Goals-Based Investing - Now Available
After delays due to supply-chain issues, and a pulp shortage, my book is now available!
While I wrote my book over several months, it is based on my many years of experience working with wealth advisors, high-net-worth, and ultra-high-net-worth families; and my decades long journey researching and challenging conventional investment theory.
Goals-Based Investing is the culmination of my 35-year journey exploring my intellectual curiosity and sharing my views with both advisors and investors.
Why I wrote my book?
The wealth management industry is constantly evolving, and the rate of change is accelerating at an incredibly rapid pace. Wealth advisors need to respond to these changes by modifying their value-proposition, expanding their capabilities, and evaluating their menu of services. They often need advanced education to keep pace with the needs and expectations of high-net-worth investors, and the increasingly competitive marketplace.
It is sometimes difficult to stay current and relevant, and some advisors have resisted the change because they feel threatened. My goal in this book is to tackle many of these challenges and arm advisors with the knowledge of how to evolve their practices to flourish in this new environment. This book addresses such topical issues as: behavioral finance, active vs. passive investing, limitations with MPT, sustainable investing, and the role & use of alternative investments. I frame these issues in the context of embracing goals-based investing.
In writing my book, I was also thinking about how confusing our industry has become for investors. So many of the firms use the same jargon, and list the same capabilities, making it difficult for investors to distinguish between the various firms and business models. If all of the firms and capabilities sound the same, investors may be tempted to opt for the low-cost solution. Of course, there are big differences amongst the firms and the advisors based on their experience, resources, and practice model.
My book helps investor in distinguishing amongst the various players, including wealth management firms, asset managers, RIAs, and custodians; and outline some of the key differences between private wealth management, global wealth management, and retail business models.
Who I wrote the book for?
My primary audience is the wealth advisor who I define as lifelong learners. These advisors recognize and embrace the changing landscape. They understand that their knowledge and experience is of great value to their clients and are constantly seeking to learn and evolve their practice to better serve clients. These advisors have built teams to respond to the changing needs of investors and have expanded their capabilities beyond merely managing portfolios.
My book also provides guidance for HNW investors who chose to make many of their own decisions. They may be senior executives at private equity firms, real estate developers, hedge fund managers, or business leaders. While they may be experts in their field, they often need guidance in developing an overarching strategy. Goals-based investing helps in putting the puzzle pieces together and provides a framework for solving their family’s various goals.
As a former senior leader at several firms, I also wanted to provide some insights regarding the inner-workings and economic models of various business models. I address such issues as revenue sharing, payment for order flow, affiliated products, and so-called “free” services. To earn investors trust, we need to be transparent about economic arrangements and any conflicts-of-interest. Personally, I think the industry can do a better job here.
Why is the book timely and relevant today?
The financial services industry is at a key inflection point. Wall Street firms are under scrutiny due to built-in conflicts of interest, and robots threaten to replace financial advisors. Financial advisors are trying to remain relevant and valued by investors, and their fees are coming under pressure. Many are evolving to become wealth advisors which requires an expanded set of capabilities. There has been a plethora of new products coming to the markets, and advisors and investors need help using them effectively.
In the current market environment, wealth advisors need to evolve their approach to investing to better serve their client’s needs. Wealth advisors need to expand the number and types of investments used to identify incremental returns, alternative sources of income, diversification, and inflation hedging. Fortunately, investing products have evolved significantly over the past few decades, making it easier for investors to access many elusive asset classes including private equity, private credit, and real assets.
The wealth management industry has changed quite a bit over the last couple of decades and will likely change considerably in the decade to come. In my book, I address a number of industry trends already underway, and make predictions about the decade ahead.
These trends include:
1. A demographic shift in advisor practices (younger & more diverse)
2. Bifurcation of advice (highly customized for HNW & robo-advice for the masses)
3. The rise of super-teams
4. ESG becomes mainstream
5. Direct-Indexing gains traction
6. RIA segment continues to gain market share
7. Private markets become more accessible
8. The emergence of non-traditional competitors (Google, Apple, Walmart, etc.)
9. Advisor ratings in a Yelp-like app
10. Goals-based investing becomes the norm
The wealth management industry has changed dramatically over the last couple of decades, and we should anticipate more changes in the decades to come. Are you prepared for these changes? Is your practice positioned for growth?
Change provides opportunities for those that embrace it!