My Key Takeaways From EBI West 2018

My Key Takeaways From EBI West 2018

Photo by David Travis on Unsplash 

I recently spent a few days at beautiful Dana Point, California, attending EBI West – an annual conference organised by IMN and Ritholtz Wealth.  It was a big investment – of both money and time – but worth it.  The sessions were varied but there were several recurring themes throughout, not all of which had anything to do with investing, evidence-based or otherwise, despite the conference’s title.  I think this made for a much more well-rounded, and interesting, conference programme overall.

Here are my main takeaways:

Your online presence matters

This was probably one of the biggest recurring themes of the whole conference.  Ritholtz Wealth is undoubtedly the leader in this, having built a phenomenal business over the last five years on the back of the team’s blogs and presence on Twitter, but the evidence is clear that many other firms which are actively engaging on social media are also seeing an increase in the number of new clients coming to them from this source.

It’s no longer about the brand or the company, it’s about the person.  Josh Brown put up a slide in his keynote speech – a Merrill Lynch tweet “so dull that it got just nine likes and one comment”.  As Josh pointed out, they have 265,000 employees and they can’t even get them to like it!  The point is, no one wants to engage with a ‘brand’ anymore, they want to engage with a person.

I took part in one of the panel sessions, on the use of technology by financial planners.  One of my co-panellists, Cullen Roche, made the interesting observation that increasingly, potential clients are following our online presence to determine not just our knowledge and expertise but also our values and whether they are aligned with theirs.  This means we must be truly authentic – you can’t keep up a false façade for long and eventually you’ll post something or make a comment or like a tweet etc. which reveals who you truly are.  The only way to behave online is to be yourself.  Or as Michael Lombardi said in the final keynote speech, “Be authentic.  Don’t be Sinatra in a leisure suit”.

This also means that by the time a potential client who has been following us on social media reaches out to us, they’ve pretty much decided they want to work with us.  This cuts down the amount of time it takes to get them on board, which should be a huge positive for all concerned in the future.

People do business with people they like.  On another panel session Justin Castelli stated, “A lot of advisers have a niche.  My niche is people I like”.  Social media helps people to self-select – they find out who you are before they meet you, thereby increasing the chance that they will be a good fit for your business.  And technology has removed many of the advantages one planning firm might have had over another in the past – ultimately all you have now is who you are and what you stand for.  Your clients must like you (and vice versa).

Cullen summed it up very neatly in a blog post he published just after the conference ended:

“It used to be that blogging and the use of social media was viewed as a waste of time or something that teenagers did in their underpants in their parents’ basement.  Today, any financial professional who isn’t blogging or on social media is an outlier.  Blogging and social media is how financial professionals now express their opinions, display their expertise and provide constant client and non-client facing communication.”


A couple of nuggets on this topic.

First, in the US the number of indices in which you can invest now exceeds the number of US stocks you can invest in, which led Rick Ferri to comment that if an index is created solely to support an investment product which invests in it (i.e. a fund or an ETF) then we probably shouldn’t be calling that an index.

Second, a great observation from Bob Seawright during a panel session that the perfect portfolio is the one you can stick with.  This is so true.  At Bloomsbury we have chosen to follow an academic, evidence-based approach whilst others may choose the active management route, but the stark truth is that far more wealth is destroyed by investor behaviour than it is by the vehicles in which they choose to invest.

That said, costs do matter.  The rise of ETFs means that those who want to adopt an active stance can now do so by creating a portfolio using these low-cost vehicles.  As Meb Faber stated, “Mutual fund flows, once people start moving out, are a one-way street.  No one goes back into an inefficient and expensive structure after coming out.”  The fund management industry needs to take this on board.

Behaviour & the dangers of living in an echo chamber

There were a lot of discussions around the topic of behavioural finance.  One of the most important takeaways is that we are ALL susceptible to letting our emotions drive our investment decisions and those of us working in the finance profession are no more immune than anyone else.  That we recognise this fact is crucial.  There’s a great quote from Jason Zweig in Michael Batnick’s book:

“You will do a great disservice to yourselves, to your clients, and to your businesses, if you view behavioural finance mainly as a window onto the world.  In truth, it is also a mirror that you must hold up to yourselves.”

The other trap those of us working in the financial profession can easily fall into is that of only listening to, and reading, those whose views agree with our own.  Whilst this is true in all aspects of life, when you are responsible for clients’ financial futures you have a duty to be constantly challenging your views.  It’s important however, as Morgan Housel pointed out, that you challenge yourself by reading or listening to people whom you respect regardless of the fact that their views differ from your own.  It is too easy and very lazy to read just anyone’s views with whom you disagree.

This is something Bloomsbury’s Investment Research Committee has always done and via Finance Twitter I have found many people whose work I consume and respect even though I don’t choose to follow the same investment process.  It helps to keep front of mind that we don’t have all the answers and that there are equally valid alternative viewpoints to mine out there. 

In summary

In the UK I attend few conferences but at those I do attend I’m in the company of my peers, many of whom I’ve known for years, so it was slightly weird to be at an event where I knew absolutely no-one, other than via interactions with some of them on Twitter, but it was lovely to meet them in person and I’m very glad I went.

The US may be ahead of the UK in terms of the power of social media in influencing the growth of financial planning and wealth management businesses but I have no doubt we will see the same thing happen here.  I want to make sure that Bloomsbury is positioned for that and attending EBI West has given me much to reflect on and incorporate into our business.

Type ‘Top US investing blogs’ into Google and the search results will inevitably predominantly feature blogs written by people working in finance (and many of those whose work I share with you on a regular basis on this blog).  Type ‘Top UK investment blogs’ into Google and you’ll get lists of DIY investors, property development companies and the odd fund management group.  Nothing from any individuals working in finance.  It will be interesting to see how that develops over the next five years.