Surviving & Thriving in the

New World of Financial Advice

Ben Carlson, CFA

Director of Institutional Asset Management,
Ritholtz Wealth Management
 My Books

Organizational A Wealth of
Alpha Common Sense

CreateSpace, 2017 John Wiley &

Sons, 2015
A manual for
institutional How simplifying
investors to the investment
improve decisions process can
and add value improve long-term
through intelligent investment results
planning and by avoiding
organizational complexity.
structure.
 Financial Advisors in the U.S.
310,000 financial advisors (down from
325,000 in 2008)

Half of all advisors are over the age of 55

An estimated 100,000 advisors will retire

in the next decade

Wirehouses control around 50% of the

market

Almost 12,000 Registered Investment

Advisors (RIAs)

Source: Cerulli Associates

The DOL Fiduciary Rule
Does the Market Care Who
the President is?

Source: DFA
 Big Ideas We Believe In
Investors are compensated for the risks
they bear & some risks pay better than
others

While the future is unknowable, the past is

a decent guide and you have to always
understand the present

Asset Management has to be tied to goals

to work effectively

Less is more, costs & taxes matter,

forecasting is unreliable & performance is
mean-reverting

Client fit is everything

Behavior will determine client success or

failure
The Advisor of the Pastand the
Future
Next Gen Advice
 Unfortunate Realities of the
Investment Business
A talented sales staff will trump a talented
investment staff when attracting $ from
clients

. The products that sound the best are

often the worst ones to invest in

. Clients are often in search of unrealistic

solutions

. Increased activity does not necessarily

lead to better results

. There are no guarantees

 Biggest Advisor Mistakes

Chasing past performance & fad investments

Overconfidence

Having the wrong type of knowledge

Fighting the last war

No idea what risk entails in the markets

Invert, always invert
Focus on What You Control
Decision-Making Amid Uncertainty

Perform a pre-mortem

. Document your process

. Stay humble

. Avoid blame & excuses

. Scenario analysis

. Make it a habit
Sources of Alpha
 How to Succeed in Todays
Financial Markets
Understand that evidence-based research doesnt always work
perfectly with real world investor behavior

Admit that every investment strategy or portfolio has drawbacks

Know what you own and why you own it

Financial advice & investment management go hand-in-hand

Perfect is the enemy of good

Know thyself
Successful Financial Advisors
manage investors more than investments.

understand that the long-term is the only

time horizon that matters but people dont live life
in the long-term.

...obsess about their clients, not their

competitors.

speak in plain English to help their clients

understand whats going on with their money.

help clients focus on those things that they

control and ignore everything else.
Questions?