Facet CEO Anders Jones on the biggest heist in finance, how advisors really sell permission, and the great boomer wealth transfer

**Auren Hoffman** (0:01)
Hello, Day of Nerds, my guest today is Anders Jones. Anders is the CEO and co-founder of Facet, a financial planning company that has spent the last decade trying to bring good financial advice to an underserved market, the mass affluent. Facet has raised over $200 million and currently has over $6 billion under management. Anders, welcome to Summation.

**Anders Jones** (0:21)
Hey, Auren, great to be here, thanks for having me.

**Auren Hoffman** (0:23)
Now, you and I have known each other for a long time. You look like a young guy, but we started working together back in 2008 How did you get so old?
I remember you as this young kid.

**Anders Jones** (0:34)
Funny how that works. You're my first boss, first experience out of college.

**Auren Hoffman** (0:39)
I'm really sorry that's a terrible way to start, by the way.

**Anders Jones** (0:43)
I learned a lot. I don't know if I learned all the right things, but I learned a lot.

**Auren Hoffman** (0:46)
Exactly. I'm good at teaching people the wrong things, just do the opposite. That's how I roll.
It's good to have counter examples in your life.

**Anders Jones** (0:55)
The thing that I really loved about working for you is that you basically hired a bunch of young smart people and you're like, just go figure it out.
I actually tell a story a lot where it's like, I have no idea how to build an advanced spreadsheet. I had no idea how to do PowerPoint very well. All the intro stuff that you're supposed to learn, you go spend your first two years in Goldman or McKinsey. Yeah. But I know how to walk into a room full of executives and hold my own because that's what I was doing at 23

**Auren Hoffman** (1:23)
Awesome. All right. I want to dive into wealth stuff.
You've seen the actual finances of tens of thousands of households. What are just some of your non-obvious learnings from that?

**Anders Jones** (1:35)
I would say the biggest one is that people come to financial advisors and work with financial advisors for permission.
It has nothing to do with... That's right. It has a little bit to do with the quantitative aspects of financial planning. There's definitely things that we help them with and that we help them understand. Part of the tax code or something like that, they wouldn't otherwise figure out themselves. But the number one thing that we do is basically give them permission to live their life the way that they want to live. And it's the most interesting psychological fishbowl because you see basically people come to you with a certain amount of anxiety about something. Whether it's like, is my money invested in the right place? Or is it like, I'm about to have my first kid? There's so many financial decisions that you have to make that come with that, it's like you have no idea where to start. And so they basically come with a level of anxiety and then they come to us looking for permission to spend or save money in some way.
And that's probably the biggest thing. We're in the anxiety relief business more than we are in the actual quantitative money management business.

**Auren Hoffman** (2:56)
What are the common ways that maybe we went to fall that people lose wealth?

**Anders Jones** (3:01)
We see this all the time where it's like an investment that sounds too good to be true.
And it blows my mind that people still fall for this stuff. I feel like you read about this on almost a daily basis where someone's guaranteeing 30% returns. And I don't know anyone in my own life who's like, oh yeah, 30% returns, that sounds reasonable. Or it's like, I have a friend who's got a friend who's got this trading strategy that's never lost. But we see that all the time that people come to us and they're like, look, my cousin's neighbor has a deal and I'm going to put some money in it.

**Auren Hoffman** (3:39)
But in some ways, if you're putting 1% of your net worth in that, I mean, whatever, it is what it is. It's the problem that comes if you put 50% in it.

**Anders Jones** (3:49)
That's exactly right. And so the number one thing that we help people with is how do we make sure the rest of your life is fine so that you can do this stuff and experiment. The more mainstream version of this is a bunch of our members have Robinhood accounts and they like to play around with day trading and all that. And we said, look, whatever you're seeing, maybe $10,000 is the right number for you to like, if you lose it all, it doesn't really impact your life and go have fun. I don't think anyone's ever created a vast amount of wealth that way, at least that we've seen, but it's more like an entertainment budget than anything else.