On clients' minds when they first talk to us...

June 30, 2017

An acquaintance of mine who works for a hedge fund recently lamented that we have it easy at One Day In July, because our clients are long term thinkers. His investors want performance measured monthly, and that forces them into decisions and trades that are short term in nature and almost certainly worse for performance long term. Who the investor is matters. Having clients that align in their thinking with the objectives of One Day In July gives us a tremendous advantage.

To wrap up the first half of the year, I want to put aside the nuts and bolts of investing and talk about a "softer" issue. Many people feel nervous or anxious when they approach us. Money talk is not on the same level of fun as vacation.

It's important to understand that we aren't judging you on what's happened in the past. Unless you've been living off the grid the past few decades, we know you have received a lot of financial messages to decipher. We are judging ourselves going forward, but we're not judging you on the types assets you hold or the level thereof. We also don't expect you to have deep knowledge of finance. Questions are welcome.

Another area that makes people nervous is that their accounts are disorganized, messy, and scattered. They don't quite need a U-Haul to get us all their statements, but sometimes it's close. This is common and we are good at cleaning things up for people and simplifying their lives.

Third, many normal humans are uncomfortable around finance people. I understand this, because I used to be. At the height of the dot-com boom, I was sitting in a Morgan Stanley office 1,500 feet above the nearest sidewalk in New York city, eating a piece of sushi that was probably worth more, in monetary terms, than I was, taking in the surreal environment of the financial world. Because I was distracted by the special verbs the financiers were using, like "color" and "lever," I was having a hard time focusing on business. It was basically anthropological theater. That's never going to be the One Day In July culture. What we are trying to impress you with, over time, is our performance and our responsiveness.

Fourth, we have no interest in you owning anything beyond the core index funds that we use in our models. We don't cross-sell any other services. Like bank accounts, insurance, accounting, legal advice, or wills and estate planning (though we can refer you to some excellent people in those fields). Wells Fargo is all over the news for their high pressure cross selling, but that's not us.

It's important to understand why. Public shareholders or private investors put enormous pressure on the management teams of financial companies to deliver increasing profits. To do so, the business extends in all kinds of crazy directions. We don't have that pressure because we don't have external shareholders.

Finally, discussing money makes people uncomfortable. I'm not sure we'll change that much, nor does it need to be changed. For that reason, we generally let clients take the lead in how much discussion they want to have. Some people want to go over things in detail, some people would rather just check in occasionally. Some people admit outright that they hate dealing with money matters. Those approaches are all ok.

Lock in your seat belts. Our eponymous month comes next!