In the financial industry, the institutions are more concerned with their own profitability rather than looking after their clients. This week, Steven Nathan joins the podcast to share about how 10X Investments is trying to bring the focus back on clients and how we should be thinking about investments.
When you first join the financial industry, you tend to be in awe of everyone because of the complex terminology used. People seem to have the best advice and everyone is excited and positive. However, after a few years, you become disillusioned and realize that people actually have no idea what they’re talking about. This is how Steven feels after spending years in the industry. Those in investment banking are experts in market prediction but the reality is that they know very little about how to manage people’s long-term savings and how to put plans in place for them to meet their retirement goals. Ultimately, the industry is not focused on achieving what is best for the client and is more concerned about their own profitability. 10X investment wants to change this by giving people a single solution that has their best interest at heart.
Steven believes that there is a huge legacy in the financial industry that makes it resistant to change. Whether it’s product legacy, system legacy, or cost legacy, these sedimented legacies make it difficult to disrupt the industry. Despite this legacy, Steven shares 2 ways that the industry can change. The first is to make the consumer more engaged. This means getting people to care enough to proactively invest themselves. The second is disrupting distribution and changing it from what is currently a short-term selling point of view.
When it comes to investing, there is a lot of bias and mistrust among consumers. These stem from the complicated nature of the industry and result in mental barriers that prevent people from investing. In order to reconcile this, education and tapping on social networks is important. Steven notes that if you hear something from someone that you have a relationship with, their advice has more credibility and standing.
For Steven, he finds that there is an interesting opportunity to change the narrative around long-term saving. Currently, the popular idea is to sacrifice for now in order to have a better financial future. However, Steven believes that it is possible to achieve financial happiness today. This means being able to do what we want to do today, but also achieving our long-term financial goals. At the end of the day, it is not about how much money you have, but the relationships you’ve fostered and what you have experienced in life that matters.
