AI Is Rewiring Retail Investing with Jim Swartwout & Jay Jacobs

**Guy Adami** (0:00)
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**Dan Nathan** (1:08)
iConnections is the largest membership-only platform for the alternative investment industry. Bringing together thousands of fund managers and allocators in one powerful hub, iConnections reimagines how the industry connects through its digital offerings and premier in-person events, empowering allocators and managers to meet, build relationships and do business anytime, anywhere. To explore more about iConnections, its events, and gain access to the members-only platform, visit iconnections.io.

**Guy Adami** (1:33)
Welcome to the Risk Reversal Podcast. I'm Guy Adami. Today, I'm joined by an old friend, Jim Swartout, the CEO at Prosperum Fintech Holdings, who's had a storied career, a career that, by the way, continues to grow. On the other side of this, Dan talks to Jay Jacobs. He's the US head of equity ETFs at BlackRock. So stick around for that, because we obviously got a sort of market-centric conversation. But Jim, it's been a long time. It's great to see you.

**Jim Swartwout** (2:00)
Yeah, it's good to see you too.

**Guy Adami** (2:01)
You know, I like to start these things by letting the audience get a little flavor for who you are and sort of your background. And as I mentioned, you have a great background, a storied background. You've been at a lot of really cool places, Robinhood, Scottrade, E-Trade, Fidelity, Schwab. These are all the gold standard names of the industry. So, Sartus, walk us through a little bit.

**Jim Swartwout** (2:21)
Yeah, so I was lucky enough to get into the industry in the late 80s, right, as online brokerage and discount brokerage was really getting going. And my first, you know, real job in discount brokerage was with Schwab. And I was at the 24-hour call center as a phone rep. And, you know, in those days, I spent most of my nights just reading quotes off to people. As customers had no access to live quotes, they had no access to news. And I remember when we rolled out StreetSmart, you know, the first thing we all said is, people aren't going to trade at home on their computers. A year later, I was running the overnight order review team for StreetSmart. So kind of got to ride that wave, which was nice. But, you know, spent some time at Schwab in both the call center and in the branches, then at Fidelity in there as a risk manager for their brokerage call center. And really my big break was when I joined E-Trade. I joined E-Trade in 1999, was there through 2007, rapid growth and discount brokerage. I started out building out the East Coast offices for E-Trade. It was the first office in Atlanta, Georgia, ran the trading operations, then picked up Margin, some other things, then launched the actual clearing firm that was E-Trade Clearing out in Sacramento, was there for a few years, moved to Chicago, ran the global trading operations there, and then left to join a little startup called TradeMonster, which was along with John and Pete Najarian, and it's where I met you originally, Guy, when I was at TradeMonster. We built a very option-centric platform. It was the first one that you could run streaming quotes in a browser using Adobe Flex back in the time. This was pre all the current Web3 stuff that we have.
Sold that to General Atlantic Partners, went to Scottrade, sold Scottrade to Ameritrade, went to Ally for a little while, then joined Robinhood and was at Robinhood for about six years.
Really came in to get the clearing firm up and running and to get us IPO ready. Six years later, I was looking for a different opportunity and joined Prosperum.

**Guy Adami** (4:21)
And it's four decades. I wanted to sort of get that out there because that's obviously four decades of some of the best names, some of the highest level names that we talk about. The names that will give you a really good feel as to what's going on with the retail trader. And you've seen obviously the progression over these four decades. But over the last, I would submit, well, since COVID, this is sort of just my thought, the retail trader has really ramped things up. I mean, there was an arc going on for many, many years, but over the last six or seven years, that arc has really taken off. And in terms of the playing field, as level as it's probably ever been, and in terms of sophistication, I'll put the retail trader out there with any big desk trader on the Wall Street firm. So speak to that.