Financial Advisors Keep Learning

As the world is continuously changing, and the financial markets certainly are, it is important that we as financial advisors continue to learn, listen and interact with top industry experts.

Keith and I recently attended a series of programs in late September, as we do multiple times a year. I participated in a “Masters Forum” study group on Friday and Saturday, September 23-24th. This group of 20-25 members, which started in 2006, meets twice a year, once in the fall and once in the spring. We also talk in smaller groups every two weeks, to discuss topical issues. Keith participated in a similar study group on Sunday, and also talks to members of his peer group on a regular basis throughout the year.

These sessions were followed by the BAM Annual National Conference, which is a 3 day event featuring top speakers from across the country. This conference is attended by approximately 125 firms, representing $14 Billion in assets under management.

The following are some of the items from these meetings:

  • Investor behavior is critical to investment success. That was the message of Carl Richards, of This NY Times weekly writer and sketch artist, has developed a series of sketches to explain and discuss complex financial issues in a simpler manner. We now have 4 of his sketches in our office, and will soon have a fifth. Visit us to see them!
    • Carl emphasized the importance of investors’ behaviors and emotions, which cause huge gaps (differences) between market returns and what most people actually earn on their own (usually much less!).
  • We interacted with a number of portfolio managers and mutual fund executives, regarding updates on the financial markets and the strategies that we utilize. We are very confident in our long term investment philosophy, which for stocks is primarily implemented through Dimensional Fund Advisors (DFA) mutual funds.
  • Hedge funds: we continue to not recommend them, as they are hard to evaluate, costs are huge (relative to mutual funds that we recommend), a substantial numbers of these funds fail, which makes historical analysis very difficult, as the poor performing funds drop out of the databases.
  • We heard one of the top national speakers on retirement distribution strategies.
  • Portfolio rebalancing is critical for long term investment success. Having the discipline to rebalance (to buy certain stocks when they are low, and sell certain stocks when they are high) remains a key part of our philosophy and value we provide to our clients.
  • We discussed the importance of communication skills and truly listening to our clients. One of the speakers, Mitch Anthony, has written a book titled “Defining Conversations.” He stressed the importance of real conversations, about deep issues and concerns, not just having superficial discussions. I started this book and highly recommend it.
Throughout the five days, we had the opportunity to share ideas and discuss various topics with both industry experts, as well as our peers throughout the country. This strong network of fellow advisors is an important component of our firm, as being able to discuss both specific client situations and general financial issues is critical to maintaining our discipline and add intellectual value on behalf of our clients.
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