Updated: Feb 26
When our firm parted ways with an insurance giant in 2019, we knew we had our work cut out for us. Our goal was to pave our way, so we could serve clients the way we knew was best — and, in the process, create a best-in-class financial services firm that remained boutique and highly personal.
I believe our firm is at that perfect point today. We still maintain deep relationships with clients and are involved in all critical moments: weddings, deaths, funerals, and everything in between. Because we only serve 364 families, we know their circumstances like our own. We can dig deep into everything from their investments to cash management. Yet, we still maintain massive resources from both a human and technology standpoint. It's the perfect intersection of a high-touch client service model, with all the leading technology, specialization, and talent clients could expect from a larger firm.
To preserve this sweet spot of size and strategy, the GWS Leadership Team intentionally outlines our vision, mission, and plan for the firm each year. We leverage quarterly goals and incentive compensation to inspire our employees to perform at their very best for our clients. When it comes to advisor acquisitions and succession plans, we have all our resources in-house, so advisors can be confident they're leaving their clients in good hands. From specialized knowledge to in-house CFA®'s and marketing professionals, we don't need to outsource essential resources and departments. That gives us creative control and inspires confidence in our partners.
Best of all, we are not obligated to any investment management, holding, or fund company. We want our trading tools and proprietary processes to drive our trading decisions. We'll use the best funds and holdings out there. We're not biased, and we don't have any unique or sketchy relationships that lie opaquely in the background. We are committed to genuinely putting the best things we can find in our clients' portfolios.
Clients can take confidence that their team is extremely educated and equipped to handle any growth and complexity. Each client gets a Lead Advisor with an advanced degree — J.D., CFA®, MBA, or CFP® — on their team and a Service Advisor who is a CFP® or a candidate for the CFP® and CFA® program. After all, planning is not just a piece of data analysis. It's the applied wisdom and critical thinking that comes with experience and education.
Our team has worked tirelessly over the last year to create this level of service for our clients. We have heard from many prospective clients that their advisors were utterly silent during the pandemic. At GWS, on the other hand, we launched a Weekly Market Insights webinar, started publishing weekly blog posts, and now even share live daily market updates on our firm's YouTube page. It is of the utmost importance that our clients feel informed, secure, and cared for, especially during uncertain times.
"Today, our clients tell us that they believe we're the most communicative advisors out there, and that's not by accident. That's by design." - Dan Goeddel
We follow plenty of communications from competitors, big banks, and Wall Street giants. At most, they give commentary on markets once a week. It's very watered down, broad, and not applicable to typical investors. At GWS, however, we try to take stances on issues and share how we plan to protect and ultimately grow clients' wealth. We do that with risk, but feel it is essential to be thorough and transparent, rather than playing it safe with comprehensive economic data that anyone can find. No matter who is in the White House and who controls the government, there will still be opportunities and threats to take advantage of and avoid for our clients' portfolios. Our goal is to take a clear stance and be thought leaders.
For many of GWS's younger employees, the 2020 market dip was their first real bear market. Many had weathered market corrections, but some were still in college or younger during the great recession or immediate aftermath. Fortunately, our clients are tough, resilient, and quick to learn. Even in a challenging year, we surpassed our stretch goal ($500 million in assets) to $750 million AUM.
Not only did we add $223 million in new assets and 62 households in new client relationships, but we also maintained 100% client retention in 2020 and received top marks on our client-wide Net Promoter Score (NPS) surveys.
2021: The Rise and Fall of the Wall Street Titans
Then, in 2021 we had one of the craziest investment stories I've ever encountered. It was the WallStreetBets and retail investor mob vs. the Wall Street Titans.
We already saw the "David and Goliath" story begin with a few holdings where retail was right and Wall Street was wrong. But when the GameStop short squeeze happened, it was fascinating. Many of our team members were familiar with WallStreetBets on Reddit. We noticed they were getting more serious this year as the Fed was pumping in money. Retail investors were sitting at home with helicopter money investing.
Still, the GameStop short squeeze controversy was just fascinating. More than 100% of the market cap was short. It didn't even seem like that could be possible. We heard from clients with outside trading accounts on T.D. Ameritrade, Schwab, RobinHood, etc.; their trading was immediately limited with different capital requirements and the numbers of shares they could buy and sell. It was clear that more was at play behind the scenes.
Our GWS Investment Committee believes this is a broader symptom of money and liquidity in the system. It will be interesting to see what regulatory action, if any, comes out of this.
A Line in the Sand?
At the end of the day, when it comes down to Wall Street and large institutional players vs. retail investors, at GWS we are on the side of the retail investors and the families we serve.
We work hard every day to protect and grow the hard-earned money for the families we serve. Whether they are retired or still working, they count on us to look out for them. That is where our heart and our passion are at the end of the day. We share personal loyalty for our clients and look out for them. I don't know how many times we've seen clients with investment portfolios, annuities, and insurance products that made no sense for their situation and goals. We help them unwind those, undo the damage and get to a better state as soon as possible. We always try to do things the right way — for example, not charging a management fee on cash in hub accounts to provide retirees insulation. We also don't charge management fees on other brokerage accounts.
All of our services are inclusive. We're doing this as value providers, not because we're trying to make the absolute most money we can off these families. We try to benchmark our fees and make sure we're on the low side of average and providing tremendous value. We also don't shy away from sharing performance net fees like many advisors. In everything we do, we take radical transparency.
We want to be the signal through the noise that helps clients determine what headlines are worth paying attention to and what it means for their portfolios.
Let's Just Talk: Getting to Know our Clients
We hold our Midwestern values — including honesty, hard work, and kindness — close to our hearts at GWS. We don't believe in trying to intimidate or prove ourselves to clients through the jargon. We take special care to train all our new employees in using real words for our client meetings as if they were talking to a family member. Every client has the right to understand and learn, know what they have in their portfolio, how their plan is working, and what we're doing for them to help them work toward their goals and financial dreams.
Another reason we find it so important to get to know clients is we get a sense of their individual investor biases. Then, we can help them become aware and provide coaching to ensure we're getting to a good outcome.
For example, we have some clients with action bias. Whenever a significant event happens, they feel the immediate urge to take some action, even if it doesn't make sense for their situation. On the other hand, we have some clients with an overconfidence bias. In those cases, we must reign clients back in and show them their bias, reminding them they need to stay insulated against unpredictable market conditions.
Another bias we often see is overconfidence in clients' company stock. The tendency translates to a significant overconcentration in that stock. Clients never think their company is the one that is going to get disrupted. But as we learned in 2020, industries can disappear overnight by no fault of their own. No sector or business is truly immune. These are the risks we bring to our clients and work hard to mitigate based on their circumstances.
Where We're Headed Next
Our highly credentialed team is continually working for the improvement of our firm. If everyone improves 1% every day, the compounded effects of that growth are limitless.
Toward the top of our list is an effort to democratize family office services. In our industry, these types of services are reserved for families with $50 million or more. We want to continue to bring down that threshold. Many incredible services are being provided to ultra-high net worth individuals who want to be aggressive in giving to others. That desire to provide above-and-beyond speaks to the heart of our firm. When we see the needs a client has, we want to be part of their solution.
Next, we are preparing for a way to address the new money regime. Our long-term investment thesis states that while the U.S. dollar is the reserve currency of the world, it will ultimately need to be addressed in one way or another. Modern Monetary Theory can't simply be implemented successfully in the long term. First, we had the gold standard, then Keynesian, then Modern Monetary Theory. What will the money regime be next?
We hope you'll join us in our journey as we continue to fight ruthlessly on behalf of our clients and their families in 2021. Thank you for your time!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
All indices are unmanaged and may not be invested directly. The economic forecasts outlined in this material may not develop as predicted, and there can be no guarantee that the strategies promoted will be successful.
All investing involves risk, including the possible loss of principal. No strategy assures success or protects against loss.
Securities and advisory services are offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.