Advice for Advisors

November 19, 20225 Comments

Lots of Investment Advisors read this blog, and I am happy they do. Today’s blog is, I hope, some helpful advice for those Advisors – particularly newer Advisors. It may also help individual investors understand a little more about the Investment Industry. I know this sounds counter-intuitive for the President of a Money Management firm to offer advice to newer Investment Advisors and/ or would-be Portfolio Managers. Aren’t they my competitors? Actually, I do not view sharing knowledge as a disadvantage to anyone. In fact – that’s what this blog is about.

My wife used to say to me  – “don’t give away all of your hard earned knowledge & research”.  I understood her point, but I believed that sharing knowledge creates a better business for ValueTrend. In fact, I have received referrals from “do it yourself” blog readers who don’t want their own accounts managed, but do want (for example) older parents, friends etc to have their money managed by ValueTrend. These readers know our style, and wouldn’t want anyone else to manage their parents or friends money. Some readers follow me for years only to discover they are not as diligent as they’d like to be. They’d rather have ValueTrend do the work. I never lose when helping others.

More importantly, I don’t beleive in “competitive” business. Instead, I believe in “creative innovation” business. That’s the crux of today’s advice for aspiring Advisors. The message I am going to impart is the creative application of original thought to your Advisory practice. Hard to do, but worth the effort.

This essay was originally an idea I had for a book. But, I decided it might be best to publish it as a blog to reach more people. As such, its my hope that any newer burgeoning Investment Professionals who read this blog might gain insights from my 33 years of experience in the industry.

Later on, I’m going to repeat 2 questions throughout this essay in an attempt to drive them into your head. If nothing else, I hope some of you will ask yourself these 2 questions, and act on them. If you are an Advisor reading this – I’d love to hear your feedback in the comments section below.

Its not about a Harvard Degree

Do you need to be academically brilliant to become a standout (not just “successful”) in the investment field? Well, its true that you do need some level of intelligence to truly “make it” in the field.  Its also true that there are some brilliant people in the industry. Some do have top of the class grades in business and commerce degrees from prestigious institutes like Harvard, MIT, Stanford, etc.  But that’s not the dominant trait of the most successful Investment Managers – nor any business leaders in the world – believe it or not.

It’s an interesting fact that some off the most successful, influential entrepreneurs in any business were/are not braniacs like Elon Musk. In fact, many of the richest, most successful business leaders dropped out of college! Wealthy, renowned, game-changing entrepreneurs with no college/university education include:

  • Mark Zuckerberg
  • Steve Jobs
  • Bill Gates
  • Richard Branson
  • Larry Ellison

Would you say that these people were dumb?  Or would you think say they are truly great “thinkers”? I believe the school system as a whole discourages entrepreneurial thinking  on a fundamental level; it only prepare students to step in line, follow the rules, and become good employees.

“2% of the people think, 3% of the people think they think, and 95% of the people would rather DIE than think!” -Bob Proctor

If you are to stand out in any field, you must learn to think outside of the box. You must forge a unique path. In our industry – you can do so on your own, or by working in a smaller, unique, growing firm –  sharing in the development as a key player. Craig Aucoin joined me at ValueTrend a decade ago in that spirit. In either case: You must look for what needs to be fixed in this industry. You need to look at what is NOT being done in the industry, and join a small firm doing that thing.  Or do it on your own.


Its an unfortunate fact that true innovative, game-changing, rule-breaking & disruptive thinkers cannot be found within the big brokerages and banks. Not to say there aren’t any talented Advisors and Portfolio Managers in these institutions, because there are. But they are not game changers, mold breakers or innovators. Corporate policy and mandates in the institutions allow for some flexibility.  But not game-changing disruptive innovation. I know this for a fact. Been there, tried that. Had to leave. If you are an innovator, a game changer, a disruptor – you will not be able to stay with a big institution.

True- You need to start off at a big firm and learn the ropes.  I did. But you can’t be a big-firm lifer if you want to be an innovator. Full stop.

Perhaps you don’t want to be an innovator, or simply don’t have the ability to be an innovator. This is the reality for most people in this and every other industry. No problem–you can still do very well in a big firm.  Some big firm Advisors have client books and a staff of assistants that are much larger than my entire firm! They make lots of money.

But – lets be clear- they are not innovators or entrepreneurs.

Their book is ultimately owned, or at least perceived to be owned, by their firm.  Most importantly, they are neutered  to some degree in how, what, and when they invest.  There are constant incentives to push in-house products and services . They are restricted in how they market and communicate. They usually can’t even talk to the media. Because they do not own the business, they ultimately retire by a corporate-approved transfer of their book to another Advisor only within the firm. The “business”, aka the philosophy and strategy (assuming some degree of uniqueness ) of that retired Advisor largely dies with that retirement.

Big firm Advisors are employees. Again, nothing wrong with that. But that world is poison to an entrepreneur.


If you are not an entrepreneur, you could instead be an in-trepreneur. An in-trepreneur works within the big firms guidelines and policies. But he or she adds their own special spice to the corporate stew. If you choose the in-trepreneur route, you have a safety net within the big firm. But you will never become a disrupter… a true entrepreneur . That’s perfectly OK. Like I mentioned above, many such Advisors are hugely successful working within big firms. For many years, I was an In-trepeneur within a big firm. That’s where I formulated the ValueTrend Equity Platform – albeit, with various degrees of pushback by my firm.

The two questions

Only independent Advisors can be true disrupters.  They ask the same questions that leaders in other industries like Steve Jobs or Elon Musk did:

 What can I do that could improve, and even upset the current industry model? What needs to be done that isn’t being done now?


Competition vs creation

Competitive Advisor

By thinking like a true entrepreneur, you move from the competitive mindset to the creative mindset. In his book “The Science of Getting Rich“, Wallace Wattles talked about moving away from the traditional competitive mindset of attempting to gain “market share”. Most Advisors try to out-sell or take clients away from other Investment firms or Advisors. The competitive Advisor attempts to explain to prospective clients how they differ in a superior way from their current Advisor.

Creative Advisor

Wattles says that the creative mindset is less about “market share”. It’s not about taking clients away from other Advisors or Investment firms. Instead, the creative Advisor asks him or herself the two questions, as all great entrepreneurs do (once again…):

What can I do that could improve and even upset the current industry model? What needs to be done that isn’t being done now? 

Entrepreneurial investment managers include: Warren Buffett, Peter Lynch, Stan Drukenmiller, John Templeton, Bill Ackman….the list goes on. Anyone who has stood out as an innovator in the industry asked the 2 questions  (here we go again…) :  

What can I do that could improve, and even upset, the current industry model? What needs to be done that isn’t being done now?

For example,

  • Warren Buffet proved the value of deep conviction large position ownership and private equity deals within his long-termed value philosophy.
  • Bill Ackman proved that deep analysis of distressed opportunistic equities could reap massive gains.
  • Peter Lynch was the ultimate detective in discovering up and coming growth stocks when nobody else was aware of them.
  • John Templeton was a pioneer in buying international equities when investors were largely sticking to their home markets.


These giants didn’t compete with anyone. They did what wasn’t being done, at least on any level of proficiency. They addressed an overlooked opportunity that most firms and investors hadn’t fully explored. They didn’t focus on taking market share away from others. They created their own market. They bypassed the common approach and followed the “Field of Dreams” mindset. Who else was competing with these iconic investors and their disruptive strategies?  Answer: Nobody! They were like the Star Trek Enterprise–boldly going where no man (or woman) had gone before!

If you build it, they will come!

Its like cars – a favorite subject for me. Those who want a fast, maneuverable fully involved driving experience buy a Porsche GT3 with a stick shift and a hand brake for drifting. Those who want to haul their 6000 lb. third wheel trailer across the country will buy a sturdy pickup truck with a Cummings Diesel. The mom & dad who want a comfortable grocery getter to fit the kids and perhaps haul a few things will buy an SUV with an automatic transmission. None of these compete with each other.

No desire to compete

Does Bill Ackman dish Warren Buffett and his long termed value style? Does Stan Drukenmiller tell investors that the late John Templeton’s International investment firm is benign, and the only way to invest is with currency and hedge fund tactics? Would Warren Buffett have anything bad to say about these two hedge fund managers? HECK, NO!!! They do not compete – they create!

In summary…You need to move from the competitive mindset to the creative mindset.

A recap of my own career path: albeit less impressive than the above noted masters!

Back in the 1990’s, Technical Analysis was largely unknown.  It was considered witchcraft at best. It was unpopular to call yourself a Technical Analyst. You were criticized and ostracized. Crowd-think in the industry said TA didn’t work, you cant time the markets, yada yada…

Despite crowd-think, I found that Technical Analysis was a valuable investment tool. I wanted to learn more about it. I began to study Technical Analysis in the late 1990’s, at first under the great Ralph Acampora. Ralph influenced me to become one of the first 40 Canadians to get a Chartered Market Technician (CMT) designation. This made me quite unique at the time. I went on and became a pioneer in contrarian/sentiment analysis – another overlooked specialty within the already unpopular field of Technical Analysis. Deeper down the rabbit hole I went….

By asking myself the two questions: 

“What can I do that could improve, and even upset, the current industry model? What needs to be done that isn’t being done now?”

I reached the following conclusions:

  1. Nobody in the industry based their investment analysis process with Technical Analysis as a priority.
  2. Nobody focused on managing losses during market declines as a market beating strategy. It was all about beating the market on the upside.

I developed an investment strategy that did NOT prioritize achieving market alpha (outperformance of a benchmark) through stock picking. After all, most buy and hold managers – with the exception of greats like Peter Lynch and Warren Buffett noted above, did NOT outperform the indices. So it seemed to me that it was a mugs game to chase alpha. Sure, I still focused on good stock picking – but more importantly – my goal was to limit damage caused by market drawdowns.  Quite frankly – Its hard to outperform the index when everything’s going up.

I found that losing less during down markets helps offset the near impossibility of index outperformance during up-markets.

With my Technical Analysis focus, along with my focus on risk-dampening rules, my clients experienced long termed performance AND far less stress when markets fell!  That meant – less stressful conversations when markets went south, and more client loyalty.  “Win by not losing”, as is said. My strategy was incepted in the early 2000’s, and was trademarked as “ValueTrend”. It lives on today via our ValueTrend Managed Equity Platform. Our mantra remains “Limit your risk, Keep your money”.

In summary…By asking myself  “What can I do that could improve, and even upset, the current industry model? What needs to be done that isn’t being done now?”  the ValueTrend model was created.

Start with the end in mind

Despite my comments surrounding the benefits of entrepreneurship and independence, a new Advisor will need to spend their first years in the business working at an established firm. You’ll want the support of the institution, and benefit from the experience of the established Advisors within that firm. It takes time and knowledge to spot the gaps that need to be filled in the industry. So gain the experience, gather some clients (who, hopefully, you can retain if you leave the institution), and work towards developing your vision. As you learn, keep asking yourself:

What can I do that could improve, and even upset, the current industry model? What needs to be done that isn’t being done now?

Warning: Many firms these days push their in-house managed products offering greater payouts and/or steady revenue to the Advisors.  They offer Advisors a basket of stocks that are put together by their research team. The goal of the firm is to create steady revenue with proprietary products or turn-key portfolios that make it difficult for Advisors to leave the firm. Advisors push these products, or create portfolios using ready-made stock selection lists. They don’t fully develop a deep analytical process or portfolio management savvy in doing so. They become assimilated as a middle man/woman.  I recommend that new Advisors remain cognizant of these facts. If you are to become an entrepreneur, or even an in-trepeneur….avoid assimilation.  Like the Borg in Star Trek Next Generation. Ok, that’s two Star Trek references now. Nerd alert!


Here’s what I did to retain my autonomy as a new Advisor:

Back in my early days, there was a big push in mutual funds. As a new Advisor, I didn’t want to be trapped in a box. I didn’t want to sell expensive mutual funds like everyone else. So I didn’t, despite the lucrative commissions. Then, when managed products came around – I refused to embrace these in-house “client solutions” – again, despite the higher payouts. Nor did I want to become a “stock jockey” like many of the old-time brokers in my office.

Instead, I had a vision of doing something that most Advisors just weren’t doing. I wanted to learn to invest through a structured & disciplined process of my own. But to develop that structure, I needed to learn how to do it!

After 2 years in the business, in 1993 I made an appointment to visit the most successful stock broker in my firm. I will forever be grateful for the time and guidance this man gave me. He introduced me to the book How to Make Money in Stocks by William O’Neil. He also influenced me to subscribe to the “Red & Blue Chart Books”.  It was O’Neil’s book, and those chart books, that started me on my journey towards creating s systematic investment strategy.

Take people to lunch. Make connections. Keep the end game in mind. Read business and investment books by investment masters like O’Neil and Howard Marks’s book The Most Important Thing. I strongly recommend reading the book Think & Grow Rich by Napoleon Hill as a platform for entrepreneurship.  I also recommend listening to a Bob Proctor seminar, such as his “Ultimate Bob Proctor Library” on Audible. Bod was incredibly cerebral – he will help you understand the mindset in achieving your goal. I was fortunate enough to work for Bob when I was in my 20’s. He literally changed my life.


In summary... Learn from your firm, but also learn from  others who may have alternative insights.

Rome wasn’t built in a day. It will take time, experience, observations, knowledge and lots of insight before the “ah-ha” moment arrives . Then you will be able answer the two questions I keep harping on to form your vision.

Integrity first

Another big influence in my life was Zig Ziglar. I met Zig in person, and bought every (then) tape he ever produced. I recommend you listen to his seminars on
Audible or any other audio/video source. I attended countless live seminars by Zig. He had many valuable lessons, but the key lesson that stuck with me was:

You can get anything YOU want in life – if you just help enough other get what THEY want in life.

Think of that for a moment. We need to focus on what the client wants. Not what we want. As noted above, when I was a new Advisor, mutual funds were the thing to buy. They had big management fees, they underperformed the markets… but they paid high commissions.  Commissions  paid for by “loads” that penalized clients from selling them for many years. Advisors made a fortune selling “DSC funds” when compared to the trading commissions on ordinary stocks and bonds. Less work, more pay. So -guess what Advisors were pushing?

But here’s the problem: The Advisors were putting themselves first. There were more efficient less costly ways of investing. Ways that didn’t lock clients into a fund group for 5-7 years.  But the commissions were high with DSC funds, and you didn’t have to do any stock analysis – so the clients got them.

Zig Ziglar’s message was to do right by the client first, which is the best way for you to get ahead too! How did a client receive an equal or greater benefit by being sold an underperforming product that traps them in a 7 year commitment?

Philosopher Ayn Rand had a similar ethic, noted in her fabulously titled book The Virtue of Selfishness. She believed that all business and personal transactions should be conducted where each party mutually feels they have received equal or greater benefit from the transaction. 


Under promise, over deliver

As a new Advisor, I would visit clients at their homes. In fact, many of my older clients will recall when, as a 29 year old Advisor (with hair!), I would drive to their house and talk to them about their investments. Sometimes, clients would ask if I could give them specific levels of returns or deliver a specific future portfolio value. I was anxious for their business. But, as Zig taught me – you must always be able to deliver what you say – help them get what they want in a realistic &  truthful manner.

I sometimes lost a potential client when I didn’t present a plan implying 10% average returns. Keep in mind that this was during the 1990’s – where 10%+ returns were the norm. But I felt that things could change, and it wasn’t right to plan anyone’s financial life by extrapolating current returns into the future. I understated potential returns (we still do this at ValueTrend).  Sometimes the client went with a different Advisor. One who told them what they wanted to hear. And of course, along came the 2001 crash. But that’s another story.


Family & Friends (work in circles)

As you become more established, you want to focus on building your business from the center-out. Your current clients came to you for your unique model. They selected you for your unique approach rather than the traditional big-firm cookie cutters. Its likely that their friends and family are of similar mindsets, and would be open to your strategy. Remind your clients to tell their friends about their success!

Brutal honesty 

New Advisors are desperate for business. The temptation is to say what it takes to get a new client. This is a mistake. Always be up front when you take on a new client with regard to exactly what they should expect when you manage their money. Detail your buy & sell process as best you can. Be brutally honest with performance expectations – including long termed upside. As noted above, ValueTrend tends to understate future expectations because you really don’t know what’s going to happen. Its better to meet or beat a clients expectations – than the opposite.

At ValueTrend, we go further. We outline our historic drawdowns (you will need to have records of performance history to do this).  New clients get an understanding of how much downside – historically – we have experienced in market crashes. Clients understand that, even if we are focused on managing risk, there is still potential downside!

Never tell people what they want to hear. Tell them what they need to hear.


One final thought on building your book: PITA’s (pain-in-the-arse) clients are not worth keeping. Some people are never happy. Sure, clients will occasionally ask reasonable questions, or question you on something within your structure. That’s valuable input that will help you improve. You need to listen to such input and be open to changing something in your practice if needed. But there are sometimes nasty personalities. They constantly call and nit-pick. These people may be emotional firecrackers, critical by nature, have unrealistic expectations (hence, why you need to be brutally honest upfront as discussed above). Fire these people. They are not worth the aggravation.

We carefully screen our clients to ensure that we are the right fit for a potential client, and visa versa. We want them to be happy, which results in referrals and loyalty. In fact, we get independent auditors to do client surveys every few years to ensure they remain happy. We just did one this summer – and got top marks from our clients again. I recommend Absolute Engagement , who do arms length independent surveys on your behalf. They audit for satisfaction, or lack therein, in various categories. More importantly, they ask questions to identify needs you haven’t addressed.  This is valuable information to help make your practice even better – ultimately attracting more business. If you build it, they will come!

There is no sense keeping a marginal client relationship. Decades ago, I was so focused on building my business that I knowingly took on, or kept, a few PITA’s. Trust me, I learned that even when you are new and desperately want the business, it isn’t worth it. Moreover, you aren’t doing them any favors by doing business with them. In the end, you are trying to, as Zig said, help people get what they want out of life. A bad fit is good for neither of you. So end it. You might even go one step further and see if you can recommend a more suitable firm for them to deal with.


Never stop learning

I hope this essay was of interest to new Advisors interested in building their practice. Perhaps it will also help individual investors understand a bit more about the Investment business! As noted above, I do hope you will take the time to post comments below, whether you are an Advisor or not.



  • An excellent article, Keith.

    I was, in my hay day, a commercial realtor. Your comments could apply to many businesses, including real estate. My son in law sells residential real estate and I forwarded the article on to him.

    Thanks for sharing

    Bob Turnbull

  • You continue to demonstrate through your blog, books, seminars and technical course that you want to be transparent and share your experience and knowledge.

    I believe that a quote attributed to Charlie Munger suits you very well.
    “The best thing a human can do is to help another human being know more”.

    Thanks for providing information that encourages us to learn.

    • Thanks Andy–I forgot that I wrote that! I guess I have written too many blogs to recall them all!


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