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Jake Miller and Michael Durso on prioritizing goals and trust to form strong relationships
Key Takeaways
- Meeting client goals, like supporting their family or creating specific experiences, is far more important than benchmarking against metrics like S&P 500 performance.
- Building enduring relationships based on trust is vital for advisors, clients, and investment partners.
- Supporting your partners when they face adversity can foster stronger bonds and a willingness to pay more for that support and understanding of their business needs.
Transcript
Jake Miller: Hi, I'm Jake Miller, co-founder at Opto Investments.
Michael Durso: Michael Durso, co-founder and CEO of Shorehaven Wealth Partners. We have enormous benefit from my father being part of our business as our chairman. Doing this for 45 years, he's seen it all and he understands clients better than anyone. He understands that at the end of the day, if you sit down with a client when they reach retirement and you haven't met a single one of their goals, who cares what the S&P 500 did over that timeframe versus your portfolio? That's irrelevant. If you sit down with a client when they reach retirement and they're going to hang out with their grandkids because they have a vacation house by the beach and they help pay for their grandkids to go through college, but maybe they underperformed the S&P by 3% over a five-year span in their portfolio, they don't care about that. They care about the fact that they sat down with you 25 years ago and said, "When I hit retirement, I want to be able to have a beach house to spend time with my grandkids" or "I want to be able to go to Alaska." These are the conversations that my father's having with clients. It's not about the performance in their portfolio or why did you buy this ETF versus that ETF.
And so at the end of the day, we want to build great portfolios and we want to do great from a risk and return standpoint. But the most important part of it is: why do you want this money? Why do you want this return? What are those goals you set forth? And we are cognizant of that and we take it very seriously to meet those goals because that is why we do what we do. Some of the best clients and prospects that we work with, they picked up the phone and called us because they either have a relationship with us, they're a friend or family member. And it's not very different on the private market side, right? You want to work with people that you trust, that you've worked with before, especially through difficult times, as you mentioned, because you really find out the character of people through difficult times. Anybody can do great when things are awesome, right? It's always fun to hang out with your friends when they're in the best mode of their life. But your true friends are the ones that show up when things get rough and it's very similar on the investing side. And I think that's something that we've done really well historically for clients. In being that we've had the benefit of being around for a long time, is we've seen it through multiple market cycles and ability to pick managers who survive through multiple market cycles, founders who've launched businesses in really tough times, understanding that and really being with them through those times is something where you can have that comfort level that when you do write a check to a founder that you know they're going to be able to survive if things trend downward and that they won't just pull that ejection switch really quickly and end up in a poor situation.
Jake Miller: And it's almost a summation of the benefit of just behaving like a good steward, like you do the same relationship you can build with the clients by being there in the hard periods is what we're looking for on the manager side, right? I had coffee yesterday with one of our private credit partners. It's a small vertical firm. One thing they do is lease back some financing for airplane parts. 2020 hits, no one wanted to finance airplanes, no one is ever going to fly again. They were the one group who stepped up and wrote a loan to one of the largest airplane engine and landing gear manufacturers in the world. This year, that person made to come back to market. They went with this private credit manager, even though their rate was 5% higher than the bank because they were there when no one else was. And that could happen again. And they know that this is a partner who understands their business, understands the support it needs, and they're willing to pay a premium for that
Important disclosures
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