Animal Spirits Podcast - Talk Your Book: How Custom Indexing Works

Episode Date: September 8, 2025

On this episode of Animal Spirits: Talk Your Book, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ are joined by Ehren J. Stanhope, CFA, Principal, Chief Investment Strategist at Canvas Custom Indexing to discuss: the evolution of investment products, why 2019 changed everything, how financial advisors are using Canvas with their clients and why technology is such an important component in this process. Find complete show notes on our blogs... Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation. Check out the latest in financial blogger fashion at The Compound shop: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://idontshop.com⁠⁠⁠⁠⁠⁠⁠⁠⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits Talk Your book is brought to you by Canvas custom indexing. Go to can canvas.osam.com to learn more about how you can use Canvas custom indexing for your financial advisory firm and your clients. That's canvassam.com. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholtz Wealth Management may maintain

positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Michael, today, this one was an easy one for us and talk your book because this is something that we're, I guess we're literally talking our book in some ways. This is a platform that we use and have used for years now. I guess six years running? Is that about right? Which of 2019. Yep.

Okay. About six years or so, we've been using the Canvas custom indexing. We've seen a lot of different iterations. We were one of the, I guess, the very first users on the ground floor. We've seen them go through an acquisition by Franklin Templeton. And you mentioned it on the show a little bit today, but we've seen that piece go bad before. where boutique, can we call O'Shaughnessy a boutique firm? Absolutely.

The boutique firm who has sort of really good service, great culture, the big behemoth takes them over, and then, oh, no, this is not what we used to use. And they've done a really good job, I think, of keeping that small town flavor when the big town takes them over. And you saw the first example of this from Patrick O'Shaughnessy, like he gave you the first English. of what this was going to be, and you immediately saw the potential for it. Credit to you. And I think we probably did have a few advisors at first who were a little concerned. Like, wait a minute, this is totally different than what we do. Even though from an investing perspective is not completely different, it's new for a lot of people. Yes. I was going to say something totally else, but I want to address what you just said. You know, there was definitely a learning

curve. There was definitely, we had, you know, it was a lot. It is a lot. It's a big transition. And certainly it's been a rage in success, not just for our business, for our clients, but in general, it's gained massive adoption. I don't think it's an ETF killer. I think that's hyperbolic. But the use cases are undeniable. Custom indexing, is there a branding problem there? Or can they do better?

So you don't, you really don't like that name, do you? Yeah, well, it's not, that's not direct indexing. I mean, yeah, there are direct indexing. is where you can just do that. But with a lot of these platforms, you can do so much more than just replicate the index. It's kind of like one of those technology companies

like Facebook that had the name. And do you really want to change the name afterwards and then get stuck with meta as a name? I think that's kind of goes to show you how much evolution there's been in the space. It goes so far beyond that now. You're right. But I really do think it takes sinking your teeth into this

and going through a demo or trying it out to understand really what it can do for you and your clients. I think for wealth management firms, it really is a game changer. Obviously, you said it's not an ETF killer. Of course it's not.

For many people, an ETF or a mutual fund is going to be fine, but for a lot of wealth management clients, this thing really can, even if it's only making a difference on the edges of your portfolio, right? People really hate taxes so, so much. And I think if you can help,

them on their tax bill, that clients love that kind of stuff. So we talked today to Aaron Stanhope. Aaron is the chief investment strategist at Canvas custom indexing, a term you don't like, but we're going to work on. I'm just asking, I think we can do better as an industry. So we talked to Aaron about just the evolution of this, how it worked, kind of some of our thoughts on using it. If you're a financial advisor, I think you have to at least understand what this is

and know whether this is right for you in your clients or it's not. I think you have to really, and so I think this talk will probably help you. So here is our conversation with Aaron. Aaron, welcome to the show. Thanks for having me, guys. So a lot of times on these Talk Your Book segments, Michael and I are coming in blind or blind-ish, where it's a new strategy or a new product or a new service, and it's something that we may know a little bit about,

but a lot of times we don't have a lot of familiarity. This is obviously a little different. We've been using the Canvas platform for a number of years now. our firm. We were one of the very first users. But I feel like there are still a lot of advisors who are still relatively new to the idea of direct indexing and everything it can do. I did a panel in a conference last year in Miami, and they kind of did a show of hands. Like how many people use it or have heard of it, and it was a shocking number of advisors who still were sort of on the fence and didn't really get and understand it. I've always liked how you all talk about

the sort of evolution of getting to this place. So maybe you could just start there just to give people an idea of like where we've been and where we're at now and where it's going. Yeah. I mean, it's actually, I'm sure one day it'll be a really interesting case study at one of the schools. I mean, the inflection point was really 2019. You know, prior to, we sort of think of things as like before Canvas and after Canvas at O'Shaughnessy. And before Canvas, I mean, we were just, We were quant-active factor equity managers, and that was our decades of legacy, was in building alpha-oriented portfolios. And we sort of had this idea of, you know, let's turn the research platform inside out so that

others can access it. So it sort of started out on this vein of people seem to be in smart beta, they're not interested in active and large cap, how can we continue to participate in that market? And then in October of 2019, transaction costs went away. all of the sudden that was really the watershed moment for direct indexing, where prior to that, you know, the big players were parametric and imperio. And their businesses were designed around this sort of white glove service for ultra-high net worth investors that could really handle all the transaction costs associated with these

direct index portfolios. And once that happened then, it was really off to the races and very quickly the interest in our platform and other platforms. forms became around bringing this idea of direct indexing into more of the mass market. And so I think that today now, we've also been in this period where since that time, the equity markets have really just been on a tear. So the market has had to, the industry has had to mature really, really quickly because that sort of sowed the seeds of what is now the biggest problem that everyone in the industry has, which is I've been in a direct index portfolio for a

couple years. And now all of a sudden, I don't know that I have any more tax loss harvesting that's remaining in these portfolios. And kind of what do I do now? And I think that's kind of like where a lot of things sit at the moment. The success of the direct indexing strategies, and you guys were late but early, parametric and imperio and others, we're doing this for years with the index, primarily at the index level. So we're now at the point where there are products, being launched, the 351 exchange products being launched, to take advantage of the ossification of these strategies. Maybe talk about how what you're doing is a little bit different and why there is less of that existing on canvas as opposed to if you were to just run a straight

S&P 500 direct replication. Yeah, so taxless harvesting, a lot of people think of it in the direct index and concept because it's a really, if you put yourself in the shoes of an advisor, it's a really great pitch, right? You've got everybody has been bludgeoned over the head about how terrible active management is. And so all of a sudden then you can make this trade where you get index exposure, but you get to do it in a way that you can defer the tax losses. Like that's a really great, easy pitch for a lot of clients. And that's fantastic for a lot of clients. Tremendous value has been created. But what has also happened to your point about 351 exchanges is it's not just appreciated ETFs. It's also appreciated concentrated stocks.

It's really everything because we've had these historically high equity returns over the past several years post-COVID. So it's really in it, I think the industry is trying to attempt to solve that problem across the board. 351 exchanges is a really interesting idea. I don't think that it solves everything just as exchange funds don't solve everything. There's kind of like hair on everything, right? And so we think 351 exchanges are really, really interesting and are going to be a great use case for lots and lots of clients. But for us, what we really think about is most clients, first of all, are going to be dipping in and out of their accounts. When we look across our client base, in a given calendar year, 70-ish percent of accounts have either a withdrawal

or an inflow into their accounts. So then all of a sudden, I think one thing that's really underappreciated is that changes the whole calculus of tax management and tax house harvesting. Because if you go in a 351 exchange, as long as you're willing to leave that money in there and forget about it kind of forever until you can gift it away, if you need to dip into it, you're going to kind of end up being at the same spot because when you do a 351 exchange, your basis doesn't change. The perspective that we've always taken is we see clients transacting in their accounts.

And so we want to be able to provide flexibility there for them to be able to do the analytics to basically say, okay, if I do want to make this withdrawal, here's the impact. And do we have a way that we can minimize that tax impact? So there's lots of different ways. But I think that one of the key things is you really have to take it from a practical perspective where a lot of what you read about is making some assumptions that the money is just kind of sit there kind of like forever. So to his credit, Michael immediately saw the benefits of Canvas platform.

But I think one of the things that we were a little nervous on at the beginning is like, how do we explain this to our advisors and then how do we help the advisors explain it to the clients as well? Because this is a relatively new thing that a lot, not a lot of people have experience with. And now they kind of more people understand it. But it is still, if you compare this to the mutual fund industry or the ETFs or whatever, direct indexing is probably still pretty small relatively. So I'm curious how you guys think of first educating advisors who are new to this and how you explain it to them and how you

help them explain it to their clients as well. We have a pretty robust system, a training program is honestly how it works. And it's multiple hours because there's a lot of different layers to custom indexing platforms. There's the investment capabilities, which just table stakes need to be world-class. They need to be really great investment offerings. The perspective that we've always taken is we don't want to tell you what you have to use. You get to design it. But in order to do that, we need to offer a full range of different capabilities so that advisors and investment teams can solve whatever the particular client problem is. So there's definitely a process of education. It's not just a log-on and it works. So there's sort of an investment layer. And then

at sophisticated firms, there's an operational layer that exists as well. Custom indexing as much as anything is about the workflow as it is just about the investments in and of themselves. And there's lots of give and take to these platforms where you can take on certain amount of tax budgets or tracking error budgets relative to your models. And you have to be aware of what those tradeoffs are because you can end up in situations where there might be violent market events where things may not act the way that you intended. And so I think in a lot of ways, it's really just educating our partners and advisors of the choices effectively that they're making so that they can make those on their own in an informed way. What do you think about the name

custom indexing? Because what you all are doing is really, it's not really that. You know, we've struggled with this a lot because I was just speaking to one of my colleagues about this a few minutes ago, because we're actually getting ready to launch a few new capabilities over the next few quarters, where, again, along this idea that if you, we have to provide sort of world-class investment solutions. And so that means long only. And within that, that means total return type strategies. For us, it's quant factor because that tends to cater really, really well to tax-house harvesting. They're defensive equity strategies. They're income strategies. We just launched managed options. We have individual municipal bonds. We're getting

ready for long short and ETFs and things like that as well. So it's kind of more around model management of the entire book than it is just about custom indexing in and of itself. I think that is probably one of the things that most people don't understand. And I think a lot of people in the ETF industry kind of look at direct indexing or custom indexing, whatever we're call it and say, why would we need this? ETFs are already a really great wrapper. They're tax efficient, they're easy. And then we've had clients and prospects before tell us once they get it.

And I think it is, the education piece, like you said, is so key because for some people, it is a learning curve, but once the light bulb goes off, they go, oh, geez, and we've had clients say, why doesn't everyone just do this once you kind of get it? But obviously, it's not for everyone. But I guess I'm curious about the importance of the financial advisor in this equation because it is not a set-it-and-forget-a-type of strategy. Like you said, there's dials you can turn up and turn down, and you have to kind of set budgets and understand when it makes sense to use certain tools and when to sort of back off of them. So I'm just curious how that part of it has evolved. Yeah.

Again, tremendous education around it because those different levers that exist. So first of all, there's so many different levers that are available. on the platform that, so number one is awareness. Second is understanding what each of them do. And then like when I think about the platform and what it does is for Canvas partners, it really enables scale for the firm where you can customize on each account, whether that be a tax budget or a tracking error budget or ESG or whatever those parameters are or individual stock restrictions or things of that nature. But you have the ability to do it. at scale across hundreds of accounts.

And for many firms also, they have different, we call them templates, whether that may be for an investor that's looking to be a little bit more conservative or one focused on income or one focused on total return. So I think that the key is really helping them understand what each of the levers do, the implications for what those toggles are, and then allowing them to implement it sort of at scale really across their book. You know, also things that ordinarily should be super, super easy, like reallocations, it's actually a really complicated exercise, particularly when you start thinking about things like taxes.

I think that a lot of advisors that aren't using things like direct indexing or custom indexing and manage their books, maybe it's an ETF model, they may not even be aware of the tax implications of what those moves are. So that firm may be focused on specifically the investment offering, but when you start doing the analytics to try and understand how those model updates and reallocations are impacting their clients from a tax perspective, then all of a sudden that deteriorates the actual after-tax wealth that you're providing for clients. So I do think in a lot of ways what we're offering is scale in the business of managing wealth as well in a more informed way. We are more than a decade

into a bull market, and we're in a bull market in which a lot of people have made a lot of money and a handful of names. How frequent is it where you get people with concertated portfolios and you are using taxiles harvesting to glide path them into a more diversified portfolio? It's very common. I'd say the most common application is an incumbent portfolio that's coming over that is low basis in nature, where we are trying to, in a tax-efficient way, move it to a new target portfolio. That's probably the most common. But practically, it's the same implementation. One, there's just a lot more risk concentrated in the single position. But working down concentrated positions is very, very common. And there is a, in the next few quarters, there will be a pretty

broad suite of options available in order to do that. You can do it with, you know, we talked about 351 exchanges. Other ways to do it are just a straight, long-only workdown. Clients can contribute cash alongside the position or the existing portfolio. That helps work things down. You can pair it with a managed option strategy as well to hedge some of the risk. You can do concentrated workdowns or transition-osified portfolios with long-short type strategies as an overlay as well. So there's lots of different options. They kind of all have their risks and benefits in one form of another. But this is probably like the mega trend that exists in our industry right now is this idea

that there's been tremendous appreciation. And then all of a sudden, what do I do with this if I get stuck in whatever the names are that have appreciated so much over the last five to 10 years? So we seem to get these bursts of corrections in bear markets. and they happen, seem to be happening quicker and quicker. And obviously, advisors can, you can harvest losses then. But what is this type of strategy like look like? And what does it offer advisors and clients if you had a more extended bear market?

Well, it certainly makes it a lot easier to change allocations and move out of those portfolios. So I'll give you an example earlier this year. I mean, in April of this year, we had really historic volatility, 10% swings in a given day. And I think something like 99 plus percent of our taxable accounts traded multiple times in that period. So you have to dip in when there's opportunity. I think that one of the challenges is you can't time, just as is the case with anything investing. You can't time when these things are going to happen. So if you're not already set up ready to go, it's really hard to make a tactical decision in a moment to say, oh, I'm going to direct index or I'm going to start doing tax loss harvesting.

So it tends to be the periods that are best for tax loss harvesting are kind of flat markets, volatile markets, down markets. So if we went into a multi-year extended bear market, that'd be great for tax loss harvesting, probably not so great for absolute returns. That is one of the sort of nuances of tax loss harvesting. It is kind of like an uncorrelated source of alpha because generally your tax alpha is going to be higher when absolute returns are the worst. So how does it work when you're talking with an advisor and they're having an initial conversation with you?

They want to learn more. They go through the process and they get to the five-yard line, maybe the 20. Let's just say inside the red zone. And they say, all right, here's how we manage money. What does it look like if we were to transition our portfolio over to the campus platform? So we have a process that we call a map over. That's basically, so our client portfolio management team basically gets paired up with the prospect or the client to basically say, hey, give us your investment allocation, we'll take a look at it. Usually it's ETFs or funds, and we'll then look through that, look at it on a bunch of different dimensions.

So we'll look at it at risk model exposures, sectors, industries, countries, regions, factor exposures, sectors, sectors, sectors. the full gamut. And what we'll try to do is translate that to the Canvas platform so that advisors can see what an apples-to-apples comparison is. And again, we're not trying to say that our investment offerings are better than what you currently have, but it's to basically translate to say by unwrapping the wrapper of what's in your existing portfolio and providing the individual securities and similar exposures. We think now what we're effectively doing is opening up to this portfolio.

portfolio, the ability to add tax benefits over time. The investing piece was important for us because we wanted to take our current portfolios and exposures and have you map them out, which was a cool process to go through. But since the start of the platform, you've obviously added a ton of investment strategies. I don't know what the numbers would be if you went through all the different iterations and because of all the different choices you can make between index and active and large, small, mid, international, all these different strategies, right? Conservative, aggressive, all these different things that you've added.

I'm curious just what you've learned over time, adding these different investment strategies and taking kind of the best of what's out there in the current fund landscape and making your own tweaks and changes to those types of strategies for this platform. Yeah, there's something like 150 or so different strategies and combinations. It's growing. What we were able to do from the outset is leverage all of those strategies leverage a suite of foundational factor building blocks. So that's how we're able to add the scale

and the number of strategies that are available and really just apply those to different regions, different areas of the market. And, you know, on a go forward base, so I think we have a lot of the ground covered. So we have proprietary passive, we have branded passive from some of the popular index providers,

we have factor strategies that we've traveled in for 30 plus years. And so really now, I think the biggest area of growth, growth for us is really, you know, I mentioned we added individual bonds. Having those in a single account is something that clients have said is really, really important to them. So we've added that as well. And then also things that I think are more alternative-like. We're not creating hedge funds on the platform, but there are some capabilities that are coming to bear on the platform

that are kind of like ones that normally hedge fund type strategies would use. We're using them for specific purposes, like I mentioned with manage options and concentrated position work downs and long short to the same effect. So those are kind of the places that we've been adding more and more recently because they're really meant to solve specific client problems that we've been talking about of the appreciation that we've seen over the last five to 10 years. Obviously a lot of what you're doing is powered by very, very significant technological resources. It sounds like you're a technology company. But as you mentioned, your background, I mean, this is an asset manager. Maybe talk about the history and the transition and where did this even come from? So Jim O'Shaughnessy was always a bit of a

technophile. Even in the 80s and 90s, some my colleagues can tell the stories about him, you know, packing his old computer into the trunk of his car and taking it with him on family vacation. So, like technology has really always sort of been in our DNA, certainly since I joined the firm in 2010. Jim was the largest systematic equity manager of Bear Stearns. They left in 2007, fortunately, before a lot of the rumbling started to occur. The purpose was to build out a research platform where there just wasn't the investment while they were at that firm in the platform that he wanted to see. So they split out to build the research platform.

And then basically since then, we generally found, so because of that, we were a really weird equity, boutique equity factor shop in that we managed lots of separately managed accounts. Most firms of our side would be like a single commingled fund hedge fund type structure. It really wasn't us. So we had to build this operational backbone to handle thousands of separately managed accounts where we were managing the tax lots for those really from the get-go. And so then connect the research platform, the operational platform. We had a third-party provider that we used for our trading and our OMS.

We got frustrated with them because we couldn't implement as efficiently as we wanted to. So we built our own. So we have our internal OMS that we used to trade our entire book of business. So we kind of just gradually layered things on. And so we moved offices recently post-acquisition. But prior to when we moved, if you walked into our trading floor, it was kind of like this large dining room table where the tech team sat on one side and the PM team sat. on the other. So technology was always critically important to what we did. And we always had a bit

of an outsized technology staff. If we didn't have that in our culture, we wouldn't be able to deliver on canvas the way that we are. Technology is incredibly important to what we do. We've worked with several service providers over the years who have gotten acquired. You mentioned the acquisition. You guys were bought by Franklin Templeton. And in many cases, not all, but in many cases, things change and not for the better. And in your case, it's been business as usual plus. Obviously, you guys have more resources. And that is a credit to the culture that Jim built once upon a time. Obviously, you and the team and Ari and Roger and everybody else keeping that in check. But what's it like, what's it been like for you

working for Franklin Templeton, a much, much larger organization? I think that, you know, like most people, to your point, when these, when these murders and acquisitions, when they occur, you never know really what's going to happen. And I do feel like the acquisition went from an employee perspective about as well as a corporate acquisition could occur. You know, we sit within an entity within Franklin that's dedicated towards innovative solutions and technology and sort of growing those.

So we get the benefit of kind of being able to act like a startup up within, you know, within a larger corporate entity and the resources that exist. So from that perspective, I'm very, very thankful because, you know, the other thing that we were really concerned about is, you know, we got acquired and then all of a sudden our investment philosophy is going to have to change and we're going to have to neuter all the products and everything like that. That never happened. And I think that, you know, those are some of the things that have enabled the platform to

continue to grow. They said they were going to invest in us and Franklin has, you know, The platform went from, I think, around $2 billion, and we got acquired to now about $15 billion. So we've been able to invest in scale on the platform and the people and everything. So what can advisors look forward to in this platform going forward? I think our operating ethos is really, it's a couple things. I think that we have a little bit of an advantage, given that we sort of have this alpha-oriented background, which I think is an underappreciated trait for sort of direct and customer.

and MnDX providers because when you have to do things like generate alpha in a previous life and that's solely what you're judged on, you've got to be really creative in doing that because you're against the most competitive set in the world. What Canvas has allowed us to do is sort of redirect that creativity to solving client problems. And so if we can then do that on a platform that has scale, It's sort of like the Nick's sleep idea of like economies of scale shared. If we can solve a problem for one client that then gets put on the platform, that adds value to everyone. And so that's really what our team is oriented towards doing, is solving these problems.

And with that is going to naturally come as the different regimes come and go with good returns and bad returns is new and different capabilities. We have some specific ones coming online over the next few quarters. but this sort of culture of trying to solve client problems and then add them on the platform at scale so that we can help our clients. That's really what it's all about. How long does it take for a firm to get up and running? I mean, it is not a light lift. There are all sorts of moving parts. There's the investments. There's the operations. There's the advisor training, the client training. I mean, there's a lot that goes into it. What does the process look like?

So it depends on how a client is coming into the platform. So there's certainly a lot of training that's involved. There's training from the perspective of the investments themselves, from the operational perspective. There's usually a few different tiers of users that are going to be coming onto the platform and using it on different ways. So there's specific trainings around each of those. And then there's an onboarding process that exists of mapping over accounts.

It depends on if there are custodial changes that are involved, integrations with performance software and existing software and things of that nature. So it is definitely a multi-month process. Are there certain types of advisors that you're looking to work with outside of handsome podcasters like us? Always. I think that one of the things that we learned early on in the process, I know you all know very well, is, you know, when we initially started up, we started with nine Canvas partners. And what we really wanted to do with them is learn alongside them for what features of the

platform we needed to develop that they would benefit the most from. And one of the things that we learned in that whole process was about the type of clients that we want to work for. We're not interested in people that are looking for, like the hot dot, those that are willing to use Canvas as basically like their investment management operating system, they tend to get the biggest bang for the buck out of it as well. It's not sort of a one-off account type platform because of all the reasons that we talked about. There are a lot of features to the platform that need to be used in the proper way. And so that's really important. And that's one of the

things that we're very open about at the outset is we want Canvas to be used as sort of the investment management operating system at the firm, and we think that the statistics bear that out because Canvas partners that have been with us are generally growing at about 2x the industry average. And so that sort of deep knowledge of the platform itself is incredibly helpful. I think what it ultimately does is it allows advisors to focus on either servicing the clients as opposed to kind of like all the administrative minutia. that can exist with having to trade individual accounts on your own and things of that nature.

Well, the platform has been great for our clients and for our business, and don't just take my word for it. Reach out to Aaron and his team. Canvas, Canvas. Aaron, for advisors that want to learn more about the platform, where do they find you guys? Just canvas.osam, osam.com. It's the best place. All right. Appreciate the time today. Thanks, guys.

Okay, thank you, Aaron. Remember, check out Canvast.OSAM.com. We learn more. Email us, Animal Spirits at the compound news.com.