Caliber Founder Harvey Hudes and Managing Director Scott Paer sat down for a chat…

Harvey: What part of the fintech and financial services space do you find most fascinating? How did your passion for these areas ignite?
There are many sub-sectors of fintech that fascinate me as technology continues to disrupt the once mundane sector. I am intrigued with any innovation that is creating efficiencies for consumers and companies.

Scott: Technology can make our lives and jobs easier. For example, a real estate tech (proptech) company that has developed technology which makes it possible to accurately capture the square footage and detailed floor plan of a home armed with only a smartphone and a 5 to 10-minute walkthrough.

Outside of fintech, asset management has always been fascinating to me. In the financial sector, there are many different roles and responsibilities. On one side of the spectrum, there is advisory where one provides counsel and advice to the client whereas asset managers are given discretion to decide ultimately where capital is put to work. Moreover, I am highly interested in global affairs and news which means I am always keeping a pulse on what is happening around the world – as that ultimately has an impact on global markets.

What truly ignited my passion is seeing how certain companies have grown over the years and the returns they have provided for investors who may have taken ‘a bet’ on them at an earlier stage of growth.

Harvey: How have you seen the areas of investment management and capital markets evolve over the course of your career? How have you been able to grow your expertise at Caliber?

Scott: Investment management has drastically changed over the last decade plus. We have seen billions of dollars flock out of actively managed mutual funds – where a portfolio manager selects individual securities – to a passive investing approach, such as Exchange-Traded Funds (ETFs), where investors buy and hold assets in order to not necessarily beat the market, but match the market.

Both ordinary and institutional investors will continue to watch fees associated with their portfolios and “low-cost indexing’’ has become front and center. Why? 86% of US equity funds have underperformed their benchmark over the 20-year period ended December 31, 2020, according to the S&P Dow Jones Indices. ETFs have racked in $1.9 trillion over the past five years compared to $1 trillion in outflows from mutual funds. The numbers tell the story, which is that this investing-style trend will only continue.

At Caliber, I have had the benefit of working with companies in the financial ecosystem, from asset managers and mutual fund companies to the custodial banks, investment banking firms and technology platforms which are being adopted by these traditional financial institutions. I am frequently attending events and conferences, whether virtual or in-person, to better educate myself on the intricacies of financial markets and investment management.

Harvey: What trends are you seeing since the pandemic began? How do you predict these trends will evolve over the next 5 years?

Scott: The pandemic has fundamentally changed the way people and businesses operate. This could not be more true for the financial sector. During the ‘’lockdowns’’ of 2020, a new hobby was born: trading.

According to a Charles Schwab survey, over 15% of current retail investors began investing in 2020 – and companies like Robinhood and other investing apps became mainstream. Robinhood is one of many trading platforms that provide the ability for ordinary people to trade securities at their fingertips. What was once manual, complicated and time consuming has transformed into ‘another app’ on your smartphone.

The retail trading boom only continued in 2021 as we were introduced to ‘’meme stocks’’ such as GameStop and AMC. A whopping 7.8 million new retail investors entered the market in January and February (2021) alone, according to JMP Securities. Analyst forecasts predict that by the time we turn the calendar to next year, we will see record highs in terms of new trading accounts opened in ‘21. Over the next five years we will see more entrants into the online brokerage space competing for market share, which ultimately will lead to more acquisitions and consolidation.

This once in a generation pandemic has also shown us there is a need for digital currencies, especially bitcoin. While skepticism remains, we have seen a cryptocurrency emergence. DeFi (decentralized finance) and NFT (non-fungible token) markets boomed while people were stuck at home looking for new and different ways to invest – or invest for the first time.

Crypto was always here to stay but the pandemic has accelerated its time frame and has lured in institutional investors to explore, and in some cases adopt, these digital assets.

Harvey: What are you and the Caliber team doing to advise clients in the capital markets space right now? 

Scott: Caliber is frequently called upon by emerging fintechs as well as established financial leaders who are looking to tell their story to the market. Our decades of collective experience crafting stories for clients as well as our deep domain knowledge of financial services puts us in a unique position to be a thought partner to our clients.

Examples of clients Caliber is working with includes a unicorn fintech instant messaging serviced adopted by leading financial firms, one of the largest custodial banking institutions in the world, a leading global law firm who is looking to expand their fintech capabilities and a once-defunct investment bank making a comeback.

Caliber is also the official marketing communications partner to many leading fintech and financial services events and organizations.

All of these companies and organizations have a common goal – enhance their public profiles, particularly among target audiences. Depending on the company’s objective, the Caliber team creates a custom, tailored marketing communications strategy and plan. Our team of experienced professionals executes on a scope of work which can include corporate communications and news strategy, media relations, content marketing, social media and digital marketing – including SEO, lead generation, creative, branding and more.

Having conversations with a variety of outside partners and potential in-source solutions will put you in a position to determine if you should build in-house, engage outside help, or explore a hybrid approach.

Feel free to reach out to us. We’d love to talk to you about where you are on your marketing and communications journey.