Joshua Wilson, Founder of United Ethos Wealth Partners, is a wealth management executive whose primary goal is to educate advisors and provide expertise that improves their client relationships. Russell Rhoads, Head of Research and Education at United Ethos Wealth Partners, specializes in financial market trends and volatility management techniques. With both set to join the Tidal Financial Group family, they join the ETF Think Tank to discuss what they’ll be bringing to the table.
Wilson explains that one of his goals is to deliver more cost-effective and efficient solutions to investors and advisors. According to Rhoads, banks typically suggest over-the-counter products. He instead proposed that investors can use SPX options to achieve a similar exposure and do so at a fraction of the cost. Along with product specific research, their hope is to create solutions that optimize effectiveness while doing so as inexpensively as possible.
Should advisors want to develop customized solutions? Wilson believes that they should if they can. If you do not put a client into a cookie cutter model portfolio solution, you must explain yourself. He notes that deviating from the expected approach may require additional explanation, and he aims to assist advisors in this regard to avoid complications. Wilson suggests that advisors identify their specialty and focus on improving it, rather than attempting to find a bespoke solution for everything, you’re probably going to fail. You should, however, try to shine in the area you are specialized in. Advisors don’t need to be completely generic. There is an opportunity to find a middle ground.
At a high level, Wilson and Rhoads are looking to develop ETFs or models that fit into wealth management solutions. They find that some advisors can struggle because of a focus on products and technology, not necessarily the people they’re working with. Sometimes, there can be such a focus on figuring out what’s going on that it takes away from what advisors should focus on, their clients and how it affects them. Wilson explains that he wants to help deliver the first part so advisors can focus on the second part. They will assist with marketing, media and whatever else it might take to get to the next level.
There’s a saying that robots are coming for the advisors. Wilson emphasizes that the key factor that will separate the advisor from the robot is the humanity element. Advisors can provide the personalized attention to clients, making them feel like they have a true partner in their financial journey. Advisors also have the ability to transport people towards a narrative and help them envision the finish line. Rhoads explains that this is a big reason why robo-advisory hasn’t really caught on to any major degree. It highlights the importance of trust and the value that clients place on working with a financial advisor.
To say that the relationship between ETPs and volatility is tumultuous would be an understatement. Wilson and Rhoads explained that this emphasizes the importance of education and knowledge. When it comes to VIX products, Wilson acknowledges that educating clients can be a time-consuming process, and finding ways to integrate protective strategies without overburdening clients with technical details can be difficult. How can you get a protective strategy into client accounts without forcing the education aspect?
Other key takeaways:
- Have the needs of investors evolved? Wilson doesn’t believe so, but he thinks a lot of people are trying to keep up with the information flow. People used to not ask a lot of questions. Then, he’d start getting calls every week when Jim Cramer threw out his ideas. It’s a function of everybody’s access to information.
- Where do you draw the funds from for volatility protection in your portfolio? It could come from the alternatives bucket or from cash if there’s some waiting to be deployed. Does it come from the alternatives bucket? These, however, shouldn’t be long-term holdings.
Be on the lookout for a new podcast “Untamed Ethos” with both Wilson and Russell, dropping episodes later this week. You can follow Joshua Wilson on Twitter to stay up to date.
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