like that. It's essentially a high-yielding bond with an equity kicker.

• 59:10Speaker 05

  That's essentially, it's a convert.

• 59:11Barry Ritholtz?

  That's what it looks like.

• 59:13Speaker 05

  And, I mean, the truth of the matter is that if I really believed, if the board really believed the stock price would really pop, if our majority owner didn't have a negative tax implication of doing it, I think you're obliged to look at it. But the honest answer is, if you do it and you don't get that pop, you've got a lot of people who are not so happy with you.

• 59:37Barry Ritholtz?

  Right, to say the very least. All right, I only have you for a few more minutes, so let's jump to our favorite questions that we ask all of our guests, starting with, who are your mentors? Who helped shape your career?

• 59:49Speaker 05

  Oh, I had a number of mentors. I guess my most influential mentor was my mother. She was a very successful advertising executive, and she was no-nonsense, always. But when I go beyond that, at JP Morgan, the guy who ran equity capital markets and believed in me, a guy named Brian Watson, who ended up running the private equity, I'm sorry, the venture capital and private equity business of JP Morgan before the merger, he was a really instrumental mentor to me.

• 1:00:25Speaker 05

  I think that the guy who runs Equitable, Mark Pearson, has been an unbelievable mentor and partner in running it because the relationship between those two firms was rocky for time. And I think we've run it as one larger business while maintaining the individuality of the individual business unit. Those are three people that come to mind.

• 1:00:50Barry Ritholtz?

  Really interesting. Let's talk about books. What are some of your favorites? What are you reading currently?

• 1:00:56Speaker 05

  I am reading the new book on the Trump administration that came out that Maggie Harrison wrote.

• 1:01:04Barry Ritholtz?

  She's always a fun fiery writer.

• 1:01:06Speaker 05

  She sure is. And it brings it home and it brings it live. During COVID, a bunch of friends and I got together and created a book club. And so we were reading, we never read fiction. And so for while the book was operating, we read a ton of fiction, which was

• 1:01:26Barry Ritholtz?

  Give us a few names.

• 1:01:29Speaker 05

  We read Razor's Edge, we read Kim by Roger Kipling, we read the, we, God, I'm having a senior moment, which come more and more frequently.

• 1:01:49Barry Ritholtz?

  It only trends in one direction. As an older man.

• 1:01:51Speaker 05

  It gets worse.

• 1:01:52Barry Ritholtz?

  As an older man, I can tell you, only, I'm a day older than you, and let me just share my experience, it only gets worse.

• 1:01:58Speaker 05

  Right. One of the books we read, which I loved was James, which is kind of a retelling of the Huckleberry Finn.

• 1:02:11Barry Ritholtz?

  Oh, really?

• 1:02:12Speaker 05

  It's a fantastic

• 1:02:13Barry Ritholtz?

  James, I'm going to definitely put that on my list. Since you mentioned what you

• 1:02:17Speaker 05

  Tom Sawyer, yeah.

• 1:02:19Barry Ritholtz?

  Yeah. Well, since you mentioned what you were doing during the pandemic, what about streaming? Are you watching or listening to anything?

• 1:02:27Speaker 05

  No, my wife hates me because I don't watch stuff with her.

• 1:02:30Barry Ritholtz?

  Oh, really?

• 1:02:31Speaker 05

  I mean, we did, we watched a lot of things like Shrinking. We love Shrinking. I was a big Game of Thrones fan and stuff like that. But no, I don't, I read a lot. Yeah. So I'm not great at that.

• 1:02:44Barry Ritholtz?

  Final two questions. What sort of advice would you give to a recent college grad interested in a career in either investing, wealth management, fixed income trading, anything along those lines?

• 1:02:56Speaker 05

  Sure. My advice to them is never act like you know the answer if you don't, because you don't have, people aren't going to trust you because of your experience. So if you lose that trust early, it's really hard to regain. Two.

• 1:03:12Barry Ritholtz?

  Wait, don't fake it till you make it? Because that was

• 1:03:15Speaker 05

  I think you're out of your mind.

• 1:03:16Barry Ritholtz?

  I heard that year after year after year and always hated it.

• 1:03:21Speaker 05

  The second thing I would say to you is the, is the other side of that coin, which is ask lots of questions. It's okay. I mean, you can get totally irritating and I'm going to throw you out of my office eventually, but I don't expect you to know the answer.

• 1:03:36Barry Ritholtz?

  And our final question, what do you know about the world of investing today might have been useful 30, 40 years ago when you were first getting started?

• 1:03:47Speaker 05

  People who think they can time the market and do, and actually can prove out that they really do it well, you can count on one hand. Diversification, no one diversifies to get rich. You diversify to stay rich.

• 1:04:02Barry Ritholtz?

  And those are two very different skill sets, huh?

• 1:04:04Speaker 05

  Exactly.

• 1:04:05Barry Ritholtz?

  Really fascinating. Seth, thank you so much for being so generous with your time. This has been absolutely delightful. We have been speaking with Seth Bernstein. He is the CEO of Alliance Bernstein and the head of asset management at Equitable Holdings. If you enjoy this conversation, well, check out any of the 659 we've done over the past 12 years. You can find those at Bloomberg, iTunes, Spotify, YouTube, or wherever you find your favorite podcasts. I would be remiss if I didn't thank the crack staff that helps put these conversations together each and every week. Sean Russo is my head of research.

• 1:04:45Barry Ritholtz?

  Anna Luke is my producer. And today is the last episode of Alexis Noriega, my video producer, who helped bring Masters in Business to the video world over the past year. I just want to say an extra special thank you to Alexis for everything she's done for us. I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio.

• 1:05:18Speaker 09

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