Wealth Management Unwrapped, Revised and Expanded. Beyer Charlotte B.
not have written this book without your support, loyalty, and wisdom.
FOREWORD
Do not lend this book to your friends – or even your family!
Buy a copy and give it. Better, buy several copies and give them to those you love. Or, best of all, get them to buy their own copies. Then, they’ll feel more committed to reading, enjoying, and savoring the insights, wisdom, and confident good humor with which my friend Charlotte Beyer has gathered together valuable investing insights from her years of experience, particularly as the founder and doyenne of the Institute for Private Investors.
Meanwhile, keep your copy where you can easily reach for it to refresh your own best thinking on the particular ideas and explanations that mean the most to you. NB: Keeping your copy handy is not being selfish, it’s setting a good example for your friends and family.
“Phooey on Phees!” could have been yet one more chapter title with attitude. All the titles send a clear signal: candor is coming! Candor with an edge —and a sense of humor – is coming from a writer who “knows the score” and “tells it like it is.”
Being realistic about investment prospects is the first half of every investor’s challenge – and opportunity. The second half is being realistic about our particular objectives and priorities. All this and more is illuminated in a breezy, easy way – but with evidence behind every point and sources cited in the extensive endnotes.
Charlotte Beyer’s readers will enjoy receiving treasured insights into the world of investing and how each individual can best navigate to catch the favorable winds and tides – and avoid the rocks and shoals – to reach the chosen destination safely. Along the way, her companions will enjoy having an engaging story‐teller who knows what’s important and how best to share her understanding. Charlotte has been my friend for many years and, over a few interesting and enjoyable hours of reading, she will be your friend, too.
Charles D. Ellis
New Haven, CT
June 2017
INTRODUCTION
For those families and entrepreneurs interested in preserving their wealth and fortunes, this is a must‐read book – not a prescriptive manual, more a dramatised documentary. Here is the proper distillation of experience that Charlotte Beyer has gleaned over 40 years of working with private investors. Staying rich and growing financial wealth successfully over an extended period of time is no easy task. The skills needed to manage and oversee a diverse pool of financial assets are different from those required to manage or sell a family business or other significant concentrated asset – a job for which most individuals have received little or no training.
Following the extraordinary transition of wealth over the past fifty years from one generation to the next, the marked changes in the financial services landscape and the events of 2008 in the financial markets, private investors have been forced to address numerous concerns within their portfolios. The past five years have challenged traditional thinking about investing and asset allocation, diversification and correlation. For individual investors, risk tolerances have been tested, investment assumptions have been overturned, and fundamental truisms have been questioned. For this reason wealth managers must be prepared to respond to a greater need by clients to understand, access, and communicate with advisors regarding their current relationship as well as the products and services that may satisfy future needs. Moreover, advisors must have sufficient information, from objective sources, regarding all products and services owned by their clients to answer enquiries relating to performance and degree of risk – at the client, portfolio and individual‐security levels. This state of affairs poses a dilemma for wealth managers who, for a generation, have adhered to the core principles of asset allocation and earned their keep by preaching the mantras of “Buy and hold,” “Invest for the long term,” and when things get tough, “Stay the course.”
The key to following best practices starts with having a formal process. Now more than ever the value and importance of education for investors and advisors has increased immeasurably. A pioneer in recognising these challenges and setting out to deliver answers for both communities was the Institute for Private Investors, the membership organisation that Charlotte Beyer founded 27 years ago. Along with the Investor Education Collaborative, which has been providing experiential investment education since 2004, enabling investors and advisors to benefit from the learnings of their peers, these two organisations have continuously set the benchmark for others to follow.
The importance and contribution of private investors to our society and economy is increasingly being recognised, so Charlotte’s insights and sound recommendations appear at a prescient time. My hope is that private investors and advisors alike take note and act on them.
Dominic Samuelson
CEO, Campden Wealth
ACKNOWLEDGMENTS
What a journey! Many of the ideas you will find inside this expanded version of my book were first tried out during Institute for Private Investors programs. My colleagues were incredibly helpful in recording much of what you will read.
A profound source of insight has been the Private Wealth Management program at The Wharton School of the University of Pennsylvania. For the past 18 years I have had the privilege of learning from the most amazing professors and equally amazing investors – all 1,000 of them! I am especially indebted to Professor Dick Marston, whose leadership of the program has been inspiring and inspired.
Many friends and industry colleagues have also given generously of their time. I want to single out three: Charley Ellis, who shared his insights at many a breakfast over the years; Susan Remmer Ryzewic, who read an early draft and offered such terrific suggestions; and Niall Gannon, who highlighted mathematical omissions and nuances in return calculations. Also, Rosamond Ivey, Lloyd Hascoe, Joan Siegel, Tony Schneider, Bette Morris, and the late Mark Morris each played a key role in this book’s creation. Those courageous women, all 100 of you who have attended a Principle Quest retreat, were my inspiration for the chapter addressed to women investors,
I want to give a special mention to my editors at Wiley, Bill Falloon and Julie Kerr; also Christina Ho and Barbara Thompson, who helped in the book’s production, as well as an extraordinary graphic designer, Bud Lavery.
Finally, I owe an enormous debt of gratitude to my family. My sister, Allen Beyer, helped me formulate my thoughts and patiently listened to me read chapters aloud.
My husband, Keith Fiveson, deserves the most profound thanks because he sustains me with incredible love – not to mention a sense of humor and adventure!
ABOUT THE AUTHOR
Charlotte B. Beyer founded the Institute for Private Investors (IPI) in 1991, after 20 years on Wall Street, to help improve the relationship between wealthy investors and their financial advisors. Then in 1999 she collaborated with the Wharton School to create the first‐of‐its‐kind private wealth management curriculum for families with substantial assets. Named an Aresty Fellow in 2016, Beyer continues to teach in this program twice a year.
Beyer also launched the Investor Education Collaborative in 2004 to continue to spread the message of IPI, where she served as CEO for 21 years until her retirement in 2012. In 2015, Family Wealth Report awarded Beyer a Lifetime Achievement citation for her “tangible legacy” that “championed the interests of private investors.”
Beyer was recognized by IMCA® for key innovations and thought leadership in 2016 with the J. Richard Joyner Wealth Management Impact award. A graduate of Hunter College, Beyer also attended the University of Pennsylvania and the Stern/NYU Graduate School of Business Administration. A lifetime trustee of the Westover School, an all‐girls’ school, in 2012 Beyer founded the Principle Quest Foundation, a private foundation whose mission is to support innovative education and creative mentoring programs for girls and women.
She currently serves on the global association board of 100 Women in Finance and the Ambassador Board of Institutional Investor’s Journal of Wealth Management.
PROLOGUE
In