3rd Quarter 2017
“The best way to predict your future is to create it”—Abraham Lincoln
To our clients and friends:
This quarter’s newsletter will differ slightly in content and tone as compared to the usual discussion of investments, risk management and financial advice. Hopefully, it will be as interesting and engaging!
As regular readers of this letter know, I’ve often invoked the names of a number of famous investments gurus in my writings. I have within the past three weeks or so crossed paths—albeit indirectly—with two of the more famous names in the world of finance. Those two people are Warren Buffet and John Bogle.
Examining and studying the thoughts and writings of these two individuals in great depth over the years has enlightened me—and hopefully, my readers as well—in so many ways. I can explain further.
Omaha conference for the Peak Advisor Alliance Group
A recent trip that I made to Omaha in mid-October was a tremendously rewarding and beneficial learning experience for me. The Peak Advisor Alliance conference is an annual event sponsored by Carson Wealth, located in Omaha. Carson Wealth and the Carson Group is led by Ron Carson, a cutting-edge thought leader in the world of independent RIAs (Registered Investment Advisors).
Ron has put together an amazing group of people from multiple disciplines. All of them are high-minded individuals focused on helping others in their financial lives. I easily related to many of the people working at Carson Wealth, and to fellow attendees.
Many new friendships were created for me at this wonderful educational event. The young people I met were particularly inspiring in terms of their motivation and care in helping others. This was apparent and demonstrable in their words and actions.
Designation of “High Performing Firm” Awarded by Fidelity Investments
The reason for my attending the Omaha conference was that Fama Fiduciary Wealth has, for the past several years, been designated by Fidelity Investments as a model of a successful small, closely-held RIA firm.
In their industry-leading and highly respected annual Fidelity Benchmarking Study, Fama Fiduciary Wealth is identified as a “high-performing” firm in terms of client service, efficiency and the delivery of advice in the category of firms under $50 million in assets under management. While not an endorsement in any way, the Fidelity Benchmarking Study is used by similar-sized firms as a model to emulate going forward.
The reason for raising this topic is not to boast about the designation (it was not previously brought up in my earlier newsletters), but instead as an explanation of why I was invited to attend this conference. Fidelity had in early 2017 asked me to consider joining the Peak Advisor Alliance membership for one year under a pilot program they’re pioneering with Carson Wealth for those “high-performing” independent RIA firms.
Membership in the Peak Advisor Alliance involves a one-year commitment of participation in meetings and teleconferences with like-minded advisors from across the U.S. It also includes a variety of “best practices” training and coaching sessions, workshops, and advisor roundtables. These intensive and productive learning experiences have been incredibly valuable as a resource to both me, and in many ways, to my clients.
What About Buffet?
This background sets the stage for my explanation of how Warren Buffett fits into the picture. First, we all know that Buffett lives and works in Omaha. It seems that Ron Carson knows Buffett, and others who work for Buffett. Carson held a private event the first evening of the conference. This event was held in an airplane hangar in Council Bluffs, Iowa which is directly across the Missouri River, separating Nebraska from Iowa.
No, Buffett was not at this gathering. A country western performer by the name of Cole Swindell was invited to perform at the event. I had never heard of him but apparently the young people in attendance were thrilled. There were perhaps a hundred people present. It was therefore a fairly intimate setting and easy to meet other people.
While wandering around the hangar, I ran into a guy who was waiting in a short line to go aboard Ron Carson’s private jet. I’d just gotten into the line and we began a conversation. He told me he used to work directly for Buffett and Berkshire Hathaway. He said that Buffett receives about 300 fan letters a day! The letters are opened and then sorted in rank of importance by Buffett’s private secretary, a lady by the name of Deb. The guy said that if I wanted to be sure Buffett read a letter sent to him to simply handwrite “Attention: Deb” on the envelope, along with “Personal” or “Private”.
It turns out that I had an item of interest that I wanted Buffett to see (not related to investments, but on a different subject). So I followed the advice and direction of this fellow I’d met in line. I handwrote a short note, with an enclosure of the item of interest along with my business card. I mailed it to Buffett (as opposed to driving down to his office, which was only a few blocks from our hotel and dropping it off in person). It will be interesting to see if he (or someone) writes back to me. I’ll be sure to let my readers know if, and when, I hear back from Warren.
As if the trip to Omaha wasn’t enough excitement for one month, I just returned from a visit to Vanguard headquarters in Valley Forge, Pennsylvania, where I’d been invited to a 2-day symposium. The first day included a private reception and dinner at a well-known restaurant in Valley Forge hosted by Vanguard for about 60 advisors from across the U.S. At that reception, and during the following day’s symposium, I once again met with and got to know advisors from all over the country, just as in Omaha.
Although I did not see or meet John Bogle, I was able to walk the Vanguard campus and admire the bronze statue of Bogle in one of the many beautiful courtyards. The reason I use the term “campus” is that the Vanguard properties are the size of a small university. The campus is aptly named “Vanguard University” by employees and others.
Bogle was nowhere to be seen on campus during my visit, and therefore I did not meet him in person. I did, however, manage to have a quiet, personal conversation with the Chairman and Chief Executive Officer of Vanguard, Bill McNabb. This was actually the second time that I’d had the chance to speak privately with McNabb in recent months.
H. William McNabb, Vanguard Chairman and Chief Executive Officer
Several months ago, Vanguard invited a handful of advisors from western New York and the Southern Tier area to a private full-day event at The Country Club of Rochester (CCR). When I arrived early that morning in July, I passed through the lobby area at CCR and noticed that McNabb (or at least someone who resembled him) was sitting in a chair in the foyer. The only reason I thought it might be him was from seeing his photograph over the years in the media. When I entered the meeting room, breakfast was being served. I remarked to someone at my table that I thought I’d spotted McNabb out in the foyer. The people at my table agreed that wasn’t possible, as he would never bother coming to Rochester for a gathering like this, nor would he have the time to do so.
It turned out that McNabb was indeed waiting in the foyer. The agenda didn’t reflect the fact that he was coming. During his surprise presentation, just before lunch, he explained that he was a Rochester native. Everyone was pretty surprised to hear that. He then mentioned delivering newspapers as a kid for the Times-Union in our suburb of Brighton. That was an interesting tidbit of information. In any event, his presentation was folksy, intimate, and down-to-earth in every respect. It was agreed by the attendees that he is a very impressive communicator. As the public face of The Vanguard Group, he’s a perfect match for their philosophy of simplicity, directness and humility.
After the presentation, I was compelled to introduce myself to Bill as a fellow paperboy who delivered the Times-Union afternoon paper in the same neighborhood. I approached him and during the course of our conversation it immediately became clear that we had several other things in common. We attended the same high school, McQuaid Jesuit, in Brighton. He was two years behind me, and left the high school (something he said he deeply regretted) during his sophomore year when his family moved to Boston.
Together we ran through a list of teachers that we’d had and discovered a number of “matches”. We had a great laugh over that. A small luncheon was beginning in the meeting room, and I was able to continue my conversation with Bill over lunch. We were accompanied by two or three other advisors, one of whom also attended McQuaid and whose father was a teacher that McNabb had for freshman English. McNabb also mentioned that his parents had both attended the University of Rochester, had graduated in 1954, and then settled in Rochester before moving to Boston in the early 1970’s. It now made sense why McNabb had traveled to Rochester for this Vanguard private event.
This is not quite the end of the story. Later that evening, I was speaking with my mother and related to her the interesting story about meeting McNabb. My mother said to me: “I know that name”. It turns out that my mother, who also graduated from the University of Rochester in 1954, had known a McNabb in her class at school. She asked me if Bill McNabb might have been related to this person.
Meanwhile, McNabb had given me his business card at the CCR meeting and had asked me to keep in touch, given our common background. I took the opportunity to send him an email asking about his parents and their graduating class. He responded to me about a week later with his mother’s maiden name. It turned out that my mother and his parents knew one another in college. My mother also knew that Bill’s parents were dating and had married after graduation. Apparently, they also had many friends in common.
I had compiled a list of all my mother’s friends in the Class of 1954. So, at the Vanguard symposium last week in Pennsylvania, during this second conversation with McNabb I gave the list to him. He promised that he’d let me know what he discovered as he was seeing his parents the upcoming weekend. As the saying goes, it’s a small world!
As I stated earlier in this letter, everything about Vanguard is perfectly epitomized by the personality of a guy like Bill McNabb. He is gracious, warm and genuine. He is generous with his time, despite being burdened with a clearly overwhelming schedule. It was apparent in my two encounters with Bill that he was tutored in the model of John Bogle, who, like Buffett, is considered a folksy, kind and generous person committed to doing the right thing at all times. All three men demonstrate a depth of honesty and transparency in dealing with others—something critical in matters involving money.
Harkening back to the quote which introduced this letter, Abraham Lincoln’s words of wisdom have absolute relevancy to the tales of Buffett, Bogle and McNabb. By modeling one’s own behavior, reflective of their integrity and deep humility, after these three important men, success and a great many positive outcomes will assuredly follow.
Thank you for your continuing interest
Andrew J.Fama, JD, AEP, MRFC®, MHA, Registered Fiduciary (RF™)
Principal, Fama Fiduciary Wealth LLC
Registered Investment Advisor
*Past performance is no guarantee of future results*
*Nothing contained in this quarterly newsletter should be construed as investment advice*
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This newsletter was produced by Fama Fiduciary Wealth LLC, an SEC-registered investment advisory services firm. The content is intended for educational and information purposes only and not as investment advice or an offer or recommendation to buy or sell an investment product. Any investment or tax decision made carries risk including the risk of financial loss and is ultimately the responsibility of the individual who should consult beforehand with a financial or tax advisor. Past performance is not indicative of future returns.
Written by Andrew J. Fama on Wednesday, 22 November 2017. Posted in 2017
About the Author
Andrew J. Fama
Fama Fiduciary Wealth LLC is an SEC-Registered Investment Advisory firm originally established in 2001 under the name of Andrew J. Fama Asset Management. With over 30 years of experience representing financial institutions, businesses and individuals, Mr. Fama understands the risks inherent in all types of investments.
To learn more about Andrew J. Fama click here.