Understand Complexity – Keeping It Simple
The founders of Fiduciary Wealth Partners, Preston McSwain and James Cornell, together have over 50 years of experience working with wealthy families in senior management and advisory positions with leading financial services, investment management and trust companies.
Our analysis of independent academic research and evaluation investment manager presentations from many investment firms and consultants all keep pointing us to the same conclusion:
Index funds should be the at the center of all investment portfolios
In addition, we have stepped back and looked at our past biases and experiences.
“I successfully sold active management for the better part of 25 years and even won an award at a prior large firm for selling record amount of actively management equity funds.”
“I did not think I was biased, but incentives can be a powerful force in behavior. Once I started my own firm and looked at nothing but the evidence my views changed. The evidence is clear: Index funds outperform the vast majority of active managers over most any time period or market cycle.”
Preston McSwain, Founder, Fiduciary Wealth Partners
In addition, we don’t believe in marking large tactical asset allocation or economic calls. Again, it isn’t that we don’t follow the markets and events closely. We constantly debate ideas.
The problem is that the evidence is quite strong that even the most haloed investment professionals or economists are less accurate than a coin toss (click here for more or see below to find out why we don’t make forecasts).
We believe talented managers exist, but as an independent fiduciary that has no ties to any investment firm or managers we feel we are as unbiased as we can be (everyone has natural biases).
Based on the evidence and our practical experiences related to both emotions and returns, we encourage clients to consider what we call opportunistic investments such as various types of private investments. We do not feel that they are a “need-to-do”, however, and should only be implemented if a client is fully comfortable as it relates to all costs, terms, liquidity and risks.
Related to all of this, we know that many websites have impressive charts that can make emotional points related to views that differ from ours, and we respect and encourage all to challenge our views (it will only make us better and create better outcomes for our clients).
We encourage you to take time to read what we have researched and written about in detail, which has been reviewed and published by some leading investment organizations.
Below are links to pieces we hope you will find useful. We think the evidence for our approach that actively resists the complex and keeps it simple is compelling, but after researching the issue yourself, let us know your thoughts.