IMPLEMENT WEALTH MANAGEMENT SERVICES INTO YOUR ACCOUNTING FIRM

Transform Your Accounting Business into an Advisory Firm with our
Wealth Management Forward Program.

AFO WEALTH MANAGEMENT FORWARD PODCAST

Episode 5

Blockchain, Cryptocurrency

Blockchain, Cryptocurrency

Dr. Sean Stein Smith joins Rob and Rory on AFO|Wealth Management Forward podcast to talk about blockchain, cryptocurrency, the pending IPO of Coinbase, and NFT’s. Dr. Smith is a Professor at Lehman College, Wall Street BTC board of advisor, Gilded Finance Board, NYSSCPA 40 under 40, and a Forbes Crypto Contributor. Dr. Smith breaks down how crypto and NFT’s are taxed and the many common issues taxpayers are running into when it comes to reporting and filing taxes. You’ll be interested to hear his answer on if the 60/40 portfolio is dead. You won’t want to miss this informative commentary on all things crypto. And make sure to like and subscribe. Click HERE for Dr. Smith’s Twitter Page

5/5
Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

Transcript

Speaker1: [00:00:00] And I know that Steve Forbes actually publishes a Forbes 50 blockchain list, and I believe it comes out every April and on that list. Right. There are actual examples of big firms both here in the US and internationally, who are actually using blockchain in their core operations. So over there but in terms of actually some of the applications of it, any business or enterprise, health care insurance, IP, intellectual property, anything with transportation, real estate, any company, any industry, any area that has to handle large quantities of information and has to be able to transact it, to be able to convey those quantities of information to external parties, is a prime candidate to actually use blockchain itself as a enterprise application.

Speaker2: [00:01:07] Welcome to AFO Wealth Management Forward, a podcast about finance, accounting, technology and entrepreneurship. We apply our decade’s worth of experience and insight into what makes businesses work so we can help others grow both personally and professionally in this ever evolving marketplace. We help accounting firms and financial advisors grow their practice through the adoption of holistic wealth management services, learn from industry leaders in subject matter experts to unlock the secrets of their success. A podcast that shows people in companies the transformative power of technology so they don’t fear it, but instead harness it. Don’t fight the robots team up with them. And here are your hosts, Rory Henry, director of business development and CEO Rob Santos of Arrowroot Family Office.

Speaker3: [00:01:50] Hello and welcome to Info Wealth Management. For today, we have the honor of being joined by Dr. Schoenstein Smith, a professor at Lehman College, a member of the Wall Street Blockchain Alliance Advisory Board. And the Gilded Finance Board is a part of the New York State Society of Certified Public Accountants, 40 under 40 recipient of the New Jersey Society of CPAs, two thousand ninety Innovation Award, American Institute of Economic Research Fellow and a Forbes crypto contributor as long with the list goes on and on for this man. Without further ado, Dr Sean Stein Smith. Welcome, Sean.

Speaker1: [00:02:27] How’s it going? Right.

Speaker3: [00:02:29] It’s going to be great. And I’m also we’re joined by Rob Santo’s CEO of Error and a family office. Rob, how are you doing? Doing well. Can’t complain. Excited to have Dr. Smith on. Big fan of his Twitter account and his Forbes articles. So really excited. And I think it’s just a perfect time to have someone like him on the podcast. All right. Well, let’s dive right in here, Sean. You know, for our audience accounting firms mostly. Can you do a just a brief description of what blockchain is in cryptocurrency?

Speaker1: [00:03:05] Yeah, sure thing. So. So if so, if you’re trying to analyze what actually blockchain is from a sort of data management enterprise onboarding point of view, it’s it’s basically trying to store and to transmit data between anybody who’s a part of that network, either inside the firm or outside the firm. And to do so on the continuous basis and to do so in a manner that up until now at least has been on packable. So it’s so it’s basically a upgraded way for anybody, right, at a firm individual enterprise or the rest to actually try to manage their information. They are content data in a way to actually try to get the most out of it. Ok, 48 now where all of the hype is, right? Bitcoin cryptocurrency is all the rest of it. Those are right. Are applications running on top of that underlying watching every single cryptocurrency out there. And there are over, I think, 50 to 100 of them right now being actively traded. Every single one of them has to run on top of a underlying watching. So so it’s always important, I think, for any firm partner, manager or owner to be able to really I.D.. Are we talking about blockchain itself in terms of what you’re being used as a sort of data management tool? Or are we talking more on the Bitcoin crypto assets side in terms of holding it, being paid in it, paying our suppliers in it? And so and so from a operational point of view, that’s if that’s the core point, to always ask first, what aspects are we actually trying to talk about here?

Speaker3: [00:05:03] Yeah, that’s that that makes total sense and and I guess kind of a next Segway into that, could you maybe just talk about a few things in kind of today’s market about the value of blockchain and cryptocurrency, both as a utility and kind of an asset class, you know, as it’s being used to kind of today?

Speaker1: [00:05:28] Sure. And I know that Forbes actually publishes a Forbes 50 blockchain list, and I believe it comes out every April and on that list. Right. There are actual examples of big firms both here in the US and internationally, who are using blockchain in their core operations. So over there but in terms of actually some of the applications of it, any business or enterprise, health care insurance, IP, intellectual property, anything with transportation, real estate, any company, any industry, any area that has to handle large quantities of information and has to be able to transact it, to be able to convey those quantities of information to external parties, is a prime candidate to actually use blockchain itself as a enterprise application. Right. Right. Because anybody who’s worked in banking, Kalani markets, any aspect of that knows that probably the top drags on. Time is trying to get confirmation. Right on trades payments, inventory. That’s always a tremendous drag on time, resources, energy. And so having you and your external partners as a part of this underlying blockchain, as a part of this blockchain network, now all of you have access to the transactions, to those confirmations to keep those payments, all the rest as they happen. And so in terms of applications, that’s honestly where the the true upside is for most enterprises trying to use actually sort of a enterprise blockchain as a sort of data management tool. Now, in terms of the of the crypto assets side, now, it’s all depends on who is asked.

Speaker1: [00:07:36] Right, because the whole underlying idea of Bitcoin, it was just a libertarian idea, which is fine. Right. But the whole idea, it was it was to try to build out this alternative payment system, financial system outside of the payment processors, banks, governments. And to date, that hasn’t really happened yet. One, the actual processing speed of a Bitcoin blockchain is not up to par tachy handle enterprise level transactions. And to me, who right now is actually going to spend Bitcoin on anything to buy Tesla to buy pizza? I can’t think of anybody. And I spent all day talking to people in blockchain crypto acid areas. And I can’t think of anybody I know who’s actually looking to use Bitcoin as a currency. So in terms of sort of where where do assets fit in terms of their applications right now, I would personally argue that we are that we are starting to actually see Bitcoin plus everything else. Right. And so Bitcoin, it’s the biggest, baddest, highest profile is the worst. It’s worth north of one trillion dollars now by its self. And then the rest of the coin toking crypto asset marketplace is actually where most of the applications are coming in terms of which are being used either inside a entity, a sort of a points almost option or trying to be used as a currency option.

Speaker3: [00:09:21] Yeah. No, that’s that’s wonderful. And, you know, in our practice over here on the financial services side, you touched on a lot of it. And you know that decentralization of trust. Right. So you’re talking like confirmations of of exchange of data. Some, you know, stuff that we see about, you know, going to be disrupted by blockchain or things like title for people’s home. Right. You know, everyone knows that they pay a tremendous amount for a third party to verify the transfer of the title of a home and blockchain can do that securely, more efficiently and instantaneously for everyone. Account. Burning documents. You know, anything that requires some kind of verification, like we’re saying from a third party, is really going to be disrupted by this. And we think that is both scary for a lot of people, especially we have a lot of accountants that are using our program. And so, you know, we’ll get to that later, later on. And, you know, certainly on the value of the cryptocurrency is something that’s really kind of kind of top of mind because it’s in the press so much. So that kind of leads to the next question is, you know, do you think the broader retail population should be investing in cryptocurrency as a kind of, you know, alternative asset class or, you know, how would you, you know, prepare the the average person out there thinking about if they should invest in cryptocurrency or blockchain?

Speaker1: [00:10:59] Yep. Excellent question there. And probably the opening opening statement I would make is to always talk to folks like rob this team to actually have them help you understand your own risk, appetite, risk, risk, outlook, all the rest. But after that. Right. How to choose, how to get yourself educated. Personally, I would say that the that the best place to go is to actually go to and to try to do your homework on Coinbase. Right. Coinbase is going public. Would be a direct listing in in April. Right. It could be

Speaker3: [00:11:42] Coinbase being one of the largest wallets or places that an actual retail investor could purchase one of these cryptocurrency.

Speaker1: [00:11:51] Yes. Yes. All right. Yeah. And it’s the and it’s the actually largest one here in the US. And so on their site, in their S-1, in their sort of press outlet items, they have quite a bit of educational content outlining sort of what is Bitcoin, what are the currencies, how they fit into the sort of risk outlook profile overall. So personally, I would say that the absolute first first item to handle is education. Right. Do you actually understand what your boss. All of us here understand all of your audience, all of your external clients, I’m sure. Understand equities. Bonds. Yeah. And all the rest. But actually, Bitcoin and other and other crypto currencies aren’t really like traditional equities or or traditional debt instruments yet. Right. And and that and that could always change. But I would say that it’s really important to understand the overlap between blockchain and crypto and to understand that even though they’re all under the sort of crypto asset umbrella, you know, there are big, big differences between the options out there in terms of their supply, in terms of of actually who owns them, who controls them, like Bitcoin is totally decentralized, not owned controlled by anybody as opposed to XPI, which I know is is currently going through its own fights with the SCC, but it’s actively managed and controlled by a entity REPL. So all of that does influence what the risk actually is of these assets. But I would say that the overall sort of rule of thumb that that I’ve heard, seen talked about is that. If you are comfortable after doing your education, all the rest, that if you were to allocate between one and five percent of your overall assets into crypto, that’s a good place to actually start.

Speaker3: [00:14:08] Got it. Yeah. That makes that makes total sense and education, obviously, number one thing to be able to do in tandem with your financial professionals to be able to to to look at it. You know, one thing that we tell clients a lot is, you know, blockchain technology is a little bit like the Internet. You know, everyone with Internet came out, everyone knew it was going to change the world in some form or fashion. And so, you know, some of these the cryptocurrency is although different kind of asset classes are kind of, you know, an embodiment of using that platform. And we don’t know who the winners or the losers are going to be. And people have, you know, recollection of the dot com bubble where pet scam and all of these other things that were, you know, allegedly going to be the biggest winners in these. You know, we make it really clear that even though this is starting to become more institutionalized, certainly by the enterprise and by people investing in it as an asset class or as a currency or form of payment, is that it’s still early. Right. And we don’t know, you know, that we don’t know who is going to be the MySpace or the Facebook out there in that in that regard. So super, super helpful.

Speaker1: [00:15:27] No, and and to sort of piggyback on that, Rob. Actually, it’s also a matter of trying to time this, right, because as you said, it’s still very, very early. And it’s always important to point out that that we had the sort of infamous pet scum. But right now we have a chili dot com. Yeah. So and so the exact same idea can ultimately work out. You have to be able to understand what the idea is. And ultimately right here, what is the business benefit of this asset write of a blockchain of the individual crypto assets? Is there a is there any sort of business application? Is the rate. Is there an actual benefit to owning it either as a enterprise or as a asset allocator?

Speaker3: [00:16:25] Speaking of owning, and I said, let’s now dive into equities, if you can show you something, there’s something new. This is what has hit the stage here in twenty twenty one. Everybody’s heard of NAFTA. So can you talk a little bit about what exactly is and you know, what what’s going on in that connects commercials?

Speaker1: [00:16:46] Absolutely. So a NAFTA is a non fungible token, which is a kind of convoluted way of trying to say that they are items that are not equal to each other. So I have two pens here, right? I have two pens here. And they’re both pens, but they’re both actually different. And I can’t swap them for each other. Ok, so how so? How do we connect NAFTA supply chain to Bitcoin? Ok, so NAFTA has to run on a underly logic. Right. It’s a crypto asset. So it has to be run on a blockchain. Most of them are run on the art theory and blockchain. And that’s opposed to Bitcoin. Every single Bitcoin is exactly equivalent to every single other one. Right. Dollar equals dollar. Bitcoin equals Bitcoin. And I can chop them both up. I can chop the sense of Bitcoin into pieces and I can use those pieces. So tosches to do individual transactions. Ok. Then if teams don’t operate that way, every single NFTY is a non fungible item, meaning that it’s individual and it has its own defining characteristics. Ok, great. So what does it all actually mean? Right. So the highest profile NFTY right now has been the beeble art that that have been sold in March for, I believe. Sixty nine million dollars. Ok, so what actually is there? And so and so here’s where it can get a bit nuanced. So so there is this concept out there that, OK, fine. So I have this NFTE and it’s linked to artwork, trading card, online assets or a or a clip of a game. I know I

Speaker3: [00:18:52] Remember a girlfriend of mine who works for an NBA players family office. She said, Rory, there’s this LeBron James, Klint going for, you know, fifty nine fifty thousand dollars. I said, are you kidding me? A clip. Well, LeBron James is being bought for over fifty thousand dollars, which which is ridiculous to me. But now this is what this is what it really is.

Speaker1: [00:19:13] And yeah, and so and so, but the actual owner of that NFTY only owns that token. Right. There is no direct ownership between the buyer, the NFTY and that underlying asset. So in terms of of. And and there are some efforts under way out there are dapple labs currently has a product and a and a plan out there to help NFTE owners actually be able to monetize that underlying artwork to a certain level. But in terms of of of how it fits. Right. So if I buy a NFT, I’m buying a token that is connected to a piece of right now either artwork clips and hopefully in the future physical assets. Ok, great. But what do I actually. Oh, right, right. Because I can go online on to YouTube. I can watch that exact same clip library. And I didn’t pay anything for it. And so and so I believe that’s where there has been a bit of a overhype in this space. But if a bubble. And I saw a quote that was on Bloomberg, that that the average price for antisepsis has dropped from about 20 million down to about two point eight. So there has been some overhyped because I, I personally think that it was an idea and a concept that got out in front of actually where the mechanics were to have it work in terms of, OK, fine, so I have this, how do we monetize it? But you own a token link to a underlying blockchain. And that token is is is linked to that underlying asset.

Speaker3: [00:21:11] Great. And how is how is this taxed? You know, as far as it long term capital gains in short term, how are these tax? And I guess let’s go back and how are crypto currencies tax as well?

Speaker1: [00:21:26] So so every single crypto I set out there for Bitcoin are stable coins or and if these are all taxed as property, that’s part of the IRS. Ok, so in terms of the actual rate, so if you hold it for over one annual period, capital gains, if you hold it for under under one annual period, ordinary income. But then Lefty’s adds, add the little extra sort of nuance in there in as much as if it’s classified and and to hammer Camba this all out, talk to a tax pro CPA. You know, all the rest. But but if your NFTY is actually held classified as a collectible, then it’s taxed at that incrementally higher rate. And if you are holding it as a collectible and you earn over a certain income level, then you owe a additional tax on top of that. So long story short, teams are probably taxed. All else being equal that the highest rate of any crypto asset out there. As of right now,

Speaker3: [00:22:42] You know, on that theme, kind of what are some of the big mistakes people are making around, you know, CPAs and people around filing their taxes around these things. You know, and so, you know, suggest to folks.

Speaker1: [00:22:56] Sure. So I would say that probably the top top error that I see you, that I hear about almost every day right now is that individuals are not really hoarding crypto winter. Right, and that is the number one error, and the and the IRS has been very transparent over the last 18 months or so that that that the collection of that crypto income is a top priority for them. And actually, on the first page of the individual 10 40, there is a question asked, can you were you involved in any crypto transactions? And as a as a little PSA here. If you just bought Krypto, right, used the dollars to buy crypto in 2020, you don’t have to check that box. Ok, the the iris came out during March and added that extra bit of transparency in there. But in terms of all the errors. Right. One, they they aren’t telling the the IRS that they have income. And two, there are all of these traders right down, Robin, old Coinbase. There were all of these individuals trading crypto, the crypto, converting crypto, rather crypto, doing all of these transactions on these mobile apps who are not aware that every single time there’s any transaction using crypto.

Speaker1: [00:24:31] And I can be selling it, paying for stuff in a trading crypto for other crypto. All of that means income taxes are going to be do so. So, one, it’s it’s the it’s the lack of transparency on the part of the individual taxpayers to stupas. And then, too, it’s it’s that, again, that educational component that individuals are not aware. Right. Right. Because it’s called cryptocurrency, but it’s taxed as if you’re trading equity shares. And then, three, there is no obligation right now on on the side of platforms like cracking Coinbase, Coinbase, finance, any of these platforms out there to actually issue you. Ten, ninety nine. Most of them are trying to issue a sort of proxy for that bond voluntarily. But there is no obligation as of yet. So. So now we have this whole outlook where individuals don’t know calm, saying anything and then don’t have the appropriate documentation to actually do so even if they want to. So it’s so so so it can very, very quickly become a huge headache for everyone involved.

Speaker3: [00:25:59] Absolutely, and and kind of going that theme of investment, you know, taking a look at your Twitter account, you know, we see that.

Speaker1: [00:26:06] I’ll tell you

Speaker3: [00:26:08] About Bitcoin IRAs. Yes. And so could you maybe just spend a minute talking about, you know, what is a Bitcoin IRA and how people should think about potentially utilizing it?

Speaker1: [00:26:18] Sure. So a Bitcoin IRA, Bitcoin IRA is a sort of, I think, a logical outgrowth of the increased interest, investment and awareness of Bitcoin and other and other crypto assets. But I think Bitcoin really is the highest profile one as a true sort of asset choice. Right. As a investment choice going forward. But there’s only one small issue there. Under current IRS rules, calling Bitcoin property means that I can’t put a Bitcoin directly into any IRA currently operating. So in so in order to get actual Bitcoin and there are declining trust products, Bitcoin ETFs not here yet, but there are some up in Canada. But but if I want to get Bitcoin proper right. Bitcoin itself into an IRA. I have to actually set up a self directed IRA. All sounds pretty straightforward, right, Ira? Right, right. But there are some key items in here. One is that is that is that because it’s a new emerging, fast growing field? It’s not. Every operator out there has the same level of expertise, personnel, insurance, competence, to be honest, in actually how to handle customer assets under management. One, two. They are not always. And and the actual specifics of this, I would advise you to call your Rob, Roary and his team. There are lots of different rules.

Speaker1: [00:28:03] The depending on actually what what compliance measures have to be in place from a SD iret angle in terms of sort of how they operate in individual states. And then, three, it actually costs more in terms of operating fees to have these SD IRAs actually up and running. It’s it’s it’s costing more just overall right now and then and then the fourth point is that they almost always have a higher minimum opening bounce to actually open up the SD IRA to begin with. So overall costs more to operate, cost more to actually set up. You have to do more more homework on the firm itself to actually have that same level of faith in the operator. But if you are and and there are plenty of operators out there on the up and up, I believe I did have a hyperlink to them in the article that I wrote on this at Forbes. So, I mean, there are plenty of ethical operators out there, but it’s always important, I think, to be totally transparent. Kassidy, upside and to the cost of doing so. But for anybody who is trying to get Bitcoin itself into a Iray product, you have to go right now the SD Iray rep.

Speaker3: [00:29:34] Got it. No, very it’s super, super interesting. And, you know, I guess kind of going to the next stage here is in a kind of broader sense. You know, there’s been a lot of talk about, you know, the 60 the classic 60 40 portfolio is dead because interest rates have gone down so much and fixed income is potentially riskier for very little compensation. As far as interest your your you know, your earning. Are you seeing kind of a, you know, a fundamental shift towards, you know, away from that 60 40 and, you know, maybe utilizing some of these other asset classes to to build out something for the future? Or do you still think that might be I mean, obviously understanding risk and reward appetite, but, you know, putting our future hat on. Looking forward, do you think this is going to become, you know, something that’s going to be part of that traditional outlook as far as allocation is concerned?

Speaker1: [00:30:35] And so, if so, if I had to count the total number of times that I’ve heard that the that the traditional 60 40 is is dead and obsolete over the last half year or so. It would be hundreds of times there, Rob. But I think yeah, I mean, there there is going to have to be some sort of wee balancing, right? Right. Because to your point, you have debt, fixed income. They aren’t giving you the real rate of return anymore. And actually, there’s a big chunk of that market that’s actually negative. So that’s not good. Ok. Equities are are I would argue they are overvalued in some areas, undervalued and some others. But but for a, you know, average sort of non expert investor, it’s overvalued or it’s higher valuations than you might otherwise see as a direct result of all of the economic efforts underway right here in the US and overseas to help combat the economic damage of Covid. So, OK, fine. So what do we do? Right. And I know back in 06, 07, and then in the aftermath in twenty ten to twenty twelve, maybe there was a big push towards private equity, non non traditional assets. But all of that is ultimately kind of tapped out for now. Again, there was this excess wall of cash out there that all of these funds. Right, S.P., AC companies are just pots of of active cash that they’re trying to find stuff. And so and so for a asset allocator, individual or institutional, how do we actually create any alpha? Right. I do actually go to areas that are outpacing the overall market. And to be honest, there has been no other asset class really since about twenty ten that overall. Right. Hindsight is always 20/20, but there has been no asset class that has out performed crypto.

Speaker1: [00:32:55] And so ultimately, I think and I do want to I do want to just point out here that there is this underlying in narrative that I hear that Bitcoin is going to be put out of business, that the US government is going to outlaw it because they outlawed gold right back in nineteen thirty something. Ok. And you know what? That that that could happen, certainly. But I would argue that, well, with the biggest crypto trading platform going public and and the biggest asset allocators, asset managers actively trying to file for a Bitcoin ETF, I kind of find it hard to understand how then it’s going to be outlawed. So so it could just sort of put that thought process down for a moment. Absolutely. You know, Bitcoin and other crypto, I believe, are going to be a part of the asset allocation conversation. Now, I don’t know if they’re going to if if they’re going to take the place of gold commodities or they are or they’re going to take the place of any traditional sort of private equity allocation. But but I would argue that they’re absolutely going to be a part of that conversation. And and to add some extra hot sauce in here, there are also all of these options out here now for individuals or institutions who who own crypto to actually earn income on that crypto in the form of other crypto. So and so. So as a sort of add on to that, now we have the price appreciation argument and we have the income generation option, too. So so from a high level, I would say it’s I think a pretty easy. Yes.

Speaker3: [00:34:52] Yeah, and, you know, a lot of folks will remember when Jamie Dimon was asked about Bitcoin five years ago and he said, you know, only drug cartels and, you know, nefarious people are the ones that are using it. And then and I think in his annual letter this year, it was just boasting about how it’s kind of part of the future and how they’re embracing it. So, you know, you got folks like Jamie Diamond out there that are obviously starting to see this as part of the future. So it would be hard, I think, to be able to squash that worry. You have you have any questions before I go on? And I think on the other end of that, though, Peter Thiel just came out, I believe, yesterday, the day before, and talked about the Chinese government utilizing cryptocurrency as a way to undermine, you know, us the US government is enduring thing to say about that, John.

Speaker1: [00:35:50] I have a lot of thoughts on that, but I want to keep it family friendly. Right. So I would say that, one, it’s always important. I found over the last 10 to 12 years watching Peter Thiel to try to focus more on his actions and his investments as opposed to sometimes what he is actually talking about on air one and two. I mean, sure, there could be some effort underway to undermine the US dollar. I mean, I would I would hazard that you say that the US and mainland China are the two biggest economic rivals in the last 50 years. So, yes, there are there there are going to be efforts to undermine, outsmart each other. And frankly, that’s just part of how it’s going to be. And then and then three, to sort of hop back to a earlier comment there, Rob said, and it’s quite interesting that at JP Morgan, they have a price target for Bitcoin year end of, I think one hundred and and forty two thousand dollars. Yeah. And I would also just just want to point out there that, you know, that there was that argument that if Bitcoin is used for drugs and crime, but that’s also what the US dollar could be used for, too.

Speaker3: [00:37:21] Yeah, absolutely. And then, you know, another question here. We in tandem with the podcast and we’ve discussed this, we’ve brought out a program called Wealth Management Forward, which is helping tax and CPA firms out there. You know, not compete with technology, but partner with it and elevate their practice to more of a kind of advisory model. You know, we would argue that being knowledgeable around crypto in this new asset class makes them better advisors. But could you maybe just speak for a moment about what you’re seeing in the kind of accounting space about how software technology is affecting that that industry and what some folks can maybe do to prepare themselves to to elevate that practice and become that advisor of the future?

Speaker1: [00:38:12] Sure. And I would say that really, at every single accounting conference show podcast, there is always this this effort to become that trusted business partner over and over and over again. But actually, now the tools are out there to actually have us move up that ladder. Right. But to to help automate some of that bookkeeping, some of that tax stuff, some of that audit stuff, and to actually have more time for conversations, business planning, business, advising it to ultimately help our clients make better business choices. And really, what I would say out there, what what I’ve seen, heard, talked about, done, I’d say will be the the absolute most outside of watching crypto. I’ll come back to that. But the the one biggest item that any firm can do, large, medium, tiny firms can actually do is to automate what you can. And I know automation can be a big headache. Trust me, I know it can be a hassle headache because there’s training, onboarding. Testing isn’t working right the first time. I’ll do it the old way. But it’s important to automate anything, anything you can. I have a colleague and a friend of mine whose whole firm he actually purchased the the firm back in twenty eighteen and his own driving force after that purchase was to automate anything that non core to their operations. Customer service, calendar management, email. No follow up, marketing off off hours, customer service, all of that has been automated to help this practice that you focus more on client service and actually between twenty eighteen and current fees actually increase the overall size of the firm by I believe twenty five percent during Covid and all the rest. It’s been it’s been increasing. So all of that and and there are options out there that are affordable, doable, understandable for anybody at any firm, any size.

Speaker1: [00:40:29] And I cannot stress that enough for any anybody out there. Audit, tax, bookkeeping, compilation, anything, automate anything non core to your business as trustee. Your external clients always have more work. And more problems that that that you were able to then help them with. Right. And so and so, so to so to then just hop back on to that sort of critical conversation. I mean, my parents know what Bitcoin is. Right. Right. That’s about it. Yeah. So and so what if individuals in that boomer age bracket and no ageism here, obviously. But even if those individuals in nesib boomer age bracket are aware of Bitcoin, aware of its opportunity, then those individuals are going to be doing is the largest wealth transfer in US history. Over the next five, seven years. And so any advisor who was out there who is kind of complacent, saying, well, I don’t have to worry about it now and it could be true, but if you want to ever actually have a exit plan. Right, or to hold on to your new external clients going forward or to add new ones going forward, I mean, crypto and all of the other applications that are going to come as a result of it. Right. Bitcoin, NFTE, default state. All of these other applications sort of mushrooming out of Bitcoin are going to be items that investors are going to want their advisors to be aware of, that the very least. Right, to be able to have a conversation to understand what questions are being asked of them and to have those answers, if not right away, to at the very least be able to have the knowledge, have the context to to go. But you find those answers for their external clients.

Speaker3: [00:42:42] Yeah, it makes a tremendous amount of sense. And we talk about it a lot on the podcast about the largest transition of wealth ever in the history of the world about about to happen. And we really try to reiterate to a lot of practitioners out there that, one, you know, denial is not a business business plan. And two, is that looking at things like you just mentioned, automation, utilizing software, partnering with the robots instead of competing with them doesn’t have to be scary. And also is an excellent tool to be able to recruit some new talent to your firm that maybe is, you know, more knowledgeable in how to use these software solutions, how to integrate them, how to test the automation. And we’re seeing a lot of firms out there similar to that large transition of wealth. Is that a lot of firms are finding very difficult to be able to bring new talent in in transition that leadership or transition responsibility to younger generations. And we see that more as an opportunity as opposed to a challenge, especially, like you said, all of the solutions that are available out there for people to to utilize. So I think that that really resonates, I guess, kind of, you know, wrap it up, you know, in the next 10 years here, you know. You know, some big, big ideas that you haven’t kind of talked about. You know, where do you think in kind of 10 years do you think the big things out of this are going to be? Do you think it’s going to be a nationalized bit, you know, cryptocurrency? Is it going to be blockchain kind of taking over a lot of the supply chain? You know, what are the kind of big ideas that, you know, kind of Star Wars predictor type of things that you think will happen in kind of 10 years? Star Wars.

Speaker1: [00:44:31] Awesome. So what I would say there is that, yes, there’s absolutely going to be some sort of centralized nation, say, cryptocurrency. Now, I don’t know how it’s going to play out. I have no idea who is going to be first. I know that mainland China has one actually actually being tested right now. And that and that, I think, raises a whole host of. The other questions, but I do believe that there is going to be some sort of sort of dollar back cryptocurrency, there are talks underway as we speak on that exact idea. Right. There are projects underway, and I think something like 82 countries, and they’re already out there. The Bahamas has one, and there are a handful of other nations out there. So, yes, there is going to be some sort of, I think, bifurcation in the overall overall crypto asset marketplace. Bitcoin as a it’s investment. Cryptocurrency is that are used as virtual currencies. And then what? And then what I think is arguably going to be more interesting, crypto products, either ETFs. Then have teas or some other acronym that I haven’t thought of yet. And in terms of actually blockchain, I would argue and I am aware that in twenty seventeen, in twenty eighteen, it’s there was this whole movement of its blockchain, not Bitcoin. And so, you know, it can it can come off as a bit tired, but I think Bitcoin has a definite role out there in the financial markets.

Speaker1: [00:46:11] But in terms of applications for actual blockchain, I, I think that two that are going under the radar right now, kind of for obvious reasons, are watching for health care. And trying to try to manage data treatment shipments, vaccine data, all the rest is a huge area that obviously is on the backburner right now. But in twenty eighteen point nineteen, it was a really hot area. And then two outside of trying to make buying houses easier, track my Amazon items easier, apples more more transparently. This whole idea of a self sovereign ID. Right. And so I have some harsh. Backs right here. Probably all all of our IDs are on the dark web somewhere, right? Just got the life. But a real cause of that is that our personal data is everywhere. It’s at every doctor’s office, every DMV, every every place that I go has a copy of all of my data. Why? Right. In in a perfect world. Right. Or in a world that can help to be created by adding up blockchain integrity. I can then have custody over all of that. Information and only has to, I guess. Actually show that information to the entities that need it at a point in time for a on demand really I.D. system. And I believe that there are a lot of applications for that, both in terms of trying to cut down on ideas being stolen, but also in terms of trying to streamline how data is managed right at that entity level and from a individual outlet to.

Speaker1: [00:48:18] So I would say that there are obviously going to be developments in some sort of the crypto asset space, obviously. Right. But in terms of of the blockchain applications, that’s really hard to pin down because as and as you right about probably the audit is the most obvious application. Right. If I can have a comprehensive audit, hundred percent or or almost hundred percent audit being done on a continuous basis, that’s going to fundamentally change that one third of the accounting field overnight. Income taxes are immediately after that. And so and so then all of us are going to have to figure out how we’re going to evolve, develop and to move into new areas of advisory services. And I would argue that going forward, that overall there is going to be a huge uptick in one having analysts to help analyze this huge trove of information. Right. Being five G data, Internet of things, and having these AI programs, collecting all of this data. Great. What do we do with it? Right. So I have this outport dashboard. What do I do with it? And how is that going to drive this forward? And so I would say that there are going to be a lot of opportunities linked to supply chain itself and some blockchain adjacent applications.

Speaker3: [00:49:59] Since scary, but yet promising here, it seems like once again we go back to, you know, teaming up with robots, not not fighting them. So I think we want to end our show here and, you know, tell our audience how they can get a hold. Yeah, you know, where you locate your Twitter, handle your your LinkedIn and all that stuff.

Speaker1: [00:50:17] Absolutely. So. So I’m on Twitter, LinkedIn, that Schoenstein, so easy to find. And I post stuff every single day.

Speaker3: [00:50:27] Yeah, we really we really, really enjoy it, and we really appreciate you coming on to the show, Dr. Smith, and looking forward to doing it again sometime soon. But thanks again for all of your time.

Speaker1: [00:50:41] Absolutely. Thank you, guys, so much. Thank you.

DON'T LOSE YOUR BUSINESS
BOOK TO AUTOMATION OR
FINANCIAL ADVISORS.

WHAT LEVEL
WEALTH MANAGEMENT
FIRM ARE YOU?

Level 1

Level 2

Level 3

OUR IDENTITY

Wealth Management Forward was founded by professionals with diverse financial backgrounds and tenures with Actua, Aspirant, Bear Stearns, J.P. Morgan, Lazard, OpenGate Capital, Nuveen Investments, Platinum Equity, Smith Barney, TA Associates, UBS, Schwab & Thorofare Capital.

It was created to bring a new perspective to the way people do business without the fear of losing clients to automation. We are a holistic Wealth Management firm dedicated to providing independent advice to clients. We believe in forming the best relationships and treat every client equally because your success story is our Unique Selling Point.

At WMF, we offer a strategy that includes comprehensive financial, estate, tax planning, and asset and liability management. We also leverage our team of best-in-class professionals armed with cutting-edge technology and an extensive understanding of your unique needs. This enables us to provide efficient and transparent solutions.

IMPLEMENT THESE SERVICES
THROUGH OUR PROGRAM

ACCESS OUR FAMILY OFFICE LEVEL OF CARE BY IMPLEMENTING ANY OF
THE FOLLOWING SERVICES. YOU DESERVE THE BEST COMPANIONS IN YOUR
BUSINESS JOURNEY; THAT IS WHY ARROWROOT FAMILY OFFICE WEALTH
MANAGEMENT FORWARD IS HERE FOR YOU.

Financial Planning

Investment Advisory

Life Insurance

Estate Planning

DOWNLOAD OUR PLAYBOOK

* By signing up, you will also receive occasional email updates.

DOWNLOAD OUR PLAYBOOK