Bogleheads® on Investing Podcast 006 – Dan Egan, host Rick Ferri (audio only)

00:00:10.000 | Hello everyone and welcome to the sixth episode of Bogleheads on Investing.

00:00:17.000 | Today we're talking about behavioral finance.

00:00:21.000 | Our guest is Dan Egan, Director of Behavior Science and Investing at Betterment.

00:00:38.000 | My name is Rick Ferry and I'm the host of Bogleheads on Investing.

00:00:43.000 | This episode is brought to you by the John C. Bogle Center for Financial Literacy, a 501(c)(3) corporation.

00:00:53.000 | Today we're talking with Dan Egan.

00:00:56.000 | Dan is a behavioral scientist who works at Betterment.

00:01:00.000 | Betterment is a robo-advisor who is using technology to help people invest better.

00:01:08.000 | And a lot of what Betterment is doing and the programs that they're running are based on behavioral science.

00:01:16.000 | I've been following Dan's work for several years now

00:01:20.000 | and I find it extremely interesting how this company is, for lack of a better word,

00:01:26.000 | controlling their clients' behavior by analyzing client data and testing various hypotheses

00:01:34.000 | in a real lab of hundreds of thousands of clients to improve their investment performance.

00:01:41.000 | Let's get right to Dan Egan. Welcome, Dan.

00:01:44.000 | Thank you very much for having me.

00:01:46.000 | I really appreciate you being on the show. You're an up-and-comer, if you will.

00:01:50.000 | What you're doing at Betterment as the Director of Behavioral Science and Investing is extremely interesting.

00:01:56.000 | And I thought it'd be great to have you on the show so you can talk with us about all the work that you're doing there and all the neat stuff.

00:02:02.000 | It's like you're in this big lab in real world and you get to actually run experiments on real people

00:02:08.000 | and do real things as opposed to theory, sort of an ivory tower classroom setting.

00:02:13.000 | So can you tell us a little bit about who you are and how you ended up at Betterment?

00:02:17.000 | It's a great place to be, but with great power comes great responsibility.

00:02:21.000 | I'll trace out so that I think it's actually useful for the path that I got here by.

00:02:26.000 | It's interesting that it explains my background a bit.

00:02:28.000 | I did my graduate degree in decision science, which is a combination of psychology and game theory and statistics.

00:02:36.000 | So trying to figure out how to help people, real people, make better decisions.

00:02:40.000 | And I had never had any desire to go into finance or investing.

00:02:44.000 | But during that program, one of the people who I worked with said,

00:02:47.000 | why don't you come and work with my investment company for a little while?

00:02:50.000 | And I thought, you know, I heard that these people get paid well and it sounds really interesting what they're doing.

00:02:56.000 | So I went and did that and I worked there for about a year and it was an incredible experience.

00:03:01.000 | Learning very quickly the difference between academic finance and real world finance.

00:03:06.000 | And after doing that for a year, I realized that that specific kind of finance,

00:03:11.000 | a private equity firm, was not what I wanted to do.

00:03:14.000 | And this job came up at Barclays Wealth in the UK, which is a high net worth asset management firm,

00:03:20.000 | doing applied behavioral finance, trying to help advisors give better advice,

00:03:25.000 | not only in terms of it fitting to the client better,

00:03:28.000 | but also the client being more likely to adhere to it, to actually go through with it.

00:03:33.000 | So I worked there for about six years with advisors,

00:03:36.000 | both building behavioral tweaks to the platforms as well as integrating it into their advice.

00:03:42.000 | And one of the things that kept striking me, as you've alluded to,

00:03:46.000 | is that there's this three body problem going on.

00:03:48.000 | So we have the end investor who's going to come with their specific circumstances,

00:03:52.000 | but also their psyche and their particular strengths and weaknesses as an individual.

00:03:57.000 | Then you have the same thing for the advisor.

00:04:00.000 | And here's me sort of in the background trying to change the system,

00:04:04.000 | trying to change the system and the advisors and coach them and train them

00:04:07.000 | to see if we can help the end client be better off.

00:04:09.000 | And that's a very noisy environment to be in.

00:04:12.000 | The feedback is delayed and noisy.

00:04:15.000 | You're never really sure if what you are doing is actually working.

00:04:18.000 | So I moved to the U.S. and I started looking at Betterment.

00:04:22.000 | It struck me as a great opportunity to improve upon both of these things.

00:04:25.000 | So number one, I, as a behavioral scientist, can try to improve things with clients,

00:04:31.000 | but test it in a rigorous fashion in the real world, see what impact it has on the behavior,

00:04:36.000 | and if it works, roll it out to all of them and have high confidence that it actually works

00:04:40.000 | rather than hope that it works.

00:04:42.000 | So you were looking at Betterment as an option,

00:04:45.000 | and you liked the idea that it was a real-time experiment with real investors.

00:04:50.000 | At the time, the company was up and running and they were using index funds.

00:04:55.000 | Did you give it any thought to why John Stein had chosen index funds

00:05:01.000 | and why that was the focus of the investment philosophy behind Betterment?

00:05:06.000 | I think there are a lot of reasons to go with index funds.

00:05:09.000 | Obviously, they tend to be much lower cost than more opaque or more actively managed funds.

00:05:15.000 | They're also more transparent about exactly what they're going to do and when and how.

00:05:19.000 | They scale very well in that generally you can put a lot of money into them

00:05:24.000 | and it's not going to negatively affect the performance of the fund,

00:05:27.000 | which is true of some active funds.

00:05:29.000 | And we wanted to be able to say to clients that we were doing

00:05:33.000 | what there was a lot of good long-run evidence for,

00:05:36.000 | which is that lower-cost, systematic, index-based investing tends to do better.

00:05:42.000 | But you're using only ETFs as opposed to open-end, traditional mutual funds.

00:05:47.000 | Is that an operational reason, or do you think they're better than open-end funds?

00:05:52.000 | I kind of want to go with one type of fund.

00:05:55.000 | I would definitely say an ETF is better.

00:05:57.000 | We manage a lot of taxable accounts,

00:05:59.000 | and ETFs are significantly more tax-efficient than mutual funds.

00:06:03.000 | They are able to trade throughout the course of the day.

00:06:06.000 | That's something that we can talk about and come back to about whether or not that's good or bad.

00:06:10.000 | If you use them in a portfolio, it provides some services and functions

00:06:14.000 | that it's much harder to do with mutual funds.

00:06:16.000 | A very small example, in terms of transparency,

00:06:19.000 | is that a lot of mutual funds have 12(b)(1) and marketing fees embedded in them,

00:06:24.000 | which are not transparent to the end user,

00:06:26.000 | but is a way that third parties can be compensated for using those funds.

00:06:30.000 | Structurally, that's just not possible with ETFs.

00:06:33.000 | The ETF doesn't know who owns it.

00:06:35.000 | So there's a level of transparency and an inability to have conflicts of interest

00:06:40.000 | that make ETFs preferable, as well as tax-efficient.

00:06:43.000 | The founder of the company, John Stein,

00:06:46.000 | made a comment that there would be no betterment without Bogle.

00:06:49.000 | In fact, I think that was the title of the article that he wrote,

00:06:53.000 | and that Bogle was his idol.

00:06:56.000 | He was invited by Jack Bogle to go to Vanguard.

00:06:59.000 | He spent all day with Jack, and Jack was very encouraged by what he was doing.

00:07:03.000 | I can understand that, because to get young people,

00:07:06.000 | particularly interested in index fund investing at a young age,

00:07:11.000 | is something that I didn't have when I was growing up.

00:07:15.000 | When I was in my 20s, there was one index fund,

00:07:18.000 | but unfortunately I didn't know about it.

00:07:21.000 | So what you're doing by getting the word out about index fund investing at a young age,

00:07:27.000 | I find it to be very encouraging and very good for society long term.

00:07:33.000 | John hopes to do for broader personal finance what Jack Bogle did for investing.

00:07:39.000 | Jack was able to do well by doing good.

00:07:42.000 | He didn't compromise on his morals and what he thought was right,

00:07:47.000 | and his ability to be successful and to grow a very large company that serves millions of people,

00:07:52.000 | that's a perfect inspiration for what we're trying to do at Betterment.

00:07:56.000 | I think that he created a little beachhead there in terms of investing

00:08:01.000 | and having low-cost funds that were owned as mutuals,

00:08:05.000 | but that is a very small component of what most people need in terms of help with their finances.

00:08:10.000 | They need the ability to plan for and manage cash flow better,

00:08:14.000 | the ability to use the correct account types if we're talking about a Roth or a traditional IRA or a 529.

00:08:20.000 | Investing in personal finance is very complicated,

00:08:23.000 | especially if you want to do it, if you want to make the most out of all the possibilities out there.

00:08:28.000 | Making it easy for the vast majority of normal people to do that is John's mission.

00:08:33.000 | One of the things that I found fascinating about Betterment is your automation.

00:08:39.000 | Do you truly believe that through automation you can get people to behave better?

00:08:45.000 | You talk a lot about bad behavior of investors and the cost of what's called the behavior gap or the investor gap,

00:08:55.000 | and there's different names for it, but you use the behavior gap.

00:08:58.000 | Can you first talk about the behavior gap and then talk about what Betterment is doing

00:09:03.000 | and the automation that you've created to get people to invest better?

00:09:07.000 | Absolutely. The behavior gap most broadly is that we might know what it is that we are supposed to do

00:09:15.000 | in order to get some kind of an optimal outcome, but it's hard for us to actually execute on it.

00:09:19.000 | You can think about wanting to lose weight.

00:09:21.000 | It's fairly straightforward that you eat less and exercise more and you'll probably lose weight,

00:09:26.000 | but it's hard to actually get through with that, to actually stay the course and be consistent in it.

00:09:31.000 | In investing, we see this come up in a number of different places.

00:09:35.000 | I think there's a lot of the studies transparently lead to investors try and do too much

00:09:42.000 | and do the wrong things at the wrong time.

00:09:44.000 | They trade more than they should, and every time they trade, they probably pay commissions

00:09:49.000 | and bid-ask spreads and possibly even taxes if they have any gains that they're realizing.

00:09:55.000 | They hold much more concentrated portfolios, so they'll hold a few stocks of companies

00:10:00.000 | that they're familiar with or maybe they've done a little bit of research on,

00:10:03.000 | but they tend to not be very diversified or not intentionally diversified.

00:10:07.000 | These two or three things, which actually take a lot of work and thought on the part of the investor,

00:10:13.000 | end up with them underperforming a simple low-cost index portfolio.

00:10:18.000 | There's this strange thing where they're doing worse because they're putting a lot more effort in,

00:10:23.000 | because they're trying harder.

00:10:26.000 | What we're trying to do is, number one, make it so that people are confident and comfortable

00:10:31.000 | that they are doing the right thing by investing in the diversified portfolio,

00:10:36.000 | by allowing us to manage it in a really transparent, systematic way for them.

00:10:41.000 | That will help them be comfortable and reduce the kind of anxiety-provoked actions

00:10:48.000 | they might take, like selling out after the market goes down or trading a little bit too much every month.

00:10:55.000 | The interesting thing about your research is you have actual data.

00:11:00.000 | You have access to literally hundreds of thousands of accounts that you can drill down into.

00:11:07.000 | You like to study quant and you're a programmer, and you can drill down into actual accounts,

00:11:14.000 | whereas other researchers at academics, they would have to ask companies for data.

00:11:19.000 | You have the data, and you can drill down, and you can look at what your investors are doing.

00:11:24.000 | You found that even in your own accounts that there is behavioral issues, even with your own investors.

00:11:31.000 | Based on our research, about 70% of our clients are what I would consider like they get a 100 out of 100.

00:11:38.000 | The remaining 30% have very specific markers of when and why they are behaved badly.

00:11:45.000 | I'd actually take your statement and double down on it and say, not only do I have access to really good data,

00:11:51.000 | I really care about improving that data.

00:11:53.000 | If I could put myself out of a job, that would be fantastic.

00:11:56.000 | Because when you look at that 30% of clients who are making specific mistakes, it's fairly predictable.

00:12:03.000 | They are going to trade too much. One of the things that we look at is the role that gender plays.

00:12:08.000 | Men trade. They log in more. They trade more than women.

00:12:12.000 | Here's the neat thing. When they trade, they make much more extreme moves.

00:12:16.000 | Men are much more likely to go from 100% stocks to 0% stocks than these sort of whipsaws,

00:12:22.000 | whereas women are much more likely to go from 90% stocks down to 80% stocks if they're going to make an allocation change.

00:12:29.000 | Looking at the things that predict people's bad investing behavior and then at the same time saying,

00:12:36.000 | "Okay, how could I improve that? How do I reduce this gap using this behavior?"

00:12:40.000 | and then going out and running scientific trials of those improvements, that's what I love doing.

00:12:46.000 | What have you found? What have you done to help that 30% who are making the mistakes?

00:12:52.000 | One component of it, which is neat, is knowing who's really paying attention to the markets.

00:12:58.000 | If you take 100 people and the market is going down and it's generating a lot of news,

00:13:04.000 | a standard traditional financial advisor, especially because of the client base they work with,

00:13:08.000 | might be tempted to say, "Well, I need to get in touch with all my clients

00:13:11.000 | and tell them what I think about what's going on in markets right now."

00:13:15.000 | What we found, again, running randomized control trials,

00:13:19.000 | is that the vast majority of people really aren't paying that much attention to what's going on in markets.

00:13:25.000 | There are things in their lives that are far more important.

00:13:28.000 | If you do send out a blast communication or email of some kind,

00:13:32.000 | you're actually going to generate more anxiety than you are going to resolve

00:13:36.000 | because you're hitting a lot of people who weren't worried about it.

00:13:39.000 | Dan, I completely agree with you when you talk about alerting clients that the market is going down

00:13:43.000 | so not to worry that that causes anxiety.

00:13:47.000 | I recall several times in my career when we would have a downturn in the market

00:13:54.000 | and some of the advisors who worked with me would say,

00:13:57.000 | "Look, we need to send out a letter to a client to tell them everything's okay."

00:14:00.000 | I would say, "No, we don't. If it's not okay, they'll call us.

00:14:06.000 | If it is okay, then let's not make them worry

00:14:10.000 | because anytime we send out a letter that says, 'Don't worry,' they worry."

00:14:15.000 | One of the things that when we saw this issue, we said,

00:14:19.000 | "Okay, so what we need to do, much like as if you're a doctor,

00:14:23.000 | is that you don't treat everybody for a disease.

00:14:26.000 | You only treat the people who are afflicted by it."

00:14:29.000 | We want to be able to identify just the people who are really engaged with markets,

00:14:35.000 | who are most likely to be anxious about what's going on in the markets.

00:14:39.000 | Rather than sending out blast emails, when you log in,

00:14:43.000 | we would send you a targeted notification with different messages

00:14:46.000 | to try and see if different messages resonate differently with different kinds of people.

00:14:51.000 | Some messages will be highly factual and relate to the market.

00:14:55.000 | Other messages will be very personal.

00:14:57.000 | They'll say, "You're doing a great job, and you're still on track for retirement.

00:15:00.000 | Keep going." They'll be positive and affirming of things.

00:15:04.000 | In testing those messages, we found that, number one,

00:15:07.000 | the targeting rather than the shotgun blast is much, much more effective.

00:15:11.000 | It means that we get much fewer false positives.

00:15:14.000 | Number two, tailoring the message so that it is more relevant

00:15:18.000 | to the way a person thinks about it and that it's going to be more positive

00:15:21.000 | and affirming for them personally is much more effective.

00:15:24.000 | Generally speaking, when we run experiments to learn this,

00:15:28.000 | we see the people who get those messages have about a 15% to 20% improvement in their behavior,

00:15:33.000 | meaning that they're less likely to make allocation changes or withdraw all their money.

00:15:37.000 | Do you happen to go as far as sending a different message to men

00:15:41.000 | than you do to women or different age groups?

00:15:45.000 | We haven't intentionally targeted it quite that way yet.

00:15:48.000 | One of the reasons is that, generally, we use broad archetypal variables like age and gender

00:15:55.000 | because we don't have a better measure of some underlying thing,

00:15:58.000 | like how engaged you are with markets.

00:16:01.000 | If I can use a variable like the client's login rate, how often they log in,

00:16:06.000 | how often they log in on mobile versus how long they log in on web,

00:16:10.000 | that's generally like a higher fidelity signal about how engaged they are with markets,

00:16:15.000 | whereas a lot of other researchers will say, "Well, young men tend to be the most engaged with markets."

00:16:19.000 | I would even go down to an individual level metric that lets me see,

00:16:24.000 | what does this person look like they're doing?

00:16:27.000 | You wrote a paper called the Mercat Effect where you found that on both positive and negative market days,

00:16:33.000 | big days, big up days, big down days,

00:16:36.000 | more people do have a tendency to log in and look at their accounts.

00:16:43.000 | But once they do log in, you're trying to ensure that they don't do something about it.

00:16:49.000 | Yeah, this is an interesting thing that I think it's worth taking a step back on to give better context to.

00:16:55.000 | One of the things I've learned over the years is that the same person will look and think fundamentally differently

00:17:03.000 | depending upon what platform they are.

00:17:06.000 | Take a person who has a 401(k) through their employer.

00:17:10.000 | They are going to treat that 401(k) in terms of trading and log-ons and management

00:17:14.000 | very differently than they're going to treat their Betterment account,

00:17:17.000 | which is very different than they're going to treat their online brokerage playing account.

00:17:21.000 | The Mercat Effect study was done on an online discount brokerage

00:17:24.000 | where a lot of people had highly concentrated portfolios and logged into trade.

00:17:28.000 | And I think that behavior might be localized a bit to the platform that you're on.

00:17:35.000 | You don't go to Vegas to have a quiet time.

00:17:38.000 | And I think that the behavior that we're going to see, depending upon the data set,

00:17:42.000 | the same person who has a brokerage account is going to act differently inside that brokerage account

00:17:47.000 | than they're going to act on the Betterment platform.

00:17:50.000 | Us and Vanguard have done studies looking at our clients, looking at the same

00:17:54.000 | when do people pay attention to their accounts and to markets.

00:17:58.000 | And you see we're a little bit closer to Vanguard in that when people have some inkling

00:18:03.000 | that the market is down and that they're going to be unhappy about their accounts,

00:18:06.000 | they're less likely to log in.

00:18:08.000 | Dan, I found it was interesting in listening to one of your presentations

00:18:12.000 | that the 30% of the people who will get on the Betterment website and trade,

00:18:19.000 | that if you show them how much they're going to have to pay in taxes

00:18:23.000 | if they do this trade that they're thinking about,

00:18:25.000 | that it almost stops them in their tracks from doing the trade.

00:18:29.000 | Can you talk about how taxes or the prospect of having to pay taxes affect people's decisions?

00:18:36.000 | Definitely. And I'm going to, again, take a step back and give a little bit of broader context

00:18:40.000 | about why this is so interesting for end consumers.

00:18:44.000 | Most of us will have interacted with our finances through websites that are set up by brokers.

00:18:50.000 | And brokers, if you think about it, they have very specific incentives.

00:18:55.000 | They make money when you transact, when you trade, or you buy or sell a fund.

00:18:59.000 | And they also make money when you hold cash.

00:19:03.000 | And that means that a lot of the interfaces we're used to, in a very subtle way,

00:19:08.000 | encourage those two things.

00:19:09.000 | They're going to encourage us to trade and they're going to encourage us to hold cash.

00:19:13.000 | It might be by using red and green to indicate things going up and down,

00:19:18.000 | which excites us emotionally. Cash always feels safe.

00:19:22.000 | Here's a neat thing. If you want to get rid of red on your holdings, you can sell it.

00:19:27.000 | And it just simply goes away. It's like you never had that loss.

00:19:30.000 | And you go back to feeling like you're safe in cash.

00:19:33.000 | And one of the things that's different about Betterment is that we are a fiduciary advisor,

00:19:39.000 | and we make money when clients grow their money more.

00:19:42.000 | So we're kind of aligned in that way.

00:19:44.000 | We don't have these incentives to have people trade more or hold cash.

00:19:48.000 | And one of the things that we were noticing is that people were trading,

00:19:52.000 | and it looked like they weren't taking into account the fact that they were going to owe tax

00:19:56.000 | because they were realizing capital gains.

00:19:59.000 | And taxes work like a really, really bad credit card.

00:20:03.000 | In that, in February, if you get worried about the markets and you sell out of everything

00:20:10.000 | and you realize a $1,000 short-term capital gain, nobody tells you about it,

00:20:15.000 | and you don't owe any money right then.

00:20:17.000 | You have to wait until the following April when you do your taxes with the IRS

00:20:21.000 | to find out that actually you didn't make a $1,000 gain.

00:20:24.000 | You made a $500 gain because the IRS is going to keep half of it.

00:20:28.000 | So it was important to us to say, well, we don't make money when people trade.

00:20:33.000 | And maybe people are trading because they're not taking into consideration

00:20:37.000 | all of the important factors, like how much this is going to be worth

00:20:40.000 | after they pay the taxes on it.

00:20:42.000 | So we were able to, in real time, they say, like, I would like to go from 90% stocks

00:20:47.000 | to 0% stocks, where we calculate how much that's going to realize in short-term

00:20:52.000 | and long-term capital gains and put up an estimate of that impact in front of them.

00:20:57.000 | And what we saw is that people who were given that information,

00:21:01.000 | if they were going to owe more than $50 in taxes, regardless of how big their account was,

00:21:06.000 | there was less than a 1 in 10 chance of them going through with the allocation change.

00:21:11.000 | So the first component of it, which I think is important, is that it looks like people

00:21:15.000 | didn't know or weren't considering that when they do this thing now,

00:21:18.000 | they're going to owe a lot of tax because of the transaction.

00:21:22.000 | And simply by putting important information in front of them at that point in time,

00:21:27.000 | we were able to reduce how much they were market timing.

00:21:30.000 | You said if they were going to pay $50 in taxes, regardless of the size of the account,

00:21:35.000 | I mean, I could understand that if it's a small account.

00:21:37.000 | But people had millions of dollars. I mean, $50 is nothing.

00:21:41.000 | But you found that it didn't matter.

00:21:45.000 | Yeah, this is one of the interesting things.

00:21:47.000 | So I actually ended up writing an academic paper on this.

00:21:51.000 | People's aversion to taxes isn't rational.

00:21:55.000 | It is just a "I really don't like taxes."

00:21:58.000 | There are a number of papers that find that people will pay more than a dollar

00:22:03.000 | to avoid a dollar's worth of taxes.

00:22:06.000 | Dan, another piece of research that you wrote or participated in writing

00:22:10.000 | for the Journal of Economic Behavior and Organization talked about second-order beliefs.

00:22:15.000 | In other words, if everybody around you is optimistic, thinking that the market is going up,

00:22:19.000 | that even though you've done all this great work to determine what your risk allocation should be,

00:22:23.000 | what your optimal asset allocation should be for your situation,

00:22:26.000 | people have a tendency to increase that and add more equity

00:22:30.000 | and perhaps getting them over their tolerance for risk unintentionally.

00:22:35.000 | There's a saying by John Maynard Keynes that the stock market is like a beauty contest.

00:22:40.000 | It's not really necessarily that you're trying to say, like,

00:22:43.000 | if the market's overvalued or undervalued, but what do other people think?

00:22:47.000 | You know, if you want to be able to speculate effectively,

00:22:50.000 | it's not a matter of being right in an absolute sense.

00:22:53.000 | It's a matter of just being ahead of the crowd.

00:22:56.000 | So we went out and looked at how much people thought they knew what other people were thinking,

00:23:03.000 | how accurate they were in those beliefs,

00:23:05.000 | and how comfortable they were being different from the herd.

00:23:09.000 | And so one of the first things that we picked up on is that

00:23:12.000 | everybody thinks that the crowd agrees with them more than they actually do.

00:23:17.000 | So if you're really bearish for the next quarter,

00:23:20.000 | you're going to believe that most people are very bearish too.

00:23:23.000 | If you're very bullish for the next quarter, you're going to believe that too.

00:23:27.000 | And one of the nice things that we found was that the more self-aware a person was about

00:23:32.000 | when their views diverged from the crowd.

00:23:34.000 | So you have two things.

00:23:35.000 | You have how good are you at understanding what the broad sentiment of the market is?

00:23:40.000 | And are you accurate at conveying that?

00:23:42.000 | And number two, do you know that you are being a maverick by having a different view?

00:23:47.000 | That sense of self-perspective and crowd perspective,

00:23:51.000 | there were very few people that had it and the people who had it tended to have better performance.

00:23:56.000 | Dan, in one of your presentations you gave to a CFA group,

00:24:00.000 | you talked about how exocortex of a brain,

00:24:05.000 | the part of our brain that does the logic and the thinking

00:24:08.000 | and comes up with asset allocations and so forth,

00:24:11.000 | that through artificial intelligence and other technology tools,

00:24:15.000 | we are taking a lot of the decision making and we are letting computers do it,

00:24:21.000 | letting machines do it, and that this is a good thing.

00:24:24.000 | And that there's a lot of things out there in personal finance that used to take a lot of thought

00:24:29.000 | and advisors and individuals take up a lot of time and quite frankly made a lot of mistakes,

00:24:35.000 | that by outsourcing it, if you will, to machines, behavior is getting better.

00:24:41.000 | Could you talk about that whole concept and what can be outsourced to a machine these days?

00:24:46.000 | One of our key advantages as a species is our ability to not only sort of use tools,

00:24:52.000 | but also imagine and design new tools for us to use.

00:24:56.000 | And for a lot of history, you can think about like cameras and steam engines and so on.

00:25:00.000 | These were physical tools that we built outside of ourselves.

00:25:03.000 | And we're just now starting to build and really explore the use of logical tools

00:25:08.000 | that are able to make decisions in the real world for us.

00:25:11.000 | We're still the ones building and designing them.

00:25:13.000 | Computers aren't building and designing themselves quite yet.

00:25:16.000 | That allows me to do a lot more because I can kind of like outsource a lot of my thinking

00:25:21.000 | and monitoring to software.

00:25:24.000 | So I don't actually know what I'm doing after this call, but I'm sure that my calendar knows.

00:25:29.000 | My calendar is going to notify me with what I need to do next.

00:25:32.000 | But we're still the ones who need to say, well, what do we want this technology to do for us?

00:25:36.000 | How do we want it to expand our capability?

00:25:39.000 | Something you keep coming back to is that the things that computers are really good at

00:25:43.000 | are things that we are not good at.

00:25:45.000 | They're incredibly good at doing the same thing over and over again, hundreds of thousands of times.

00:25:49.000 | They're very good at math. They're very good at statistics.

00:25:53.000 | What they're not good at is non-routine, creative, imaginative labor that understands human beings

00:25:59.000 | and understands the circumstances that they find themselves in.

00:26:02.000 | So there's a really nice symbiosis, a yin and yang going on right there,

00:26:07.000 | where we can take the things that are boring and routine,

00:26:10.000 | things like processing trades and calculating how much to put in each asset class

00:26:14.000 | and looking at whether or not the taxes are going to be worth changing it compared to the fees.

00:26:18.000 | We can program a computer to do that.

00:26:20.000 | And the programming itself, the thinking and designing of how we would go about that decision,

00:26:25.000 | is very creative and very sort of challenging.

00:26:28.000 | But once we've done it, we can have a computer execute it for lots and lots of people.

00:26:32.000 | And I sort of think this in terms of how it dovetails with advisors,

00:26:36.000 | is that there was a period of time where advisors had to,

00:26:40.000 | because we didn't have the kind of exocortex doing things for us,

00:26:43.000 | had to figure out how much each asset class should be bought in order to rebalance

00:26:48.000 | or where the money should come from in terms of tax efficiency when you're doing retirement planning.

00:26:53.000 | We knew what the answers were. We just needed to implement that thought process in a machine.

00:26:58.000 | And now that frees up advisors to spend more time with clients

00:27:03.000 | on the things that the computers are not going to be able to do.

00:27:06.000 | Sitting down with a couple and having a conversation with them

00:27:09.000 | about how they're going to actually spend time in retirement,

00:27:12.000 | how much they're going to spend every year, what the budget constraints mean,

00:27:15.000 | what they're comfortable with, that's something that you still need human-to-human back and forth on.

00:27:19.000 | Knowing when somebody says something but doesn't really mean it

00:27:23.000 | and being able to detect that and being a good coach, a personal finance coach for them,

00:27:28.000 | that's somewhere where advisors are going to excel for a long time.

00:27:31.000 | And so I really like where we're coming to now, where advisors are letting go of,

00:27:38.000 | well, I need to be the one to place the trades and to do due diligence on all of the indices and so on,

00:27:43.000 | really sort of like detailed in the weeds labor.

00:27:46.000 | And they're getting freed up to do that, which means that they are spending more time

00:27:49.000 | having better, higher-quality conversations and doing more quality planning

00:27:53.000 | with the people on the other side of the table, with their clients.

00:27:56.000 | I completely agree with that as far as a lot of the execution and the implementation of portfolios,

00:28:02.000 | tax-loss harvesting, which has now become automated.

00:28:05.000 | Back in the day when I was doing it 10 years ago, you had to do it by hand.

00:28:09.000 | So a lot of the things that we used to have to do by hand as advisors,

00:28:13.000 | machines can do it much better, more accurate, and I don't have to spend time doing that.

00:28:19.000 | But not only that, human beings are expensive, an expensive commodity.

00:28:22.000 | So you can outsource this to technology.

00:28:26.000 | The advisor can spend more time where it's really needed, which is on the behavioral side.

00:28:30.000 | So that's all good.

00:28:32.000 | One of the areas that I actually think advisors don't give themselves enough credit for

00:28:37.000 | is the communicating of different things to different people.

00:28:43.000 | So when a person comes to a website, it's very hard for the website to know ahead of time

00:28:49.000 | that a football analogy would work very well for them.

00:28:53.000 | But advisors know that different people, they can track those different people's interests

00:28:57.000 | and know what kind of analogies or explanations are going to really resonate with them

00:29:01.000 | such that they get a point, whereas a lot of times technology has,

00:29:05.000 | in terms of communicating things, a one-size-fits-all dimension,

00:29:09.000 | especially during the educational and onboarding component of advising a client.

00:29:14.000 | Advisors have a real advantage in that they will communicate more effectively

00:29:18.000 | and more efficiently with each individual client

00:29:20.000 | because they can change the way they talk on the fly.

00:29:23.000 | Hey, I can give you a story about that.

00:29:25.000 | I was talking with a client several years ago, and I made a golf analogy,

00:29:29.000 | and I was talking about index funds.

00:29:31.000 | And I said, "Let's say you went out on the golf course,

00:29:34.000 | and every time you went out on the golf course, you shot par every single time.

00:29:39.000 | That would be great, wouldn't it?"

00:29:40.000 | And I was asking this woman, and she said, "I don't play golf,

00:29:43.000 | and I have no idea what you're talking about."

00:29:46.000 | Yep.

00:29:47.000 | But you're right.

00:29:48.000 | I mean, if we have a questionnaire where it says, you know, "What are your hobbies?"

00:29:51.000 | and somebody wrote down "golf," I could use that analogy with that person.

00:29:55.000 | Dan, one of the other things that you do at Betterment, which I find very interesting,

00:29:58.000 | and I learned a lot from listening to one of your presentations,

00:30:01.000 | is that when you're talking about goals with clients, in other words,

00:30:06.000 | what do you want your money to do for you, where do you want to go,

00:30:09.000 | that people have a really difficult time articulating or defining what their goals are.

00:30:15.000 | So you sort of reversed all that.

00:30:17.000 | You've come to the realization that most people have common goals,

00:30:21.000 | and that it's better to have them eliminate goals rather than say what the goal is.

00:30:27.000 | Can you talk about how you came to that conclusion?

00:30:30.000 | Yeah, I think there's two inputs to this, or two reasons we ended up here.

00:30:34.000 | One is just the general idea that we can learn a lot from each other.

00:30:39.000 | One of my favorite books that I've read over the last year was

00:30:42.000 | "30 Lessons for Living from the Oldest Americans."

00:30:45.000 | They speak to 70-, 80-, 90-year-olds about what they think went well in their life

00:30:50.000 | and what didn't go well, and what they would go back and change

00:30:54.000 | across career and marriage and being a parent.

00:30:57.000 | And I think we really need to do a better job of learning from each other

00:31:02.000 | and using the wisdom that's available to us from a wide array of other people.

00:31:06.000 | One of the things that we've been doing is looking at how clients use our platform,

00:31:10.000 | looking at what goals our CFPs recommend to people.

00:31:14.000 | And rather than trying to reinvent the wheel every single time for each client

00:31:18.000 | and putting the weight upon them to do it, I said,

00:31:21.000 | "Well, wait, we know what goals our CFPs are going to recommend

00:31:25.000 | for somebody who's in their early 20s,

00:31:28.000 | and we know how they would go through a budgeting plan.

00:31:30.000 | We know that they're the ones if you are in your mid-20s and not yet married,

00:31:36.000 | maybe you need to start thinking ahead to the kind of goals that come up later,

00:31:40.000 | whereas if you're in your mid-50s and you've already kicked the kids out of the house,

00:31:43.000 | you have a different set of goals."

00:31:45.000 | The other element of it, when you start with it, we have a really good,

00:31:50.000 | kind of like wise set of goals that come up from the experiences of lots of people through time.

00:31:55.000 | The other element of it is that, as you said,

00:31:58.000 | people have a hard time coming up with those goals themselves when they're in the future.

00:32:03.000 | I could go back now and tell 25-year-old me things he should be thinking about,

00:32:08.000 | but 25-year-old me would feel it was very hard for him to think ahead.

00:32:12.000 | So rather than have people try and come up with and imagine

00:32:17.000 | and brainstorm the things that they might need to spend money on over the next 5, 10, 15, 20 years,

00:32:22.000 | we put them there in front of them and say,

00:32:24.000 | "These seem like they're the things that you need to be thinking about.

00:32:27.000 | Why don't you remove any that you know aren't applicable to you?"

00:32:30.000 | And we can work through prioritizing the rest of them.

00:32:33.000 | That's a lot less effort on the individual.

00:32:36.000 | Generally speaking, people who are given a kind of master list of goals that they remove from

00:32:41.000 | end up with twice as many goals that they want to be planning for

00:32:45.000 | compared to somebody who you force to start from scratch.

00:32:48.000 | So it's a very effective way of helping people identify what goals they think they should be planning for

00:32:53.000 | based on the wisdom of the crowd.

00:32:56.000 | And it also means that those people are better set up to invest intelligently for the future.

00:33:00.000 | Because instead of saying, "Well, I'm going to assess performance by whether or not my account went up and down,"

00:33:05.000 | they say, "Well, I'm going to assess performance based on whether or not I'm on track to hit these personal finance goals that I have."

00:33:12.000 | One of the questions I have for the future of fintech, using technology to become better investors,

00:33:21.000 | is the shift that is going on with the—and if you don't mind me saying robo-advisors,

00:33:28.000 | I don't know how you feel about that phrase being that you—

00:33:31.000 | Go for it.

00:33:32.000 | Okay.

00:33:34.000 | Is that, you know, they're set up for young people who are just getting started in, you know, how to do a budget,

00:33:39.000 | put a few bucks a month away, get them into index funds, all that's very good.

00:33:43.000 | Get them investing.

00:33:44.000 | They're going to need to learn how to invest, and this is a great way of doing it.

00:33:47.000 | But one of the things that I always found lacking, at least at the beginning of all of the robo-advisors,

00:33:53.000 | is it was for that other generation.

00:33:55.000 | It was for the millennials.

00:33:56.000 | It wasn't really for my generation, which is the baby boomer generation, who are retiring.

00:34:02.000 | So a lot of the tools that were created were for the accumulation of assets.

00:34:08.000 | And I believe the next phase of all this is how do you provide tools for people like me,

00:34:16.000 | who are 60 years old, and the distribution of our assets in retirement?

00:34:21.000 | It seems to me that that's the next phase of this whole robo-advising world.

00:34:28.000 | It's definitely going to happen, I would say, for three reasons.

00:34:31.000 | One is that myself and the current crop of people, we get one year older every year,

00:34:37.000 | and that's steady march.

00:34:39.000 | We're good at building for ourselves because we kind of know what we need at this point in our life.

00:34:44.000 | The closer we get to retirement, the more that we hear about and want those sets of tools for ourselves.

00:34:49.000 | I already have these discussions with my parents, and understanding what they need is really important.

00:34:55.000 | On the flip side of the market is the consumers.

00:34:58.000 | Our parents are very uncomfortable with the idea of just using a digital investment solution

00:35:03.000 | because they want to be able to talk to somebody, because they want to have them communicate

00:35:07.000 | in one person that they can go face-to-face to.

00:35:09.000 | Younger generations, you know, they go both ways.

00:35:12.000 | I think there's a mix of it, but they're more likely to be comfortable with a purely digital solution

00:35:17.000 | and less feel like they need a face-to-face contact.

00:35:21.000 | That might change over time as the cohort gets older.

00:35:24.000 | Either way, I think that we're going to see greater adoption of sort of decumulation in retirement software

00:35:31.000 | and planning as people who grew up with computers and who have been using them their entire

00:35:36.000 | white-collar professional life are going to want that same thing in retirement,

00:35:40.000 | as opposed to a generation who might not have.

00:35:42.000 | And I think, to your point, there are more people who are, even right now,

00:35:47.000 | starting up companies that are focused on retirees to try and help them make those decisions.

00:35:53.000 | One of the interesting components of it is when you look at a business that has a target customer

00:35:59.000 | that is accumulating money over time, they kind of have positive growth curves built into their customers.

00:36:04.000 | A retiree-focused product is looking at specifically customers who are reducing their wealth over time.

00:36:11.000 | So I think there's going to be an interesting kind of like they're going to want to look at different

00:36:15.000 | compensation models for that kind of advice to dovetail better with the incentive schemes

00:36:22.000 | that are present specifically for retirees and how they are going to be spending their money

00:36:27.000 | and managing their assets.

00:36:29.000 | I completely agree with you. The company that I'm starting is hourly-based advice,

00:36:34.000 | where I'm not actually going to be implementing anything.

00:36:37.000 | I'm just going to be talking with people and getting paid for that intellectual property.

00:36:42.000 | And when it comes to the actual implementation, use these tools, such as Betterment and others,

00:36:50.000 | to actually implement the client's portfolios at a very low cost.

00:36:57.000 | So it's getting back to what you're saying.

00:36:59.000 | At some point, people need or want that human interaction.

00:37:06.000 | They want that second opinion.

00:37:08.000 | They want to run it by somebody and get input.

00:37:13.000 | But it doesn't need to be ongoing.

00:37:15.000 | It doesn't need to be every quarter or every year.

00:37:18.000 | So the pricing model on that type of advice needs to reflect the way it's used,

00:37:27.000 | as opposed to, say, just assets under management.

00:37:30.000 | There's advisors that are charging 1% per year,

00:37:33.000 | and clients are not utilizing 1% per year worth of advice.

00:37:37.000 | They might use it one year, but for the next two or three years, they don't need it.

00:37:41.000 | So I think the pricing models and the way it's delivered,

00:37:44.000 | there's going to be a separation between the advice givers, who get paid for the advice,

00:37:49.000 | and the implementers, who get paid for managing the portfolios,

00:37:54.000 | as a difference in the way that the services are delivered.

00:37:59.000 | And Betterment has already started to go down this path,

00:38:02.000 | because now you've implemented a financial planning and advisory model.

00:38:09.000 | Betterment started out just charging 25 basis points to our retail clients.

00:38:15.000 | And over the years, we learned that, number one, some people wanted more of a CFP engagement.

00:38:22.000 | We found that there's a lot of upfront costs.

00:38:24.000 | So we have to get to know them, gather all their data, understand their circumstances,

00:38:29.000 | and then have one or two calls with them.

00:38:32.000 | And then they didn't want to start again from scratch later.

00:38:34.000 | So we started offering what we called Betterment Premium,

00:38:36.000 | which was 40 basis points instead of 25 basis points.

00:38:39.000 | And it was an annual fee, so that you were kind of locked in for one year at 40 basis points rather than 25.

00:38:46.000 | And the uptake on that was just of a very specific person who wanted kind of like that ongoing relationship,

00:38:53.000 | where they wanted to be able to call us anytime, which was a subset of people.

00:38:57.000 | I think a lot of people think like you think, which is, well, actually,

00:39:00.000 | I just have this specific question that I want an answer and some guidance on,

00:39:04.000 | and I don't want that to translate into this long ongoing relationship.

00:39:09.000 | So about six months or a year ago, we started offering what we call Advice Packages,

00:39:14.000 | which are modular little a la carte packages you can buy, like I'm getting married,

00:39:20.000 | and I want to understand what's involved in merging our finances and the options there,

00:39:24.000 | or planning for a kid's college education, or optimizing Social Security in retirement.

00:39:29.000 | These are questions that the person doesn't feel like they need advice tied to their assets in any way,

00:39:34.000 | but they do want, as you said, a conversation with an expert, somebody to take a look at it,

00:39:39.000 | check their work, make sure that they're doing the right thing.

00:39:42.000 | And then once they have that confidence, maybe help them set up a bit of the execution for it,

00:39:46.000 | maybe set up goals in their betterment account. And we found that that's been very effective.

00:39:50.000 | The most common package that people buy is actually an initial getting set up and check up package,

00:39:56.000 | where they're just going to pay us, I think, something like $200 for us to look at their information,

00:40:03.000 | set up their betterment account the right way, check that everything's right,

00:40:07.000 | have a conversation with them and their spouse about it, and then they're confident.

00:40:10.000 | Then they're ready to have it run on the 25 basis points for the rest of the time.

00:40:15.000 | So I think that that kind of giving people the option to buy the level of service

00:40:19.000 | and the type of service that they feel is appropriate for what they want is very important.

00:40:23.000 | I think that there's room for both of them. I think there are people who want to pay an extra 25 basis points

00:40:29.000 | to have an ongoing relationship and feel like you're going to be monitoring and looking at it,

00:40:33.000 | and they can call you anytime. But there are also people who know that they have specific,

00:40:37.000 | discreet questions, and there's no reason for them to have an annual fee to get them answered.

00:40:41.000 | I think that's great. Giving people options on how they pay for the advice that they're getting is a great concept.

00:40:47.000 | Again, I used to be on the all asset management side. We used to give some advice.

00:40:52.000 | Now, just giving people different options as to how they can pay for the advice going forward,

00:40:57.000 | whether they're going to roll it into an asset management fee,

00:41:00.000 | whether they're going to just pay for it a la carte, which is what you're talking about.

00:41:04.000 | They could pay for it through a ongoing retainer that they're paying directly to advisors,

00:41:10.000 | such as XY Planners, a company that is doing subscription-based type planning.

00:41:16.000 | I mean, there's lots of different options available to people out there now, and it's just getting better.

00:41:20.000 | It all better aligns the services that are being provided to the clients with the fees that are being charged to clients.

00:41:29.000 | I didn't know about your a la carte offering, and I'm happy to hear that it's going well.

00:41:33.000 | It does seem to be a very good way of doing things.

00:41:36.000 | The next level in this that I'd like to see at some point is a fee arrangement that is based upon the success of the client.

00:41:45.000 | So, number one, I wish advisors were a little bit more incentivized to take a look at clients ahead of time and see what value they could add and say,

00:41:53.000 | "I think that I can wring an extra $50,000 out of your retirement savings if we tweak things and change them.

00:42:02.000 | And if I help you adhere to this plan over the next 10 years, would you be willing to take me on as kind of a profit share?

00:42:09.000 | Because I want to see you succeed, and you want to see you succeed.

00:42:12.000 | So, let's figure out a way where advisors, even going further down that incentive alignment chain,

00:42:18.000 | where advisors are kind of equity holders in their client's success.

00:42:23.000 | And I would want to know that I'm going to get paid not only for knowing the financial planning details,

00:42:29.000 | but actually helping the client execute on those plans.

00:42:33.000 | Yeah, I don't know how the SEC, the Security Exchange Commission, is going to feel about that.

00:42:40.000 | Participating in any way in any of the client's profits, aside from AUM, which is a way of participating in their profits,

00:42:47.000 | is something the regulators have always looked at very negatively,

00:42:53.000 | because it creates incentives to the advisor to take more risk in the client account.

00:42:59.000 | I understand what you're saying, to be an equity holder in the client's success, but what's the downside?

00:43:05.000 | In other words, what if it doesn't work? Are you also, you know...

00:43:09.000 | Are you on the hook?

00:43:10.000 | Are you on the hook? Yeah.

00:43:12.000 | Yeah, there are a number of companies now.

00:43:17.000 | My wife happens to be doing one of them, which is sort of doing a career change into being a software engineer.

00:43:24.000 | And a lot of them are set up where they're going to train you for three to six months,

00:43:29.000 | and they only get paid when you are making more than $80,000 a year in a tech job,

00:43:35.000 | and then they can make up to sort of $40,000.

00:43:38.000 | So I'm seeing more and more incentive-aligned or success-incentive-aligned commercial relationships,

00:43:45.000 | and it's interesting to think about and ponder how you could legally also do that for personal finance.

00:43:52.000 | Yeah, so what you're doing is deferring the fee.

00:43:54.000 | In other words, you know what the fee is going to be.

00:43:56.000 | You're just deferring it until you have success, and if you don't have success,

00:44:01.000 | then the fee that you owe me would be less or maybe nonexistent.

00:44:04.000 | So I could understand that where the fee is up front.

00:44:08.000 | This is our fee. We're just not going to collect it.

00:44:11.000 | We're just going to collect a little bit now, and we're going to collect the rest of it later on down the road when you are successful.

00:44:16.000 | I think that would be an intelligent approach rather than just kind of a profit-sharing

00:44:21.000 | where we're going to get more if you're more successful later on down the road.

00:44:26.000 | It's all interesting.

00:44:28.000 | Dan, generally in the financial services industry, we separate people between delegators and do-it-yourself investors.

00:44:39.000 | The delegators will go out and hire an advisor, have somebody manage their portfolio

00:44:45.000 | because their free time is important to them.

00:44:48.000 | Either they don't want to do it or they can't do it, but to them, they'd rather not do it.

00:44:53.000 | They'd rather go do something else, and their free time is important.

00:44:58.000 | The do-it-yourself investors, though, they might like it as a hobby.

00:45:03.000 | They might prefer to save the money of the advisor because the delegators do have to pay something,

00:45:09.000 | as you say, 25 basis points, fair fee.

00:45:12.000 | But on the do-it-yourself side, there's also a cost, and that's the behavioral cost, as we talked about.

00:45:18.000 | Can you talk about the difference between the delegators, the do-it-yourself investors,

00:45:22.000 | and how to maybe get more do-it-yourself investors to see that the value of delegating is really worth the cost?

00:45:30.000 | If you're a delegator or if you're a do-it-yourselfer, it's easy to see the pros for your side of things,

00:45:37.000 | and I think it's easy to not see the cons.

00:45:39.000 | To be fair, if you're a delegator, maybe you don't really understand everything that's going on in your portfolio,

00:45:44.000 | and maybe you're not completely on top of it.

00:45:46.000 | Maybe there's a higher chance that somebody might have you invested in a not-great fund or a high-fee fund,

00:45:53.000 | so there are costs to being completely hands-off.

00:45:56.000 | At the same time, there are huge costs, I think, to being very hands-on.

00:46:00.000 | I do not tune up my car or my bike myself.

00:46:04.000 | I don't try and be my own plumber or my own electrician,

00:46:07.000 | and I think that the people who spend a lot of their own time being their own portfolio manager,

00:46:13.000 | they might be missing out on that number one.

00:46:15.000 | They're kind of valuing their free time at zero when they should have a really high value of it,

00:46:20.000 | and they could be using that time to help other people profitably themselves more.

00:46:26.000 | I really enjoy building out portfolio management algorithms and working with the teams and designing them well,

00:46:32.000 | and I kind of think of that as my contribution to society.

00:46:35.000 | If I'm a liver cell, this is the role that the liver cell plays,

00:46:38.000 | and I rely upon all the other cells to do right by me.

00:46:42.000 | And if we try and be all things, and if we try and be a portfolio manager and be our own financial advisor,

00:46:49.000 | we're probably not going to do as good a job at it as somebody who dedicates their entire life to doing that thing.

00:46:54.000 | And it also means that we're spending that time not playing with our kids,

00:46:58.000 | not developing our own skill sets, our own professional network in some way,

00:47:02.000 | that would be more advantageous to us as a whole.

00:47:05.000 | So I think that DIYers, they might enjoy it, it might be a good hobby,

00:47:09.000 | but I think they often miss out on the costs that they don't see,

00:47:13.000 | that they are paying by virtue of not delegating it.

00:47:17.000 | I've started to note when people are a little bit cost averse in an irrational way too.

00:47:23.000 | So I think that Jack Bogle did a great job of making us very conscious of costs,

00:47:30.000 | but the idea that the cheaper one is definitively better when the difference in costs is so low isn't quite true.

00:47:38.000 | I have this thing where I cut my hair at home so that I can save money,

00:47:42.000 | and then I realized that I actually am not as good as a professional at it,

00:47:46.000 | and I need to go out and get a professional to cut my hair sort of every other month so that it doesn't look too silly.

00:47:51.000 | And I worry about people a little bit like being too tax averse.

00:47:54.000 | Even though the costs are small, the costs are something that they can avoid,

00:47:58.000 | and so they're becoming kind of irrationally cost averse too,

00:48:01.000 | where they're not considering the value that they get for the cost.

00:48:04.000 | They're just looking at cost as a way to make the decision.

00:48:07.000 | Well, Dan, this has been really an interesting discussion with you,

00:48:10.000 | and I really appreciate you giving us all the insights that you've gathered,

00:48:15.000 | seeing real people managing their money over at Betterment,

00:48:18.000 | and we're looking for great things from you in the future.

00:48:20.000 | So thanks for being on the show.

00:48:22.000 | Thank you very much for having me. It's been a pleasure.

00:48:25.000 | This concludes the sixth episode of Bogleheads on Investing.

00:48:29.000 | I'm your host, Rick Ferry.

00:48:31.000 | Join us each month to hear a new special guest.

00:48:35.000 | In the meantime, visit bogleheads.org and the Bogleheads Wiki.

00:48:40.000 | Participate in the forum and help others find the forum.

00:48:44.000 | Thanks for listening.

00:48:46.000 | [Music playing]

Bogleheads® on Investing Podcast 006 – Dan Egan, host Rick Ferri (audio only)

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