What sets top wealth management client advisors apart?

I work as a wealth management expert and get to observe many client advisors. I have noticed 4 key areas where top advisors set themselves apart:

1. Develop a defined value proposition.This has never been more important. Robo-advisors have set the benchmark for fees and services. You need to differentiate your services to allow you to continue to charge fees above what the robos charge. According to Cerulli Research, an attribute of the fastest-growing advisors is the ability to communicate their value proposition in a concise and compelling manner.

Jacoline Loewen

2. Lower fees.

Look to scale your operations by leveraging technology, people, and processes to more effectively support clients while driving down cost.

3. Develop specific services for targeted clients.
Don’t try to be all things to all people. The top advisors have told me they focus on serving one segment of the market (for example, high-net-worth clients). Without client segmentation, advisors tend to overserve clients on the lower end and underserve clients on the higher end. By focusing on one type of client, you’ll help drive down your costs.

4. Get to know your clients and their families.

Spend time early and often with clients and their families to build trust and lasting relationships. By getting to know your clients’ goals, you’ll increase your ability to retain their assets and generate business through referrals.

Private equity owns more companies than those listed on the public markets

Private equity now owns far more companies than the public market. The private markets allow a more effective way to manage than public companies.
That is why we are seeing financial engineering with mergers and buy-outs and buy backs. It is an important part of the economy and the financial markets. The duration of the assets is lengthened and increases the price sensitivity.
The issue is that more and more equities are owned privately. There is a vibrant market that is private.

What would Ray Dalio, a billionaire, do with a personality assessment tool?

Ray Dalio is a Hedge Fund founder who is also a self made billionaire. His recently released book, Principles, shocked me as it features more about how tomeditate, build habits, manage your monkey brain and learn how to use pain to achieve your dreams. in short, Dalio shares the soft issues that built his success and zip on the schematics of hedge fund algorithms. I am full of admiration as Dalio is sharing his true secret sauce at great risk to his reputation.

One of the tools Dalio reviews is the simple personality tool - achiever, promoter, analyst and supporter. I am very familiar with this tool and have used it throughout my career so it was wonderful to read Dalio's positive views.

Back in the 1990s and I was part of the merger of Deloitte. We were requested to take personality tests to help the newly formed team understand each other better. The tool was a simpler version of Myers-Briggs personality test. Very quickly, I observed that the insights I gained from this test were a game changer for my attitudes to all the different personalities I encountered in my work at Deloitte. Different styles clashed with my more creative style but armed with my newly gained insights, I changed the way I reacted. I began to recognize that what I thought were odd ways of working were, in fact, a great asset to my project work. With the personality models tool, I could respect others and their different ways of approaching work. It would help me go on to leverage my ability to sync with teams very quickly anywhere in the world.

But, back then, when I asked my new Deloitte leader what he thought of these personality tests, I got an earful. When my senior partner at Deloitte answered my question about a management tool with, "It's useless and a waste of time!" I took that advise to heart and did not pursue using personality types in my consulting work for many years. Boy, was that wrong advice. This senior pertner was stressed but also, ironically, I noted that his personality profile did say he would be skeptical of most information until he could analyze it to death.

Later, that leader would go on to be head of Deloitte, Canada, and then London, and finally, the world. When I caught up with him in Toronto a few years later, I mentioned his comment about personality tests. I was shocked when he said that, in fact, he had done a complete right turn on his assessment quite soon after our conversation. In contrast to his early scoffing, he had gone on to use the tool extensively, and credited it as one of his most valuable tools as a top management consultant.

Dalio goes through how I could have learned from this experience, I learned two lessons from Dalio:

1. To speak up and explain my truth - why I thought the tool was particularly a stand out and why I valued its impact on my ability to be a better team player.
2. To speak up to my seniors with the attitude to share and to have an open mind. I did not need to be afraid but realize that my worth came from adding insights.

Ray Dalio says personality tools were invaluable in understanding his people and their significant alternative ways of thinking and feeling. He started using these tools in the 90s, at about the same time my newly forming Deloitte team was struggling to grasp the different personalities.  I do think that the Deloitte merger change group achieved a tremendous jump-start by having the courage to get the teams to apply the analysis. These are the very same tools named by Dalio who also had the courage to build a unique culture, starting with nothing and growing his business to make him a billionaire.

One of Ray's Principles is truth.  He has created a corporate culture where the team is encouraged to understand different personalities and the way they will view the world. The culture at Bridgewater then encourages everyone to speak up about their opinion.

In my case, speaking my "truth" back then may have pushed me along my career path faster. Also, my Deloitte leader may have picked up those personality assessment tools far quicker too. In a world of speed, we both would have benefitted.

I give Ray's book five gold stars and am amazed that he has chosen to share his Principles with all of us but grateful. Thank you, Ray!

Why Endowment Style Portfolios are catching on like fire

For those with wealth over ten million, the Endowment Style Portfolio is being used as a model to protect wealth, as well as to give it a better grwoth trajectory than the traditional 60/40 portfolio structure. Here is a great summary of ESP and how their performance is influencing wealth management by John Authors, FT:

The endowments of the most prestigious US universities have long been watched as a model by asset allocators, and have helped to drive interest in such sectors as private equity, hedge funds, and natural resources. Their financial year ends in June, and their results are now available, summarised in this excellent blog post by Markov Processes International. The most interesting result, by far, is what has happened over the past 10 years — a period that started almost exactly as the credit crisis was beginning to take hold in July 2007. By lucky coincidence, I wrote this Long View column in June 2007 after listening to David Swensen, head of Yale’s endowment speak at a Yale reunion. At that point, Yale’s record looked stunningly good. How has it done since? This is Markov’s summary of how the eight Ivy League universities performed, compared with a “60/40” portfolio (60 per cent US stocks, 40 per cent US bonds) representing a typical asset allocation for such endowments before the move into alternative assets took hold:

Jacoline Loewen

 Only Princeton and Columbia have managed to beat a 60/40 portfolio over that time, even though it started just before one of the worst crashes for public equities in history. Yale has almost matched it — but it went to far more trouble than it would have taken just to put the endowment’s money into conventional public assets. Others, particularly Harvard and Cornell, have lagged behind badly.

 Over the past year (not such a relevant period for a long-term endowment, but the results are still interesting), all the Ivies managed positive results, and all bar Harvard managed to beat the 60/40 portfolio reasonably easily, led by Dartmouth. What are the lessons on asset allocation?

 Execution evidently matters. This is not just a game of asset allocation. If you look at how Harvard and Princeton were positioned 10 years ago, they are strikingly similar; with much the same weight in hedge funds and minimal interest in bonds and cash. Harvard had a much greater weighting of resources, which appears to have hurt its returns, and Princeton was considerably more enthusiastic about private equity and venture capital. But these asset allocations are similar enough, while other asset allocations among the Ivies are very different and yet ended with returns in the middle of the pack, to suggest that implementation had a lot to do with this.

Book by Jacoline Loewen

Moving the needle – 3 success factors for the Family Office

If you look at the families that have managed their wealth very well, it is very clear that they have one thing in common: they have dared to talk about the money.  It is difficult to understand why 

Jacoline Loewen, Family Office

this would be avoided by many entrepreneurs who have sold their companies and made a sudden fortune. 

Why not discuss the money with their family? What could go wrong? Surely open discussion and sharing of the wealth made by the entrepreneur is a wonderful way to go?

What are the Ingredients?

The families that do well and stay wealthy are able to address the big questions: What does money mean to me and how do I want this vision to actually get achieved?

The experience of families that become and stay wealthy is very clear:

1.       these families grow their wealth above their consumption rate,

2.       maintain family unity,

3.       develop family and non-family talent that contributes to these objectives.

Stumbling in any one of these areas – asset growth, family issues, talent growth – can slow the family down. Falling down on two of these three areas can mean failure. Failing on all three of these areas for over five years or more can signal the end of the family's wealth.

Creating Success

Setting up your family to succeed does mean having the Family Office approach. Whatever the size of Family Office, it is a good vehicle for creating lasting family and financial success.

FinTech Awards Black Tie Gala packed with AI and Fintech Innovation

Jacoline Loewen

The Digital Finance Institute is a think tank for FinTech and AI which provides leadership in four key areas - Financial Technology, Artificial Intelligence, Women in FinTech and Financial Inclusion. It also supports the development of FinTech ecosystems for investment in Canada and hosts events of interest to the FinTech community.

FinTech Awards Black Tie Gala Dinner

It was a terrific party at the 3rd Annual Canadian FinTech and AI Awards in Toronto on November 27, 2017 from 7-11:30pm! The Black Tie Reception and Gala Dinner was bigger than ever this year with more award catgories and a much larger venue.

Mindbridge wins the Top Award

The crowd were glamourous in their evening clothes despite being AI tech qeeks and there were also lots of booths with demos of fintech products.  Great to see Toronto buzzing with entrepreneural spirit.

How to leave a legacy

From the magazine Unlimited, they have a fascinating story on how to leave a great legacy and the lessons come from looking at how cathedrals were built in the middle ages. 

Jacoline Loewen

I also wrote an article for the Globe and Mail on Cathedral building and how similar it is to building a business in that each generation adds a wing or a tower and then passes it along to the next generation to continue the vision. Some cathedrals took hundreds of years to complete which is hard to imagine. 

I am complaining about Eglinton Avenue and the time to build the subway so it does make me realize that time is relative.

I will post my article below but here is the article from Unlimited and the link to the full article.

We are entering an era of Cathedral Wealth, where the most meaningful thing that you can hand down to the next generation is no longer a watch or family estate, but a grand challenge, a life’s work or a multi-generational task.

In the Middle Ages, building a cathedral to honour God was considered one of the greatest works that a community could undertake. Everyone from heads of state and religious leaders to architects, craftsmen and labourers joined together to create these monumental structures.

Building a cathedral was an endeavour of such scale that they would often take decades or even centuries to finish. The people that laid the foundations would do so in the almost certain knowledge that they would never live to see the finished product.

Today, at a time when the future of mankind has never looked more complex and uncertain, we are increasingly realising that our biggest questions may require multi-generational answers.

‘Modernity has pulled us into an era of short-termism and individualism,’ says Rachel Armstrong, senior TED fellow and founder of Black Sky Thinking.

‘However, the biggest issues facing humanity, such as climate change, over-population and energy and resource shortages, require us to think in terms of solutions that will span generations.’

Like the craftsmen that laid the first stones at St Paul’s, St Basil’s and Notre Dame, today’s leading scientists, business leaders and creative innovators are beginning to think in terms of a new kind of wealth – the handing down of purposeful and life-affirming projects that only their grandchildren, or even great-grandchildren, will see bear fruit.

‘In the past, your legacy would have been much more about handing down tangible assets, such as cash and bricks and mortar,’ says Ken Forster, angel investor and managing director of Internet of Things solutions company Momenta Partners.

‘Today, it’s about a more organic, more sustainable wealth transfer – leaving your life’s work, something you created, unfinished, and trusting those who follow you to see it through to completion.’

In this report, we examine how Cathedral Wealth and long-termism are beginning to emerge in society in three pivotal ways.

: Creative Cathedrals – the multi-generational projects that are shaping the future of science, technology and design

: Commercial Cathedrals – how the world of business is moving its sights from the next quarter to the next decade and even the next century

: Cultural Cathedrals – why our fascination with long-term cathedral wealth is driving the emergence of new forms of art and culture that will be enjoyed by future generations

read the article here

Do you fall victim to soundbite economics?

Jacoline Loewen

At a recent book club, one of my girlfriends who teaches fashion and clothing at Ryerson, brought along a women's magazine from the early 1900s. I was startled by the quality of the content and the depth of the stories.

It made me realize that there has been a steep decline in the sheer complexity and structure of the written word. In comparison, the media and economic sources have simplified and shortened their features. It made me reflect on just how do we cull our daily information? How does this impact on how we view the markets and our investments?

Likewise, I do believe that the quality of economic analysis in financial markets has suffered in recent years. This is not a comment on the quality of my peers in the industry – there are many excellent economists and I do see the very best. 

However the trend in the broader market has been inexorably towards soundbite economics; superficial analysis with little attempt to challenge the wisdom of established authority or "rule of thumb" relationships. 
Call it the economics of the airport bestseller (am I bitter that my books are not stocked at Pearson? Maybe). 

We can see this in the way markets overreact to underlying data, even in the questions that are asked in the media. 

And do not get me started on the blogosphere.

Is it getting too late? The market is late in the cycle prompting investors to ask this question.

I am concerned about Canada says Niall Ferguson

With a flair for the dramatic, Niall Ferguson, is saying he is concerned for Canada. Ferguson likes to remind us that he predicted the 2008 crisis and was shouted down. He is now sounding a warning for Canada. Read the full article here.

Ferguson is a senior fellow at the Hoover Institution, Stanford University in California and a senior research fellow at Oxford. He is a prolific author on history, economics and colonialism and has written and presented five major television series, including The Ascent of Money, which won the 2009 International Emmy Award for best documentary.
"It seems to me unnecessary because Canada doesn't have a major fiscal problem," he said. "It's not as though Canada needs to sell its assets, so I don't see the need for a major realignment of its position as the United States' little brother."
On a recent visit to Australia, Ferguson recalled remarking to an Australian acquaintance: 'You realize you're gradually becoming a Chinese colony? "He said, 'No mate, it's more like a semi-autonomous republic. It's a good place to start (when discussing Canada-China relations)."
"I don't think China makes a massive distinction between Australia and Canada," said Ferguson. "These are thinly populated (nations) with huge quantities of resources that China needs. The question (for China) is: How best to access those? Do you do it by straight forward purchases on the open market or do you want to own them? And if you own them, how far can you go before there is a political backlash. This is what China is asking about a lot of countries."