Extra! Extra! The sky isn’t falling!

Coyne_HeadshotJohn Coyne, Vice Chairman

Growing up in an extended family passionate about politics, I have been watching elections closely since 1968. It seemed that every four years if “our guy (now gal as well)” didn’t win; go get Marlon Brando and remake the movie Apocalypse Now. The world as we know it was over, the economy would collapse and…life went on.

Most importantly, let’s first remember that the fear and anger that is driving these apocalyptic visions are being created by the media’s desire to sell advertising! Now I am the first to admit that there are characteristics to this election that are different in many ways than we have seen in the past and they center on the historically high unfavorable ratings of both presidential candidates. Nevertheless, we have not become the most envied democracy in the world by accident. Regardless of the rhetoric, both parties will accept the outcome and we will have a new President of the United States and a new congress in January.  Will they be as ineffective as some believe they have been in the past? Maybe. What is for sure is that our lives will continue, people will retire, get married, divorced, change jobs, fight illness and move forward. And they will need to invest in order to deal with all the mundane components that make up our hopes, dreams and anxieties.

Our friend Dan Clifton at Strategas Research Partners has been providing us with some of the most outstanding “in the moment” political and market analysis for the past 18 months. He has been doing this with an eye towards providing us with the sectors of the economy that will be impacted by the makeup of a government whether all Democrat, all Republican, or a mix. He has deftly pointed out the potential winners and losers by sectors and asset classes and provided historical context to demonstrate that the presumed wisdom that says we do better with this party or that is never always the case and often is the exact opposite of the believers assumption. He also notes that active investment managers understand this.

Chuck Widger, Brinker Capital’s Founder and Executive Chairman, has been educating advisors and investors throughout his career on the idea that emotions can wreak havoc on a lifetime of careful planning. He uses a bucket approach to categorizing assets that you could consider adopting in light of the election results. Are your safety assets going to remain that way? Highly probable. Are your income assets going to continue to work? The Fed has more influence than the President of the United States, but much of these investments are already locked in. It is more important that you have a good manager going forward than worry who the next Speaker of the House will be. What about your accumulation bucket? Your long-term money will outlast this incoming administration and probably many beyond it. Regardless of who is elected, there will be times of turmoil and unbridled enthusiasm. The only thing that is predictable is that in the proper hands your investments will compound over time.

So put on your seatbelt and get ready for a nasty, scary ride for the next few days…but leave the portfolio alone.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a Registered Investment Advisor.

Personal Benchmark was Made for Days Like This

Crosby_2015Dr. Daniel Crosby, Executive Director, The Center for Outcomes

Chuck Widger and I released our New York Times bestselling book, Personal Benchmark: Integrating Behavioral Finance and Investment Management, on October 20, 2014. Although the book was published in 2014, the writing process began in 2013, and Chuck’s original idea for a goals-based investing system is much older still. Both 2013 and 2014 were great years to be invested, with the S&P 500 returning 32.39% and 13.69% respectively. But although Personal Benchmark was crafted in a time of prosperity it was created with an eye to days just like today.

What is needed during times of fear is an embedded solution that helps clients say “no” to short-termism and say “yes” to something bigger.

As we wrote in the book, “While investor awareness and education can be powerful, the very nature of stressful events is such that rational thinking and self-reliance are at their nadir when fear is at its peak.”

Financial advisors do their clients a great service by educating them about investing best practices, but at times of volatility, logic is often thrown out the window. What is needed during times of fear is an embedded solution that helps clients say “no” to short-termism and say “yes” to something bigger.

When presented with an extremely complicated decision, it is human nature to seek simplicity, something psychologists refer to as “answering an easier question.” Rather than deeply consider and weight the relative importance of social, economic and foreign policy positions, voters tasked with choosing a Presidential candidate tend to instead answer, “Do I like this person?” Confronted with a complex dynamic system like the stock market, the easier question that we ask ourselves is, “Am I going to be OK?” Part of the power of the Personal Benchmark solution is that it helps clients answer this important question in the affirmative.

bookOur book discusses the human tendency to engage in “mental accounting”, the psychological partitioning of money into buckets and the corresponding change in attitudes toward that money depending on how it is accounted for. Page 154 features the story of Marty, a Philadelphia-area gang member who separated his money into “good” and “bad” piles depending on whether it was honestly or ill-gotten. Marty would tithe to his local church using the good money, but reserved his bad money for reinvestment in his criminal pursuits. Although we are hopefully all more civic-minded than Marty, we are no less likely to label our money and spend, invest and think about it relative to that label. One huge advantage of Personal Benchmark the solution is that it sets aside a dedicated “Safety” bucket for days just like today. When a client asks herself, “Will I be OK?” she can take comfort from the fact that her advisor has accounted for her short-term needs. Being comforted in the here-and-now, she will be less likely to put long-term capital appreciation needs at risk.

“While investor awareness and education can be powerful, the very nature of stressful events is such that rational thinking and self-reliance are at their nadir when fear is at its peak.”

Besides helping clients say “no” to short-termism, Personal Benchmark also helps advisors paint a more vivid, personalized picture of return needs. Page 203 of Personal Benchmark tells the story of Sir Isaac Newton, who lost a fortune by investing in what we now refer to as the “South Sea Bubble.” Newton invested some money, profited handsomely and eventually sold his shares in the South Sea Company. However, some of his friends continued to profit from their investment in South Sea shares and Newton was unable to sit idly by and watch people less gifted than he accrue such fantastic wealth. Goaded on by jealousy, he piled back in at the top and lost almost everything, saying after the fact, “I can calculate the movement of the stars, but not the madness of men.” Newton’s failure is a direct result of anchoring his benchmark to keeping up with his friends instead of attending to his own needs and appetite for risk. If Personal Benchmark’s Safety bucket is for providing comfort today, then the Accumulation bucket is a vehicle for rich conversations about the dreams of tomorrow. As clients simultaneously manage their short-term fears and identify their long-term goals, they are able to experience the best of a goals-based solution.

Personal Benchmark was created in a time of comfort and even complacency on the part of some investors, but was done so with a perfect knowledge that there would be days like this. At Brinker Capital we believe that an advisor’s greatest value is providing “behavioral alpha”, increasing returns and mitigating risk through the provision of sound counsel. Our goal is to be your partner in that sometimes-difficult journey and Personal Benchmark is evidence of that commitment.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a Registered Investment Advisor.

Brinker Capital Founder and Executive Chairman Charles Widger Makes Historic $25 Million Investment in the Villanova University School of Law

Coyne_HeadshotJohn Coyne, Vice Chairman

All of us at Brinker Capital are proud to recognize the generosity of our founder and executive chairman, Chuck Widger, who has made a transformative $25 million investment in the Villanova University School of Law. In recognition, the school has been renamed the Villanova University Charles Widger School of Law.

Chuck, a 1973 Villanova School of Law grad, proudly refers to himself as a “Villanova lawyer,” and has remained involved with the school in various capacities over the years. He has played an active role in its efforts to revolutionize legal education by infusing vital business coursework and practical experience into the Villanova School of Law’s curriculum. Its tagline, “Where Law Meets Business” perfectly captures Chuck’s vision of what law schools should be doing to train tomorrow’s legal, business, government and nonprofit leaders.

Chuck_BlogChuck stated: “My investment in Villanova Law is an investment in the preservation of the two institutions that are vital to a free society, the rule of law and a market economy, both of which will enable us to flourish as a people for generations to come.”

Brinker Capital is pleased to recognize all of our Villanova alumni: Phil Green, Ping Guan, Ed Kelly, Neal McLaughlin, Jeff Raupp and Jamie Shoup.

More information about the Villanova University Charles Widger School of Law can be found at: http://www1.villanova.edu/villanova/law.html

Brinker Capital, a Registered Investment Advisor.

Addressing Diversity through Gateway to Leadership

Coyne_HeadshotJohn Coyne, Vice Chairman

“The investment advice profession has a long way to go in reflecting the diversity of America,” so says Elizabeth MacBride in her recent InvestmentNews feature, “A Diversity Problemand she’s not wrong. The financial services industry, as a whole, has too often trailed other professions in terms of diversity among the workforce; but, that’s not to say nothing is being done to address it.

At the Money Management Institute (MMI), the national association for the investment advisory solutions industry, we have cultivated a program that purposefully addresses this issue head-on.

GTL_Logo

The Gateway to Leadership program was established in 2007 and is designed to introduce qualified minority students to the investment advisory solutions business. Through the program, we place candidates from historically black colleges and universities (HBCUs) in paid summer internships with leading financial services firms and fellow MMI members.

Brinker Capital has been entrenched from the beginning of Gateway to Leadership as our founder Chuck Widger was one of the original architects of the program. I, too, am fortunate to serve as the chairman of this program and have been able to see many participating students come through the doors at Brinker Capital over the last nine years.

While the placement of 160 students across 31 HBCUs into 34 host firms is small in context to the larger issue, we are proud of the program’s growth, success and the enthusiasm to which it has been received by its participants.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a Registered Investment Advisor.

A Reliable Partner Dedicated to Delivering Better Outcomes for Advisors and Investors

Widger 4_v2Charles Widger, Founder & Executive Chairman

By now, many of you are aware of Curian Capital’s decision to exit the fee-based business to focus on the core activities of Jackson National Life Insurance Company.  I am sure there are many strong, global, corporate considerations that led them to this determination; nonetheless, it does not alleviate the disruption to impacted financial advisors and investors.

This situation reminds me of the motivations that led me to create Brinker Capital 28 years ago.  When our original parent company, Mutual Benefit, floundered in 1991, it was part of an unfortunate reoccurrence taking place in the financial service industry.  Venerable names like E.F. Hutton, Kidder Peabody and Prudential Bache were also falling by the wayside.  I was determined to make Brinker Capital different.

That is why I built an organization with the laser focus of helping advisors and investors succeed by delivering a premier investment experience that would allow them to achieve the outcomes that they were seeking.  I surrounded myself with professionals who were committed to this same vision, and I’m proud that six of the eight founders are still here today and further, that over 40% percent of my employees have been here for over 10 years.

Brinker Capital is 100% employee-owned. That has allowed us to make thoughtful, long-range decisions without outside ownership staring over our shoulder.  We are proud of our independence and will continue to be independent. Independence empowers Brinker Capital to continue to build this great organization that for 28 years has, and always will, put the advisor and investor first.

I, along with my colleagues, will continue to provide the best in investment management and advisor support.

For more information, please click here to read our latest press release.

Brinker Capital, Inc., a Registered Investment Advisor

Happy Holidays from Brinker Capital

Noreen D. BeamanNoreen D. Beaman, Chief Executive Officer, Brinker Capital

I wanted to take a moment to wish all of our advisors, the clients they serve, our strategic partners, and all friends of Brinker Capital, a wonderful holiday season.

We are thankful for the many partnerships we have with you and the continued support you show us. We are looking forward to another year of commitment to taking great ideas and applying a strong discipline to provide better outcomes.

On behalf of Brinker Capital, Happy Holidays!

“During this holiday season, please pause and take a moment to remember and thank, in some fashion, our men and women in uniform both past and present.”
~Chuck Widger, Founder & Executive Chairman

Announcing our New Book, Personal Benchmark: Integrating Behavioral Finance and Investment Management

Chuck WidgerCharles Widger, Executive Chairman

Today is a very exciting day. I am pleased to announce the completion of my book, Personal Benchmark: Integrating Behavioral Finance and Investment Management co-authored by Dr. Daniel Crosby (@incblot) and published by John A. Wiley & Sons, Inc. This book is dedicated to America’s advisors, as it is these professionals who help investors achieve their goals.

We chose to write this book for three reasons:

  • The current investment advice delivery system is broken
  • In order to fix the system, it’s time to change the conversation toward goals-based investing
  • Behavioral finance needs to be automatic in order to be effective in improving investor behavior

The current investment advice delivery system is broken. The Great Recession of 2008-2009 was the wake-up call for investors and, in turn, advisors and the architects of the wealth management advice delivery system. No investor ever wants to experience a more than 20 to 30% decline in their investment portfolio. And yet, over the decades, this has not been an infrequent occurrence. Too often, encouraged by advisors, asset managers and the media, investors have sought to mimic returns generated by indexes. They tend to discover, albeit too late, that they really didn’t understand the risk involved with index-oriented or relative return investing. Then when the risk hits the fan, investors proceed to sell at market bottoms, having piled in at market tops. The existing system is not sufficiently helping investors.

bookIt’s time to change the conversation toward goals-based investing. We believe the solution to improving the investment advice delivery system begins with a focus toward goals-based investing. We believe it’s time to help advisors improve the investment experience for their clients. It’s time to turn emotion away from being an investor’s worst enemy to its best friend, time to get personal and help investors become more focused on their goals, time to change the conversation.

Behavioral finance needs to be automatic in order to effective. We also believe that in order to improve investor behavior, the elements of behavioral finance must be embedded within the investment management framework. This will help advisors and investors discuss, recognize, and manage behavioral biases. As a result, investors may avoid the typical pitfalls of wanting risk in bull markets, safety in bear markets, and failing to achieve expected returns because they do not properly manage risk.

I encourage you to visit http://www.personalbenchmarkbook.com for more information about Personal Benchmark: Integrating Behavioral Finance and Investment Management and hope that you find the book both educational and valuable.

The views, information, or opinions expressed in this blog are solely those of the authors and do not necessarily represent those of Brinker Capital, Inc. and its employees. The primary purpose of this blog is to educate and inform. This blog does not constitute financial advice. Brinker Capital, Inc. is a registered investment advisor.

Happy Holidays from Brinker Capital

Brinker Capital Executive Chairman, Chuck Widger, provides commentary on Brinker’s investment strategies in 2013, headwinds and tailwinds we will face in 2014, and his thoughts on the the current state of emerging and frontier economies.

Happy Holidays!

Classic Indexes Are Hurting Retirees

Personal Benchmark InvestingEngrained in most retirees is that as the markets go, so do their savings—up markets are good, down markets are bad. It’s not that it’s inherently wrong to think that way, it’s just that there’s a better way of looking at your savings in action. Historical benchmarks do a disservice to investors at indicating how successful they can be in creating real purchasing power.

Chuck Widger, Executive Chairman of Brinker Capital, was brought on to TheStreet.com, a leading financial news website, to discuss this new line of thought, and how the industry needs to redefine its value proposition.

Check it out here: Classic Indexes Are Hurting Retirees

*Please note that references to specific holdings in the video are for illustrative purposes only and not necessarily owned by Brinker Capital.

Brinker Capital and eMoney Advisor Sponsor Philadelphia Wings Lacrosse Match And Auction To Benefit Wounded Veterans

Conshohoken, Pa. – January 16, 2013 – Brinker Capital, Inc., a leading investment management firm, has teamed up with eMoney Advisor (“eMoney”), the only wealth-planning system for financial advisors that offers transparency, security, mobile access and superior organization for everything that impacts their clients’ financial lives, and the Philadelphia Wings professional lacrosse team to sponsor an American Heroes celebration benefitting wounded armed forces veterans.

The Philadelphia Wings will host the Calgary Roughnecks at Wells Fargo Center in Philadelphia on Sunday, January 27, 2013 at 4 p.m. Commemorative camouflage jerseys provided by Brinker Capital and eMoney will be worn by the players during the game and auctioned off after the game to raise money for the Wounded Warrior Project, a non-profit organization that seeks to empower and honor injured veterans.

“The Wounded Warrior Project plays an important role in reintegrating injured veterans into civilian life,” said Chuck Widger, Executive Chairman, Brinker Capital. “By attending the American Heroes event, the residents of Philadelphia and the surrounding metropolitan area can help this organization continue its life-enhancing work with wounded veterans and their families.”

“It is our duty as Americans to recognize the tremendous sacrifices made by our veterans, especially those who have been injured in the line of duty,” said Michael Zebrowski, Chief Operating Officer, eMoney, a former Marine who served in the Persian Gulf War. “We take the Wounded Warrior Project’s motto, ‘The greatest casualty is being forgotten,’ to heart by ensuring our community never forgets the brave men and women who risked their lives to protect us.”

This is the latest endeavor in the firms’ ongoing commitment to veterans. They co-sponsored a previous American Heroes celebration during a Philadelphia Wings game on January 21, 2012. In addition, on December 7, 2012, eMoney sponsored the Be a Hero-Hire a Hero Career Expo at Philadelphia’s National Constitution Center to help qualified veterans and their family members find employment.

Tickets are available at www.wingsLAX.com or by calling (215) 389-WING.

About Brinker Capital
Brinker Capital, Inc. is a leading investment management firm which provides managed account investment programs to individual and institutional investors through financial advisors. Brinker was founded in 1987 by Charles Widger and is located in suburban Philadelphia. Learn more at www.brinkercapital.com and www.twitter.com/BrinkerCapital.

About eMoney Advisor, LLC
eMoney Advisor, LLC, (eMoney), based in Conshohocken, Pennsylvania, is the only wealth-planning system for financial advisors that offers transparency, security, mobile access and superior organization for everything that impacts their clients’ financial lives. Our award-winning, web-based services and resources are designed to transform the advisor’s ability to implement comprehensive financial plans and prepare clients for a secure financial future.