After 20 years in the corporate world, I decided to follow my true passion for helping people improve their financial lives. I spent six months doing informational interviews with a variety of firms, large and small, publicly traded and independent, commission-based and fee-only. Virtually everyone I met was helpful and supportive, and I greatly appreciated their advice. However, it quickly became clear that this is a tough industry to enter – between 60% and 90% of new advisors quit or get fired within three years. The reason is simple – they didn’t bring in enough assets.
In most of my discussions, I heard words like “marketing”, “sales”, “business development”, and “assets under management”. Things changed when I met Pat and Josh at Greenspring. I heard words like “client”, “service”, and “asset allocation”. At Greenspring, while bringing in new money is necessary, of course, in order to sustain the business, it is not the primary focus. First and foremost is doing a great job for clients and delivering outstanding results. Because of this, unlike most firms, there are not strict quotas for bringing in new clients. Also, Greenspring is unique with a team approach where two advisors are assigned to each client relationship. Instead of spending 90% of my time prospecting for new business, I can focus 90% of my time on developing and implementing strategies that help our clients.
Fortunately, our clients agree. With a 99% retention rate and steady stream of client referrals, Greenspring is thriving. I feel lucky to have found Greenspring. After all, instead of spending time finding wealth, shouldn’t wealth management be more about managing wealth?
At Greenspring, our investment philosophy is pretty simple. We try to help our clients manage their investing behavior by focusing on the four simple things they can control:
- Being globally diversified
- Being disciplined
- Controlling costs
- Minimizing taxes
Arguably the wisest and most successful investor in history, Warren Buffett is certainly the richest (at the end of 2013 he was worth an estimated $60 billion and made roughly $37 million per day last year!). One of my favorite reads each year is the annual letter he writes for shareholders of Berkshire Hathaway (see the link for access to his letters dating back to 1965). You will learn more about business and investing than you can imagine simply by reading this treasure chest of information.
Fortune Magazine has just released an exclusive excerpt from this year’s upcoming letter. I was struck by 3 things that he emphasized that resonate closely with our approach:
- The importance of managing behavior – His 5 “fundamentals of investing” all focus on avoiding negative behaviors (” If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays.”)
- Validation of passive investing for most people – “The goal of the nonprofessional should not be to pick winners — neither he nor his ‘helpers’ can do that — but should rather be to own a cross section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal.”
- The wisdom of low cost diversification – “Following those rules, the ‘know-nothing’ investor who both diversifies and keeps his costs minimal is virtually certain to get satisfactory results.”
If you have an interest in becoming a smarter investor I would encourage you to give Mr. Buffett’s annual letter a read when it is released on Saturday. If the excerpt is any indication, it’s sure to be a great read.
Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.