Before heading into the final stage of The LongView Process—Review—I thought it would be helpful to remind you of the top three things that we look for in a new relationship:

1) Are they pleasant and nice to be with? We’ll be together for a long time. Does it feel right?

2) Does a prospective client understand and truly believe in our evidenced-based investment approach?

3) Is the future client willing to delegate day-to-day investment decisions to Hill Investment Group? If someone is a micro-manager or has done it themselves for decades, we are not going to be a good fit. Highly successful families, executives, and businesses owners often understand that they benefit by delegating responsibility for all kinds of activities, at home and at the office, to those that have a unique ability in a particular area. Doing so usually leads to a much better result and increased peace of mind while freeing them to do what they do best…whether it’s lead people, perform surgery or donate their valuable time to organizations that they are passionate about. In the end, leveraging time and talent are key difference makers.

These three traits are all present in our most successful, long-term relationships.

In stage 4 of The LongView Process—about 45 days after The Commitment Meeting—we sit down with our clients and review all that has gone on during the previous six weeks. This is one of the first tests for Hill: Did we do what we said we were going to do, and what does it all look like? This highly practical meeting includes ensuring that all of the investment assets and cash have successfully transferred to their new accounts, answering any pending questions, reviewing service expectations, and providing an overview of regular communications. This includes walking through our client’s first Hill Investment Group statement to provide a clear understanding of the information available there.

We’ve provided a simple visual of the overall process below, and click here to read a detailed description of the entire process.

As you follow the journey through the LongView process, we’ve now arrived at Mutual Commitment. This is the moment of truth for you, the prospective client, and for Hill. Having participated in both the Discovery and Planning stages, you now know a lot about Hill, as we do about you. We call it mutual because we’re both making significant commitments to each other. You are turning over your life savings for us to shepherd, and we are taking on a fiduciary obligation to act solely in your best interests. Yes. A significant commitment for both parties. This is a meaningful change for you if you’re coming from a large brokerage firm where their only obligation is suitability—meaning the broker is not required to put their interests below yours. Welcome to a higher standard.

Ultimately, your decision to make this commitment should be based on a feeling of trust and belief that all parties are better off working together than without each other. If we both agree to move forward, our team keeps it simple and as hassle-free as possible.

Click here to read a detailed summary of the entire process.

Recall from last month that Hill Investment Group has a defined process to introduce prospective clients to our firm and take them through the first 45 days as a new client. We call it The LongView Process. Last month I discussed Stage 1: Discovery, and now I’ll dig into Stage 2: Planning.

PLANNING
The Planning meeting begins with a review of everything that we captured in Discovery. Since then, we’ve translated your life into a Family Profile Map that categorizes everything with specific topic areas: goals, family, financials, etc. Once we’ve agreed that we have an accurate understanding of your family and finances, our team then walks through an outline of the transition, new allocation, and other improvements to be made.

One of the key topics you’ll understand clearly after the Planning meeting is what makes our philosophy on investing so different. We strive for after-tax, risk-adjusted, global market returns that few people actually get. Let’s pick that last sentence apart.

• “After-tax” returns are most important because we all pay taxes. No one can pay tuition or retire on pre-tax income. Our approach is highly sensitive to taxes.
• “Risk adjusted” means that we design a portfolio that reflects your willingness, ability, and need to take investment risk. We will do this by coupling your intangible desire to meet your goals with detailed modeling to paint a picture of potential outcomes…not just a single number.
• “Global” means that the typical equity portion of our portfolios reaches worldwide with approximately 12,000 underlying equities in the United States, Europe, Asia, and Emerging Markets.
• “Market Returns” means that your portfolio is designed to reflect the market with a tilt to value and small securities. We are not trying to beat the market. Rather, we are trying to build a portfolio that emphasizes those persistent and robust factors as identified in academic journals—those that have shown to outperform a typical market index like the S&P 500 over long periods of time (10, 20, 30+ years).
• “That few people actually get” means working with Hill will help you close The Behavior Gap. Simply put, individual investors tend to significantly underperform the market over time because of poor behavior. Driven by fear, they sell at market bottoms and subsequently (driven by greed) buy back into the market at its high—the exact opposite of what defines long-term investment success.

The takeaways are 1.) a clear understanding of your before & after, 2.) a well-documented summary of your personal and financial circumstances, and 3.) a deeper understanding of what makes our approach different. With these in hand, you are well situated to decide whether we’re the perfect fit.

Click here to read a detailed summary of the entire process.