AUM/Boston -- Q3 2018 Volume 1, Issue 1 by AUM/Boston

June 2018 / VOLUME 1 ISSUE 1

New England’s First Magazine For Financial Leaders » Thoughts » Boston Agenda

AUMBoston THOUGHT LEADERS IN ASSET MANAGEMENT

CITY OF

CHAMPIONS

LIKE ITS SPORTS HEROES, BOSTON'S FINANCIAL LEADERS ARE MAKING THEIR MARK

page 6

in this issue 2 OUR STORY Welcome to AUM/

Boston; the power of a story; what your shoes say

JUNE 2018

LEADERS

28 THOUGHTS Robots vs. human advisors; does

COVER STORY

campaign spending affect elections?;

about you

considering convertible bonds; the road ahead for

4 AUM/ BOSTON ADVISORY BOARD

the almighty dollar

34 AUM AGENDA

Meet the

minds behind

Mark your

AUM/Boston

calendars for these upcoming events, seminars, and

page 10

15 CITY OF CHAMPIONS

conferences

Celebrating Boston’s financial superstars

page 36

20 A CALCULATED IMPACT

36 GOOD CITIZENS

Lisette Cooper and Bill McCalpin of Athena

6 TRENDING

big balance sheets; they have big hearts, too.

Data meets art

Spotlight on The

investing; advice

Camp Harbor View

bars for Millenials;

Foundation and

a foodie’s guide to eating well in Boston; how supporting social

empowerHER

LUCIE WICKER PHOTOGRAPHY (COOPER); RICH OFSTHUN (GILBERTIE); ISTOCK (TWITTER AND FOOD)

Twitter sins; Big

have more than

power of values investing

The seven deadly

Wealth managers

Capital Advisors share the

25 A PROVEN COMMODITY

Sal Gilbertie and Jake Hanley

40 END USERS

causes can boost

of Teucrium Trading LLC

your bottom line

show how Commodity ETFs

millionaire next

... and more

are changing the game

door

Finding the

COVER CREDITS TOP, L-R: JOHN HANCOCK; ABIGAIL JOHNSON (CREATIVE COMMONS); EDWARD JOHNSON III ON THE COVER OF TIME MAGAZINE; JOAN BAVARIA (TRILLIUM ASSET MANAGEMENT); GREG MILLER (WELLESLEY ASSET MANAGEMENT); PETER LYNCH (CREATIVE COMMONS). BOTTOM, L-R: JOE DEITCH (COMMONWEALTH FINANCIAL NETWORK); SUSAN KAPLAN (KAPLAN FINANCIAL SERVICES); LISETTE COOPER (ATHENA CAPITAL ADVISORS); DOUGLAS CHAMBERLAIN (APPLETON PARTNERS); LISA JONES (AMUNDI PIONEER ASSET MANAGEMENT); ROBERT GLOVSKY (THE COLONY GROUP); GILLETTE STADIUM (PXHERE); FENWAY PARK (PXHERE); TD GARDEN (PXHERE); 2011 BOSTON BRUINS STANLEY CUP PARADE (CREATIVECOMMONS/MATTHEW REID)

AUM/Boston June 2018

OUR STORY

“This is a people business.”

—Rich Ofsthun, Founder & Publisher, AUM/Boston

WELCOME TO AUM/BOSTON AND THE CITY OF CHAMPIONS

Rich@AUMBoston.com

RARELY DO WE MAKE MAJOR INVESTMENTS unless we do our due diligence, so it is in that same spirit I vetted the idea of AUM/Boston – a local, people-oriented, omnichannel trade medium. Amidst the overwhelming positive reception was, “this is an idea whose time has come.” Our mission is to introduce the thousands of asset managers, RIAs, independent brokers and financial advisors to each other. We want you to learn more about those you could be doing business with, so we can achieve our overarching goal: for you to grow your AUM. AUM/Boston will appear online at AUMBoston.com and six-times/year in print.

professionals. But, no matter, they aren’t

ethics, lessons learned, accomplishments,

We’ll co-host local, informal Meet-Ups and

well-known, much less known. We should

goals, philosophies and the role we play

webinars. You’ll have the opportunity to

all get to know each other. Why? Because

in our community. Those are the qualities

meet and get to know the many financial and

it’s better to do business with those who are

that really matter in a long-term business

investment thought leaders in New England

close by – neighbors you can get to know

relationship, especially those that involve

who make Boston such an important and

and trust.

millions of dollars.

AUM IS IMPORTANT, BUT SO IS … HEIGHT?

CHANGES IN YOUR MARKETPLACE CALL FOR NEW STRATEGIES TO GROW AUM

influential financial center.

BOSTON: HOME OF THOUGHT LEADERS IN ASSET MANAGEMENT … WHO OFTEN GO UNNOTICED

Differentiation: There are so many

Have you ever noticed the multitude of

everyone and everything has been

championship banners hanging from the

commoditized. You must, and you can,

ceiling of Logan Airport’s Terminal C security

stand apart if you humanize yourself. Exposure: Advisors (asset allocators) can’t

area? It was on a recent trip that I first looked up to notice all the banners from all the

Judge Smails: Ty, what

know all of the asset managers, even in

teams we know so well. It’s very impressive.

did you shoot today?

their own backyards. But you can gain that

Ty: Oh, Judge, I don’t keep score.

advantage and build relationships if you put

made up of individuals: players, coaches,

Judge Smails: Then how

yourself and your messages out there.

owners who played their parts well. The

do you measure yourself

Thought Leadership: Content has replaced

same is true of Boston and New England’s

with other golfers?

most advertising, and you must work it.

Blue Chip and fast-growing investment

Ty: By height.

It’s easy to get lost in a sea of blogs, emails,

Those great teams were just that: teams,

firms and advisories: it’s the individuals that

—Caddyshack, 1980

We’ve done our best to find them in order

social media or languish on your corporate website, but you can be heard.

make them great. I have no doubt most of you are familiar

At AUM/Boston, we can help by breaking

to hang their banners from the rafters, but

with the movie Caddyshack. This comment

the mold of traditional trade media to

it wasn’t easy. Boston is home to many AUM

from wealthy playboy, Ty Webb, reminds

better serve you. Remember, this is a people

Champions, but most of those in the business

us that while rankings and score is kept

business.

couldn’t name more than five or six.

by AUM, we should also be measuring

Perhaps it’s because New England is teeming with thousands of investment

AUM/Boston June 2018

more human characteristics — not height, perhaps, but one’s history, passions,

Welcome. Enjoy. Participate. Grow.

AUMBoston THOUGHT LEADERS IN ASSET MANAGEMENT

LUCIE WICKER PHOTOGRAPHY (RICH OFSTHUN); ISTOCK (ILLUSTRATION)

professionals and products, practically

AUMBoston THOUGHT LEADERS IN ASSET MANAGEMENT

VOLUME 1, ISSUE 1 FOUNDER & PUBLISHER

THE POWER OF A STORY

Richard Ofsthun

rich@aumboston.com

AUM/BOSTON HAS A

The conversion was a complete

MESSAGE for everyone who

success. The bank was so ecstatic that

believes that their stories are unworthy of attention:

they worked with me to write

You’re wrong. What’s more,

the story of their conversion.

your story could be just the

It was published in a regional

thing that sets you apart and

banking publication under the

drives lasting growth. Let me

Chief Technology Officer’s

give you a personal example.

name. The story took off. In the five years since the

More than a decade ago, I worked for a bank technology company that suffered under

Robert@AUMBoston.com

company doubled its annual sales and cemented its

the weight of an undeserved reputation: “good for simple banks; not

reputation as the best of the best. That

sophisticated enough for complex banks.”

company continues its meteoric growth to

We changed that company’s reputation with one story. The company had convinced a large, LUCIE WICKER PHOTOGRAPHY (2)

story appeared, the technology

this day. Without that story, the company and its technology could have faded from memory,

EDITORIAL DIRECTOR

Robert Bessel

Robert@aumboston.com BUSINESS DEVELOPMENT DIRECTOR

Peter Berg

Peter@aumboston.com ART & PRODUCTION DIRECTOR

Kristen Goodfriend kbonami@gmail.com WEB DEVELOPER

Melissa Clark

melissaclarkdesigns@gmail.com STAFF PHOTOGRAPHER

Lucie Wicker

lucie@luciewickerhotography.com CONTRIBUTING PHOTOGRAPHER

Keith Conforti

keith@twistcg.com CONTACT AUM Publishing Inc. 132 Cardinal Joseph Cushing Highway Cohasset, MA 02025 617-285-0447

complex bank to replace its technology.

unknown to anyone but a few nostalgic

The new system would be the one provided

bankers. Instead, the technology company

by our company – a brand new technology

told its story and changed its reputation

AUM/BOSTON ADVISORY BOARD

designed to streamline bank operations.

from “also-ran” to “winner.”

ROBERT BESSEL

At 8 a.m. the first day after conversion,

AUM/Boston was founded on the

every teller was at his or her workstation.

principle of stories: their power to connect

The emergency staff was in place. At 9 a.m.,

people and to open doors to new business

the bank had opened its doors. By 1 p.m.,

opportunities.

the bank sent its emergency staff home.

— Robert Bessel, Editorial Director

Editorial Director, AUM/Boston DEBORAH WELL

Harbor Capital Advisors and PAICR PETER BERG

Director of Business Development, AUM/Boston CHRISTOPHER ARNOLD

Managing Director at Morgan Creek Capital Management, LLC MAX OSBON

Let Them See your Shoes Shoes describe a person in so many ways. Style, wear, shine – they are all decisions, but there’s history, too. How did the person find such a comfortable pair of shoes? Why is he wearing shoes from the 1980s? Where can I get shoes just like those? Yes, our shoes speak about our priorities, our desire to stand out, even our approach to life. Shoes bear some similarity to investment products. Everybody has one or more, but how do they stand AUM/Boston’s editor, out? What differentiates one from photographer, publisher and art director. another? How does a suite of products create a total financial picture? To build a lasting relationship, you need to see your client in totality. To start that relationship, they need to see you in totality, which means letting them see your shoes. Can we tell your story? Everyone has a story that, if told well, sets them apart and opens doors. Your story makes you relatable and supports your brand at the same time. If you have a story to tell (everyone does!), let us know. We are here to help. You can reach us at Rich@AUMBoston.com or Robert@AUMBoston.com.

Partner, Osbon Capital Management JILL BERESFORD

CEO, Gendernomics MARK TOOMEY

Consultant, Institutional Asset Management Distribution PATRICK CAROLAN

Managing Parner, Endeavour Investment Management

AUM/Boston is published six times per year, in both print and digital formats, by AUM/Boston Copyright © AUM/Boston 2018. All rights reserved. Reproduction in whole or in part of any text, photograph, or illustration without express written permission of the publisher is strictly prohibited. None of the content constitutes any advice or recommendation whatsoever in relation to any security, investment, potential investment or decision. No decision of any kind should be made on the basis of the Content. It is for informational use only. AUM/Boston content can be original, contributed or curated, and unpaid or paid through contributing partnerships. We strive to maintain journalistic standards of objectivity even in contributed pieces. AUM/Boston can receive remuneration from some content contributors for copyrights, reprints, hosted webinars and events. With regard to contributed content, past performance is no guarantee of future results. No content in those articles should be construed as specific investment advice, or replacement for investment advice from investment professionals. Publication of articles should not be construed as a recommendation, endorsement, or sponsorship by AUM/Boston or the contributors.

AUM/Boston June 2018

AUMBoston

ADVISORY BOARD ROBERT BESSEL

DEB WELL

PETER BERG

EDITORIAL DIRECTOR, AUM/BOSTON

DIRECTOR OF E-BUSINESS; HARBOR CAPITAL ADVISORS

DIRECTOR OF BUSINESS DEVELOPMENT, AUM/BOSTON

In 2017, Bob signed onto AUM/Boston as Editorial Director. In this role, Bob works with founder and publisher Rich Ofsthun to execute AUM/Boston’s vision for a vibrant wealth management community in Greater Boston. Prior to AUM/Boston, Bob spent 30 years as PR Director for COCC, a cooperatively held technology service for banks and credit unions throughout the Northeastern U.S. Bob’s creative placements changed the narrative about COCC, tripling its annual revenue in a mere five years. Bob’s work has been featured in American Banker, Bank Technology News, Credit Union Times, Massachusetts Banker and many more. He lives and works in Collinsville, CT within a short walk of the Collins Ax Factory, which started the American Industrial Revolution in 1826.

Deb Well has guided Harbor Capital’s e-Business efforts since 2002, overseeing e-marketing strategy, which includes everything from sales to artificial intelligence and the digital transformation of service design in financial advisory business. Deb is a frequent conference speaker on topics such as Social Media, Digital Strategy, Data and Digital Process Flow, Marketing Automation, and Best Practices for the partnership between Marketing and Compliance. As co-chair of the PAICR Marketing committee, she helped transform the Association’s thinking about social media as a marketing tool for wealth management services. Prior to her work at Harbor Capital, Deb directed management information services for Natixis Global Associates, which markets funds for such companies as Loomis Sayles and Oakmark.

Peter Berg is one of those people that you want by your side no matter what. This veteran sales and marketing executive has worked every angle of AUM growth using custodian resources to help these advisors to succeed. He began working with registered investment advisors in the 1990’s, then joined Charles Schwab, where he served as Senior Regional Vice President for institutional business in the Northeast. After Schwab, Peter launched HSBC’s Private Banking operation in Boston, started his own firm (Boston Light Investments) and worked for BNY Mellon where he facilitated their internal merger with their wholly-owned subsidiary, Pershing Advisor Solutions. Working with AUM/Boston enables Peter to help advisors showcase their discipline and commitment to do their right thing for their clients.

MAX OSBON

PARTNER, OSBON CAPITAL MANAGEMENT Osbon Capital is 100% owned by the Osbon family and is its sole investment vehicle. Max earned full Osbon Capital partnership status in 2014 with the goal of building it for the next generation. Max enjoys working directly with the next generation of Osbon Capital Clients. Previously, he worked for Bloomberg L.P. in NYC leading the coverage of the Goldman Sachs account. Max participates annually in the Wall Street Decathlon, benefiting Memorial Sloan-Kettering Cancer Research. He is a Young Partner of Boston Ballet with a focus on event planning and audience building for that organization.

AUM/Boston June 2018

JILL BERESFORD

CEO, GENDERNOMICS

Jill Beresford became the CEO and Chairman of the Board of a publicly-held corporation during the 1990’s. She was given the CEO job as the company teetered on the brink of bankruptcy and was successful in turning it around into profitability. Jill has spent 25+ years successfully working in the Turnaround & Restructuring Industry filling the positions of CEO, CFO, CRO and/or CMO. More recently, she has been bringing the message of improved economics through gender balance to the C-suite of Fortune 500 companies through one-on-one trainings, facilitating workshops, participating in Summits, and conducting Key note addresses. Recently, the American Small Business Development Centers recognized Jill as the top small business advisor in Massachusetts where she was awarded the coveted State Star Performer award.

MARK TOOMEY

CHRIS ARNOLD

MANAGING DIRECTOR, NORTHERN REGION, MORGAN CREEK CAPITAL Chris works with institutions and large asset holders on behalf of Morgan Creek Capital, a firm led by Mark Y usko and central to the proliferation of Endowment-model investing. With a legacy of investing in non-liquid alternatives including hedged equity and private equity, Morgan Creek has staked a claim in the Blockchain, through a strategic acquisition and the recent launch of Morgan Creek Blockchain Capital. Chris is also a founding member of the Transformative Technologies Investment Forum. Consistent with his work, Chris is a self-professed adrenaline junky, enjoys going fast and stopping along the way to enjoy time with his family of five and wife of 30 years, Heidi.

PATRICK J. CAROLAN

INDEPENDENT CONSULTANT, INSTITUTIONAL ASSET MANAGEMENT DISTRIBUTION

MANAGING PARTNER, ENDEAVOUR INVESTMENT PARTNERS, LLC

After getting his start in marketing with a sales role at IBM, Mark moved into Boston, and the financial services industry, with State Street Corporation, working with mutual fund clients across the country. He became involved in asset management business development via Fidelity and Morgan Stanley, and developed and built out the US institutional Business for Henderson Global Investors, later JanusHenderson. More recently, he was in Chicago with Legal&General Investment Management America (LGIMA) building out their strategy for index disciplines for the US market. He currently works as an independent consultant for asset managers focused on the institutional clients.

In 2006 Patrick c0-founded Endeavour Investment Partners with Cale Graham. Endeavour acts as an external team member guiding investment managers in key marketing, communication and sales activities to successfully compete and retain investment mandates. Prior to that, he spent seven years as Managing Director at Century Capital Management in Boston where he successfully led marketing/sales, and launched Small Cap Growth, SMid Growth separate accounts and funds. Previously, he was Vice President, Marketing Management at Fidelity Investments in Boston, focused on the RIA Channel and before that Vice President and Director of Mutual Funds at Wilshire Associates in Santa Monica, CA.

trending Are you committing these Seven Deadly Twitter Sins? Until now, asset managers have been slow to adopt Social Media. But more are finally jumping into the “social” waters, primarily via LinkedIn and Twitter. But are they getting the most out of their efforts? With more firms (and content) vying for eyeballs, making your social media presence relevant, meaningful, and impactful is more important than ever. If your firm is committing any of these “Twitter Sins”, making a few changes (some simple) can likely upgrade engagement activity with your content.

Deb Well MEMBER OF THE BOARD PAICR BOSTON, MA

SIN #1 LACK OF VISUALS

Numerous studies support the fact that you are more likely to get engagement on Twitter if you include a picture, video, or even emoticons with your text. Yes, a few high-profile folks can get by on just their words – Bill Gross or Jeff Gundlach don’t need

PAICR

The Asset Management Marketing Association – is the only professional organization dedicated to investment management marketing and communications professional. Our mission is to help members learn, connect and succeed.

across different channels, you need to put in the effort to optimize your content for Twitter – or any specific social platform – to get the most out of it.

SIN #4 BAD TIMING

Do your tweets that go out every Monday at 9 a.m.

visuals. But most of the content being shared by firms

perform poorly? This is not a surprise. Everyone

does not carry that weight. So look at adding images

who does email marketing knows the importance of

– it could potentially boost your engagement by

optimizing send time – and it is no different in the

up to 200%!

social realm.

SIN #2 NOT MOBILE OPTIMIZED

Over 50% of traffic on Twitter is mobile. If the

There are plenty of studies about the best time to post for all the various social platforms. And don’t forget to review your own Twitter stats. Analyzing when your

link you are sharing is to your site and it is not Mobile optimized – this is a big fail.

SIN #3 NOT TAILORING FOR TWITTER

How often have you seen this – a Tweet that shares the first sentence or so of a blog post, but is cut off mid-thought with a link to the post? Likely, the person was using the automatic “share” function from their blogging platform, which generated the

AUM/Boston June 2018

tweet when the post goes live. This can also lead to awkward cutoffs in the text shared. Automation can dilute personalization. Whether it is that blog auto-poster, or a social media management platform that posts the same content

ISTOCK

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FOR THE LATEST BUZZ, BE SURE TO VISIT AUMBOSTON.COM/ TRENDING OR SCAN THIS QR CODE

followers are engaging with your content should help you fine tune your tweet schedule to get the most out of it.

SIN #5 NOT TAGGING

Big Data Meets Art Investing

So your portfolio manager is on CNBC today? Did you remember to tag @CNBC in your post? Or perhaps your analyst was quoted in a Wall Street Journal article. Did you tag @WSJ? Tagging relevant parties in your posts increases the visibility of your content and the likelihood that it will get re-shared. Bottom line: strategic use of this function can be a big boost for your content.

SIN #6 NOT GETTING THE MOST OUT OF YOUR CONTENT In following several asset managers’ Twitter feeds, I will often see that they use a couple of different versions of tweets to share their blog posts or other content. Which is great … BUT I see those shares on the same day…and then never again. Given all the effort put into creating that content, one or two measly tweets on a given day is not getting the biggest bang for your buck! Yes, vary the visuals and blurbs, but tweet it today – and a couple of days from now – and maybe a week after that. Space it out and recycle that great content!

SIN #7 BAD HASHTAGS

Tweets with Bad Hashtags aren’t just the ones #with #too #many #hashtags #to #read. Bad hashtags are ones that are randomly placed and not well thought out. Do your research. Go to sites like Hastagify or Keyhole to gain insights and get the most out of your hashtags. Or search your proposed hashtag to see if it is trending; if it isn’t it might be worth going back to the #drawingboard. The takeaway: Twitter (and other social media platforms) can be a powerful tool to engage and expand your network and brand voice. To maximize your efforts, make sure you are avoiding these pitfalls, fine tuning your messages so that they achieve their greatest potential in reach and engagement. —Deb Well

Investors who look for returns ‘outside the box’ might find encouraging news in Arthena, a startup that manages several art funds and uses artificial intelligence to guide their investment choices. Arthena is backed by Foundation Capital, Beaumonte Investments of Boston, MA and Y Combinator, and recently teamed up with Charles Schwab as part of their alternative investment offerings. The funds range from low-risk - investing in modern art – to higher-risk funds that buy works from emerging artists. Art investments stymie most people because so little data is available to the public about art work and artists. Startups like Arthena, Magnus and Artsy have begun to change the equation by cataloging artwork and live-streaming art auctions to smart phones and tablets. Arthena goes a step further, predicting art pricing trends by crunching a range of indicators, such as public auction sales, appearances of an artist’s name in social media and art data bases, gallery and museum exhibits, and works already collected. Arthena founder Madelaine d’Angelo says her company can spot trends across a broader body of work than a team of human analysts. For now, investments in Arthena funds are limited to those who have been accredited by the Securities and Exchange Commission. Actual returns won’t be available for another year when the company sells its first art investments. —Robert Bessel

AUM/Boston June 2018

trending Reading List CONSIDER ALTERNATIVE ASSETS » INVESTMENT ADVISORY GROUP IAGADVISORS.COM

THE NEXT GENERATION OF TRUST The CFA Institute’s third Global

Survey on the State of Investor Trust examines changing investor

expectations and how a new generation of investors and new investment tools are affecting the nature of trust. Investors have a strong level of trust in the financial system overall, and trust in the industry has increased slightly. Nonetheless, challenges remain. Investor expectations are high and there are gaps between what investors want and what the industry delivers. The survey READ MORE examines changing investor expectations and how a new generation of investors and new investment tools are affecting the nature of trust.

AUM/Boston June 2018

Coming Soon? Financial “Advice Bars” for Millennials The genius behind the Chase Sapphire Rewards Card, Pam Codispoti, is on to her next project

at JPMorgan. She’s been tasked with winning

more millennial clients at the bank level and is crafting a new twist on financial advising. Per Bloomberg: “Codispoti has visions of offering advice centers, akin to Apple Inc.’s Genius Bar, where customers can discuss Pam Codispoti

financial goals such as saving for retirement or buying a first home. Millennials prefer to have a conversation about such things,

Codispoti says. ‘So we’re going to make the experience much more high-touch, much more interactive.’” Will their bank financial “Advice Bars” displace financial advisors?

Millennials make up 61 percent of the consumer bank’s new customers. How much of your new business do they represent?

Well, it might be the first step to building a relationship. And, if Codispoti is as good at that as she was with the Sapphire Card, look out. Per Bloomberg: “Codispoti has visions of offering advice centers, akin to Apple Inc.’s Genius Bar, where customers can discuss financial goals such as saving for retirement or buying a first home. Millennials prefer to have a conversation about such things, Codispoti says. ‘So we’re going to make the experience much more high-touch, much more interactive.’” It was little more than a year ago, my millennial, RIA-employed son, discovered the Chase Sapphire Credit Card and quickly turned my wife and I on to the incredible benefits. It was some of the best advice he’s ever given us. This summer, we’re flying four of us round-trip to Dublin, all on rewards. The card was so successful at achieving the company’s goal of attracting affluent millennials and so innovative, second-year branding students at Harvard Business School do a case study on the Sapphire Reserve. —Rich Ofsthun, adapted from Bloomberg, January 2, 2018

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Good portfolio diversification is not just limited to investing in different asset classes of stocks, bonds and mutual funds. Over the past century, this method of diversification has proven effective, but recently the stock and bond markets have been behaving in a more highly correlated fashion, rising and falling together. This increased correlation can lead to increased portfolio risk by minimizing the effectiveness of diversification as a risk management tool. Alternative investments offer an opportunity to invest in assets that do not have a high correlation to publicly traded investments. Some wellknown university endowments have 50% or more of their investments in alternative assets for this reaREAD MORE son. While alternative assets are not necessarily safer or more profitable than traditional investments, there may be good reasons for including them in an investment portfolio.

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trending A Boston Asset Marketing Expert and Foodie Weighs-In BY DEB WELL | PAICR When I first came to Boston in the early 90s, it was definitely not the food mecca it is today. I still remember going to the Rattlesnake and a coworker was raving about the “salsa”. Well – chopped up tomatoes and onions with a jalapeno waved in close proximity was what passed for Mexican food in those days. But no longer. Boston has some of the greatest restaurants – and some of the greatest restaurateurs (Barbara Lynch, Ken Oringer, Garrett Harker, to name but a few). Boston has something for everybody – and here are a few of my favorites to consider if you haven’t tried them yet.’

FOR THE STEAK AND POTATOES SET

North End (where Mama Maria’s is an old school fav among my friends).

us - if you want the North End experience

Boston has no short-

But great Italian food has

but with a better view - check out Strega

age of steak places.

busted out of that geo-

Waterfront down in the Seaport. It has

But if you haven’t

graphical niche to spread

the same authentic food you can get over

been to Boston Chops

across town. For a modern

on Hanover Street but with a wonderful

– you are missing out.

twist, check out Sportello

serene view of Boston Harbor.

The original is over

in the Fort Point area of

in the South End, but

the Seaport. Casual, fun,

a new sister location,

great pasta, and some

with great private

of the best Italian wine in town. For a take on a

A TASTE OF THE SOUTH New Orleans Cajun and Creole style food

just opened in Downtown Crossing. One of

different part of Italy, SRV in the South End

the greatest things on the menu has been

stands for Serene Republic of Venice, and

Buttermilk and Bourbon in the Back

their inventive takes on “Rarely Celebrat-

gives you that taste of Venice with a modern

Bay is a place to bring along your appe-

ed” parts, as they call them. The Crispy

twist. Their Arsenale tasting

has been trending in new spots lately.

tite. We have as yet to have room left at

Fried Sweetbreads in a port fig glaze

menu is an incredible deal

the end of the meal for their killer Beig-

are a fav, as is the Machaca Braised

and a great way to

nets- so we always just ask for an order

Cheeks, served as do it yourself mini tacos. They also have amazing

experience some the highlights of the

sides for those steaks – their pork

wonderful menu.

belly mac and cheese is a star. But

Love pasta but

amazing food aside – the service

have someone

is always top notch, and that is

who needs to eat

why this is also our go-to restau-

Gluten Free? Lydia

rant and top recommendation to

Shire’s Scampo,

friends.

located at the Liberty Hotel in the West

BOSTON = ITALIAN FOOD For years, I think every tourist thought that all Boston was famous for was Italian food – and that all the great Italian Food was in the North End. Well

AUM/Boston June 2018

End, has an amazing array of options - and GF pasta – to meet your needs. And if you are a cheese fanaticas I am – you won’t want to miss the Mozzarella tasting menu. Now that the good weather is upon

“to go” and take them home with us! Partly that is because their warm

ISTOCK (4)

dining spaces, has

yes – you can go to the

honey glazed biscuits (served with two spreads – a smoked cinnamon butter and a pimento cheese) are so addicting we eat way too many. Their cocktail offerings are on point, with a great barrel-aged

Massachusetts’ William Galvin Says SEC Proposals Shortchange Investors

Vieux Carre for those who love the classics, or for that Bourbon Street vibe,

Massachusetts Secretary of the Commonwealth William F. Galvin blasted

try the B&B Hurricane that they have

the U.S. Securities and Exchange Commission’s proposed new standards for

on tap. Over in the South End, Bootleg

brokers on Thursday, April 18, saying the revised rules would benefit the broker-

Special opened a few months back. With

dealer industry, not investors.

the vibe of a “classic underground creole

The SEC voted 4-1 to open to public comment three proposals for long-

hangout”, their menu focuses on takes

awaited new rules for brokers, led by a plan to require them to act in

on classic seafood boils, with some other

their clients’, not their own, best interests when recommending

southern classics (like variations of Po

investments. But in a lengthy statement, Galvin, a Democrat,

Boys and a crawfish mac and cheese). And

said the commission fell short of its stated goal to protect

don’t worry – you can get a Hurricane

Americans’ retirement savings and that the higher

here as well.

standards the commission put forth do not place the interests of investors first. He specifically highlighted the

AND NOW FOR SOMETHING COMPLETELY DIFFERENT

failure of the new rules to go far enough to eliminate potential conflict of interest issues. “The SEC is proposing a watered-down standard that simply restates current industry rules and allows certain dangerous conflicts to persist,” Galvin said.

There is a hidden gem in the South End

“How difficult would it have been to ban sales contests, which have been shown

called Stir. It is not a typical Restaurant.

time and time again to promote horrific conflicted advice? Your life savings

Billed as a “demonstration kitchen and

should not be used by brokers to win a trip to Bermuda.” —Chris Villani, Law360, Boston, April 19, 2018

cookbook store” it is a funky little space, ISTOCK 9NEST EGG); PXHERE.COM (GOLF)

located right by Barbara Lynch’s other two South End properties – the Butcher Shop and B&G Oysters. The “unicorn” of her restaurant group, it only seats 10 people. It’s a different party every night: armchair Travel down the Rhine or over to Spain maybe, or Cookbook Classes showcasing great recipes from the book that you get to take home, a class celebrating the bounty of the current season (like the ever-popular Corn, Tomatoes and Rose), or maybe a theme night, as recent classes celebrated the food in the films Big Night and Eat, Drink, Man, Woman. The schedule is posted for a month ahead and you can book online. There are so many amazing places to eat in Boston – with new ones opening all the time. And summer is a great time to get out there and try something new! I’ll report on more in the coming months. ✹

ON PAR Most of our readers who are into golf belong to a club, as do many of their clients. But there are those who don’t, and there are those who have clients located where the advisors aren’t. For them, and for those who just want a change of pace, we give you Golf Magazine’s Top Public Courses in MA. Here’s where you can “measure yourself against other golfers.

1 2 3 4 5 6 7 8 9 10

Taconic, Williamstown Red Tail, Devens Farm Neck, Oak Bluffs Crumpin-Fox, Bernardston Pinehills (Jones), Plymouth The International (Oaks), Bolton The Ranch, Southwick Pinehills (Nicklaus), Plymouth Granite Links (Granite/Milton), Quincy Miacomet, Nantucket

AUM/Boston June 2018

trending Are Tweets impacting your clients and their portfolios? BY TOM BAKER | REPORTABLENEWS.COM You’re wrapping up your last client meeting before the closing bell. You want her to believe she has your undivided attention as you’re distracted by the symphony of incessant beeps and vibrations emanating from your phone. As you escort one client out, you accept an urgent call from another about an earnings surprise. A quick search on Dow Jones, Reuters, Yahoo Finance, and Google reveal nothing. You have a brief moment left before the pause becomes uncomfortable. What do you do next to show your client you’re in control? Maybe the year was 2015. Twitter’s earnings release was leaked. The results were ironically shared across their own platform, prompting a sharp stock decline. Or it was 2012. Reed Hastings posted to Facebook that his company, Netflix, hit a major investor milestone sending the stock up with no trace of the news outside the social network. Or it was just a few weeks ago. Elon Musk was taking a question on Tesla’s earnings call from an

Tom Baker

investor on YouTube. Welcome to the new era of investor communications, where social media is now a player. To assure clients that your finger is on the pulse, it’s more critical than ever to track your client portfolios on social media.

REPORTABLE COHASSET, MA

HOW DID WE GET HERE?

Social media is the great democratizer of publishing; even, or especially, when it comes to investing. Tom is the co-founder of Reportable, Inc., a modern release and wire service that’s built to get corporate news shared on social media and covered in the press. The inspiration to start Reportable was from Tom’s 15+ years in the world of biotech communications and investor relations, where he experienced countless news releases go unnoticed. He suffers from an insatiable desire to be in and around the ocean, sufring, swimming, or chasing after three toddlers.

» A millennial in Starbucks with a tablet, a wireless

connection and a mind for the capital markets can move stocks with an investment blog. » A PhD postdoc at Harvard can instigate a selloff on a biotech company in under 280 characters (previously 140) while conducting a lab experiment. » Or, due to the SEC’s 2013 endorsement of social media as a means to disclose material information, companies can and do use Twitter in lieu of PRNewswire to update investors. This is evidenced by the many earnings reports from companies such as Qualcomm, Tesla, Citi, Goldman Sachs, and others who eschew wires in favor of alerting investors via social media that they posted news to their corporate website.

SCAN THIS QR CODE TO GO TO REPORTABLENEWS.COM

SERVE YOUR CLIENTS BY EMBRACING TECHNOLOGY

Social media in the last ﬁve years has earned a rightful place alongside the Bloomberg terminal. The good news for ﬁnancial advisors is that tracking a portfolio is easy and free with the following steps: 1. Create a Facebook, LinkedIn, and Twitter account if you don’t already have one 2. Follow the companies in your client portfolios, especially on Twitter. 3. Create a screen of “cashtags” (ie: $APPL for Apple) and social media handles (ie @apple) with services such as Tweetdeck, StockTwits, and others. 4. Listen to what is being said without engaging to avoid compliance missteps. Following these simple steps will keep you informed and prepared for future mobile phone symphonies. The next time a client calls, rather than frantically panic, you can calmly review Bloomberg, Yahoo Finance, and, last but not least, your screen of Twitter cashtags so you can respond with authority. ✹

AUM/Boston June 2018

ISTOCK

CO-FOUNDER

ARTICLE: WASHINGTONPOST.COM/NEWS/ON-SMALL-BUSINESS/WP/2018/05/02/SMALL-BUSINESSES-THAT-SUPPORT-SOCIAL-CAUSES-CAN-BOOST-REVENUE-SURVEY-SHOWS/?UTM_TERM=.9F2F2FBDBA55 ISTOCK (ILLUSTRATION)

Small businesses that support social causes can boost revenue, survey shows BY GENE MARKS | OWNER, THE MARKS GROUP | GENEMARKS.COM Gene Marks owns the Marks Group, a consulting firm that helps clients with customer relationship management. Marks is an author and a certified public accountant, and he writes regularly for The Washington Post’s On Small Business blog. For more about Marks, visit

Gene Marks OWNER THE MARKS GROUP PC BALA CYNWYD, PA

genemarks.com. Back in the day, the business owners I knew — wary about alienating their customers — would generally keep the causes they care about separate from the workplace. Today, the reverse is true. Business owners who get more involved in social issues are seeing a rise in revenue because of their activism.

Gene Marks owns the Marks Group, a consulting firm that helps clients with customer relationship management. Marks is an author and a certified public accountant, and he writes regularly for The Washington Post’s ‘On Small Business’ blog. For more about Marks, visit genemarks.com.

A survey of more than 1,100 consumers conducted by Cox Business, the commercial division of Cox Communications, found that 71 percent of the respondents would spend

this are missing out on the great

more money at a small business if it

benefits hidden on the other side of

cause, there are many ways to show

supported a social cause — as long

socially responsible companies.”

it, including offering your em-

as it’s positive or environmental.

But before a business own-

But if you do decide to support a

ployees a chance to do pro-bono or

According to entrepreneur

er starts marching in rallies or

volunteer work, matching employee

and lawyer Chidike Samuelson, a

contributing a bunch of money

gifts to the cause, hosting events or

socially active company can reap

to their favorite charity, they should

running holiday or special fundrais-

many benefits besides increasing

be careful: Half of the consumers

ing campaigns. You won’t be alone.

revenue. Companies that partic-

participating in the survey said they

A 2017 survey from Allstate Insur-

ipate in certain causes are able to

wouldn’t buy from a small busi-

ance Company and USA Today found

recruit better talent, increase em-

ness if the causes they supported

that almost half of the business

ployee morale, improve their brand

“weren’t in line with the consumer’s

owners asked said they contribute to

and attract more capital, he said.

social and/or environmental views.”

local charities or perform communi-

So, good luck figuring that out!

ty service close to home. ✹

“We are in the era of giving back and social impact,” he wrote recently in Entrepreneur. “Businesses should face this and stop using the fact that they are not yet ‘big businesses’ as an excuse for boycotting charitable involvements or social

THIS STORY ORIGINALLY APPEARED ONLINE AT WASHINGTONPOST.COM. USED WITH PERMISSION FROM GENE MARKS. READ THE ORIGINAL POST BY SCANNING THE QR CODE AT RIGHT.

responsibility. Businesses that do

AUM/Boston June 2018

The Forevermark Tribute™ Collection

FOR ALL T H AT YO U ARE A diamond for each of your qualities

BOSTON

•

FRAMINGHAM • HINGHAM DESCENZA.COM

•

PEABODY

#TheDescenzaDifference

™

LEADERS COVER STORY

oston is the “hub of the world” in sports,

increasing their access to capital through gender inclusive

education, business and, of course, finance.

investment strategies.

Sure there’s a town southwest of Boston that flaunts a “Wall Street” and newspaper

And no wonder. Boston’s history as a financial center began long before

to match. But where would New York be

most of America’s immigrants arrived. The great trading

without Boston’s mutual funds, investment

center in Massachusetts Bay harbored John Hancock who began his investment history with the Charles River Bridge.

gurus and superstars? In fact, Boston is where the first open-end mutual

While Hancock is best known for his grand signature on

fund with redeemable shares was established. Boston

the Declaration of Independence, he was also one of the

nurtured the talents of Fidelity’s Peter Lynch, CGM Fund’s

wealthiest men in the original thirteen colonies.

Ken Heebner and Harvard’s Larry Summers. Boston is

In the following pages, AUM/Boston celebrates Boston’s

where impact funds first made their mark with Pax World

hotbed of new ideas, its relentless refinements of the

Funds (now Impax Assets) and later became home to

tried and true, and its long standing commitment to client

Athena Capital where Lisette Cooper empowers women by

understanding of capital markets.

CONTINUED

CITY OF

CHAMPIONS BY AUM/BOSTON STAFF

AUM/Boston June 2018

■ LEADERS

[COVER STORY]

ICONS

Local Legends

»BOSTON’S FINANCIAL EDWARD JOHNSON III

»FMR CORP

A founder of the modern mutual fund industry, Ned Johnson pioneered lowcost brokerage services, charitable gift funds and investing apps. During his 39 years with the firm, Fidelity’s $3.9 billion AUM increased to $1.2 trillion, an increase of 30,700%.

JOHN HANCOCK

»FIRST GOVERNOR OF MASSACHUSETTS »PRESIDENT OF THE SECOND CONTINENTAL CONGRESS

THE NEXT GENERATION Making their Mark (list in progress, more to come)

WILL DANOFF

»FIDELITY CONTRAFUND

A true oneman band, Will Danoff, portfolio manager of Fidelity Contrafund since 1990, runs the largest actively managed stock or bond mutual fund by himself. This champion manages Contrafund’s US$108 billion portfolio.

AUM/Boston June 2018

KEN HEEBNER

»CGM FUNDS

Ken Heebner began his legendary career with average annual returns of 24% at CGM Focus Fund, but he cemented his champion status with an 80% return in 2007. Later on, Ken fell on hard times, but in 2017 he charged back to champion status with a 45.6% gain.

LISETTE COOPER

»ATHENA CAPITAL ADVISORS

Lisette Cooper earned her firm, Athena Capital, repeated recognition as a top RIA year after year. Her ability to find opportunities in social change, such as rising gender equality, her focus on mindful investing and giving back have made Athena Capital a champion for the next generation of investors.

PHIL GROSS

»ADAGE CAPITAL

Phil Gross has up-ended the high fee/ spotty results model for hedge funds by charging clients only when his funds outperform specific market benchmarks. Adage Capital even returns money to investors when its funds miss the mark. So far, Adage has refunded fees to investors twice in the past 16 years.

GREG MILLER

»WELLESLEY ASSET MANAGEMENT

Focusing almost exclusively on convertible bonds, Greg Miller of Wellesley Asset Management has claimed the top spot on Massachusetts’ list of Financial Advisors by Barron’s for four years running. His secret: offer one of the few fixed-income products that performs well when interest rates rise.

DARLENE MURPHY

»WELLESLEY ASSET MANAGEMENT

Co-founder and Portfolio Manager of Wellesley Asset Management, Darlene has been a Top 100 Woman-Led Business Leader in Massachusetts for six consecutive years. As a leading financial planner, she has helped investors of all sizes grow and protect their portfolios.

STEPHEN CUCCHIARO

»3 EDGE ASSET MANAGEMENT

Steve is relatively young, but his old firm, Windward Management, started from nothing in the late 90’s and grew to $18 B. He sold the business to Schwab for $155 million.

PHOTOS COURTESY OF ATHENA CAPITAL ADVISORS; WELLESLEY ASSET MANAGEMENT; FIDELITY, 3 EDGE ASSET MANAGEMENT

One of the wealthiest men in the original thirteen colonies, John Hancock began a Boston tradition of pairing wealth with underwriting social causes when he pledged his fortune to the cause of the American revolution.

BY THE NUMBERS

CHAMPIONS MASSACHUSETTS INVESTORS TRUST

LUTHER TYSON AND JACK CORBETT

PHOTOS COURTESY OF TRILLIUM ASSET MANAGEMENT; COMMONWEALTH FINANCIAL NETWORK THE COLONY GROUP, APPLETON PARTNERS, AMUNDI PIONEER ASSET MANAGEMENT, BOSTON COMMUNITY CAPITAL, BALLENTINE PARTNERS

Commonwealth Equity Services was the first independent brokerdealer firm. Formed by Joseph Deitch in Boston in 1979, the company grew to $156 billion in assets, and Investment Advisor Magazine conferred its Broker/Dealer of the Year award to Joe ten times.

LISA JONES

»AMUNDI PIONEER ASSET MANAGEMENT

Lisa Jones’ resume reads like a who’s who of Boston’s investment community, and Lisa has been a champion in all of them. She is now in charge of Amundi Pioneer Asset Management US with more than $72 billion in assets under management and 560 employees in Boston.

(FIVE-STATE NEW ENGLAND)

Peter Lynch captivated the mutual fund industry for 14 years with a remarkable 36% average annual return at Fidelity’s Magellan Fund. He beat the S&P 500 by an average 17% each year. Over the same 14 year period, Magellan’s AUM increased from $18 million to $14 billion, an increase of 77,800%.

JIM ROSS

»STATE STREET GLOBAL ADVISORS

Luther Tyson and Jack Corbett were the first fund managers to align investments with values. Their Pax World Fund was the first publicly available mutual fund in America to use social as well as financial criteria in the investment decision-making process.

JOSEPH DEITCH

OVER $12 TRILLION TOTAL AUM

PETER LYNCH

The first open-end mutual fund with redeemable shares was launched in Boston in 1924 by Massachusetts Investors Trust. This provided millions of Americans with an easier way to invest their savings without fear that they couldn’t redeem their shares.

»COMMONWEALTH FINANCIAL NETWORK

266/37% WITH > $1B AUM

»FIDELITY MAGELLAN

»(NOW MFS INVESTMENTS)

»PAXWORLD (IMPAX ASSET MANAGEMENT)

721 SECREGISTERED INVESTMENT ADVISORS

Jim Ross introduced the first Exchange Traded Fund (ETF) in the United States at State Street Global Advisors – one of the oldest firms in Boston and the United States. ETFs became wildly successful, changing the way investors trade stocks worldwide.

ROBERT GLOVSKY

»THE COLONY GROUP

Bob is the father of Boston University’s CFP program. He is a highly successful business owner and partner in one of the largest RIA firms in NE.

ELYSE CHERRY

»BOSTON COMMUNITY CAPITAL

A determined church group with $3,500 and a vision – that’s how Elyse Cherry began to build Boston Community Capital into an organization that has invested more than $1 billion to support businesses and other organizations that benefit underserved communities across the United States.

JOAN BAVARIA

»TRILLIUM

Joan Bavaria is the “Founding Mother” of sustainable and socially responsible investing. Her visionary company, Trillium, is the first and largest SRI investment firm in the United States, enabling clients to align their investments with their values. Joan proudly used Trillium as an incubator to create organizations with impact, helping to nurture US SIF, Ceres, SIRAN and Open MIC.

ROBERT REYNOLDS

»PUTNAM INVESTMENTS

Bob was named Fund Leader of the Year at the Mutual Fund Industry Awards in 2010 for the strategic improvements he initiated at Putnam. Followed by Leader of the Year for initiatives and innovative solutions in the workplace savings arena.

ABIGAIL JOHNSON

»FIDELITY INVESTMENTS

The wealthiest person in Massachusetts is also the Chairman and CEO of Fidelity Investments - Abigail Johnson. She is the third generation to run this vast company which holds a quarter of the market for corporate 401(k) plans.

DOUG CHAMBERLAIN

»APPLETON PARTNERS

For forty years, Doug Chamberlain has complemented his legacy of investment at Appleton Partners with an equally impressive legacy of giving back. When he’s not directing Appleton, Doug serves on the board of the Franciscan’s Hospital for Children, Bay Cove Human Services and Opera Boston.

ROY BALLENTINE

»BALLENTINE PARTNERS

Legendary financial planner with a stellar reputation for building a successful practice and managing some of the most complex financial practices in the country.

CONTINUED

AUM/Boston June 2018

■ LEADERS

[COVER STORY]

HOW YOU MEASURE-UP ACCORDING TO THE TRADE PRESS

2017 BESTIN-BUSINESS IMPACT AWARD™

(CHARLES SCHWAB) Heritage Financial Services, LLC Charles Bean, III, CEO Westwood

AUM/Boston June 2018

Massachusetts Maine

39 Wellesley Investment Partners, Welleseley Louis Crosier, President

New Hampshire

22 Adviser Investments, Newton Dan Silver, President, CEO & COFounder

Rank Name

Rhode Island

(MASSACHUSETTS)

FORBES 2018 BEST-IN-STATE WEALTH ADVISORS

Vermont

FINANCIAL ADVISOR MAGAZINE: TOP 50 FASTEST GROWING RIA FIRMS (+$250AUM)

Company

City/Town

James Atwood

Merrill Lynch - Private Banking & Investment Group

Boston

Raj Sharma

Merrill Lynch - Private Banking & Investment Group

Boston

Susan Kaplan

Kaplan Financial Services

Newton

Peter Princi

Graystone Consulting

Boston

Chuck Bean

Heritage Financial Services

Westwood

Brian Strachan

Morgan Stanley Private Wealth Management

Boston

Greg Miller

Wellesley Asset Management

Wellesley

Sean Dillon

UBS Financial Services

Boston

Richard F. Connolly, Jr.

Morgan Stanley Private Wealth Management

Boston

Devin Condron

Morgan Stanley Private Wealth Management

Boston

Gibson Wilkes

HighTower Advisors

Portland

Todd Doolan

Morgan Stanley Wealth Management

Portland

Josh Burns

Morgan Stanley Wealth Management

Portland

Eric Dexter

Wells Fargo Advisors

Portland

Nichole Raftopoulos

Nvest Financial Group

Kennebunk

Lance Hoenig

Ameriprise Financial

Springvale

Sean Doyle

Merrill Lynch Wealth Management

Manchester

Bob Bonfiglio

Ameriprise Financial

Bedford

John Habig

Morgan Stanley Wealth Management

Portsmouth

Tom Sedoric

Wells Fargo Advisors

Portsmouth

Rob Carrigg, Jr.

Merrill Lynch Wealth Management

Portsmouth

Gary Pelletier

Northeast Planning Associates

Nashua

Malcolm Makin

Professional Planning Group/Raymond James

Westerly

Edythe De Marco

Merrill Lynch Wealth Management

Providence

Dennis McGuire

Wells Fargo Advisors

Charlestown

Jeffrey Martin

Morgan Stanley Wealth Management

Providence

Tricia O’Neil

Morgan Stanley Wealth Management

Providence

Jeff Loring

Loring Advisory Group

Greenville

Tim Stotz

Morgan Stanley Wealth Management

Colchester

Brian Pelkey

Morgan Stanley Wealth Management

Colchester

Christopher Dubie

Morgan Stanley Wealth Management

Colchester

CJ Charlebois Melendy

Ameriprise Financial

Williston

Danielle Gilbert-Richard Merrill Lynch Wealth Management

Burlington

BARRON’S 2018 TOP ADVISOR RANKINGS

1 GW&K Investment Management Harold Kotler, Partner, CEO, CIO 2 Breckinridge Capital Advisors Peter Coffin, President

Maine

Massachusetts

BOSTON BUSINESS JOURNAL: LARGEST INDEPENDENT INVESTMENT ADVISERS IN MASSACHUSETTS

5 Fiduciary Trust Co. Austin Shapard, President, CEO 6 The Investment Fund for Foundations (TIFF) Richard Flannery, CEO 7 Anchor Capital Advisors William Rice, President, CEO

Rhode Island

4 Westfield Capital Management William Muggia, President, CEO, CIO

New Hampshire

3 Baystate Financial David Porter, Managing partner

9 Appleton Partners Inc. Douglas Chamberlain, President, CEO 10 LMCG Investments Ken Swan, CEO

Vermont

8 Congress Asset Management Co. Daniel Lagan, President, CEO

Rank Name

Company

City/Town

Greg Miller

Wellesley Asset Mgmt

Wellesley

James Atwood

Merrill Lynch PBIG

Boston

Peter Princi

Graystone Consulting

Boston

Raj Sharma

Merrill Lynch PBIG

Boston

Richard Connolly

Morgan Stanley PWM

Boston

Susan Kaplan

Kaplan Financial Svcs

Newton

Kevin Grimes

Grimes & Company

Westborough

Dan Wiener

Adviser Investments

Newton

Brian Strachan

Morgan Stanley PWM

Boston

Victor Livingstone

Morgan Stanley PWM

Boston

Todd Doolan

Morgan Stanley Wealth Mgmt

Portland

Jeremiah Burns

Morgan Stanley PWM

Portland

Brian Clement

RBC Wealth Mgmt

Portland

Gibson Wilkes

Wilkes Duffy WM at HighTower

Portland

Jeffrey Kolod

Edward Jones

Eliot

Thomas Gower III

UBS Financial Svcs

Bangor

John Habig

Morgan Stanley Wealth Mgmt

Portsmouth

Robert Bonfiglio

Ameriprise Financial

Bedford

Brian Doyle

Wells Fargo Advisors

Hanover

Sean Doyle

Merrill Lynch Wealth Mgmt

Manchester

Stephen Loughman Wells Fargo Advisors

Hanover

Marc Chareth

Edward Jones

Milford

Malcolm Makin

Raymond James

Westerly

David Reiser

Morgan Stanley Wealth Mgmt

Newport

Edythe De Marco

Merrill Lynch Wealth Mgmt

Providence

John Zitzmann

Morgan Stanley Wealth Mgmt

Providence

Joseph Hassett

Janney Montgomery Scott

Providence

Denise Roberts

Morgan Stanley Wealth Mgmt

Newport

Tim Stotz

Morgan Stanley Wealth Mgmt

Colchester

Brian Pelkey

Morgan Stanley Wealth Mgmt

Colchester

Timothy O’Brien

UBS Financial Svcs

South Burlington

Donald W. Tynion II UBS Financial Svcs

South Burlington

Jeff Dannies

Morgan Stanley Wealth Mgmt

Burlington

Jennifer Kelley

Wells Fargo Advisors

Burlington

KAPLAN FINANCIAL SERVICES

FORBES 2018 TOP WOMEN WEALTH ADVISORS (MASSACHUSETTS) 2 21 24 40 43 92 97

Susan Kaplan (left) Debra Brede Mary Mullin Darlene Murphy Marcie Behman Gibson Wilkes Christine Armstrong

Kaplan Financial Services, Newton D.K. Brede Investment Management Company, Needham Merrill Lynch Wealth Management, Boston Wellesley Asset Management, Wellesley Merrill Lynch - Private Banking & Investment Group, Boston HighTower Advisors, Portland Morgan Stanley Wealth Management, Boston

AUM/Boston June 2018

LEADERS

A Calculated Impact INSIGHTS FROM LISETTE COOPER AND BILL MCCALPIN, ATHENA CAPITAL ADVISORS

As a Board Member of the Garrison Institute, just west of the Berkshires, Lissette Cooper implements her interest in bringing the benefits of contemplative practices into action in the world.

FOUNDER AND CHIEF INVESTMENT OFFICER

answers born of experience in the field and in

press. Her captivating story of her early years

their early lives.

as the daughter of teenage parents and her

Lisette’s experiences in poor neighborhoods

subsequent rise to the top of Boston’s financial

living with so many obstacles to success have

advisory world has inspired a generation of

fueled a mission as much as an ambition to

William F. McCalpin

aspiring professionals. It is also changing the

give back. Bill’s early professional experience

world of impact investing.

trying to bridge the gap between philanthropy

MANAGING PARTNER, IMPACT INVETMENTS

forefront of the sea change from traditional

a Notion”) has kept the issue of social impact

risk/return objectives to the revolutionary

top of mind.

ATHENA CAPITAL ADVISORS LINCOLN, MA

AUM/Boston June 2018

Her firm, Athena Capital Advisors, is at the

charge of changing the world through valuesbased investing. The question facing every values-based

and investment performance (see “Teased by

Their deep dive on the subject has produced papers, such as Building Impact Portfolios (2017) and Investing in Gender Equality (2018), blogs,

investor and advisory firm is how to do impact

presentations and awards for the firm. It has

investing well. Lisette Cooper, founder and

also inspired philanthropy through the Garrison

chief investment officer for Athena Capital

Institute and Boston Sanctuary for Children.

Advisors, and William F. McCalpin, Managing

Athena Capital’s white papers present quan-

Partner, Impact Investments at Athena, have

titative analyses of the deeply nuanced world of

LUCIE WICKER PHOTOGRAPHY

Lisette Cooper

LISETTE COOPER IS NO STRANGER to industry

TOWARD A VALUES INVESTING SYSTEM Lisette Cooper, founder and Chief Investment Officer at Athena Capital Advisors, remembers when she received her first ‘holistic, modern, impact investing mandate.’ “We had a client who passionately believed in their values and wanted to align their investments with those values,” Cooper remembers. “We worked with that client and then others who wanted to do the same thing without sacrificing performance. After a while, we wanted to become more systematic about impact investing.” Coming from a ‘quant’ background, Cooper wanted to develop a rigorous framework for Athena Capital’s investing practices. Her team discovered a tendency for most asset owners to approach values-based investing as a two-step process: exclude companies based on a single criteria and then build a portfolio. Cooper and her team recommend a one-step approach by integrating financial analysis and values-based analysis to build a portfolio that’s best-in-class. Common practice for investing in gender equality is to identify companies that have three or more women on the board or in senior management positions. But exercising that criteria alone would restrict the portfolio and omit certain segments of the market almost entirely. A better approach is to look at gender, for example, as one of many criteria of whether a company is likely to do well. This allows the advisor to build a portfolio where the social criteria can produce alpha and actually enhance valuation.

impact investing. The blogs provide pragmatic

because each client’s value preferences are

tips, heuristics and rules of thumb garnered

different. Some might oppose investing in

from research and the experience of putting the

companies that manufacture land mines while

ideas into practice.

others might balk at firms that refuse to bridge

The firm has spent considerable efforts developing and executing a research-driven ap-

the gender pay gap. “A lot of people push simplistic ‘yes/no’

proach to impact investing. The timing couldn’t

approaches to values-based investing,” said

have been better.

Cooper. “But impact investing is far more

“Survey data point pretty convincingly to

CONTINUED

women and millennials as the ones driving the impact investing approach,” said Lisette Cooper. “Increasingly, they are moving into positions of responsibility in wealthy families

Lisette Cooper and William F. McCalpin

and institutions. This trend is opening the door

COURTESY OF ATHENA CAPITAL ADVISORS (PHOTO); ISTOCK (ILLUSTRATION)

for more impact investing activity.” Athena has participated in the growing trend since 2005. It started as an individual client’s mandate (see “Paths to a Values Investing System”) and now approximately 25% of the firm’s clients integrate impact investments that align with their values or mission objectives into their portfolios. Bill credits Athena’s success to the investment-centric culture that Lisette has built at Athena and her commitment to customization and open architecture. “Many firms talk about customization, but Lisette has made it happen at Athena,” McCalpin said. “To be sure, it’s a harder business model to scale than a product-based model, but it’s what investors really want and what the firm needs to do in order to be a leader in impact investing.” Customization is a critical element in the construction of a values-based portfolio,

AUM/Boston June 2018

[ATHENA CAPITAL ADVISORS]

Impact Market Consensus “Values-based investing is far more complex than saying ‘I don’t want to invest in companies that do this one thing. Through experience, we have learned that the best results come from analyzing financial and impact metrics simultaneously.” —Lisette Cooper, founder and chief investment officer for Athena Capital Advisors

“To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” — BlackRock CEO Larry Fink, “A sense of purpose,” BlackRock, January 2018

TEASED BY A NOTION

While Bill McCalpin has been with Athena Capital for only two years, he has been working with impact investing for far longer. Bill started his career in philanthropy at the Rockefeller Brothers Fund. A change in management brought him to the other side of the organization – investing. He began splitting his time between the “do good” world of philanthropy and the world of institutional asset management. “As I moved back and forth between these two worlds, I asked myself why the disciplines needed to be separate,” Bill recalls. “It made sense to invest capital in a way that aligns with and hopefully advances your philanthropic agenda. That’s where I got teased by the notion of combining the discipline of fiduciary stewardship and having a long term social or environmental impact.” Bill has been working in the impact investing field ever since. “I think it’s a difference between an “either/or” and a “both/and” mindset. “Many members of the baby boomer demographic view impact investing as “either/ or” – you’re getting a good return or you’re doing good in the world. But younger generations don’t view the world that way. They see return and impact as completely integrated, and this view governs the way they spend their discretionary money, their choice of jobs, their life style and the way they invest in the future. They really are on a mission to change the world.”

complex than saying ‘I don’t want to invest

It’s a contribution that will be an important

in companies that do this one thing, such as

part of our brand going forward. We are not

producing fossil fuels. Through experience,

just sitting back. We’re leaning in.”

we have learned that the best results come

“76% of millennials see investment decisions as a way to express their social, political and environmental values.” — Jackie VanderBrug, managing director at U.S. Trust

ing, it’s a good thing that Cooper and McCalpin

multaneously. If an asset owner overly restricts

are actively publishing. “Asset owners used to

the range of potential investments to meet a

separate investing from philanthropy,” said

certain criteria, the portfolio will be challenged

McCalpin. “Now we are contributing to a dis-

to meet benchmark performance.”

ciplined field where the head and the heart are

Deciding how to allocate assets based on client preferences can be next to impossible

AUM/Boston June 2018

integrated – which is far more challenging.” There may be no one better than Lisette

without a systematic approach. Cooper laid out

Cooper and Bill McCalpin to guide the industry

a process to do this in several white papers on

through the head and heart of impact invest-

impact investing. She expanded these ideas in

ing. Together with Athena’s 50+ professionals,

this year’s white paper on gender equity.

Lisette and Bill are writing the next chapters of

LEANING IN

Given the complexity of values-based invest-

from analyzing financial and impact metrics si-

the company’s quest to serve their clients. They see each asset owner as someone on a journey

“While growing our business and serving

toward self-fulfillment. As Bill said to AUM/

our clients is paramount at Athena, we are also

Boston, “Our clients want to know that their

committed to giving back to the development of

capital is catalytic, that it’s making a difference

this practice,” said Cooper. “That’s what mo-

in the world. Whenever we can help them do

tivates us to publish thought leadership pieces.

that, we find it hugely rewarding.” ✹

ISTOCK

■ LEADERS

#TheDescenzaDifference

TO FIND OUT MORE ABOUT TEUCRIUM TRADING LLC., GO TO TEUCRIUM.COM OR SCAN THIS QR CODE.

LEADERS

A Proven Commodity COMMODITY ETFs ARE CHANGING THE GAME BY ROBERT BESSEL

Sal Gilbertie PRESIDENT TEUCRIUM TRADING LLC VERMONT AND CONNECTICUT

THE GOSPEL ACCORDING TO SAL GILBERTIE

HAVE YOU EVER met an evangelist? I have, and his name is Sal Gilbertie. His scripture isn’t chapter and verse, and his subject is the polar opposite of eternal. But compelling? Absolutely, especially for RIAs and AUM overall. Sal is the founder and chairman of Teucrium, a family of commodities ETFs. And if you think “commodities” and “ETFs” could never connect in a million years, you haven’t met Sal. Like I said, he’s an evangelist. He’s also a commodities trader with 36 years in the business. So here’s the deal: After years of trading oil and gas futures for Societe General on the Chicago Board of Exchange, Sal got the idea of combining ETFs with “ags” – commodities speak for agricultural products. Why ags and commodities trading? In short, Sal was playing counterparty to so many commodity trades on behalf of ETFs that he was actually managing a desk at Societe General. Smart trader that he is, Sal decided to structure these commodities “a little better.” He realized that commodities futures made institutional investors queasy, so he focused on raising the risk adjusted returns of the client’s portfolio. So how does adding a more volatile investment than individual stocks reduce portfolio risk? Sal explains it this way: “Say you have a group of airline stocks RICH OFSTHUN

in your securities mix. Eventually you know there’s going to be a war or a disaster that shocks the price of oil, and you’re going to lose money. But suppose you own the oil when CONTINUED

AUM/Boston June 2018

[TEUCRIUM]

those shocks occurred; you could actually make

among them are “contango” and “backward-

money in that part of your portfolio. After the

ation.” Contango is when the costs of storing

shock, when the airlines adjust their operations

and insuring the underlying commodity causes

to the higher oil price, your stock portfolio has

the delivery price for future contracts to

a fresh chance to rise. That’s a simple example

exceed the spot price. “Backwardation” is the

of how commodities can mitigate volatility in a

opposite – the seller doesn’t have enough of

stock portfolio.”

the commodity to fill a contract.

“CONTANGO” AND “BACKWARDATION”

Let’s take a breath. Sal is the kind of guy who goes so fast, your brain really does need to catch

“CORN PRICES COULD DOUBLE” Less output, more Chinese demand for ethanol, and adverse weather trends could push the price to $8 a bushel. ... Alternatively, consider the Teucrium Corn exchange-traded fund (ticker: CORN), which tracks corn futures.

—Barron’s, April 6,2018

If all that is way too technical, then think

behind commodities trading, that it pays to slow

ground floor of commodities trading. A newly

down before he explains how Teucrium miti-

minted college graduate, Sal was sitting in the

gates “contango” and “backwardation” in “ag”

Stagger Inn reading the Wall Street Journal

trades for their ETFs.

when he saw an ad for a “commercial trader

Sal’s nuts and bolts understanding of these and a hundred other factors in commodities

at Cargill.” Sal had no idea who Cargill was or what a

futures comes from his early days working in

commercial trader did, so he went to the library

greenhouses with his father at the family herb

and looked up Cargill in the microfiche. “I came

farm in Westport, CT. During school vacations,

up with 5-6 things that interested me,” he

Sal kept his hands dirty.

recalls. “My girlfriend at the time (now my wife)

Maybe that’s the inner reason for Teucrium’s

gave me a tie with pigs on it, and I wore it to the

interest in agricultural products. Raise the topic

interview. After we finished with the questions

of commodities and most people think of gold

and answers, I pointed to the tie and said: ‘This

and oil, maybe pork bellies and orange juice if

is what I want to trade – pork bellies.’ They hired

they saw the movie “Trading Places.” According

me on the spot.”

to Sal, they don’t get it. “Take a look at corn,” he says. “It’s in

you know that corn is used to make paper? Or that 50% of petroleum needs ethanol to burn? Here’s another corn fact: every year, there’s a finite supply. Corn only grows in the northern hemisphere and it’s only harvested in September. If there’s any disruption in corn production, the price is going to rise.” In Sal’s experience, investing in corn, wheat, sugar and all the other commodities that Teucrium trades is the best way to get the gold. Teucrium Funds provide unleveraged direct exposure to individual commodities without requiring the investor to get a futures account. Teucrium invests in a known benchmark that lists all holdings nightly, and provides future roll dates. The key is not to buy and hold commodities funds. Rather, the Teucrium investor needs to mind the planting cycle – invest when the harvest comes in (the downside is low and the upside is high), rebalance when a disruption occurs (the downside is high and the upside is low). Of course, every strategy holds a danger, and commodities hold their own variety, chief

AUM/Boston June 2018

of contract rolls each year. of Sal’s job interview that landed him on the

know about ethanol, and corn syrup, but did

futures contracts and thus limiting the number

up to your ears. And there are so many factors

everything from animal feed to plastics. We

[SAL] REALIZED THAT COMMODITIES FUTURES MADE INSTITUTIONAL INVESTORS QUEASY, SO HE FOCUSED ON RAISING THE RISK ADJUSTED RETURNS OF THE CLIENT’S PORTFOLIO.

The fund reduces contango and backwardation by not investing in front-month (spot)

RICH OFSTHUN

■ LEADERS

Jake Hanley DIRECTOR OF OPERATIONS, SALES & MARKETING TEUCRIUM TRADING LLC SHELBURNE, VT

REBALANCING

JAKE HANLEY, THE NEW FACE of Teucrium Trading, LLC, is a 30-something who lives and works in Vermont with his wife and two daughters. The former advisor started with Teucrium in January, and the last few months have been a whirlwind. “Teucrium is very different from my work as an investment advisor,” says Jake. “I’m representing a game-changing concept and a fast-growing product line while I absorb the experience and start-up mindset of Teucrium’s principals, Sal Gilbertie and Dale Riker.” Jake directs operations and marketing for the nine year old company. Most days he’s glued to his computer, although he’s just one room away from his 3 year old and 20 month old daughters. It’s not at all what he expected to do in college. Jake’s had charted a course to be a history teacher with a summer job at Abbot’s Lobster House, a landmark in Mystic, Connecticut. Then he graduated college and asked what he would really do with his life. The answer was a three year stint with Ameriprise followed by another five years with Merrill Lynch. “About the same time my team at Merrill started to fall apart, my wife got pregnant,”

“It’s a matter of diversification,” he says.

Jake recalls. “My wife and I asked ourselves

“I have always believed in active management

what we really wanted, and the answer was

through product diversification – particularly

Vermont. We wanted to live, work, play and

exposure to financial sectors that clients couldn’t

raise our daughters in a more rural environ-

otherwise access. Most investors don’t have

ment. We saw it as an opportunity to rebalance

the knowledge or the risk profile to trade in

our lives.”

commodities futures. But Teucrium gives them

In Shelburne, just south of Burlington, VT,

complexity. It can actually be another way to

Peoples United Bank. But a chance meeting with

spread risk.“

Teucrium’s operations manager led to another move – to Teucrium. “It’s really exciting stuff,” says Jake. “For years, advisors have been telling their clients that commodities are risky. Now I’m showing

RICH OFSTHUN

exposure to commodities without the cost and

Jake joined the Wealth Management Division of

Key to the commodities play is that prices rarely relate to the stock market. “Weather is a big factor in corn, wheat and sugar,” says Jake, “and weather doesn’t care about the S&P.” His advice to clients is “get into a fund, wait

those same advisors how commodity funds can

for a supply disruption, then rebalance.“That

help stabilize client portfolios. It’s a complete

may sound strange coming from a commodities

reversal of their thinking, and as we make our

perspective, but Jake considers himself a buy and

case, the money is flowing in.”

hold investor who still manages his positions so

Jake enjoys working with clients where he can use his experience as an advisor to show them where commodities fit in most portfolios.

they’re in line with his overall risk profile.

MOST INVESTORS DON’T HAVE THE KNOWLEDGE OR THE RISK PROFILE TO TRADE IN COMMODITIES FUTURES. BUT TEUCRIUM GIVES THEM EXPOSURE TO COMMODITIES WITHOUT THE COST AND COMPLEXITY.

Good advice from someone who has rebalanced on many levels. ✹

AUM/Boston June 2018

thoughts Robot vs. Human A D V I S O R S

Can a computer algorithm replace the human touch? BY ROBERT BESSEL Can an investor quantify the value added by personal attention? The industry has been asking – and will continue to ask – these questions for years to come. For any investors, the human

Will Trout WEALTH MANAGEMENT TECHNOLOGY STRATEGIST CELENT BOSTON, MA

touch means everything. They reason that financial decisions aren’t coldly logical calculations of balances, cash flow and time horizons – they’re emotional, too. These investors feel that humans are uniquely equipped to read other human’s signals and reactions. If an investor refuses to meet a savings goal, a human is much better equipped

AUM/Boston June 2018

to apply “tough love” than a computer. But that’s not the whole story. Will Trout, Head of Wealth Management Research for Celent, a division of Oliver Wyman, Inc.,

In Trout’s view, older advisors

gent Portfolios by Charles Schwab. Advertised as ‘a simpler, smarter

says the perceived threat of robotic

are fighting against economics

advisors has evolved substantially

when they cling to a human-only

way to invest,’ Intelligent Portfolios

from ‘Us vs. Them.’ Today’s views

advisor model. “Advisors need to

uses a short online questionnaire to

of cyber vs. human often break

rationalize their delivery costs if

guide the construction of a client’s

along age lines.

they are truly going to grow their

investment portfolio. Schwab’s ro-

“Younger advisors tend to

businesses,” says Trout. “The

bots build, monitor and automati-

be more open to a hybrid model

question is not ‘if’ but ‘to what

cally rebalance the client’s portfolio

where humans handle key touch

degree’ any advisor is going to use

of low-cost exchange-traded funds.

points of the relationship,”

automated capabilities in today’s

There are no advisory fees, account

says Trout. “The younger advi-

market.”

service fees or commissions. Clients

sors often rely on robotic capabil-

The cost of placing a human

can start with as little as $5,000.

ities to automate the on-boarding

advisor across the desk from an

Trout says that Schwab built

and portfolio construction func-

investor has pushed more than

Intelligent Portfolios as a defen-

tions, especially for clients who

100 investment companies to offer

sive strategy. “Schwab figured

do not have a high net worth.”

robo alternatives, such as Intelli-

that clients are going to leave any-

ISTOCK

Will’s research centers on technology strategy and innovation in the securities, wealth management and banking industries. He has particular expertise on automated advice delivery, data analytics and segmentation, retirement investments, the use of digital tools and wealth management platform technology. An authority on the robo advisory business, William has been widely quoted in publications such as Bloomberg, CNBC, Financial Times, New York Times, and the Wall Street Journal. He is also a frequent speaker at industry conferences and keynotes client gatherings.

FOR MORE INSIGHTS FROM THOUGHT LEADERS, BE SURE TO VISIT AUMBOSTON.COM/ THOUGHTS

way, so they might as well invest in a robo-advisory system that might keep them a little longer,” says Trout. The question for the financial advisory business will always be: How do advisors add value? The ready answer is ‘personal attention,’ but at what cost to the client over what period of time? Trout says the situation is more dire than most advisors realize.

The cost of placing a human advisor across the desk from an investor has pushed more than 100 investment companies to offer robo alternatives, such as Intelligent Portfolios by Charles Schwab. “So far, clients haven’t pushed back against annual portfolio fees,” says Trout. “At some point, the holders of $3-5 million portfolios will ask if their annual 30 basis point fee is worth paying after the portfolio is established.” One answer might be eventbased pricing, where the establishment or redesign of a client’s portfolio garner higher fees. Human advisors will argue that clients don’t always know when their portfolios need that level of attention until it’s too late. For those clients, a steady 30 basis point fee might be just the thing to keep the human advisor on the ISTOCK

job and sensing when the next big change in strategy needs to happen. Time will tell. ✹

The Umbrellas Made It Rain With mid-term elections on the horizon, the effect of campaign spending on election outcomes will be big news again CONTRIBUTED BY JOHN OSBON, OSBON CAPITAL MANAGEMENT CAN MONEY BUY ELECTIONS? us that Situation Imagine five to ten million dollar super PAC A caused stock contributions by individuals right before a prices to go up, primary contest! It’s legal, but isn’t that an or that Situation unfair, even immoral, advantage? “A big fat B caused bond no,” according to Stephen Dubner and Steprices to go down. ven Levitt of Freakanomics. I suggest clicking These things may on the link to hear their reasoning directly. sometimes happen In a nutshell, they argue that yes, the canditogether, like a rising stock date with the most financial support often market when GDP grows, wins, but the money itself doesn’t generate but it doesn’t mean that one caused many votes. the other. Instead, their research shows As Warren Buffett has often it is more the other way around said, “just because you know what – candidates who have successes the economy is doing doesn’t tell attract donations because conyou what stock prices are.” Novemtributors want to back a candiber 2007 was a very rosy economic date who can win. That is, voter time, with earnings, stock prices, support triggers contributions; but and the economy all hitting record contributions and the ad spending highs. We know what happened that follow do not produce much next. Similarly, in February 2009 additional voter support. This is a great example that FOUNDER AND the opposite was true. The former MANAGING was a time to sell stocks, and the differentiates correlation and PARTNER latter a time to buy, although I can causation. Just because you see OSBON CAPITAL count on one hand the number lots of umbrellas on rainy days INVESTMENT of people I know who actually did does not mean the umbrellas BOSTON, MA that. Everyone else saw causal recause the rain. While commentalationships that weren’t there and paid a big tors may rant about the unfair influence of price. It’s now 2018 and I still hear predictions big contributions, the Freakanomists say all of imminent investment doom. that money is not buying much additional support at the polls. THE ALTERNATIVE Plan, instead of guessing, is our advice at CORRELATION, NOT CAUSATION Osbon Capital. Pay attention to facts (curJust as candidates running behind in the polls rent prices and yields) and things you can may blame their failures on fat cat donations control (expenses, diversification), and stay to opponent super PACs, we often see the focused on your personal investment goals. same foggy reasoning in investing. The misIn that way, you can ignore a lot of useless understanding of correlation and causation information and enjoy a portfolio that is built screws up our intuition. Market pundits and for you. ✹ analysts make a living by trying to convince

John Osbon

AUM/Boston June 2018

thoughts

Time to Give Convertible Bonds Their Due? Rising interest rates, a nine year old bull market and investor portfolios at 80/20, even 90/10 allocation. If now isn’t the time to rebalance, then when is?

“The trouble is discipline,” says

ABOUT WELLESLEY ASSET MANAGEMENT

Michael Miller, Chief Investment

Wellesley Asset Management, Inc. is an SEC registered investment advisory firm serving individuals, families, trusts, retirement plans, and other investment professionals. Founded in 1991 by Greg Miller, CPA and Darlene Murphy, CPA, CFP®, the firm specializes in the management of convertible bonds deploying an absolute return-seeking strategy. Wellesley Asset Management provides convertible bond investment services through separately managed accounts, a private partnership, and mutual funds.

and then the market keeps rising,

Officer at Wellesley Asset Management. “If an advisor recommends that his client sell stocks the client is going to chew the advisor’s head off. So advisors have a hard time rebalancing client portfolios right now. The beauty of the Wellesley strategy: we provide a great way to rebalance.” Wellesley’s strategy is convertible corporate bonds issued by domestic companies. This hybrid investment was introduced in 1874 by the Rome, Watertown and

sets than investors in straight,

Ogdensburg Railroad. The New

non-convertible debt. The

York company based near the

difference at Wellesley is that

Canadian border used convertibles

the firm sets more conserva-

to finance one of the first railway

tive expectations than most

lines in America. Each $1000 bond

other funds.

of 30 years. For today’s investors, convert-

side, but zero percent draw-

ible bonds pay a coupon like most

down if the market crashes,”

corporate bonds. But unlike most

said Miller. “So during a bull

bonds, convertibles provide the

market, we underperform our

option to be converted into stock.

peers and the equity markets. But

This conversion option allows

in a bear market, we really shine.” Michael and his father, Greg,

price if the underlying stock price

have history on their side. The

increases. If the stock does poorly,

firm began investing in convert-

the downside is limited because,

ibles in the 1990s, and saw its

at maturity, the investors will

first major gain in the early 2000s

receive their principal.

when they trounced the bear mar-

Of course there’s a catch: should

AUM/Boston June 2018

“Our goal is to capture 60-70% of the market up-

ket following the great dot com

the issuer go into bankruptcy, con-

bubble. They scored again in the

vertible bond investors have a lower

crash of 2008. Today, Wellesley

priority claim to the company’s as-

manages nearly $3 billion.

ISTOCK

had a coupon of 7% and a maturity

the convertible bond to rise in

Michael Miller, Chief Investment Oﬃcer, Wellesley Asset Management

TO FIND OUT MORE GO TO WELLESLEYINVESTMENT.COM OR SCAN THIS QR CODE

When Wellesley’s investors trounced the bear market of the early 2000s, more money ﬂowed in and convertible bonds became Wellesley’s sole focus.

upside of equity market gains but only one third in a falling market. This history can be compelling to many experienced investors because they understand how losses can outweigh the benefit of gains during a rising market. For example, it took the S&P 500 Index nearly 5½ years to recover from the losses suffered during the market crisis of 20072009. Avoiding and minimizing losses is a key principle for investors intent on finding superior long-term returns. Convertible bonds allow investors to realize many of the attributes they seek in investments: return of capital, current income, Most people in the industry be-

and the potential for upside appre-

lieve it would be difficult to sell an

ciation beyond what is available in

underperforming asset in a raging

regular bonds.

bull market, but Miller reports

“My clients are invested in short

that Wellesley is doing very well

to mid duration domestic corporate

right now as a rebalance strategy.

bonds,” Said Miller. “If this nine

“We’re one of the few invest-

year bull run lasts another nine

ments that plug into a client’s

years, great, my clients get to

fixed rate allocation,” said Miller.

participate on that upside due to

“Everyone is overweight equity, so

the convertibility of their bonds.

everyone is looking to rebalance

Should the markets turn south,

their portfolios. Unfortunately, no

then my clients get the protection

one is buying bonds because this

of being fully invested in bonds.”

may be one of the least attrac-

Especially now when the mar-

tive environments for bonds that

kets are increasingly uncertain and

we’ve seen. Investors feel that

investors find it hardest to hear

rates are going to go up and when

their advisors’ message of sticking

they do, their principal is going to

with a more conservative long-

erode. But convertible bonds are

term investing plan, convertibles

another thing entirely.”

are experiencing a resurgence in

Historic returns on convertible

popularity. It looks as if Wellesley

bonds are asymmetric, partici-

and the Millers are in the right

pating in roughly two thirds of the

place at the right time, again. ✹

AUM/Boston June 2018

thoughts The Road Ahead for the Almighty Dollar CONTRIBUTED BY JOHN OSBON, OSBON CAPITAL MANAGEMENT

The US dollar has been the currency of reference for the world since 1985 when President Reagan declared that “dollar strength reflects fundamental forces.” It gets a lot of attention, and it should. Big changes in dollar strength can have big economic effects at home and around the world. The strong dollar was called into question in Davos and emerged unchanged. What will investors be looking for the dollar to do in 2018? Here’s our checklist. The state of the currency: WHERE ARE WE NOW?

WHAT IS CHANGING?

With declines over the last year, the dollar has reached a

Alarmists are saying the dollar is going down and that

value-neutral level in January 2018. Another way to say this

a decline reflects a decline in the value of America. We’re

is the dollar is right in the middle of its value range for the

skeptical. A dollar decline is most unlikely this year and

last five years.

next. The signs and supports are pointing to strength, not weakness. The signs are higher interest rates, a strong

BLOOMBERG DOLLAR INDEX

economy, and surging profits. Fed rate rises are likely in

For all the headline-grabbing and hot currency talk, there

March, June or September. GDP reports and revisions come

really isn’t anything too extreme to say about the dollar right

every 45 days. They have been consistently up. For surging

now. It’s neither high or low. It’s in the middle. For US inves-

profits look to oil, technology and financials for every

tors a middling dollar in 2018 has a positive effect on their

quarter this year. They are virtually baked in, absent a

non-US investments. They get the investment appreciation

highly unlikely recession.

and a little extra from currency return.

RISKS TO CONSIDER

WATCH YOUR BALANCE The most important step you can take is to know your US

The risk impact of the dollar is easiest to see at the extremes.

versus non-US investment mix. If you or your advi-

At one extreme is a very cheap dollar (80 on the index, like

sor know the daily mix you are fully prepared for the

we saw in 2011). A cheap dollar will lead to a booming US

dollar’s wiggles in 2018. We strongly suggest that at

economy and a favorable trade balance, perhaps even a

least 65% of your investment assets be dollar-based,

postive one. The portfolio effect for an investor is likely to be higher US stock prices and lower US bond prices.

because the dollar is where you earn your money and where you spend your money. ✹

At the other extreme is a very strong dollar (100 on the index, as in 2017). The portfolio effect for the investor is likely to be lower non-US stock prices and higher bond prices. Note that it’s possible and desirable for your advisor to model the dollar extreme impact on your portfolio. The dollar’s strength is not inherently good or bad for you — it depends what you own. The vitality of the dollar also affects the cost goods and services.

AUM/Boston June 2018

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agenda

» Mark your calendars for these upcoming events, seminars, and conferences

When: July 10 5:00 PM to 7:00 PM Where: Sterling’s 60 State Street Boston, MA 02109

across the three days will be an array of work streams designed to engage all members of the asset management community. The program will be packed with technical content in the form of plenary presentations, workshops and interactive panel sessions. The event attracts over 400 delegates from over 35 different countries and offers a multitude of formal and informal networking opportunities as well as an exhibition area offering the latest innovations in asset management tools and services. » Register at theiam.org/Events/iamannual-conference-2018/

Join fellow colleagues and BEPC members this summer for drinks and appetizers at Sterling’s! Get out of the office and enjoy the summer heat on the patio! We hope to see you there. Online registration is available until 7/10/2018 Member Price: $25 Non-Member Price: $50

In|Vest 2018: Innovations & Digital Transformations in Wealth

» Register at bepc.org/events/ EventDetails.aspx?id=1110920&group=

Boomers are the new Millennials. 401ks are hot. All the major market leaders are looking for the perfect robo + advisor strategy. No one’s actually executed it. AI is more than a buzzword, but not yet worthy of the hype. Customer acquisition and engagement are on everyone’s mind. Competing technology models are forcing firms to choose a path—soupto-nuts solution, or a la carte ordering? Partnerships. Blockchain. Chatbots. Beyond TDFs. Innovation, innovation, innovation. The wealth management industry is at a crossroads, as industry leaders embrace digital transformation. But embracing and rolling out across customer segments are proving to be two very different challenges.

IAM Annual Conference 2018 When: June 25–27 Where: Hilton Birmingham Metropole The NEC Birmingham Birmingham, United Kingdom Jolly Old England isn’t so close, but as New England we can and should think of it like family, and shouldn’t we visit family often? The IAM Annual Conference 2018 will focus on asset management in the context of Growth, Innovation & Transformation, and Resilience. Running

AUM/Boston June 2018

When: July 10–11 Where: N ew York Marriott Marquis 1535 Broadway New York, NY 10036

Now in its fourth year, In|Vest 2018 will bring together the entire wealth management industry – those that serve retail customers, HNW, UHNW, digital advisors, insurance, asset managers, investors, all manners of solution providers, and consultants to debate and uncover the solutions that are working today, and on the horizon. The In|Vest 2018 program is designed to keep you ahead of an ever-changing industry and position you for success during the digital transformation of wealth management. Year after year, the event is an unqualified success, attracting nearly 1,000 executives from the U.S. and abroad. » Register at financial-planning.com/ conference/invest-2018

Focus on Advanced Portfolio Construction with ETFs

When: J uly 12 Where: Seaport Hotel & World Trade Center, Boston The financial industry has adopted the use of exchange-traded funds (ETFs) at an unprecedented rate, pouring trillions of dollars into the products due to their relatively low cost, flexibility, and liquidity. Advisors that use ETFs to construct all or part of investment portfolios must understand how to perform due diligence, construct effective portfolios, and manage risk

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BEPC - Boston Estate Planning Council: 2018 Summer Social

TO STAY ON TOP OF WHAT’S COMING UP, OR TO ADD YOUR OWN EVENT TARGETING AUM PROFESSIONALS IN GREATER BOSTON AND NEW ENGLAND, PLEASE GO TO AUMBOSTON.COM/AUM-AGENDA/ OR SCAN THE QR CODE AT RIGHT.

for their clients. With so many product choices available to investors and advisors, gain clarity and wisdom by joining our industry experts as they demonstrate real, objective, and practical decision-making when creating investment portfolios with ETFs. » Register at investmentsandwealth. org/foapcetfs

BEPC - Boston Estate Planning Council: 2018 Golf Outing

personal and professional self to the next level. » More info and register at investmentnews.com/section/ event?eventID=WAS

CFA Institute Annual Financial Analysts Seminar 2018 When: July 23–July 26 Where: University of Chicago’s Gleacher Center, Chicago, IL Internationally-recognized as one of the most comprehensive continuing professional development programs for global investors, the FAS offers engaging lectures, small classroom discussions, and interactive case studies on a wide range of timely investment topics.

» Get info and tickets at bigsister.org/ news-and-events/events/summersoiree-2018-933.

Total Impact Boston When: O ctober 4–5 Where: Boston Sheraton Total Impact, a Good Capital Project conference, is a multi-city convening series providing practical impact education and impact strategies to advisors, investors, family offices, wealth managers, and HNW individuals who are interested in aligning their investments to their values and mission. Featuring impact insights and opportunities across asset classes with a special focus on the greater Boston area. » Register by June 20th to save $400: totalimpactconference.com/

» Register at cfainstitute.org/en/ events/conferences/fas-2018 When: Monday, July 18 – Save the Date! Where: Blue Hill Country Club, Canton Save the date! Information and registrationcoming soon

Big Sister Boston Summer Soiree 2018

» Watch for info at bepc.org/events/ EventDetails.aspx?id=1079498&group=

The InvestmentNews Women Adviser Summit

ISTOCK (GLOF)

When: July 10 Where: The Colonnade Hotel, Boston 120 Huntington Ave Boston, MA 02116 A one-day workshop now held in four cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her

When: June 276/27/2018 5:30 PM Where: F inn McCools Boston 200 High Street Boston , MA 02110 Presented by BSAGB’s Young Professional Board. Kick off Summer 2018 at Big Sister Boston’s Young Professional Board’s annual Summer Soiree! Join us for amazing raffle prizes, summer games, and hosted beer & wine in the heart of downtown Boston! Eaton Vance Investments is a Gold Sponsor.

The 20th Annual Endowment and Foundation Forum When: N ov 13–14 Where: Seaport Hotel & World Trade Center, Newport, RI A forum for fluid exchange of ideas concerning portfolio planning and investment strategies. The program will also highlight the need to align fiscal strategy with values and missions. Participants and delegates will speak on topics including necessity for non-profit governance for endowments, means of capturing alpha in a portfolio, methods of choosing managers, and problems of ethics and liability in fiduciary planning. » 15% off registration code: WTEFF2018. More info at opalgroup.net/conference/ endowment-foundation-forum-2018/

AUM/Boston June 2018

GOOD CITIZENS

A TOAST TO COMMUNITY HEALTH

Wealth managers

have more than big balance sheets; they have big hearts, too. And with substantial assets under management, they are able to reininitiatives, such as empowerHer, on a grand scale. AUM/Boston proudly celebrates the many ways that

The Camp Harbor View Foundation campharborview.org

Boston’s wealth pro-

fessionals support

617.369.0070

and build the health

@CampHarborView @chvFOTF

info@campharborview.org

of the Greater Boston community. SCAN THIS QR CODE TO GO TO CAMPHARBORVIEW.ORG

AUM/Boston June 2018

Camp Harbor View works with 900 youths (each year) from Boston’s under served neighborhoods through two four-week summer camp sessions as well as programs for campers and their families throughout the year. They also provide scholarships of up to $10,000 for post-secondary education.

ISTOCK (ILLUSTRATION); CAMPHARBORVIEW.ORG (PHOTO)

force good citizen

AUM/BOSTON THOUGHT LEADERS AMONG THE BOARD OF DIRECTORS » Jack Connors, Jr., Co-Founder & Chairman, Camp Harbor View » Lori Cashman, Founder & Principal, Victress Capital, LLC » Darren Donovan, Managing Principal, KPMG LLP » Sonja Kelly, Managing Director, Kelly Family Foundation

The Camp Harbor View Foundation, Inc.

» Sharon McNally, Chief of Staff, Connors Family Office, President, Camp Harbor View Foundation

TEENS LEARN BUSINESS SKILLS, MAKE MONEY FOR COLLEGE AT BOSTON FARM

is a private, not-forprofit corporation established in March 2007. The Foundation is responsible for the overall administration of the camp and its programs. In addition, the Foundation spearheads fundraising efforts (Camp Harbor View is supported entirely by private funding), coordinates special events, and develops and maintains relationships with

CAMPHARBORVIEW.ORG

program partners.

“Tomatoes, strawberries, cucumbers, zucchini, eggplant, corn,” says Juliette Alvarez, one of the campers listing just some of the crops. “It just gives us a sense of what it’s like to run your own business basically, and gives us a little taste of what we might want to do later on,” adds Darren Roberts, another teenager in the program. The farm is a partnership with B. Good restaurants. This year, the older teens are part of an entrepreneurship program, taking what they grow and selling it at their own farm stands in the South End and Mattapan. “It helps me learn better about how to take a product, improve that product, and sell it,” says Jonathan Neal, one of the young people. The kids’ earnings are earmarked for the future. “It all goes to our college funds and I really appreciate that because I really want to go to college!” says Juliette.

For these city kids, the farm experience makes a difference. “I think what we’re really focused on is, are these kids better positioned for success in the future,” says Jon Olinto from B.Good. The kids offer a resounding “yes.” “When the summer is over I’ll walk away with a smile on my face because of this future that I have now with their scholarship,” Darren says. Produce from the farm is also used for meals at the camp, and kids take some of it home for their families. —David Wade, Multiple award-

» Bill O’Malley, Managing Principal, Income Research Management » Girard R. Sargent, President, Citizens Bank, and a principal in Citizens Capital Markets, Inc., the firm’s broker dealer. » Fred Seigel, President & Chief Operating Officer, Beacon Capital Partners Other Supporters include Osbon Capital Management

winning journalist, co-anchor at WBZ-TV News.

THIS ARTICLE ORIGINALLY APPEARED ON WBZ.COM. SCAN THE QR CODE TO READ IT IN FULL.

AUM/Boston June 2018

■ GOOD CITIZENS MEMBERS OF YOUR AUM/BOSTON COMMUNITY ON THE BOARD OF DIRECTORS » Dolly Di Pesa, President Managing Partner & CPA Di Pesa & Company, CPAs » Erin Devine, Treasurer PwC/Partner PriceWaterhouseCoopers, LLP

empowerHER

@empoweringHER @empoweringHER @empoweringher

617.648.9559 info@empoweringher.org

» Susan Daileader, CFP, CLTC Clerk/Assistant Clerk Vice President, Financial Advisor Rockland Trust

empoweringher.org

empowerHER, is the only organization in the country specifically working to address the struggles of girls whose mothers have died. Group retreats remind them that they are not alone in their grief, and mentorship gives them a strong female role model as they traverse the difficult terrain of grief. “SOMETHING BEAUTIFUL. SOMETHING EXTRAORDINARY.”

Five years after it was born, empowerHer remains a completely unique “start up non-profit.” But thanks to Belvin’s hard work and the support of grateful families and communities, empowerHer

profoundly specific mission — to empower and

has grown by 150% every year without advertising.

support girls who have lost their mothers at an

Word of mouth makes people aware.

early age. Having lost her own mother at the age of nine,

Today, empowerHer serves 130 girls in Massachusetts. Its one-on-one mentors

Belvin knows firsthand what these girls are going

complement the events and retreats that are held

through. “As long as my brother and I kept getting

through the year. The program remains unique

“A’s” in school, everybody thought we were all

and growing one state at a time.

right,” said Belvin. She became a school psychologist in Connecticut,

“The key is to keep the program small, volunteer driven and supported by the communities it

then a non-profit administrator in Chicago before

serves. All services are delivered free of charge

moving to Boston where the first empowerHer event

to families,” said Belvin. “We are building a

came to be. Belvin hosted a Mother’s Day gathering

supportive community that girls can rely on.“

for seven teenage girls who had lost their mothers.

Her dream became a reality thanks to the

The event was low pressure, non-therapeutic and

generosity and hard work of Dolly Di Pesa,

focused on showing each girl that she was not alone.

Managing Partner at Di Pesa & Company, CPAs and

“The day was magical,” said Belvin. “I started

Erin Devine, partner at PriceWaterhouseCoopers,

to envision other events, like a day at the beach,

LLP. Both serve on the board of empowerHER as

an honest discussion about social media, a mentor

President and Treasurer respectively. ✹

program, and more. Before we knew it, we had expanded from a single Mother’s Day gathering to 10 events per year.”

AUM/Boston June 2018

To learn how you can help empowerHER, call 617.648.9559 or visit www.empoweringher.org.

EMPOWERINGHER.ORG

SCAN THIS QR CODE TO GO TO EMPOWERINGHER.ORG

Cara Belvin started empowerHER in 2013 with a

In business they say:

It’s all about relationships....

We couldn’t agree more. And, we’re in the business of making them. Girls who have a Big Sister mentor in our program develop the confidence needed for academic achievement, improved interpersonal relationships, and

healthy decision-making. Now that’s an investment you can get behind. Yet, it is estimated that just 7% of philanthropic dollars in the U.S. are donated to girl-serving organizations. We can change that.

support girls on their path to greatness. visit www.bigsister.org to learn more.

END USERS

FINDING THE MILLIONAIRE NEXT DOOR DID YOU KNOW BOSTON RANKS THIRD IN THE COUNTRY FOR HOUSEHOLDS WITH $1 MILLION+ IN INVESTIBLE ASSETS? DO YOU KNOW WHERE TO FIND THEM AND WHAT ARE THEY LOOKING FOR IN AN ADVISOR? AUM/BOSTON RECENTLY FOUND ONE OF THEM: A RETIRED SCHOOL TEACHER COUPLE, IN FACT, RIGHT NEXT DOOR. B Y R O B E R T B E S S E L

who rehabs houses, volunteers at a local

managing yourself, not your money.” Craig also took the time to meet with

watershed association and enjoyed leading

Cathy, answer her questions and establish

elementary school students into salt water

a lasting rapport.

marshes to seed clam beds and test water

While Craig never recommended spe-

when they want to buy the house outright,” says Carl. “It’s a good way to keep them focused on the future.” The future focus is part of Carl’s story, too, starting when his father advised him

cific stocks, he did help Carl set param-

to put $100/week into a mutual fund. That

eters to manage his stock portfolio that

advice and a lot of determination helped

an educator, saved diligently via 403b

preserved profit and made more funds

get Carl and Cathy where they are today:

retirement plans. They had no college

available for stock purchases when the

millionaires next door.

loans and paid off their first house years

time was right. Since Carl went with the

ago. Carl divided his savings between

advisor, his portfolio has grown from

Carl and Cathy are left without a financial

stocks and older homes. He and Cathy

$500,000 to $1,500,000.

advisor. Interested? Are you a good fit?

quality in Greater Boston. He and his wife “Cathy,” who is also

accumulated $500,000 each in investible

Drawing from his experience in real es-

cash – enough to seek a Financial Advisor

tate and carpentry, Carl has been looking

who could help them manage their trust

for a triple decker that needs a little work

accounts. They settled on “Craig” from

in Medford for their daughters

TIAA CREF – one of several that the orga-

to move into.

nization recommended. What attracted Carl and Cathy to Craig? Because they were doing all their own stock-picking, their criterion for an advisor had nothing to do with performance. But, Carl and Cathy wanted someone who wasn’t “pushy” or “full of themselves.” They wanted someone who was “down to earth” and “wanted to know about us.” “Craig was comfortable with trusts and with my stock-picking,” says Carl. “He also spent a lot of time explaining his role – which I think a lot of people don’t understand about advisors in general.” Much of Craig’s advice came from Nick Murray’s book “Simple Wealth, Inevitable Wealth.” For Carl and Cathy, the line that became their investment mantra was: “Don’t panic. 90% of investing involves

AUM/Boston June 2018

By the way, Craig left TIAA CREF and

Will they like you? Let us know, we can pass along your name. ✹

“Our daughters will pay us rent, but we’ll keep the money as a down payment

ISTOCK

“CARL” IS A RETIRED SCIENCE TEACHER

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