Financial Times Interview: Behavioral Apathy

Murray Coleman recently interviewed Lee Munson on his views regarding behavioral coaching.

Everyone can use a coach

“Behavioral coaching is almost a lost art — too many advisors see it as crossing a line between acting like an amateur psychologist and serving as a trusted financial pro,” says Lee Munson, chief investment officer at Portfolio Wealth Advisors in Albuquerque, N.M., which manages $250 million.

Clearly, the industry sees behavior as the biggest threat to an investment plan, but why do many advisors ignore or fear this essential element? Lee Munson has a theory that most advisors were simply stockbrokers that are RIAs (Registered Investment Advisors) in name only. Most want to continue to pick high priced mutual funds and ignore the very reason people seek a world-class financial advisor. But, does holistic planning cross the line of an advisor’s skill set?

You don't have to be a doctor to be a great coach.

“You don’t have to be trained as a psychologist to become a good coach,” says advisor Munson, who considers himself a student of behavioral finance. “You just need a real desire to find out what people truly want to do with their money and how they see it affecting their lives.”

Link:

https://financialadvisoriq.com/c/1641933/189583/behavioral_apathy_seen_biggest_threat_returns?referrer_module=mostPopularSaved&module_order=2

Financial Times Interview of Lee Munson

The Financial Times recently interviewed Lee Munson regarding the Department of Labor’s new fiduciary rule that is pushing ahead with a new share class of mutual funds called T-shares. 

“T-shares are a hoax – I’m horrified that people are being put into these funds,” says Lee Munson, chief investment officer at Portfolio Wealth Advisors in Albuquerque, N.M., which manages more than $250 million.”

THE HORROR OF T-SHARES

Lee didn’t stop there, further on he told Murray Coleman how the flat-rate structure wasn’t cutting it.

“This is like trying to charge the same price for a Honda Civic as a Lexus sedan.”

It's still a Honda, folks

Ultimately, this is a overt loophole that allows stockbrokers, or those that sell financial products versus providing financial advice, to circumvent the new rules.

How does Portfolio Wealth Advisors plan to address the new fiduciary rules that require advisors to work in clients' best interest when working with retirement accounts?

“We don’t have to do a thing. Portfolio Wealth Advisors always acts as a fiduciary for our clients. So, while stockbrokers prepare for more regulation to protect their rights to NOT work in your best interests and charge high commissions for dubious so-called products, we continue to do the right thing for clients just like we have since the beginning. ”

Fox Business Asks Lee Munson Why Markets Thrive

Portfolio Wealth Advisors CIO Lee Munson was asked to appear on top ranked Fox Business show, Countdown To The Closing Bell. Ashley Webster, guest host filling in for Liz Clayman, asked Munson why the markets continue to surge despite a disappointing 1Q GDP report. Click on the link here.

Lee makes the following points:

1. Investors are moving shares forward, or merely sideways over the last few months in anticipation of tax cuts for corporations. This will immediately increase profits.

2. We don’t know if the short-term effect of tax cuts will translate into increased corporate spending and investment in people and equipment. That is the uncertainty that only time will reveal.

3. Don’t focus on dividends, focus on great companies and asset classes that you can buy at a discount. Usually those parts of the market already pay great dividends.

4. From cloud computing to advanced manufacturing, focus on profits.

5. History has shown that stocks that sell for less than their peers have higher performance than overpriced garbage. 

Don't Fight the Tape!

There is an expression in our business - "Don't fight the tape"!

So, while it was a surprise to some, we ended Q1 on a positive note. This sets a tone for the rest of the year from a momentum standpoint.  Keep in mind though that the wide variety of potential policy outcomes will cause uncertainty for the year. Uncertainty may result in increased volatility and can provide opportunities for buying on dips and selling into rallies.  Global equities and inflation-resistant assets should do well, but a tilt toward smaller capitalization stocks both home and abroad are merited at this point in the business cycle. This is a time to keep a sharp eye on the ball for both opportunities and for protection.