Goals-Based Investing: A Visionary Framework for Wealth Management

241 Pages·2021·1.957 MB·English

by  Tony Davidow

PRAISE FOR
GOALS-BASED INVESTING
Tony Davidow has effectively captured the evolution of modern wealth
management by focusing on the key determinants of financial suc-
cess. This gem is a must-read for both financial advisors and individual
investors.
—John Nersesian, CIMA®, CFP, CPWA®, Head of Advisor
Education, PIMCO Investments
With this book, Tony Davidow strikes the perfect balance of explaining
success in wealth management as both an “art” and a “science.” He care-
fully threads the needle with advice, anecdotes, and wisdom that will
inspire financial advisors everywhere.
—April Rudin, Founder and CEO, Rudin Group
I have known Tony Davidow professionally for 20-plus years and know
him to be a thought leader on the topics of goals-based investing, alter-
native investments, ESG, and behavioral finance. I think this book is an
essential reference source for any advisor who wants to better understand
the current and future states of wealth management for high-net-worth
families.
—Scott Welch, CIMA®, Board Member of the Investments &
Wealth Institute
I am seeing a growing number of institutional investors evolve their port-
folios, moving assets into foreign markets, seeking to enhance the yield
in their fixed-income portfolio, and increasing allocations to alternative
investments, such as private equity, real assets, and hedge funds. As high-
net-worth investors and their advisors seek to upgrade their portfolios and
emulate the success of institutional investors, Goals-Based Investing pro-
vides the rationale and road map to facilitate the journey.
—Keith Black, PhD, CFA, CAIA, FDP Managing Director,
Content Strategy, CAIA Association
True leaders do way more than just effectively lead—they educate, they
motivate, and they lay a strong foundation for others to succeed in their
footsteps. In the decade plus that I’ve personally experienced the lead-
ership of Tony Davidow, he has embraced every one of these traits of
leadership in the financial advisory universe. His new book is a fantastic,
concise blueprint for how advisors need to evolve—a must-read for every
A-list advisor.
—Kevin Sánchez, CIMA®, CPWA®, CFP, former Chair,
Investments & Wealth Institute
The wealth management industry is undergoing a secular shift from prod-
uct to advice. In this context, Tony Davidow captures the evolution of the
advisor/client dialogue as it has moved beyond “the money” to a host of
noninvestment needs. Goals-Based Investing is equally useful for investors
who are often confused by their choices of products and advisors and for
advisors who need to deliver much more than investment returns to meet
their clients’ idiosyncratic objectives.
—Jamie McLaughlin, CEO, J. H. McLaughlin & Co., LLC
With each passing year, client expectations rise. Those that are not on
a learning journey will find themselves left behind. Tony Davidow is a
consummate teacher and well-equipped Sherpa who contextualizes the
changing world of wealth management and provides pointed guidance to
help advisors better serve high-net-worth clients.
—Christine Gaze, Founder and Managing Partner,
Purpose Consulting Group
After decades as an advisor to financial advisors and experience in working
with institutional money managers and funds, Tony is sharing his knowl-
edge and insights in long-term wealth management. Goals-Based Investing
is a timely book for financial advisors wanting to succeed and address
their client’s needs in the current market environment. Additionally,
do-it-yourself investors would benefit from reading Goals-Based Investing,
with up-to-date information on market developments, techniques for
asset allocation, and wealth management.
—Halvard Kvaale, Portfolio Manager, former Head of Manager
Research & Due Diligence, National Broker-Dealer
In his book Goals-Based Investing, Tony Davidow fuses the diverse land-
scape of investing into one succinct and comprehensive treatment to
help investors navigate the world of wealth management. Whether you
are a financial advisor or DIY investor, you will find relevant insights to
help build and manage portfolios. From behavioral finance to alternative
assets, to sustainable investing and more, Davidow covers it all.
—Margaret M. Towle, PhD, CIMA®, CPWA®, Yakima River
Partners, LLC
Goals-Based Investing is a must-read for fiduciaries and advisors. Tony
Davidow uncovers financial myths, discloses the market realities, and
everything in between. Tony takes us on a journey exploring the evolu-
tion of the wealth management industry.
—Alan Reid, Founder and CEO, rPartners
Tony Davidow was my original teacher and mentor on all things invest-
ing as I was coming up in financial services. He taught by showing, not
just telling. He does not talk down to the retail investor. Yet he manages
to help them meaningfully elevate their understanding of investing and
leverage its benefits to help meet their goals.
—Lule Demmissie, President, Ally Invest
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Copyright © 2022 by Tony Davidow. All rights reserved. Except as permitted under the United States
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Contents
Acknowledgments v
Foreword ix
Introduction xiii
CHAPTER 1 The State of the Financial Services Industry 1
CHAPTER 2 The Evolution of Wealth Management 23
CHAPTER 3 Becoming a Behavioral Coach 49
CHAPTER 4 Challenging Modern Portfolio Theory 69
CHAPTER 5 Incorporating Active and Passive Strategies 89
CHAPTER 6 The Role and Use of Alternative Investments 109
CHAPTER 7 Innovations in Private Markets 129
CHAPTER 8 Sustainable Investing 151
CHAPTER 9 Goals-Based Investing 169
CHAPTER 10 The Future of Wealth Management 189
Notes 207
Index 211
iii
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Acknowledgments
I have wanted to write a book for many years, but due to
company restrictions and time commitments, I was never able to start
the journey. I have written dozens of white papers, blogs, and arti-
cles addressing some of the topics and themes covered in this book,
and I have spoken at hundreds of conferences over the past couple
of decades addressing the changing wealth management landscape.
I have read hundreds of books on the history of Wall Street, invest-
ment strategy, behavioral finance, and modern portfolio theory, but
I felt there was a void: a book written specifically for wealth advisors,
providing guidance on evolving their practices, value proposition, and
investment acumen. This book is also written for the high-net-worth
investor who has largely been making their own investment decisions.
In writing my first book, I was fortunate to have a team of people
help me through the process. My Advisory Board encouraged me
to write a book because they thought I had something of value to
share. They reviewed chapters, offered constructive feedback, and
wrote reviews. I owe a debt of gratitude to John Nersesian, Margaret
Towle, Alan Reid, Scott Welch, Jamie McLaughlin, Christine Gaze,
Bob Powell, and Halvard Kvaale for their guidance and friendship.
My early views on investing and dealing with wealthy families
were impacted by Hans Jepson and Charlie Schulman. They took
a chance on a young farm boy with no investing experience. Hans
and Charlie taught me many valuable lessons that have led to my
writing this book, and I am fortunate to count them both as friends
and mentors after these many years.
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