Title: Director and Portfolio Manager, The David Bruce Group
In the business: 32 years
Minimum investable assests: $1 million
Currently reading Operation Mincemeat (my father was part of this highly successful British deception plan during World War II)
The easiest return
Keeping costs low is the easiest return. I use a lot of ETFs and index funds. Most clients with a timeframe of at least 15 years should be in low-cost, tax-efficient portfolios exposed to a variety of markets such as India and Brazil, and asset classes such as small caps, value stocks, and managed mutual funds.
I only take on market risk. I build portfolios that aren’t highly correlated using high-quality bonds, REITs, equities with a tilt toward small cap and value, convertible bonds, and preferred shares. AAA and AA bonds had a negative-one correlation with equities in 2008 and 2011.
Keep it personal
I used to have five times as many clients as I have today. During semi-annual meetings, I sometimes forgot what we’d discussed previously, and kept furtively turning to my notes. That’s when I decided to focus on million-dollarplus households, and became a fee-based, discretionary advisor. I transitioned the bottom part of my book to other advisors, telling clients they’d be better served with a broker who had the resources to look after their size of account.
To my retained clients, I explained this model would allow me to make quicker investment decisions, and they’d gain from a more transparent and tax-deductible compensation model.
Now, I have enough time to get to know clients’ kids, siblings and relatives. A client recently told his four adult kids, “If anything happens to me or mom, make the first call to David.”
A lot of clients approaching retirement want to get out of volatile markets. Many of my clients are in manufacturing, which requires big capital investments and long planning cycles. I tell them, “The underlying fundamentals of investing don’t change with changing markets and life stages. You don’t start manufacturing car parts differently because of European debt problems, or because you’re no longer 40.”
Originally published in Advisor's Edge
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