ValueWalk’s interview with John Christianson, the host of The Wealth Confidant podcast and the founder and CEO of Highland Private Wealth Management. In this interview, John discusses his and his company’s background, trends with high net worth individuals, interests in alternative lending and private equity, the death of hedge funds, investing in high profile IPOs, and his advice to young workers who want to build a large egg nest for when they retire.
Interview with John Christianson
Can you tell us about your background?
When portfolio managers get started in the business, their investing style often changes over the years. However, when Will Nasgovitz bought his first stock when he was 12, he was already zeroing in on value investing, and he didn't even know it. Nasgovitz has been with mutual fund manager Heartland Advisors for almost 20 years, Read More
I’ve been working in the financial advisory space for 30+ years. During that time, I’ve had a broad base of experience, including working as a stock broker, CFO in a family office, founder and CEO of a wealth advisory firm, and most recently, a money coach and author of The Wealth Creator’s Playbook, A Guide to Maximizing Your Return on Life and Money.
Can you tell us about your firm?
Highland® is a financial life management firm based in the Pacific Northwest. We specialize in working with current and future high net worth individuals, including high achieving entrepreneurs, executives, and other professionals. Our consultative approach focuses on managing our clients’ financial details so they are free to live life fully.
You work with high net worth individuals what trends are you seeing in the space?
These individuals are busy, and they want their advisors to understand their life goals, their pain points and ideal outcomes, and they expect advisors to deliver information and value in the most efficient way possible. High net worth individuals understand the benefit of delegating their financial management needs to someone they can really trust, which allows them to spend their time and energy doing the things they love. They recognize that many investment and financial planning services are becoming automated and impersonal, while more and more, they are looking for advisors who can provide counsel on how to use money to achieve their life objectives, more akin to a wealth and life coach or confidante.
Are alternate lending and private equity a growing interest in that area?
It really depends on the client. Some are content with a simplified approach to their financial life and in general, view alternatives as adding complexity they would rather avoid. Others are intrigued with the potentially enhanced return outcomes and want to understand how to explore opportunities coming mostly through their own networks.
How do you evaluate the risk for those more illiquid types of investments?
We don’t make recommendations for illiquid investments, but we do offer second opinions on whether a potential investment fits within a client’s specific risk/return profile and asset allocation targets. We also handle administrative paperwork including capital calls, and incorporate this information into our consolidated reporting so that clients have a complete view of their investment profile.
A lot has been written about the death of hedge funds, what are your clients saying about "2/20 funds"?
I’m not sure we are hearing much from clients per se, but we haven’t seen returns for several years that come anywhere close to justifying the fees.
What about some recent high profile IPOs - is there an interest among high net worth individuals in that sector?
Clients are always interested in this space because it gets lots of headline news coverage. Our experience is that very few clients actually take steps to invest and often wait until after the company becomes public to discern whether or not to invest.
What advice would you give to a young person starting work today who wants to build a large egg nest when they retire?
Get going. There’s no time like the present to begin saving and investing. Compounding over time really works. Look hard at your budget for line items or categories where you can keep your spending in check. Be particularly sensitive to spending that doesn’t align with your values, so that you have more to invest. For example, you might feel social pressure to purchase expensive clothes or cars, when you really value experiences and travel with those you care about. Ignore most of the noise coming from the financial news outlets and instead focus on what you can control: investment fees, including manager’s fees and trading costs, and taxes. Evaluate your emotional relationship to money - are you allowing your emotions to lead your investment decisions? Many people try to time the market, which is generally a loser's game.