[0:00]advisors were not investment experts. And yet I knew from my experience in the industry that advisors were actually not necessarily the best people to help me with that. And the mission of Mezzi is to help people with holistic wealth guidance. If you were an expert stock picker, then you would probably be running your own hedge fund. There's nowhere to find holistic wealth advice. The largest challenge for us is data consistency. I think AI is going to allow their business model to change because it's going to dramatically reduce costs. We are a replacement for those that want it to be a replacement and we are a complement for those that want it to be a compliment.
[0:49]Hi everybody, and welcome to another episode of the Curiosity Code Podcast. We extend our warm welcome today to Manish Jain, an innovator at the intersection of finance and technology. As the co-founder and CEO of Mezzi, Manish is transforming the way individuals and families manage their wealth using AI. With extensive experience on Wall Street and as a venture investor, Manish combines financial expertise with a passion for empowering smarter financial decisions. Manish, it's a pleasure to have you with us. Could you begin with sharing about Mezzi and the mission that drives your platform? Yeah, Alex, thanks so much for having me. Appreciate it.
[1:38]Uh, yeah, sure, let's let's jump into the to the why we're building Mezzi. Um, you know, uh, let me give you a little bit of background on myself. I I've been around personal finance and finance, you know, my entire life. I I don't know how many people can say that or or would want to claim to be able to say that, but, uh, you know, my my first memories of kind of finance were going to, uh, the office with my mother, who's a financial advisor, and accompanying her and helping her with her paperwork in exchange for vending machine candy bars. And so, I've kind of been around, you know, conversations around retirement and stocks and things like that, uh, from from a very early age. Um, and actually, as I, as I kind of wanted to get more experience in the space, I started really, uh, you know, taking an interest and studying, and then saying, okay, well, I want to go and learn from, you know, the best on Wall Street. And so, uh, my first job was at a regional office of a major wealth management firm.
[2:40]And what I saw there was, um, you know, I thought I was going to learn all about investing and putting money to work. And what I quickly saw there was that you would see mutual fund sales people come in and pitch a variety of different mutual funds to advisors, who would then go and sell those funds to their clients or just put their clients in those funds.
[3:04]And often these were pretty expensive funds, um, you know, charging a lot a large percentage of your assets. And and what I, what I started to realize was that advisors were not, at least in this case, advisors were not investment experts. Uh, and so I said, well, I want to go and learn from the best investment experts. And so that took me to Wall Street where I was at JP Morgan and I was an equity research analyst, and I was actually researching stocks for a living and coming up with recommendations on it. But as I was doing that, you know, as a 21, 22 year old, I was also setting up my own brokerage account, my own retirement account, uh, eventually my own Roth IRA and my own traditional IRA. And then I married my wife and her accounts join the mix, and a few years ago, we had a son and we opened up a five two nine account for him and a custodial account for him. And nowhere through that journey of opening up these different investment accounts, was I getting guidance on how to best implement them, how to conduct the right asset allocation across the board for them. And yet I knew from my experience in the industry that advisors were actually not necessarily the best people to help me with that. And even if I did turn to them, it would be a very expensive value proposition. I'd be giving up 1% of my assets every year, which can amount to millions of dollars of lost wealth over a 30 year time period. Uh, and so what we saw was that for those people out there that don't want to put all of their assets with an advisor or don't want to put any of their assets with an advisor, they don't really have a great alternative. Uh, there's nowhere to find holistic wealth advice. And so, therein lies the, the kind of the birth of Mezzi and the mission of Mezzi is to help people with holistic wealth guidance. So that they can make better decisions across the board, across their assets and ultimately grow their wealth over time for, you know, fulfilling their dreams, whether it's retiring early, traveling more, traveling, traveling more luxuriously, setting up their kids for their education, et cetera. That's very nice, uh, neat, neat product. Um, I guess I came across the same challenge personally when I started, you know, like, like, uh, certain stages of of your life, you start to look into investments and like you're so confused.
[5:40]Um, and you had a background working at Wall Street, uh, I, and as many other people did not. So that's that's just frustrating. Well, well, the interesting thing isn't it, you know, I know you work a lot with financial services is that I don't think people realize how, um, how narrow different aspects of the financial field are, right? And so, just because you are an equity research analyst doesn't mean that you are actually an expert stock picker, and it doesn't mean that you are an expert stock picker across the entire, you know, landscape of stocks. If you were an expert stock picker, then you would probably be running your own hedge fund.
[6:28]And so, and just because you were a financial advisor, by no means does that mean that you are an investment expert. Um, everyone in the finance world has very, you know, different areas of expertise and they end up being fairly narrow. But I think, you know, if you were to go to a dinner table, if you go to a dinner conversation, um, a dinner gathering with friends and they ask you, you know, because they learn that you're working on Wall Street, they ask you, what's your stock pick or what do you think about the market because they think that you're an expert, uh, about finance, and that's that's really far from the truth. Yeah, financial services industry is so vast. Um, that's, that's straight to the point. Um, let's, uh, get back to Mezzi. So, Yeah. Mezzi is, uh, heavily powered by AI, right? Um, as far as, as I I understand Mezzi, it uses AI to provide investment insights, um, that as you said, typically, you would got from high cost advisors. Let's, um, lift the curtain on a bit. Uh, can you share what are the specific, like models or algorithms, uh, uh, you use to deliver precise personalized insights?
[8:15]Yeah, for sure, let's jump in.
[8:19]So, uh, you know, it really starts, uh, where I would say I am, I am, uh, technically and I've had a lot of expertise and experience is around the financial data side of things. Um, and it so happens that, uh, you know, we all know that with that for AI to really operate well, you need really good data. And so let me like kind of walk you through the the journey of a Mezzi member or Mezzi user, uh, and and how the data piece of the equation becomes so important for delivering AI-driven insights. And so, you know, I kind of shared my personal story about opening these different investment accounts and starting to figure out asset allocation along the way. And so, you know, our whole value proposition with Mezzi is, don't open yet another investment account. You probably already have a Robin Hood account for trading, a Coinbase account, maybe you're doing alternative investing on a different platform. There's so many different places, you know, so many different Fintech products out there. Bring your existing Fintech products, your existing brokerage products, your existing retirement accounts, bring them to them, us, plug them in. We can talk about how we plug them in. It's, you know, via the aggregators that many of us know, Plaid, Fincity, et cetera. Uh, and then we pull in that data and from there we have to immediately start normalizing that data and cleansing it and making it appropriate for delivering accurate insights. Um, and so what that, you know, I'll give you a couple of examples to bring that to life. From a certain brokerage, you might actually own the stock meta, right? Um, Facebook meta, and, uh, that brokerage or one of these aggregators may have mislabeled the stock as an exchange traded fund as opposed to a stock or an equity. Now, how can we properly provide you with an asset allocation unless we correct that classification? That's a small one. I'll give you another one. The stock Tesla over the past five years has done something like three different stock splits. If you were to look at your transaction history in a brokerage, it does not adjust for those stock splits. So if we want to provide you with accurate tax insights, we need to adjust for those stock splits. If we want to provide you with accurate performance data, meaning time weighted performance over a period of time, we need to adjust for those stock splits. And so this is the the level of depth that we're going in terms of cleansing the data, cleaning up the data so that we can then go and deliver you accurate insights. So now that you can flexibly come and use our AI, or we can deliver, proactively deliver you an insight for something like, by the way, did you realize that your retirement account managed by an advisor is underperforming the S&P 500 over the past two years or underperforming the NASDAQ over the past two years? Um, did you did you know that? Or alternatively, you could come to our AI co-pilot and say, well, how would, how has my portfolio performed against, you know, five different model portfolios including a 60/40 portfolio? Um, and and be able to get these kind of flexible insights. And so it's kind of marrying this really cleaned up data with obviously the flexibility and capabilities of AI. And I'd say, you know, full disclosure, we are early in our journey in terms of delivering these insights and as as we talked before the recording started, the world is moving so fast right now and so, uh, we're, we're all learning on a day-to-day basis.
[13:14]Exactly, it's it's an ongoing trend like everybody is trying to catch up and implement AI in one way or another in enterprise level and retail platforms are focusing on personalized client services. You have like pretty much backgrounds on both sides, institutional finance and startups. Where do you see the biggest potential for AI to impact wealth management for institutions versus individual investors? Yeah, I mean it's a I would say it's a really interesting challenge for institutions right now. They're obviously getting a ton of efficiency and will be getting more and more efficiency when it comes to internal processes. And so, uh, whether it comes to, you know, automating email interactions with customers to gathering financial insights. Like you might get from Mezzi, but they're doing it internally, uh, where they can, you know, quickly look at data for a given customer and then take that data and email it or hop on a phone call or a zoom call with a, with a client and discuss it. And so, I I mean, I think there's so much going on what I'm really interested to see, uh, is what is the what is the business model disruption that happens to the traditional financial world. Um, you know, and we can take the wealth management world that has been generating, you know, their revenue from 1% of assets a year and that's the primary revenue stream that they've been getting. Um, and the justification is, let me take 1% of assets, uh, even though most of the value that I'm going to provide is outside of investment management, I'm going to charge you based on your investment assets. And so, they're going to have a challenge in justifying their value to their end clients, increasingly as AI becomes more and more powerful. And so, I think the business model is going to have to change.
[15:16]Like I think AI is going to allow their business model to change because it's going to dramatically reduce costs. But the business model will have to change, and you see it across the board over the past three decades, fees in the financial services space just continue to drop. Whether it's trading commissions and Robin Hood bringing trading commissions to zero, or whether it's mutual fund fees going from 4% to 10 basis points. Um, today direct indexing is a huge value proposition that advisors pitch and they charge 60 basis points for it. But you've got players out there, um, that are now, you know, Fintechs that are in are charging 10 basis points for direct indexing. And so, it's a matter of time that fees continue to come down, including on the wealth management side of things.
[16:09]Yeah, that's, uh, that's an interesting future, uh, that's probably going to happen and evolve over the next, maybe a year, um, with the base that we see technology evolving and, you know, things are changing and enterprises are investing heavily and implementing AI. And yeah, I I I see that happening probably even this year.
[34:58]Yeah, uh, you know, don't be modest, um, about about what you're building and and, uh, you know, what what you're excited about and and, you know, ultimately that will lead to lots of different opportunities whether it's customers or or fundraising.
