Dani: Breaking news earlier this morning, Vanguard is buying digital wealth platform Altruist. The deal marks Vanguard's intensifying push into wealth management. And you might remember Altruist back in February. It sparked a sell off in wealth management stocks after launching a tool aimed at creating tax strategies. So pleased to say that joining us is Vanguard CEO Salim Ramji and Altruist CEO Jason Wenk in an exclusive interview. Thank you both so much for joining. Jason, do you enjoy the notoriety you still have remaining all of your peers sell off? This is a really exciting deal and Salim, if I can start with you because this is a departure from Vanguard. You’re known for growing organically. Why not go that method in expanding into wealth? Why does it make sense for Altruist, who you’ve already partnered with to outright buy it?

Salim: You know, we’ve been an investor in Altruist going back more than half a dozen years. So, we were a minority investor, kind of in the early days when Jason and his team were first getting started. And what we were impressed back then about is also what we’re impressed about today. The first piece was really the mission that Jason had founded the firm around, which is making advice more accessible and more affordable and better for many more Americans. And the second piece, which really takes us to today, is the tenacity with which Jason and the team have really been building their business. And from a Vanguard perspective, we want to do for financial advice what we have done for the past 50 years for investments, which is really make it much more accessible to many more people. And part of this alignment around the mission right, when Jason was talking about the mission of Altruist to me and we were comparing notes, a lot of what he was trying to do rhymed with what we were trying to do. And I think in that it really led to this moment.

Dani: I'm assuming part of the mission has been this fast growth and nimbleness that Altruist has Jason. I mean you’re in California. You know you’re away from the hub of financial services here in New York. Why not stay independent? Why partner with a behemoth when one of the sort of bright points of Altruist had been you know this independent sort of flavor that you had as a firm?

Jason: Yea I think so we’re probably more alike than people realize. I heard Salim say that you know Vanguard is not a Wall Street titan. They’re a titan of you know rural Pennsylvania. We were founded on Abbot Kinney Boulevard in Venice Beach, California. So also, about as anti-Wall Street as you can get. But Altruist is a business that’s designed to help independent financial advisors. Those independent advisors are often referred to as RIAs they serve tens of millions of clients, over $10 trillion in assets. And we’re incredibly focused on empowering those advisors to make advice better, more affordable, accessible to everybody. You’ll hear a lot of again like the rhymes with, like the genesis of Altruist in many respects was inspired by Vanguard. I’d been a fan of Jack Bogle’s work going back into the late 1990's, early 2000's. Our mission is very similar to the Vanguard mission to take a stand for all investors right. So, you start to see these things and when you are an entrepreneur and you’re thinking about leaving a really long-term legacy, and in our case it’s one of again this very mission orientation around making advice better and more affordable and more accessible. There’s no better partner I can think of and again this would have been likely the case, when I started the company eight years ago, than Vanguard.

Dani: And you also very much so rhyme with a Fidelity or a Schwab though considering your business threats them. I mean Salim is this Vanguard becoming even more of a direct competitor with those?

Salim: Look if you think about the problem we’re trying to solve, and it’s not just Vanguard and Altruist, I think it’s many firms, but I’ll be particular about what we’re trying to solve. It's how do you get more access to financial advice. Today, only one in five Americans have access to a fee-based financial advisor. We would like to see that number be most Americans having access to financial advice. And even as we surveyed Vanguard’s own investors, just earlier this summer, what they told us, 74% of them, is they want access to some form of human financial guidance to be able to make sense of all the complexity out there. And so, part of what we’re trying to do is use technology to give independent advisors greater scale, greater ways to reach more and more clients, but also use technology to help clients who may just want a second opinion or may just want some basic kind of guidance to be able to get that guidance. Because if you go back to our founding mission about helping improve the chances of people's investment success, having low-cost, high-performing products is one component of it. But another component is financial discipline. And what we’ve seen over decades is that if you’ve got a good fee-based financial advisor that’s focused on your interests, that they can really instill that long-term discipline. For an investor and with technology, we think we can do that with greater scale.

Dani: So again, the mission is nice but it’s the business case I'm also interested in. I mean is this you wrestling market share away from some of those competitors with this purchase?

Salim: Because of Vanguard's unique structure, we’re owned by our clients, we don't necessarily think like traditional companies will. And so, one of the best accomplishments I think of Vanguard in the past 50 years, you know it’s 50 years ago this month that we launched the first index fund. And one of the best accomplishments, in my opinion, is that many more people, two thirds of Americans today are investors in part because we help make investing simple and more affordable and more accessible. And what we want to do is do the same thing for advice. Because there is a scarcity of advisors, and fee-based advisors, and there’s exceptional demand. Whether you take my 74%, you take other industry stats and we think being able to marry kind of the scarcity of supply of great financial advisors with the technology that Jason and his team have built really helps us do for investors who are seeking advice, what we’ve done for investors over the past 50 years who just want a low cost investment product in which to enter the markets.

Dani: Will having this like sort of technology-based RIA again I mentioned in February, it led to kind of this panic among some of the more traditional ones. Jason, what have you seen since then? Have you been this disruptive force or is it more to the point that Sam Altman made, sometimes these things are slower moving in adoption and really embracing AI in some of these forms?

Jason: On AI, I think that there’s still a lot more opportunity. I think there's a lot more possibility than reality you know today. So, I think Sam’s probably right in that regard. As for us I mean we’ve had a fantastic year. We’re still a young enough company that virtually every quarter’s a new record quarter. I think the innovation is a big part of that. And in our case because we serve advisors. Advisors for the last you know couple of decades have had very few choices. It’s hard for them to run businesses. They have to make a lot of compromises. The compromises might be either I can only serve really wealthy people because they don't have enough capacity to serve more, or I have to reduce the quality of work I can do because I want to serve many. A lot of our growth is because we’re able to bridge those two kinds of conflicts and make it much easier for advisors to do their best work at scale, a lot more clients, a lot higher quality work, and to do it at a lot lower cost. So you know these are things AI is a huge enabler for and technology in general can help enable.

Dani: Just on that how much of that does it hinge on keeping compute costs low? Because this is something that businesses have also had to grapple with.

Jason: For us it’s not been a challenge. So you know compute, depending on the type of work, you know there are some tasks that are very compute intensive. Some knowledge work will fall in there. But definitely not an issue thus far and I don't see that being an issue in the future.

Dani: Salim, I have to get into the numbers a little bit Wall Street Journal you know reported that this deal valued Altruist at 4 billion. Is that the right figure?

Salim: Yea you know we’re not disclosing the financial terms, but what we are really quite in unison about is what do we want the outcomes to be. And one of the outcomes is to get to enable most investors to have access to some form of financial advice or some form of financial guidance over the coming decade. Because from our perspective and it’s again we’re a different type of company because we’re owned by our investors. That if we can do that and give people access to that in a high-quality, low-cost way that people have come to expect kind of from our funds, that what we can do is help them maintain financial discipline and ultimately, we can help them achieve investment success, which is what the company was set up for.

Dani: And given the sort of rhyming and how much you align on these sorts of things. In your mind is this sort of a one off? Because as I mentioned at the start it is very rare for Vanguard to grow inorganically, to do M&A. Or is this kind of maybe you dipping your toe in and this might be the future for Vanguard, looking at adding companies like Altruist, that makes sense on more frequently?

Salim: Yea like we’re a very discerning buyer. And Jason was a very discerning seller. There are so many unique circumstances that made this feel right to both of us. Some of it goes back to 2020 and the early investments we made. Some of it was a strong sense of alignment kind of a mission. And some of it was just based on the very complementary nature of what Altruist does and what Vanguard does. We have a very loyal following amongst RIAs. We’ve been big supporters of them through our funds, our models, our research and so does Altruist. And so, these are really ways in which we can serve that community better, because we really believe that if we can help that community of fee-based advisors scale what they can do, they can serve more investors and ultimately, in Vanguard's kind of parlance, that’s helping us take a stand for all investors and helping us kind of improve their odds of investment success.

Dani: I have like just over a minute, but I would love to get both of your views on prediction markets and sort of the gamification of investment, does that trend worry you at all Salim?

Salim: Oh, it worries me tremendously. What we’re about is long-term investing. We really see kind of different forms of whether it’s sports betting, gambling, and the like as things that start to cloud between what is investing and what is ultimately speculation. Vanguard has always been about long-term investing. We’re always going to be about long-term investing. And even as Jason and I talked about this kind of in some of our early days, there are similar views that you had held kind of around the bad outcomes for investors if you start blurring these lines.

Jason: We have something at Altruist, we call the sacred rule, which is that we will never build something the harms investors. And so I’ve been a very outspoken critic of prediction markets. I think they’re a terrible idea for most people and I think they don’t belong in financial services applications.

Dani: Maybe a good way to get young clients though.

Jason: If you don't want them to have money in their future, it's probably a good idea. But again, I think if we focus on like empirical evidence-based ways to help people achieve their long-term goals, this is partly why we focus with serving these independent fiduciary advisors. It’s so critical that advisors help coach people along. Look, there may be things that are okay to do it’s for fun, and then there’s things that they shouldn’t do and that these advisors play a huge role in making sure that people are on the right path.

Dani: Thank you both so much for joini