Welcome to the inaugural post of Venturi Viewpoints. We will be discussing topics on life, wealth, and wisdom, by interviewing a wide range of contributors. We look forward to sharing these posts with you regularly.
Why did you become an Advisor?
Originally, I thought I would follow in my family’s footsteps and become an engineer—namely a petroleum engineer. In the mid-80s, however, that was not a promising career path during the oil crisis. My dad, eager to have his fourth son gainfully employed, suggested that I switch to business, so I completed a degree in Economics. Following graduation, I took a job in corporate executive services work, and that’s where I really found my niche. I discovered that I had a knack for communicating with executives and entrepreneurs who were in the midst of significant transactions.
I’ve long believed that people should identify their unique abilities and focus on those strengths. Our clients do that well, which is often the reason behind their success. For me, wealth management is a good avenue for what I do well: helping people protect and preserve their asset base.
You advise a number of people who have achieved significant financial success. What are the habits and mindsets that characterize this group?
I’ve found that many entrepreneurs and business owners are able to take the long view, both of their businesses and their investments. Many see the public investment markets as a necessary component of their wealth, but their true passion is for private investments.
I’ve also found that many clients recognize that there’s more to wealth than just their balance sheet. Many of them are acutely aware of the impact of wealth on their families. They want to ensure that their children and grandchildren derive positive outcomes from their wealth and avoid its pitfalls. We help those clients cultivate sound stewardship in the next generations. For many, that means thinking beyond the next 12 months or even beyond 2-to-3 years and delineating their vision 20 years from now. Read more in our blog article for Raising Wealthy Kids.
When they take that long view, it’s akin to a business plan—something they innately understand. It helps these families crystallize what they want their wealth to accomplish—not just structurally, as in a trust or family foundation, but in terms of life’s deeper values.
“Money can’t buy happiness.” True or false?
Absolutely true. When people sell a closely held business, for example, they typically have plenty of money, but can feel a little lost. Their business had been their primary source of identity and meaning; without it, their satisfaction can dip, if only temporarily. Typically, it takes people some time to figure out a higher purpose for their wealth. They may go through a period of acquisitions or new business ventures—some of which may be more circumspect than others. Eventually, however, most people discern a path for themselves and their wealth that gives them satisfaction. Many times, that path involves their charitable interests, which can help them connect in new ways with their children and grandchildren.
What’s one time-sensitive issue that people should think about?
It’s hard to read the tea leaves in Washington, but I think whatever the outcome of the 2020 election, it would be a good idea for clients to think about wealth-transfer opportunities now. The current estate-tax exemption is more than double what it was in 2016. Wealth transfer is a politically charged issue, however, and may be subject to change in the near future. I would like to see clients capitalize on current opportunities to transfer wealth outside of their estate. These processes take time and deliberation, though, so the sooner clients can begin this process, the better.
What do you think makes people happy in life or at work?
I think it is having a higher purpose. For some, that involves their faith. For others, it involves helping their children. And for others, it’s changing the lives of people in need. The money, itself, never brings happiness. Yes, money can buy nice things and provide great experiences, but eventually, that novelty wears off. And when it wears off, people typically find more satisfaction in contributing to a cause that is greater than themselves.
Do you have any cautionary tales for wealth creators?
I would emphasize the ongoing importance of diversification and due diligence in their new business ventures. Sometimes, after a liquidity event, entrepreneurs spend the next year literally writing checks in an effort to uncover the next great opportunity. However, the odds are stacked against them—even for people who have traditionally had success “going with their gut.”
We look to provide clients with a framework and the resources to evaluate new business and investment opportunities systematically. We’re not asking them to retire or not to invest. We know they are terrible retirees, in fact, and we applaud that characteristic in our clients. However, we do want their capital to be put to good use, for them and for their families.
If you could change anything about the investment industry, what would it be?
I would like to see more separation between the banking and brokerage industry. The repeal of The Glass-Steagall Act in 1999 benefitted Wall Street and created convenience for the client, but it has also created limitless conflicts of interest, as banks have targeted their customers for cross-selling of products. Convenience usually comes with a premium price tag.
I am also a believer in the Fiduciary Standard; I’d like to see more disclosure to illuminate what this practice means, who is bound by it, and what its implications are, both when it is in force and when it is lacking. At Venturi, we follow the Fiduciary Standard, which is a game-changer for our clients. It means we have to seek their best interests in all that we do.
What words of wisdom do you have for people who are actively building their wealth?
My advice comes back to finding purpose and meaning. Yes, you want to know how well your investments are doing relative to a benchmark. And yes, you want to think carefully about taxes and structure. But most importantly, you want to focus on executing on your family’s purpose and your long-range plans. Those issues influence your success more potently than any singular financial variable.
I also encourage people to figure out “their number.” Everything in this business is a big math problem. Whether you are trying to build wealth, transfer it to your children, or give it away, you need to know the number it takes for you to be you. Once you sell your business or retire, you’ve got what you’ve got, in terms of assets. You want to make sure that your number jibes with what it takes to make you happy and maintain the lifestyle you envision for yourself and the people you love.
What’s some of the best advice you ever received?
I’ve come to see the wisdom of seeking balance, in life, and in work. I’m not an expert at that, by any means. Like my clients, I can be extremely focused and driven by my work; I’m wired a lot like them, which helps us communicate well. However, I do recognize that seeking balance is critically important and has helped me find greater purpose and meaning in what I do, for myself, my family, and my clients.