How did Wealth Science™ Advisors begin?
Why now? Maybe a good place to start is with another question I’m sometimes asked: “why did you go back to grad school in your 40’s?” And what do you plan to do with the new skills? Good questions! In short, I was curious. . . But this letter is the long version—in case you are interested. If not, please disregard this lengthy explanation.
In the early 2000s—through a serendipitous chain of large corporate events—I found myself in a conference room in Seattle, Washington—a really nice conference room I might add—overlooking the Puget Sound. I was being trained on the systematic foundations of investing—asset allocation, dollar cost averaging and rebalancing. It’s one thing to do all these things for yourself, it’s quite another to do it for hundreds of families you know and love. Being a highly conscientious person—some might say obsessive compulsive—I figured I could use all the training I could get! In this presentation, a genius CFA outlined how to build portfolios to maximize return and minimize how much they went down during the inevitable bad times. We were staring at an overhead screen and a handout that had 5 portfolio options. Many of you have since stared at this same page full of numbers. On the left of the page was the portfolio that had gotten the best results over 40 years, but the presenter was explaining how the portfolio second to the left was optimal, because it had less ups and downs. I happened to be sitting by one of the presenting company’s lead analysts—another literal genius. A genius I respect tremendously and still have a relationship with today. I leaned over and gently whispered “shouldn’t clients have the portfolio with the highest return?” He whispered back, “of course, you just can’t hold them in it” referring to the seemingly hardwired preference for humans to do the exact opposite of what they should do during downturns—SELL! For whatever reason this felt like a personal challenge, and in a “hold my beer” kind of moment I quipped, “I think I can help them.”
Fast forward to the early 2010’s and this same group of respected colleagues was in our first new office in Alpharetta, GA asking how many of our clients—you guys—had sold their precious stocks in the great panic of 2009. We happily reported “NONE!” They politely called “BS” and we showed them the system we had used to guide you guys through the storm. They listened attentively and seemed to be calling less BS as we talked. Keep in mind this institution at the time had 23 PhD economists working in their investment department and they reminded us of it—quite often. Some time passed and this same group asked if they could stop by again and bring one of their colleagues. They asked the same questions and our team happily answered everything they asked. I think we were just thrilled that “the smart people” were interested in what the “country folks” had to say. As the meeting went on, we noticed they were taking notes. After they left and we were recapping, something hit me and I said “I’m not sure that what we are doing works, but we need to figure it out and stop talking about it until we do.” We locked the door that day and haven’t explained our process to anyone but you—our clients — and the psychologists I’m about to introduce to you.
Fast forward a few years and a trusted friend quipped “with all this crazy psych stuff you read, you ought to go get a PhD.” His comment planted the idea, and he seemed to have some belief I could do it. Plus, several people I admired most in life had earned PhDs, so I did some research and made a cold call to the head of UGA’s Psych department—in a life insurance selling kind of way. A few of our longest tenured clients may have been on the receiving end of one of such calls. Why psychology and not economics you might ask? Good question. The economists wrote on how we humans mostly made rational decisions with money, the psychologist wrote about how we humans mostly made irrational decisions but in repeatable patterns. I had seen enough over my 10,000 meetings to throw my lot in with the psychologists. Plus, I already had a business degree rooted in economics which didn’t seem to have all the answers. Maybe it was time to head south from UGA’s north campus, carefully cross over Baldwin Street as not to get hit by a UGA bus, and see what the psychos had to say. At a minimum, their horribly designed building had a better view of Sanford Stadium. In March 2016, I had my first meeting with Dr. W. Keith Campbell at his office in Athens. We hit it off immediately, the gloves were off quickly and Mr. Toad’s wild ride began. I told him I thought I was seeing repeating patterns in client money behavior that seemed to be rooted in memory. I also explained that I thought the risk tolerance profiles given by the financial industrial complex were “crap” and mostly served the institution’s interests! He said they weren’t all crap as he in fact serendipitously had just written one that worked quite well. I asked him, “Who paid you to write it?” He replied, “A financial institution.” I replied, “Exactly my point!” Who is representing the regular people.
Fast forward another six years, and we wrote Professor OCEAN: A Small Fable of Personality’s Big Five to begin to explain our findings. Though my curiosity has led to 1000’s of hours of research, a PhD seminar class titled “Wealth Science” and multiple peer reviewed published research papers —and most importantly, two new lifetime friends in Dr. W. Keith Campbell and Dr. Patrick Doyle — all of that research sits behind academia’s pay walls and is mostly unreadable. Professor OCEAN is the first in a series of books designed to help us understand ourselves and each other a little bit better. Hopefully this understanding helps us all have better outcomes—including financial outcomes—and leads to genuinely happier lives. Professor OCEAN’s next adventure does involve money, but you may find that book less interesting as all he will be teaching are the systems you have been using to grow your wealth for the last 20 years. Just don’t tell the company with the 23 economist PhD’s, as they are still asking. . . Plus, they’d never believe that the psychos figured it out. . .
With all that said, Wealth Science Advisors—which includes our recent groundbreaking research— is the best platform to continue to deliver Financial HappinessTM to you and your family in the years to come.
- Jim Exley, Ph.D., CFP®, CLU®