'WEALTH
IS NOT HIS THAT HAS IT,
BUT HIS THAT ENJOYS IT'
 WE
THOUGHT it might be
interesting to feature a group of
investment advisers seldom heard about
in the media. They are the people
who manage the money of the wealthy.
Generally speaking, you need to have
a minimum of $1 million to invest
before these folks will take you on
as a client. Once in you are in, the
money is well managed in terms of
investments and other personal finance
categories, such as taxation. Even
the fees are relatively low when compared
with mutual funds. However, if you
are looking for large returns on your
money, or even better than average
returns, you’ve probably come
to the wrong place. The real allure
for the rich in having these managers
working for them is the opportunity
to be truly “wealthy.”
There are a few dozen
wealth managers who work on Bay Street.
We’ve profiled four in our cover
story (page 16). Normally reticent
about public displays, they were good
sports with us, even supplying a list
of their favourite stock picks and
allowing themselves to be photographed
stretching a rubber dollar. (Aside
from some healthy self-consciousness,
a couple fretted that being seen stretching
a dollar might be construed as being
overly aggressive in their investment
approach.)
Our wealth managers
appear to operate from an alchemy
of relationship building, trust and
integrity. That is what carries the
day for them. Clearly, their investment
strategies seem, by comparison, almost
too simplistic. For example, you buy
stocks when they are undervalued and
hold them over time. Sounds pretty
textbook.
So why can’t
most of the world do that?
Our wealth managers appear to have
the answer to that question and that
is what they are really selling. There
are forces operating in the world
that would have us all burn the textbook
time and again, such as greed. Take
1999. Our wealth managers were faced
with the pressures of jumping on the
dot-com bandwagon. As many of their
clients succumbed to the allure of
easy money to be made, our trusty
stewards stood fast, and didn’t
buy in, even under the threat of ruin.
Having withstood the client exodus,
their businesses are now growing again.
And those clients that stuck with
them are the happier for it.
In fact, reading
about these managers, I was struck
with the high level of trust that
their loyal clients afford them. There
are no constant phone calls or checking
up on how their portfolios are doing.
An update is more likely to happen
over a game of golf. The high degree
of trust may come from the wisdom
that making a lot of money is a far
different art than keeping it, or
enjoying it, for that matter. Left
to our own devices we’ll think
too much and screw up. The landscape
is littered with entrepreneurs who
were able to amass fortunes only to
lose them by not knowing when to quit
rolling the dice. Perhaps the hardest
part of being successfully wealthy
entails developing a level of trust
to listen to others’ advice,
especially people like these steadfast
wealth managers. You might consider
that you aren’t really wealthy
if all you do is worry about the money.
As Ben Franklin said: “Wealth
is not his that has it, but his that
enjoys it.”
See you in April!
Sincerely,
Martin Power |
