A few months ago we sent our existing clients a survey asking them “Why High Rock?” with 6 simple options and asked them to rank them according to their preferences:
Why High Rock? Rank your priorities:
a. Fiduciary Duty
b. Fee Transparency
c. Risk Management (Tactical Model / Tactical Approach)
d. Wealth Forecast (Goals oriented approach)
e. Independent Review Committee
f. Client Service
g. Comments (how can we do better)
The results were interesting. For many, client service was a priority. For others the risk management was at the top of their list and for some, a goals-oriented strategy held the highest ranking. Others commented that it was all of the above (which was not offered as an option, but the message we received was clear).
At the moment, as we have seen a wave of new clients come to us, it is pretty much about the risk management and, to an extent, the fiduciary duty that we provide to our clients (and of course they like our very competitive fee structure). Passive balanced portfolios are down significantly on the year – a benchmark we monitor, the I-Shares Core Balance ETF, is lower by over 15% this year. Tactically balanced portfolios at High Rock are down, but by significantly less.
We were absent from the crowded space of stock market cheerleaders through the post- pandemic easy monetary policy period that witnessed soaring stock markets, warning any who would listen that this was not going to end well. We quietly re-balanced to greater holdings of cash for our clients. Cash which we held in high interest savings funds (low return at the time, but significantly better now, as interest rates have risen). We have been (and will continue to be) spending this cash on cheaper equity market prices as they come down (as we did when prices came down in 2020 when the pandemic began).
There maybe another wave of selling yet to come, there may not be, but we have mitigated the downside and are poised to take advantage when the current situation resolves itself: higher interest rates to combat inflation will slow the economy and stock prices fall. Inflation may already be peaking, but central banks are bent and determined to make this a certainty and will likely raise rates far above where they need to be just as they waited too long to raise them in 2021. When stock market returns turn positive again, our clients will be getting back to growth in their portfolios (having gone down less in value) faster than those who’s fully invested situations force them to wait longer for the recovery to get them back to where they once were. Some call it “timing” the market. We call it letting re-balancing work to our advantage (aka Disciplined Investing).
All that aside, our new clients tired of the advisor world who popped them into equity mutual funds and stocks with the mantra being “just buy and hold!” and avoided true rebalancing. That lacks fiduciary duty to us and reeks of conflicts of interest to just generate commission revenues (for themselves, the financial institutions they work for and the shareholders of those institutions).
We are dedicated to providing our clients with the best risk-adjusted returns possible, a no-conflict of interest (where we put our clients interests ahead of our own) portfolio management strategy and optimal client service. If you think that you are not getting these in your current investment advice relationship, perhaps it is time to join the others who recently made the switch and have that conversation with someone who truly cares.