Future-Proofing Wealth Management

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The wealth management industry finds itself facing a cascading wave of wealth transfer, A.I. disruption, and a never-ending conveyor belt of product choices. That’s why thousands of them flock to the Future Proof Wealth Festival in Huntington Beach, California every September. Here they learn how to fortify their practices, learn from each other and find ways to survive and thrive in an increasingly challenging industry.

The Express rolls in on the boardwalk, and Dave Nadig, the ETF Wizard and president of ETF.com, drops in.

Full Transcript:

Caleb Silver  

On the express this week, live from future proof bearish instincts, but we still keep on buying. Where might this bull run as it nears its fourth birthday, the Costco gold connection, our buddy Dave Notting, the ETF wizard, drops in for a few good minutes live here at Future Proof, the Investopedia indicator and what to watch this week, from the canyons of Wall Street to the mighty waves of the pacific time to Future Proof our money tip top and terrific.

Welcome back and welcome aboard, and welcome to Future Proof. We are live on the beach here in Huntington Beach, California, the fourth annual Future Proof Wealth Festival, the biggest wealth festival in all of wealth management. It’s incredible. We’re here every single year, and we are really live on the boardwalk. Let me give you a shot. Show you what’s going on. People rolling out, doing some morning yoga, setting up for some morning panels here on the stage behind me. We got a few panels coming our way as well, but pretty packed show today. Excited to get down with you. But what’s going on here at Future Proof? Again, this is a huge wealth festival put together by the folks who used to run advisor circle and a few other good, good friends of ours, where they’re really gathering advice, advice for advisors, financial advisors, by advisors, plus you have the entire financial services community here, ETF issuers are here, mutual fund managers, index managers, and a big, big emphasis on AI this year and Future Proof, that is the future of wealth management.

We’re going to talk about how it fits into the picture, especially as it relates to exchange traded funds, because if you look around Future Proof, there’s nothing but ETF advertisers here. ETF issuers, because they are trying to get financial advisors like the ones that service me and and other folks out there to recommend these types of products for our portfolios, and ETFs have been a revolutionary product over the last 30 years, and I’m excited to get down with our friend Dave Nadig in a little bit and talk about what’s the what’s been happening in that industry and what might happen in that industry. So lots to come on the show, but let’s get started with what’s going on in the markets. A little bounce this morning off of last week’s weakness. Investors digesting that weaker than expected jobs report, we knew was going to be weak. It was exactly what we thought it was be much weaker than we thought, plus revisions lower for the month of June. That made June of 2025 the first month of negative job growth since the pandemic.

We got big inflation readings coming this week. All of this boiling up towards the big Fed meeting next week, where the Fed is likely, if you believe the CME fed fund futures, to cut rates just a little bit and maybe one more cut after that. But meanwhile, what’s happening in investor land? If you look at the sentiment surveys, and you know, we survey you folks every couple of months, you’re looking at a pretty bearish vibe there by individual investors. That’s the AI individual investor sentiment survey, more bears than bulls, and we’re pretty close to record highs. Why is everybody so bearish lately? Are they worried finally, that what’s happening in the economy is going to catch up with what’s actually been going on in the stock market in this melt up? Are they worried about something else, maybe a little frothiness going on there? But you know what? We still keep on buying. Bearish but we still keep on buying. If you look at band to track, which I love to check out every couple of weeks, they’re tracking what individual investors like you and me are buying outside of our 401 Ks, we keep buying, and we keep buying the same stocks over and over again. Look at the retail purchases of us listed stocks and ETFs, we may be worried, but that hasn’t stopped us from putting some money down, especially on the biggest stocks in the market, the Nvidia’s of the world, the Teslas of the world, a lot of AI related single stock purchases, plus ETFs, which just keep on getting bigger. So bearish, but buying, and we’ll see how that eventually ends up panning out. Moving on to some other things, we talked about the record highs for gold over the last few weeks, really over the last few months, gold keeps on making new record highs. But I want to take you back a couple of years to when Costco started offering us gold in store. You could go purchase your own, your own bars of gold within Costco, or your little bullion there. That really stoked the fire. Look at that bright green line. That’s when the price of gold really started shooting up.

Yeah, I know there’s concerns about what’s happening in the economy, there’s concerns about global stability, but when Costco put it on the shelves, that’s when we saw a lot of price movement, and it hasn’t stopped ever since. So little lesson there for investors. If Costco is selling it must be good for retail investors as well. Gold making new record highs, and silver too, at about a year and a half high, that’s a important precious metal we actually use for industrial production. That’s got us pretty, pretty interested in sort of the vibe on investor sentiment here, again, bearish, but buying stocks, buying gold and buying some crypto, even though crypto has come off of its record high, so plenty going on. In that side of the world, and then where are we in this bull market? October, mid October, October 22 is kind of when this bull started running in 2022 we’re nearing year four, going into the fourth birthday of the bull market. And so far, it’s really gone as planned. If you look at historical bull markets, this one pretty good mirror to some of the past bull markets in over recent years. Look at that chart on the far right. This is the going into the fourth year of a bull market. Doesn’t grow like it does over the past few years.

But this one is pretty much even though it seems like a lot has happened, it’s kind of tracked historical bull markets over time. Fourth year, not always the strongest year, if it makes it to four, but if it makes it to four, returns have been pretty good and individual investors, we’ve had it pretty good lately, pretty good returns, even though a lot of shakiness out there in the world. All right, let’s get into what is actually happening in the world of Exchange Traded products, exchange traded funds. There’s nobody smarter than I know than Dave Nadig. He’s the president of etf.com, returning for his second stint there. Let’s get to the drop in with Dave in just a second.

I know it seems strange, he’s five feet away from me. I’m going to show you where he actually is, just because of the way we stack the show. We’re going to have. I’m going to be literally yelling at Dave from about five feet away. So good to have you on the program. So good to see you again and see you Future Proof.

Dave Nadig  

So great to be here. Beautiful day out here for everybody to spend a lot of time thinking about ETFs and apparently playing pickleball. We got a lot going on here.

Caleb Silver  

Yeah, pickleball, there’s morning yoga, in addition to lots of learning and lots of education from some of our good friends in this industry. And I know you’ll be speaking later, and I have a few talks coming up on my docket. So we’re an ETF land. There’s no doubt about it. I’m sure you saw that statistic that the rest of us saw, which is that there’s more ETFs than single stocks out there. The amount of single stocks has been dropping for years. But what does it tell you, somebody who knows this industry better than anyone else, that I know that there are more ETFs than stocks out there where we headed obviously,

Dave Nadig  

It doesn’t mean anything specifically, but it is a sign that we now have just a flood of ETFs. Pretty much any exposure that you want to get in an ETF, you can get in an ETF, whether it’s double leverage MicroStrategy or the most boring bond ladder you’ve ever even heard about, it’s in an ETF wrapper now that puts a lot of pressure on the individual investor to make smart choices. Not every ETF out there is for you. A lot of the ones we’ve seen launched in the last year or two have been very expensive, often using derivatives to get interesting patterns of returns, like protected downside protection or getting income from the options market. Those are all interesting strategies, but they’re certainly not for everyone.

Caleb Silver  

But it’s like Burger King out here. Basically it’s the Burger King of ETFs. But it seems like there is no limit to how many can be created. Is this a limitless environment? When you talk to some of the experts out there, they’re talking about, hey, we’re at 14,000 we’ll be at 20,000 in five years.

Dave Nadig  

We could have 3000 to 4000 new ETFs drop within the next year, as mutual funds start converting share classes of their mutual funds into ETFs, that’s going to open the floodgates for a lot of very traditional active managers, which we should point out, have been a big story this year already, folks like Tom Lee coming to market with fundstrat’s, ‘Granny shots’, ETF, that’s the front edge of the wave of active managers. And we’re finally getting sort of old school stock pickers willing to talk about what they own, why they own it, and that’s really helpful for an individual investor who might be looking to outsource some of that acumen to a Dan Ives or to a Tom Lee.

Caleb Silver  

Talk about Dan Ives. I was having dinner with him last night. They have an ETF named after Dan. Dan was on this program just a few weeks ago, and now, as you know, we have sort of our our defined contribution plans, our retirement plans being opened up to asset classes like crypto and private equity. You know, if there are isn’t already, there’s going to be ETFs around that as well. Good thing or a bad thing for individual investors,

Dave Nadig  

I think the private credit and private equity push from the industry is not really in most individual investors favor. The thing you have to ask yourself is not whether a piece of private credit or shares in SpaceX are good. You have to ask yourself whether you believe that you as the retail investor are going to actually get clean, low cost access to those products, or whether you’re going to be the bag holder for a big private credit company that’s just looking to unload so they can use that cash to redeploy. It’s impossible to know that as an individual investor, because privates are private. They don’t tell you very much about what’s going on under the hood. So my advice here is be very skeptical of anybody promising you private, institutional access to something that seems too good to be true,

Caleb Silver  

But for a reason, we can’t see what’s inside of them. But here they come for our 401(k)s, our defined contribution plans. All right, everywhere you look around here, and it started yesterday, but it’s really all week long. AI is a big topic on everybody’s mind here. AI for wealth management. AI for financial advisors. AI for planning. AI for ETFs. Where does AI and ETFs? Where do those fit together when you look into the future a little bit? Where is this industry? Where are these two things colliding?

Dave Nadig  

Well, there’s a couple places, obviously, there’s a lot of folks in Wall Street trying to use AI to help them make better investments. That’s a that’s one category, and there are a handful of ETFs out there that use AI to help pick stocks or make asset allocations. That’s not particularly new. We had the first machine learning based ETFs about 10 years ago. These are just a natural evolution, I think where AI is actually going to help the individual investor is an analysis, being able to punch in a bunch of tickers into chat GPT or your favorite LLM, and have a conversation about why one particular ETF might be better than another. I’ll tell you, I’ve done that just straight out of the box with the models. It’s not bad. I say not bad, but there’s a caveat. Don’t use it for data Chat GPT and all of its competitors are not fantastic at surfacing you something like, tell me how the S&P 500 did last quarter. You might get a good answer. You might get a complete fabrication. So use it as a conversation partner in your due diligence. Don’t use it as a data source.

Caleb Silver

Obviously, Crypto ETFs. Nothing new about that, but we’re getting, finally, some spot Ethereum, ETFs, and now we have the stable coin Act, the genius act. We know there’s going to be more exchange credit, exchange traded products wrapped around whether it’s the spot currency, the spot itself, or the asset itself, crypto and ETFs, what’s the future look like?

Dave Nadig  

There? It’s going faster than we could possibly keep up. We just got 21 shares got approval for their big Solana ETF just last week. So this door is going to just keep opening wider and wider. I suspect we’re going to see the majority of interesting coins and projects, whether they’re coming out as tokens or coins are going to be in an ETF wrapper, probably within the next year, there’s still some work to do on the regulatory side to make that all clean and functional, but there’s no question that’s coming. ETFs are going to be the bridge for a lot of investors to get into crypto,

Caleb Silver  

From there to tokenization, let’s talk about the token of assets in general. We know that there’s a new stock exchange opening up that maybe just really a tokenization of assets, where you could trade them, 24, six, but when you talk about the ETF of tokenization, that seems to be like a whole nother level of metaphysics that I can barely wrap my head around. Where is that going?

Dave Nadig  

So the problem with tokenizing equity or tokenizing ETFs is, what’s the regulatory framework? And we don’t in this in the US. We’re not going to be building a dedicated tokenization framework. Other places are doing that. Instead, we’re going down the path of effectively wrapping your Nvidia shares or your spy shares into a token that you can then move around the ecosystem. Notably today, NASDAQ actually just filed for a rule change that would allow them to do this, and they actually file for it with niZi. So the industry is trying to get behind tokenization almost before the regulators are even here. I’m sure that when I finally pass away from this, this earth, I will be trading tokenized equity, not the way we’re doing it now, but the bridge between now and then, you know, 7080, years, when I pass away, it’s going to take a while to get there,

Caleb Silver  

Anywhere. Anytime soon. You just started a new job, so you’re not allowed to do that. All right, let’s future cast a little bit on the way out here. 2035, what does the ETF industry look like? How many are we talking about? And is this something we give our children at birthright? We used to give them baby bonds. We used to give them, you know, little gold ducats. What does the future look like to you 10 years from now in the ETF.

Dave Nadig  

I actually think by 10 years from now, we’ve got two major disruptors to the ETF wrapper as we know it, fully available to most investors. One will be direct indexing that had a lot of flash a few years ago, and people stopped talking about Meanwhile, a trillion dollars accumulated in it. It is a big deal. It is currently only high net worth investors with interesting tax problems, but that’s coming down by the year. I would suspect by 10 years from now, the average $100,000 account will be very easily able to direct index on their own, which kind of obviates the need for an ETF wrapper for some kinds of securities. On the flip side, I think tokenization will have made strong strides by then. Certainly I would hope so. And while we will still have ETFs, just like we still have mutual funds, I think we’re going to have a lot of competition.

Caleb Silver 

I think you are absolutely right about that. Well, Dave Nadig, I’ve learned so much from you about this industry. I’m so glad you’re back at etf.com I’m so excited to see what you and the team put together over there, because I know it’s going to be fantastic. Enjoy future proof. Thanks for getting up early with us and go hit that morning yoga class. 

Dave Nadig  

Thanks for having me. Caleb.

Caleb Silver  

All right, nobody better than Dave nodding when it comes to learning about the ETF industry. We’ll link to all his good stuff in the show notes. He puts out a really cool zine too that you need to check out as well. All right, let’s do a little bit of money in motion, because we’re trying to.

Caleb Silver  

We just talked about ETFs. But when you think about what ETFs are replacing, or what they’re surpassing, it’s mutual funds. And when we look at mutual fund performance, right, the SPIVA by S and P Global indices. How is your mutual fund manager doing? Well, only about 54% are outperforming the market. You wonder why there’s so many ETFs out there in the world. You wonder why there’s so much new issuance. You wonder why Dave is saying there’s going to be even more to come over the next few years. It’s harder and harder to outperform the market, especially when you’re running a heavy old mutual fund. So we like to look at the mid year performance of mutual fund managers out there, large cap, only 54% outperforming the market. You got to ask yourself, What’s that money for? What are those basis points for? All right, let’s get set up. We’re a busy week ahead. A lot going on here as we roll on into September. What’s coming up down the tracks?

Well, we’re here at Future Proof for the next couple of days, and a ton going on here in terms of learning about what’s next in the wealth management space. So we’ll be bringing you reports on our social media from future proof all week long. But when you look at what’s happening this week, a big new iPhone release, the iPhone 17, coming out from Apple, coming out of Cupertino. This week, we’re going to keep a close eye on that. We’re going to get the consumer credit report later on this morning, plus the Goldman Sachs communicopia conference is happening. What does that mean? It means some of the biggest companies in the world, like in video, like Microsoft etc, are going to present in front of Goldman Sachs and Goldman Sachs clients, there the Producer Price Index. Couple of big inflation reports this week, the Producer Price Index out on Wednesday, that tells you what wholesale manufacturers are playing, are paying for their goods. And then Thursday, the consumer price index for the month of August. If we’ve learned anything over the past few weeks, with inflation, really, over the past couple of months, it’s getting higher. So we’re going to find out more about that on Thursday, when the consumer price index is out, plus earnings from Adobe and a couple of other companies, and then Friday, consumer sentiment for the month of September, the preliminary report there. How are consumers feeling lately, and what does that mean in terms of their spending? So far it’s been holding up. So we’ll keep a close eye on all that this week. Follow the good folks at investedpedia.com in our newsroom, because we got it all covered.

All right, the indicator of the week, new companies in old companies out of the S&P 500. Usually when companies get added to a massive index like the s p5 100, we see a pretty big surge in their stock, or at least a bump, because index fund managers have to own those stocks that get added to the S&P 5500. So companies leaving the s and p5 100 market access, see you later. That was a great stock for about 20 years that is leaving Caesar’s entertainment also being booted out of the S&P 500 and Enphase energy, one of the best performing stocks, literally during the Biden administration, that is now out of the S&P 500 clean energy stock. Now, who’s in? We got a bunch of new companies coming in, and it starts with Robinhood markets. Robinhood joining the S&P 500. That’s going to be a big boost for shares of Robin Hood, if it hasn’t already been, Robin Hood getting into all kind of markets as they as they like to do, app love and also joining the S&P 500 and EMCOR also joining the S&P 500. Keep an eye on those stocks. Put them on your watch list, because when stocks join the S&P 500, and this has been telegraphed for a while, they usually do pretty well. We’ll watch those and just about everything else we can keep our eyes on this week. Shout out to all of our viewers from around the world. Everyone by hood, it’s ripping, says Jason AG, 26 Well, keep a close eye on that. Buy Sofi, it’s the next hood, says Diana 125, hey, do your own research. These are interesting picks here. Hey, found the channel because of Ian Stan, because of Caleb. Thank you, Emily. Shout out to you. Good to have you on board India is in the house as usual. Nice to see you. Good evening to you in India, we love having our viewers and our listeners from around the world chime in on the Investopedia Express, join the conversation anytime you know, we’re live here on Monday mornings, but then on demand on your favorite podcast platform. So chime on. In love having you join us and 

Caleb Silver  

‘Hey, invest in both gold and silver’ says it’s Dom’s life. Why not? Precious Metals are always good. All right. Thanks so much for joining us. Stay tuned us all week long here at future proof. One more shot down the boardwalk here. People are loading up for the morning, and that’s what all the noise is about.

But this is a wealth festival. If you’re in the wealth management industry, or if you’re a financial advisor, or you want to be one, make sure you come to future proof or future proof citywide in Miami. I learn a lot here, and I think you will too. And thank you for joining. A shout out to our friend Dave Nadig at @etf.com for joining the Express. Y’all take care of yourself, and we’ll talk again a little further on down the line.