SWS Partners was built on the idea that technology, in its various shapes and forms, is the lifeblood to delivering better financial planning and asset management solutions to high net worth individuals, family offices, endowments, foundations, and other institutions.
Inherent in our value proposition is the belief that sophisticated investors—be it high net worth individuals or institutional folks—are actually quite similar in terms of their expectations of an investment manager in 2019. This line of thinking is surprisingly uncommon within the financial services industry and highlights an element of distinction in how SWS Partners seeks to provide better solutions for both groups of investors.
When we started SWS a few years ago, my partner and I heard over and over again that wealthy individuals wanted narratives and that the institutional crowd wanted data. But that hasn’t really been our experience. Sophisticated investors, regardless of their stripes, expect automation, algorithms, and big data to empower their portfolios these days. In turn, these types of things create efficiencies for investment managers by freeing them up to be tasked with the things that computers cannot yet do: provide advice, develop a plan, and institute guardrails for the common pitfalls associated with behavioral finance.
One specific thing that has reinforced our belief that the needs of high net worth individuals and institutional investors are fairly similar is our use of Addepar. We made the decision to use this software because it comfortably models illiquid securities such as real estate, hedge funds, or private equity holdings. By design, this tool helps us by creating more informed investment decisions, streamlining our operations, and providing superior client service. It is actually the customer service element that has confirmed our belief that most sophisticated clients have pretty similar needs. And while it flies in the face of conventional wisdom, our general assessment has been that individuals using this platform are keenly interested in the data and, likewise, the institutional investors have clamored for the data visualization aspects and digital delivery mechanisms. In either case, Addepar has enabled us, as the investment manager, to focus less on delivering data, and more on providing true value to our clients.
In the end, wealthy individuals and institutional investors expect their portfolios to harness all of the latest advancements in portfolio management techniques, and they expect to participate in the journey more actively than they have in the past. As we look into the future, we think it will be compulsory for investment managers—both asset managers and financial planners—to indulge the intellect of their clients.
This requires the rethinking of conventional wisdom, including what the value proposition of an investment manager really is.