The making of an evidence-based investor
Posted by Robin Powell on April 19, 2016
One of the biggest problems facing those of us who write about evidence-based investing is the subject matter. It’s not, let’s face it, particularly exciting. As Jason Zweig once said, “My job is to write the exact same thing between 50 and 100 times a year in such a way that neither my editors nor my readers will ever think I am repeating myself”.
It’s even more of a challenge when writing a book on the subject. Active investors always have new things to say, new ideas and personalities to write about; and people are bound to be more interested in books that show them how to get rich quickly than those that advocate the slower, steadier route.
But with Odds On: the Making of an Evidence-Based Investor, Matt Hall has managed to find a winning formula. How? By describing his personal journey. His story takes us from his early career on Wall Street, where he grew disillusioned with the traditional investing model, to his discovery of evidence-based investing; he goes on to describe how an epiphany brought on by life-threatening illness helped him to overcome initial resistance, as he began to guide investors towards a more rational and rewarding approach to money management.
At 42, Matt is the co-founder and President of the St Louis-based wealth management firm Hill Investment Group, and one of US investing’s emerging thought leaders. In this interview, he tells TEBI readers about his life and his book, and his views on the future of financial advice.
The book is very much your personal story. Why did you take that route?
I learned through experience that it’s crucial to find the intersection of our approach and life. In the old days we would beat people over the head with the academic research on successful investing. That worked, but not as quickly as I’d like. There are people and events that changed all this for me and the impact on our firm and clients has been significant. We have meaningful relationships and philosophical alignment. This makes me happy.
In the book, you mention several people who have influenced you. Who would say has had the biggest impact, and why?
Beyond my parents I have a great list, but I would say Rick Hill, with whom I founded Hill Investment Group, has had the biggest impact. Without Rick I would never have started a business. I’m an accidental entrepreneur. I love having control of how we shape the client experience and I’ll never work for someone else again in my life.
You clearly believe in the life-changing potential of good financial planning. Does it frustrate you that there are so many financial professionals who don’t have their clients’ best interests at heart?
Of course! It’s frustrating, humiliating for the industry, and it’s sad for investors that the profession isn’t operating at a higher level. On the flip side it’s part of why I’m obnoxiously passionate about what we do. There is a massive difference between “good” financial planning and what most people experience. I believe my Odds On can help investors and advisers spread the word.
These are interesting times for financial advice in the US, especially with new rules on the way to tackle conflict of interest. How do you see the profession changing over the next few years?
I’m optimistic because I believe that’s the only way to be. I’m 42 and everyone I know who is younger than me demands transparency. Things are getting exposed that need fixing and this creates opportunity for those of us who want to do what is right. Those who choose to hold themselves to the lowest standards will be antiques. What’s more, as the public becomes better informed there are fewer marks for the bad guys.
What advice would you give to somebody starting out in the advisory profession?
Be curious, surround yourself with high-character people, take ownership, work hard, be someone others can count on, and care more about serving others than you do yourself. The rest will fall into place.
In the book you describe your struggle with leukaemia. Has that changed the way you think about life, money and business?
Absolutely! If not for science I might be dead right now, but I really shared that experience to highlight what I took from how my doctors treated me, not just their technical knowledge. Their calm direction from ten years ago inspires the way my firm work with clients today.
Finally, what do you hope the book will achieve?
In our firm we are constantly in search of a tool or educational piece that will be a catalyst in helping investors choose an evidence-based approach. I wrote Odds On to be an extraordinary resource. I’ve been blown away by the reaction of advisers and others in the industry. In the same way as your incredible videos are tools for us to use, Robin, Odds On is a truly unique way to introduce investors to our philosophy.