Last week, I attended Schwab Impact in Denver, Schwab’s annual conference for financial advisors — an amazing spectacle with about 5,500 advisors and another 2,000 exhibitors.
I think it was my 22nd time going, and I said last year would be my last because I’d “seen it all before.” My partners suggested I go with some of the younger folks — were they calling me old? Either way, I had a blast with Jessy Hendricks and Amanda Mertens, who made me want to go again next year with them or other team members.
It was fun to compare notes — what was new to them, what was new to me — and to divide and conquer instead of trying to cover everything myself. We checked out potential new vendors and talked about ways to improve the firm and serve you.
Jessy and Amanda also arranged a visit to Schwab’s Denver office, where we met several of the Schwab employees who help us serve our clients.
Not surprisingly, everyone we met was knowledgeable, but I was especially impressed by our main point of contact, who was highly proficient, professional, and genuinely kind. Jessy and Amanda work with her all the time, and seeing the depth of that relationship was heartening.
After attending for so many years, I tend to take a bird’s-eye view and look for patterns — what the exhibit hall says about the direction of the industry. When I started going, it was probably 90 percent what I’d call “classic” active managers, all trying to convince advisors like us that their stock-picking approach was better than the firm in the next booth.
Over the years, I’ve seen several waves come and go — from fundamental indexing to liquid alternatives to smart beta to private markets. And as time has passed, fewer investment managers are pitching their strategies and more software providers are pitching their platforms.
A minor trend this year was the return of active managers — this time in ETF wrappers. It’s interesting, but not exactly groundbreaking. The biggest trend, by far, was Artificial Intelligence. If your booth didn’t have an AI sign, you looked like a Luddite.
That was especially interesting in the context of the stock market last week, since AI-related stocks were selling off sharply. The narrative around AI has turned somewhat bearish as investors start wondering when all this massive investment will translate into profits.
I don’t have an answer for that, but it’s clear that the big tech companies see AI as winner-take-all. I don’t know how many ride-sharing apps there once were, for example, but who could compete with Uber after its massive investment? Lyft was the nearest competitor, but the last numbers I saw showed Uber holding roughly a 75 percent market share.
If you’re a leading tech company today and lose the AI arms race, where does your stock price end up five or ten years from now? I think that’s the logic behind the spending spree.
One of the presentations I attended was led by a very sharp woman demonstrating how many AI tools already exist and what they can do. I was impressed by much of it — though ironically, it was also the glitchiest presentation I’ve ever seen. I think it was just a bad tech day, but it also underscored how much of this new software still isn’t quite ready for prime time.
As always, there was plenty of showmanship as exhibitors tried to grab attention. My favorite moment came when a big guy in a cowboy hat and a bright orange sports coat walked up and loudly asked whether my orange shoes were in support of Bitcoin or the Denver Broncos.
I don’t follow sports and didn’t know Bitcoin had a color, so I admitted the truth: my feet hurt after standing all day.
