“Try to determine how they will interact with you.”, with Tyler Gallagher & William Spitz

Try to determine how they will interact with you. Do they listen? Will they truly customize a program for you or do they offer cookie cutter solutions? Will they devote the same amount of attention to your spouse and children? Is their reporting satisfactory? Aspart of our series about what one should look for when […]

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Try to determine how they will interact with you. Do they listen? Will they truly customize a program for you or do they offer cookie cutter solutions? Will they devote the same amount of attention to your spouse and children? Is their reporting satisfactory?

Aspart of our series about what one should look for when hiring a financial planner or adviser, I had the pleasure of interviewing William Spitz. As a Co-Founder of Diversified Trust, Bill has been instrumental in the ongoing development of the firm’s investment platform. From 1985 to 2007, Bill served as Treasurer and Vice Chancellor for Investments of Vanderbilt University where he presided over a ten-fold increase in endowment assets, during which time its investment performance placed in the top quartile of large endowments. Bill received NACUBO’s Rodney H. Adams Award which recognizes significant contributions to the field of endowment management, and the Hirtle Callaghan Award of Investment Leadership with exemplary investment management performance and unwavering professional ethics. He is also the 2008 recipient of Foundation & Endowment Money Management’s Lifetime Achievement award. Bill also serves on the Board of Directors of Mass Mutual Financial Group, Acadia Realty Trust, and is Trustee emeritus of Kenyon College in Ohio. He authored Get Rich Slowly: Building your Financial Future through Common Sense and is a frequent speaker at financial conferences. Bill earned a Bachelor of Arts degree from Vanderbilt University and a Master of Business Administration degree from the University of Chicago, where he was a Leon Carroll Marshall scholar.

Thank you so much for doing this with us! Our readers would love to ‘get to know you’ a bit more. Can you tell us a story about what brought you to this specific career path?

One of my professors at the University of Chicago, Jim Lorie, was preaching as early as the 1970’s that markets were relatively efficient and that the value-added in financial services was therefore in financial planning rather than investment selection. He was amazingly prescient and this view continues to guide my career.

Can you share a story about the most humorous mistake you made when you were first starting in the industry? Can you tell us what lesson or takeaway you learned from that?

Early in my career, I was working on a large stack of client reports, got sloppy, and ended up sending some of the reports out with a number of mistakes and typos. I was extremely embarrassed and learned that the presentation of material is just as important as its substance in gaining the confidence of clients. While I still have occasional lapses, I try to be meticulous with respect to details.

Are you working on any exciting new projects now? How do you think that will help people?

I regularly write white papers for our clients that discuss some aspect of investing and I occasionally venture, with some trepidation, into the world of politics and world affairs. I think education may be our most important role as financial advisors. Moreover, well informed clients are better clients because they understand the uncertainty associated with investing and have more realistic time horizons.

Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Is there a takeaway or lesson that others can learn from that?

I spent the first ten years of my career as a portfolio manager selecting stocks and bonds and came to believe that I was neither passionate nor very skilled at it. Through good fortune, I became the Chief Investment Officer of my alma mater, Vanderbilt University, where I found that I was actually quite good at asset allocation, manager selection, and identifying unexploited niche investment opportunities. Moreover, the track record that we produced was psychically very rewarding because of its impact on students, faculty, and research.

What three pieces of advice would you give to your colleagues in the finance field to thrive and avoid burnout? Can you give a story or example?

Three pieces of advice to avoid burnout

● Maintain balance and equanimity. Don’t get too excited about “wins” or down in the dumps about “losses”

● Don’t work with either clients or colleagues who damage your morale- life is too short

● Enjoy the intellectual stimulation of the financial world and constantly try to learn and adapt

As CIO at Vanderbilt, my return was widely reported and ranked against other large endowments every quarter. I would have burned out quickly if I had allowed the pressure of short term performance to define me.

Ok. Thank you for all of that. Let’s now move to the core focus of our interview. As an “finance insider”, you know much more about the finance industry than most consumers. If your loved one wanted to hire a financial advisor (not you :-)), which 5 things would you advise them to find out about before committing? Can you give an example or story for each?

Five pieces of advice when selecting an advisor

1. Ask about how they get paid-and make sure they disclose every source of revenue

2. Look for other conflicts of interest. For example, do they have an open investment architecture or only push their own firm’s products?

3. Look for a broad range of skills including tax and estate planning, cash flow modeling, portfolio construction, insurance and other forms of protection, etc.

4. Try to determine how they will interact with you. Do they listen? Will they truly customize a program for you or do they offer cookie cutter solutions? Will they devote the same amount of attention to your spouse and children? Is their reporting satisfactory?

5. Are your assets safe? Where are assets held, are there appropriate checks and balances and risk controls, is the advisor’s firm financially strong?

I think most people think that financial advisors are for very wealthy people. This is likely not actually true. Can you explain who would most benefit from hiring a financial advisor and why? Can you give an example?

Understandably, very few people are equipped to make the critical decisions that will determine their financial future so virtually everyone can benefit from a little expertise. The really important factors are: how much do you save, how is your savings invested across the various asset categories, how much of your return gets siphoned off by fees and other expenses, and most importantly, can you ride out the emotional roller coaster of markets without making a rash and destructive decision to abandon a well-conceived plan? These decisions are equally or perhaps more important for someone struggling to save for retirement than for a wealthy family with a significant financial cushion.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

While it is less true today due to intense competition, the CIOs of major endowments were quite friendly and collegial during my day. I therefore learned a great deal from interacting with my counterparts such as David Swensen at Yale, Jack Meyer at Harvard, Scott Malpass of Notre Dame, Alice Handy of UVA, and many others. Hopefully, I returned the favor by sharing good ideas with my endowment colleagues as well.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

I am very concerned about income and wealth disparity in our country and believe that we desperately need to have a civil conversation on this topic. To that end, I have written a paper on this subject for our clients and am participating in a number of small group seminars and discussions. I don’t carry very much weight in the world, but it is a start, and I am very heartened by the fact that this topic has been embraced by Warren Buffett, Jamie Dimon, and Ray Dalio among others.

How can our readers follow you on social media?

You can connect with Bill Spitz onLinkedIn here.

Thank you so much for joining us. This was very inspirational.

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