Podcast Summary: Masters in Business – At The Money: Automate Your Investing

Host: Barry Ritholtz (noted as "E" in transcript)
Guest: Jeffrey Ptak, Managing Director at Morningstar (noted as "D" in transcript)
Date: November 6, 2025
Podcast: Bloomberg’s At The Money

Episode Overview

This episode explores how automation can transform investing, focusing on how automated features—such as auto-enrollment, auto-escalation, rebalancing, and target date funds—help investors reduce behavioral errors, avoid market timing mistakes, and improve long-term returns. Host Barry Ritholtz interviews Jeffrey Ptak, a leading expert in fund analysis, to discuss research findings about automation in retirement and other investment accounts, the behavioral pitfalls investors face, and the emerging role of AI in investing.

Key Discussion Points & Insights

1. Defining Automation in Investing

• Main Features:
  • Auto enrollment: Automatically enrolling investors in retirement plans.
  • Auto escalation: Steadily increasing contribution rates.
  • Regular rebalancing and paycheck deductions.
• Setting Up Automation:
  • Simple with most brokerage platforms.
  • Often the default in retirement plans.

"It's well within our reach as investors either to switch these features on at our own election or to be opted into them as we would be in a retirement plan."
— Jeffrey Ptak (02:41)

2. Auto Enrollment vs. Auto Escalation

• Auto Enrollment: Getting people into the plan.
• Auto Escalation: Increasing their participation over time.
• Importance:
  • Both are valuable; enrollment is foundational as it starts the compounding process.

"One is about being in participating, the second is about the extent to which you are participating. Both valuable."
— Jeffrey Ptak (03:16)

3. Impact of Automation on Investor Returns

• Research Findings:
  • Automation reduces negative behavioral outcomes and promotes consistency.
  • “Mind the Gap” study: Investors in automated allocation funds (like target date funds) had almost no gap between what their funds earned and what they actually received.
  • Non-automated fund investors left about 1.1 percentage points per year on the table.

"Investors in allocation funds... do the best job of capturing their funds total returns... They experience the fewest frictions related to the timing and magnitude of their transactions over time."
— Jeffrey Ptak (04:00)

4. Behavioral Benefits of Automation

• Reduces Emotional Trading:
  • Less likely to react to market volatility.
  • Encourages inertia that is beneficial for compounding.
• Quantitative Gap:
  • Target date funds: 0.1% annual gap.
  • Other funds: 1.2% annual gap.

"It's the best kind of inertia... left to their own devices, [investors] might make a change to their allocation... In these settings, because they just continue to mechanically add to their investments... they just get on with it."
— Jeffrey Ptak (05:38)

5. Widespread Adoption of Automation

• Vanguard Study (referenced by Ptak):
  • 61% of plans have auto enrollment.
  • 2/3 of those offer auto escalation.
  • 98% of auto-enrolled investors default into a target date fund.
  • Only 1% of target-date investors transacted in 2024, compared to 11% of other fund investors.

"The reach of automation in our retirement system... gives a sense not only the breadth of automation that's taking place here, but also some of the benefits it conferred in tamping down transacting."
— Jeffrey Ptak (08:56)

6. Demographic Impacts

• Who Benefits Most:
  • Younger and lower-income participants benefit disproportionately from auto enrollment.
  • Helps close socioeconomic gaps and gets vulnerable demographics compounding wealth.

"Auto enrollment disproportionately benefited younger and lower earning participants... that's critical because we want to get those folks into plans."
— Jeffrey Ptak (09:45)

7. Automation Outside Retirement Plans

• For Non-Qualified Accounts:
  • Set up auto-investment plans and use allocation/target risk funds.
  • The key principle: "Automate, automate, automate."

"Once you've got that plan, maybe it's an allocation fund, a target date fund or a target risk fund... automate, automate, automate."
— Jeffrey Ptak (10:39)

8. AI and the Future of Automated Investing

• Potential Benefits:
  • AI can help formulate plans, allocate assets, and maintain discipline.
  • Cautions: Overconfidence risk—AI may embolden investors to trade outside their competence.

"I’m an avid user of AI... it can engender overconfidence... Use it in a way that advances our goals and we don't get carried away."
— Jeffrey Ptak (11:37)

9. Selecting Automated Investing Tools

• Due Diligence:
  • Consider the provider's culture, staying power, investor focus, and fair fees.
  • Particularly important as automation often means all-in-one solutions tied to a single fund family.

"We want to make sure that we're feeling very confident about that organization's culture, about its staying power, about its overall investor centricity..."
— Jeffrey Ptak (12:52)

10. Summary & Takeaway

• Barry Ritholtz sums up:
  • Automation improves returns, reduces mistakes, and is widely accessible.
  • “Put your investments on autopilot” is the main practical takeaway.

"There are lots of automated tools that you could use... to improve your returns, reduce emotional decision making and generally end up with better performance simply by putting your investments on autopilot."
— Barry Ritholtz (13:54)

Notable Quotes & Timestamps

• "It's the best kind of inertia." — Jeffrey Ptak (05:38)

• "Investors in allocation funds...do the best job of capturing their funds total returns." — Jeffrey Ptak (04:00)

• "Auto enrollment disproportionately benefited younger and lower earning participants." — Jeffrey Ptak (09:45)

• "Automate, automate, automate." — Jeffrey Ptak (10:39)

• "We want to make sure we're feeling very confident about that organization's culture, about its staying power..." — Jeffrey Ptak (12:52)

Timeline of Key Segments

• [01:44] – Introduction to automation in investing; Jeffrey Ptak background
• [02:41] – How investors can set up automation
• [03:16] – Difference between auto enrollment and auto escalation
• [04:00] – Evidence of automation improving investor outcomes
• [05:38] – Emotional benefits of automation; avoiding harmful trading
• [06:40] – “Investor gap” quantified between automated and non-automated investors
• [07:32] – Most impactful automation features (auto enrollment)
• [08:56] – Adoption rates and behavior data (Vanguard study)
• [09:45] – Demographic impacts of automation
• [10:39] – Applying automation outside traditional retirement plans
• [11:37] – The growing role of AI in investing and potential risks
• [12:52] – Choosing the right automation tools and providers
• [13:54] – Final summary and host’s takeaway

Tone

Conversational, practical, and data-driven. Ptak brings a measured, evidence-based approach, balancing optimism about automation and AI with clear-eyed warnings about overconfidence and the importance of fundamentals.

For listeners and non-listeners alike, the episode adeptly highlights:

• Why and how to automate investing
• The behavioral and financial advantages of automation
• How automation especially helps the vulnerable
• Considerations for using automation and selecting providers
• The promise and risk of AI in automated investing

Core message:
Set it and forget it—with the right automated systems, investing success takes care of itself.