September 28, 2015
We at NHCO have just this past week begun our Fifth Annual Women’s Investor Symposium. Those of you familiar with our firm are aware of our commitment to the education of our clients and others. We engage in a series of educational efforts that range from current families, to local high schools, to college students, to as far away as Cambridge University in England. This week we began our annual four-part series that runs through the fall and is geared to women investors.
At this past Wednesday’s meeting we discussed the differences in the actual investment experience between the various providers of financial services. During the discussion I reminded my students that as a Registered Investment Advisory firm (RIA), NHCO has a “fiduciary responsibility” for our families. One of the women in attendance chimed in that she was a fiduciary. I asked in what capacity and she replied “I’m a fiduciary for my kids”. Boy, if there ever was an answer which defined a fiduciary, she nailed it.
The fiduciary responsibility for our families is one that our firm takes very, very seriously. Our whole organization and culture is designed to ensure we fulfill this role. So how do we view what it means to have fiduciary responsibility? Let’s start with the definition of fiduciary which comes from the Latin word “fiducia” meaning trust. In reading various definitions, there are a number of nuances; it is a person who has the power and obligation to act for another under circumstances which require total trust, good faith, and honesty. The fiduciary should possess great knowledge and expertise about the matters being handled. They must also avoid self-dealing or conflicts of interest. A fiduciary is held to a standard of conduct and trust above that of a stranger and perhaps most importantly, they must put the family’s interest ahead of their own. RIA firms like us are different from other types of firms that offer investment advice or sell investment securities. Different rules apply to how each interacts with their given investors. The US Supreme Court has ruled that Registered Investment Advisors are, in fact, fiduciaries.
When the woman at our symposium exclaimed that she was a fiduciary to her children, I realized for the first time, that this certainly must be the highest and best example of a fiduciary. What better definition of the role of fiduciary than that of a mother or father raising their children? From birth to the grave, parents sacrifice, protect and put the interests of their children before their own personal needs.
The fiduciary work we do with our families is one that is typically done over years and the end result is invariably a strong bond of trust. I realized from that comment on Wednesday that a natural fiduciary inevitably emerges once a woman realizes she is having a child.
September 21, 2015
My wife and I could not have had more different high school backgrounds. I attended a large public high school which was mainly students from working class families. With a graduating class close to three hundred, my circle of friends was from a narrow socioeconomic segment. After graduation I received notices of reunions but post-reunion reports showed very little in the way of attendance. In fact, generally no more than one in ten friends attended. I realized that if I ever went along there would be a high risk that I would not know anyone. That thought process, along with the fact that my parents moved from my hometown, have caused me to miss all of my reunions.
By contrast my wife went to a small private school where her graduating class numbered only twenty-six. Over the years, around fifteen to twenty alumni have regularly attended her reunions. We last attended her fifth so as this year was the fortieth, it seemed like it might be a good one for her to reconnect.
So what had occurred over the last thirty-five years? Well first I should say that I think we avoided many of the stereotypical comments associated with reunions. There had been no shock at inevitable hair loss and weight gain, we dodged the behind-the-back jabs about career choices or failed business ventures, and we were not drawn into feelings of envy towards wealth accumulation.
The fortieth reunion had all the trappings of being the sweet spot of high school reunions. As folks gathered I was able to observe and reflect because my expected role was no more than casual observer, and unlikely “eye candy”. What better role for the writer of a weekly commentary?
My first observation was the absence of jealously or envy. Everyone seemed very comfortable with who they were and where they were. There was no sense of lost opportunity. Instead this group was all about the now and the future. The only true regret was the passing of former classmates. Several times I picked up the comment “didn’t you know he passed away two years ago”. As the night went on it was obvious that being alive, and sharing time with each other were the themes for the night. In some ways the loss of those few classmates seemed like a strong glue that bound everyone together as they shared their need to celebrate life in the present and the future.
I completed my own private assessment of the best one-liner I overheard. Two people were talking about a classmate who was remodeling his home. The brave remodeler was apparently staying in temporary living arrangements. The shocked exclamation that just burned in my mind was: “And it’s not even a double-wide!”
I am sure more adventures and excitement lie ahead for this group. Like many baby boomers, there was a strong sense that there was still much to be done. We have already started to make plans to attend the forty-fifth reunion to find out what.