Be careful how much you pay: Financial products can be like a sieve. There are just so many ways for your money to leak out into someone else’s pocket. Look carefully at all of the costs of the investment and ask questions. If someone selling you a financial product tells you that they get paid by the selling firm and not by you, run the other way. Of course it is not free. You are probably paying more for the investment in order to compensate the person selling it to you and you don’t know how much.
I had the pleasure of interviewing Dana D’Auria. Dana is a managing director of Symmetry Partners and Apella Capital and a portfolio manager for the Symmetry Panoramic Mutual Funds. She is directly responsible for overseeing Symmetry Partners’ Research, which includes Investments and Investment Communications, Operations and Product Strategy Departments. Ms. D’Auria is also a member of the firm’s Investment Committee, which is responsible for setting the firm’s investment policy. Ms. D’Auria received her B.A. from Fairfield University in 1999 and her M.B.A. in finance from Fairfield in 2007. She was awarded the CFA charter in 2010.
Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the banking/finance field?
After I graduated from college I was a business writer at a daily newspaper for a few years. I was exposed to a lot of different aspects of finance through that position, but I found the markets particularly interesting. I decided to go back to school to pursue an MBA to make sure finance was the right field for me and to facilitate an entrance into this world if I decided that it was. Sure enough, one of my professors worked as a consultant at a boutique asset manager called Symmetry Partners and he made the connection for me.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far?
Well, it’s not amusing, but I remember being in England in the summer of 2008 when the financial crisis was well underway, but we had not yet seen the worst. Talking to folks over there about what was going on and reading the papers made the sense of foreboding almost worse than being in the office. You really wondered when the next shoe was going to drop. I was back home when the news came out about AIG; I would have to put that as the moment that the world felt as if it were caving in. Our own investments were dropping with the market, though not nearly as badly as they could have if we had been concentrated in any of the banks that were failing. I spent my time scouring our investments for latent risks. I counted it particularly fortuitous that our investment philosophy stresses diversification, so we were never too overweighted in any one position. Tell anyone who says diversification doesn’t work to talk to the folks who were heavily invested in Bear Stearns or Lehman Brothers. Prior to the crisis, no one would have dreamed either of those banks could go under.
Are you working on any exciting new projects now? How do you think that will help people?
Launching a new family of mutual funds and now working to grow them probably ranks as the most exciting project I have worked on in my career. I was responsible for leading the effort at my firm to move from model management to a true fund-of-funds manager. I joke around the office that birthing mutual funds was harder than birthing my kids. There are so many business, legal, regulatory, and relationship requirements. And that doesn’t even get to the investments! The good news is that the experience was extremely fulfilling. Being at a smaller firm, I learned about literally all aspects of the business. And now we have an offering that truly brings what we believe are the best findings in evidence-based financial science to the investing public. Financial services is undergoing a sea change. Activities that used to be high touch are becoming commoditized, and that includes how you approach capital markets. Our investment philosophy has always recognized that academic findings could reduce investment costs and lead to better outcomes. Our mutual funds take advantage of that, and now the world seems to be coming around to our way of thinking.
What do you think makes your company stand out? Can you share a story?
Symmetry Partners is probably best known for its investment strategy. As a boutique firm, we have been told that we “punch above our weight.” It’s a nice compliment that basically means we have successfully brought a very effective investing philosophy — which is best-of-breed evidence-based factor investing — to the financial adviser and client community. Evidence-based investing, which relies on the insights of academia to inform how you select and weight the stocks in your portfolio, is not only a sound investing approach, but it’s a good model for building an advisory business around. My firm provides investments to financial advisers who understand the importance of wealth planning and strong client relationships to delivering an exceptional client experience. Advisers embrace the strategies we offer because they are defensible, consistent, well-engineered and explainable. They do not have to conjure up a rationale or apologize for why some investing black box failed to outperform. Returns are a function of how the markets and factor exposures perform.
Wall Street and Finance used to be an “all-white boys club”. This has changed a lot recently. In your opinion, what caused this change?
I’m a data driven person, so while I can come up with many logical explanations, I’m not sure I can identify the true driver(s). I’d guess it’s largely a combination of a couple of factors: First, you have general movements to empower women as well as to increase their participation in STEM careers. Second, I think Wall Street and finance are changing in ways that make them perhaps more inviting to women. The old Wall Street paradigm highlighted rock star managers and exclusive high-cost investments. With decades of serious academic work now thoroughly filtering into the field, money is pouring into systematic strategies that result from their findings: passive and smart beta approaches that take the ego out of investing and instead focus dispassionately on the data.
Of course, despite the progress, we still have a lot more work to do to achieve parity. According to this report in CNBC, less than 17 percent of senior positions in investment banks are held by women. In your opinion or experience, what 3 things can be done by a) individuals b) companies and /or c) society to support this movement going forward?
I think a lot of what needs to be done has been identified and is happening and we need to continue to build on that. From my experience, success in your career depends a lot more on your immediate circle than a top-down policy, though I’m sure the latter can drive change. It takes work and even a little risk to use your vantage point to open up opportunities for another person. In my experience, it’s been those moments — where someone saw my talents and made a path available to me, that have profoundly impacted my career development. Companies can foster that kind of thinking by proactively encouraging employees to help one another and especially for managers to apply that sort of thinking to the development of their people. For society, I think it’s about the work/life balance discussion and providing more support for women to have a family and still operate and grow in the workplace. It may take legal changes to force the private sector on that front. It’s not revelatory, but it seems to be taking a long time to make progress.
You are a “finance insider”. If you had to advise your adult child about 5 non intuitive things one should do to become more financially literate, what would you say? Can you please give a story or example for each?
· Take the time to familiarize yourself with the fundamentals: The adults in the household both need to have a basic understanding of how the monthly financial picture comes together. They should both have access to all of the accounts, know the basic budget, etc. Women often leave this to their husbands, but they are still likely to outlive them, and it’s a lot harder to catch up after the fact.
· Do not put all of your eggs in one basket, especially the company you work for: If you buy a stock, you own a tiny bit of one company. If that company fails, you’ve lost most or all of your investment. If you work for that company, you lose your nest egg and your job at the same time. Think of Enron, or Lehman and Bear Stearns. Instead of buying the stocks of one or a few companies, buy a mutual fund that spreads your money out amongst thousands of stocks in dozens of countries. Some will do great, some will do terribly, but overall, your money will grow along with the economy and the markets.
· Be careful how much you pay: Financial products can be like a sieve. There are just so many ways for your money to leak out into someone else’s pocket. Look carefully at all of the costs of the investment and ask questions. If someone selling you a financial product tells you that they get paid by the selling firm and not by you, run the other way. Of course it is not free. You are probably paying more for the investment in order to compensate the person selling it to you and you don’t know how much.
· Pick the right allocation and then stay put: The basic way to modulate risk is in your allocation to riskier equities vs. less-risky bonds. The more of the former, the higher the potential return, but also the greater risk of loss. In good times, investors tend to become increasingly “risk-loving.” We invest in more equities and in riskier equities and bonds. Then when volatility inevitably hits, we are not ready for it. Our portfolios take on greater losses than we had anticipated. Our brains are hard-wired for fight or flight, not calmly watching our life savings spiral down. So, we sell off to stop the bleeding. The antidote to this risk is to put only the amount in equities that you can bear to see losses in and then ride the lows out. After 2008, some investors left the market for good. If they were reasonably diversified and had stayed put, they’d most likely have made a full comeback and enjoyed the upside of a 10-year bull run.
· When you have enough saved, hire a professional to be a caretaker for your assets. Find a good financial adviser who will not only guide you through the investment, tax and estate landscape, but can help you modulate your own behavior. A good adviser will put you in an allocation you can stomach in good markets and bad, and will help you stay disciplined when times are tough.
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?
I have been lucky to have several people help me along in my career. It’s actually pretty heartening to see how many people are willing to take an interest and mentor you. I try to do the same for others. John McDermott, one of my MBA professors who is now the Chief Investment Strategist at my firm, has been particularly instrumental in my success. He connected me with my firm and he taught me not only about the industry, but the theory and empirical works that underpin modern investing. It’s been a great relationship for me that spans years of shared experiences. The first story I have is probably still the best. I went to John for a reference to a firm I was interviewing with. The firm shall remain nameless, but suffice to say that John was not impressed. He pushed me to interview with a firm he was consulting with. I took the interview but I wanted to be in New York, and as I drove toward Hartford from southern Connecticut I felt I was going an hour in the wrong direction. I was pretty convinced by the time I got there that I was going to go through with it for courtesy only. Of course, when I met the owners and learned about the investment philosophy, I was hooked. John knew I wanted New York. I guess he also knew what I’d be willing to give it up for.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“Act as if what you do makes a difference. It does.” I think it’s easy in our daily lives to minimize our own contributions — good or bad — because they are usually part of some greater whole. How many people work for firms they don’t like, let alone believe in what they are doing. I work in an industry where the need to keep a focus on excellence is crucial. We are dealing with people’s life savings, so there is no such thing as being just a cog in the wheel.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger.
I am very excited about what I see in terms of impact investing and ESG. There are many issues in our country and our world for which there is considerable broad agreement, but not enough individuals in the middle who take it on. So you have the powerful and committed few driving policy. Laborers are able to get a better deal because they band together to form unions. We can see the same type of unity in investing if the products are there. Coordinated movements in the investment savings of the broad middle class would be extremely powerful. I think the new paradigm will be that investors will demand to know what their investment dollars are supporting. The private sector cost of capital is driven by supply. Cut off the supply and you can force change. A lot of eyes are focused on impact investing, but the money isn’t there yet. I hope that Millennials will force this issue in our industry.
Thank you for these great insights!
Symmetry Partners, LLC is a Registered Investment Advisor located in Glastonbury, Connecticut. The firm designs and manages portfolios made available through a group of select advisors, including a suite of factor-based mutual fund and ETF portfolios. This content should not be considered investment advice. Information is provided for educational and background use only.
About The Author:
Tyler Gallagher is the CEO and Founder of Regal Assets, a “Bitcoin IRA” company. Regal Assets is an international alternative assets firm with offices in the United States, Canada, London and Dubai focused on helping private and institutional wealth procure alternative assets for their investment portfolios. Regal Assets is an Inc. 500 company and has been featured in many publications such as Forbes, Bloomberg, Market Watch and Reuters. With offices in multiple countries, Regal Assets is uniquely positioned as an international leader in the alternative assets industry and was awarded the first ever crypto-commodities license by the DMCC in late 2017. Regal Assets is currently the only firm in the world that holds a license to legally buy and sell cryptos within the Middle East and works closely with the DMCC to help evolve and grow the understanding and application of blockchain technology. In addition to his role with Regal Assets, Tyler is a regular contributor to Forbes, Arianna Huffington’s Thrive Global and Authority Magazine. Tyler has also been featured in many news publications and has been a guest expert on “The News with Ed Shultz”. Tyler is a proud member of the Forbes Finance Council a private invite only-group of hand-selected industry leaders.