Hello, Wealth Channel. How you doing today? I feel like, good, Jimmy, thanks for being here. Is on the end of the day capstone. Exactly. well, we’re going to, we’re gonna rock it out with a great chat, and I feel like after following Zach and Nicola, I feel like the stones following James Brown back in the day. So, so let’s get to it, everyone. I’m not here to pitch a deal. I’m here to talk about how entire generations want to be part of what you’re doing.
Credit investors, existing legacy investors. Yeah, they’re still your clients and they always will be until their unfortunate passing. But there is the greatest amount of wealth and client base about to make themselves known, and that is the great wealth transfer. How to engage young investors in the age of TikTok. That’s what I’m here to talk about, gave this last to a global FinTech conference, London and New York, and now here I’ll continue, okay?
Whether we, and why are you listening to us? Well, we’re guides. We’re Sherpas. We’re trying to decode this private investment world. The reason you’re here all day. these are for accredited investors, but there’s an entire universe now in the age of the Jobs act that is also for non-accredited investors, and they are digital first mobile natives, and you have to talk to them where and when they wanna be spoken to.
So what are we doing? We’re building the only educational hub to learn, interact, and invest in private markets for 25 to 42 year olds. We’re trying to open that door, break down the door where it all happens and eliminate the intimidating aspects. We are Noyack and so are we all a little bit more about wealth tech, what we’re talking about. That’s what this is. If you are trying to access a marketplace with, with the digital tools and the use cases that are here, it is WealthTech and it is still booming and what Jimmy and Andy are creating in Wealth channel, that’s part of WealthTech too.
It’s on the media and information side, but it is wealth tech. Okay? By the way, anyone wants this graphic and this universe map. Happy to send it to all wealth channel attendees and customers. This is the least, informational and the least useful slide in the whole deck.
yeah, obviously airbrushed with ai, that photo, not my high school photo, but I have done this for since I was 16. In fact, a little, that’s my father immigrant from Italy, getting his second medal of honor for being a New York City fireman from a New York City Mayor o’ Dwyer. Why am I here? He had a stroke and I had to take over the family investments and business, and I knew nothing.
I was, I was just a hockey player with illusional delusional dreams of the NHL. But I had to do it. And I looked for places to learn for a peer community. Even this, obviously, the internet didn’t exist way back when, but where could I meet others and get and gain mentors? That’s what is going to change today. Okay? Here’s the graphic you really need to know, changes everything. In the next two years, millennials and Gen Z and the CUSP millennials, let’s say 25 to 42, are going to inherit 4.4 trillion.
Yes, that’s trillion with a T in the next two years. By 2045, they’re going to inherit 39 trillion. That is who you need to be speaking to simply your capital allocators. You are co-investors, your sponsor’s, gps. This is your future monster LP client base.
Okay? What do we know about them? Well, this comes, this data comes from my bank, bank of America who I work with. They did a 5,000 they individual sample survey, and what they found out is 75% of ages 21 to 42, 70 5% of this group ag agree that private investments are the only way to get wealthy, the only way to achieve above average returns.
More importantly, and people by the way, in, in Berkshire Hathaway is having their annual meeting today and tomorrow, actually, I think it begins tomorrow. Warren Buffet, the, the alleged guru of the public markets, the stock stock guru has been allocated to private investments, 68% on average his entire career. And yet in fact, he’s on record saying he couldn’t care less about the public stock market.
The only way this age group believes you’re going, they’re going to achieve generational wealth is through the private markets. And that’s what we’re talking about today. 16% are already allocated, meaning this cohort is three times more allocated than my Generation X and the modern portfolio theory advocates a 30%. Maybe that’s a little heavy because of a tax advantage nature.
The the LCIO, David Swensen legendary late David Swenson advocated 30%. Again, he was dealing with a nonprofit entity, but the delta from 16% on average. Now, as all of this wealth transfers to this age group, and they are already three times more allocated, and you can get them to 25%, that is the greatest opportunity in the history of this planet. And that is not hyperbole, massive underserved demo where we should all be focused on potentially with the five-year projected growth.
You’re looking at a projected a of 2 trillion. Collectively, that’s plenty to go around for the asset classes of commercial real estate, hedge fund, private equity collectibles, cannabis opportunity zones. It sold there in this group, and they start earlier.
Millennials start investing much earlier than their parents. 31% start under 21. What does that mean for you? That means a much longer lifetime adjusted ren run revenue. You have a relationship of a potential LP and a client for much longer than if you’re speaking to a boomer or a Gen X like me. Okay?
Where do they find out? How are they going to enter? Well, 48% of young investors want personal education, excuse me, want education and personal interaction. They’re craving it. Something like this. Alts Expo, if we can include these potential investor groups, they’re going to be the most engaged. They’re, they’re, they can become the fervent cult of the private investment universe because they’re looking to do, so they have multiple asset class options that they want, but they need the right direction.
Guess what? Now this one, I, this one was not well received when I presented it to basically an advisory audience. 93% of millennials will not talk to advisors. They look at his legacy, their, their par, their, their parents’ accountant, maybe their, their uncle’s, RIA.
So where do they get their information? Well, as you can see here, tragically 20%, I don’t know, they don’t get it. 16% say social media. If you’ve been on TikTok, I don’t know what they’re talking about as a influencer, but first thing I always ask is what’s your credibility and what’s your track record? And then I’ll listen to you, but it’s there and it’s impactful. Just spoke to Mikey Taylor today from A Thousand Oaks.
He also is an el he’s also a sponsor of Multi-family. He has five funds. He does TikTok posts every day. In fact, he has garnered over $5 million in investment this year alone from TikTok. What I mean by from TikTok is referrals from his TikTok content and then his Instagram, et cetera. That’s how, how you have to engage with this audience More. 13% say friends in a family.
Basically you’re at a cocktail party and, and your buddy is telling you about a new opportunity. Do you know, is he an advisor? Does he, has he done the due diligence? Has she, you don’t know, but that’s what’s happening. And 30% online research. So let’s recap, 30 46% is basically digital research to identify their investment opportunities that they’re also already three times more predisposed to invest in the private investment market.
Alright? What are their problem? What is the problem for them? It is too expensive, clearly. Fees, fees, fees. I have been pitching a performance based compensation model for a couple of years now. I got, I get laughed outta the room when I’m talking to the alternatives. they’re like, yeah, yeah, two and 20 and that’s it. And, and be quiet and they’re fine. You can keep your two and 20, but as soon as your current, clientele pass away tragically accelerated by the pandemic, you’re not going to be able to expect the same from your future investors.
The data shows it. So either you prove skin in the game, either you receive your compensation from doing well or you’re not going to, you’re not going to be the same entity. Complexity, wow, this is a big one because again, the, the Darth of education means that everything seems complex. Let’s be plain spoken and radically transparent, and that will reduce this problem of complexity, lack of liquidity, obviously the toughest one.
the very DNA of the private markets is an illiquid entity. However, I spend that a different way. There is so much data that shows trading and activity is what brings the poorer returns for participants in the stock markets.
They’re their own worst enemy by doing less and by understanding the need for long duration, they’re, the returns are going to be improved. Warren Buffet says, if you’re not ready to own a stock or an investment for 10 years, you’re not ready to own it for 10 minutes, no access to attractive offerings. Well, obviously that’s what wealth channel and all of us are here to change, so I’m gonna, that’s not the one we need to talk about. Problem summary, complexity, fragmentation, inaccessibility.
Let’s make all of these great opportunities accessible to a new investor class and this age. Let’s make it plain spoken with radical transparency. Let’s allow them not to have to go to five places, usually online in order to do one goal, to achieve one goal. This is how you’re going to win with this potential, with this monster investor base.
Okay? What does this mean? This is mostly, addressed to the advisory group. However, it’s still matters to anyone seeking new investors. Education and nurturing a relationship will lower your acquisition costs. We have data showing that registered investment advisors, they spend on average 35 to $3,800 per client. Now, usually that client is 55 to 70, maybe 50 to 70, so their lifetime run revenue has, is finite.
They’re not spending the time with the younger investor base, and they’re not doing it in a way that it’s a purely transactional conversation, which makes it a very high acquisition cost. Education, relationship management will bring you younger investors at a cheaper cost for a longer lifetime financial relationship.
Okay? This is what we’re proposing, and this is not specific to us. This is for all allocators and investors, education, engagement, community, and then access to investments. Learn, interact, transact. That is what the future investment in groups want. The data shows it. There, there, their anecdotal conversations show it, and the massive success of influencers, financial influencers on all social media prove it.
Now, on the engagement side, that’s both peer to peer and experts. So subject matter experts, everyone here and with their own, with their own investing asset classes are subject matter experts. But when you bring in the peer-to-peer in a community like this, you’re going to have powerful adoption lowering that acquisition cost that I previous, previously mentioned.
And then how can they access the minimums are sometimes inaccessible, whether it’s Reg D or reg A, whether, whether you’re making it approachable and understandable to all investors, 5,000, 20,000 or 500,000 This is something that we are addressing. I’m gonna be first person self-referential on this.
One thing that we found is that while Morningstar is great for the public markets, there’s no one to discuss the private placements. Yes, obviously the sponsors and everyone here is talking up their own book. But what about the third part? Third person independent research that give people comfort. If you’re good, everyone will know it, but someone else should say it rather than yourself. These plain spoken, I put down no Sortino, ratio jargon is necessary.
That is definitely something less jargon, more plain spoken substance value. We have a four x mantra. If they’re doing something or spending something they should get, they should feel that they received four times its perceived cost or it’s been perceived value of its cost. Transparency, transparency, transparency. My replacement for the location mantra. Let’s not hide anything.
It’s not good for the long term and let’s make them feel comfortable as potential investors. Okay? Again, we are here and this is NOYACK. Well, these are the players in this wealth tech space, but everyone here can participate. I’m just showing you the different y and xxi and a matrix to show you what we believe wins. Focus on the private markets. You do lead with education and transparency. That is a, that is a winning combination.
Oh, look, the sun came out. That’s nice. You can even see the, empire State Building and the Cressler building behind me. Okay, community speaking, one-to-One is great for an existing relationship, but you have to build a community off premise, off platform. And then when they are ready after you have nurtured that relationship, it’s not, there are no shortcuts. You have to speak to ’em. Digital natives, mobile natives, in off-premise, social media communities, nurture that communities, and then once you’ve built that credibility and trust, they will, they will be your best customers and your best clients and your best LPs.
This is a community we built. Actually, this slide apparently is a a couple months old because we’ve built a community of over 325 individuals and audience, and it’s really hard. There is no shortcut.
I’m not going to lie to you. It’s very, very hard. And that’s again why we’re here today. It’s to build a community. Okay? This is what I’m doing. We are raising money for this education platform. Everyone can participate and we walk the walk. When, when we talk about accessibility, plain spoken presentation and transparency, there is no minimum. That is also hard.
Yes, we have institutional investors and they do have a minimum, but they don’t need, they don’t, they, they don’t need the community education and the mentorship. They don’t. They’re the insiders. They’re the so-called experts, the professionals. We are here for everyone else and to do what we’re doing. Education, build a community, and then access to the best investments like you’ve seen here today. That’s what we’re raising for, and we feel it’s going to change the entire private investment universe.
And that is how we approach the new generation of investors. Like I usually say, I’m not interested in getting rich quickly. And if you, if you are, I’m sure there’s plenty of people you can talk to on social media. We don’t want to get rich quick. We want to get wealthy forever and together. Thank you for, thank you for joining. Thank you to Jimmy and Andy, thank you for let me be here and hope you had a great day. Awesome.
Thank you. CJA scanned your QR code. It works and everything. And, what are some, asset classes that you’ve got your eye on, over the next couple of years here as we’re kind of going through some turbulent times might be headed into a recession. Wanted to get your broad macro thoughts on asset classes you like. Yeah, I, I have a few, micro for example, cold storage is the best idea for a long time, but all commercial real estate is a, if you’re not already, with long duration debt and you’re not al you’re not already have a portfolio entering new commercial real estate asset classes is going to, is going to be harmful for a while.
The investments are great, but you, you, you have to have, you have to have adjustable debt and you have to be able to have the cash flow. So already the, the cap rates are compressed by 25 to 30%. We’re talking to someone today about it. However, best idea, bar none private credit offerings. Carlisle actually, I, I don’t talk about giant legacy offerings too often, but Carlisle has a great one.
As a, as a business development corp. There’s a few others. I love both peer-to-peer credit for business for small and middle market business, as well as private credit for other real estate entities. Best idea, get in now. It’ll be, it’ll be gangbusters for two or three years and then it’ll normalize to just darn good. Fantastic. Well, CJ, thanks for putting a cap on this event. Really appreciate you participating with us today and, looking forward to spending some more time with you down the road here.
Thanks for joining cj, really appreciate your time. My pleasure. Great to be here. Good luck Andy. And, and Jimmy, thank you very much. Thank you CJ.
