By Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP, Managing Director, Head of UniFi by CAIA™.
In this blog post, I go behind the scenes with key contributor Shannon Saccocia, CFA, CIMA®, chief investment officer of NB Private Wealth for a final look at Crossing the Threshold: Mapping a Journey Towards Alternative Investments in Wealth Management. Shannon prepared us for the return journey by discussing some of the important ongoing considerations organizations should make post-investment. She also charted a path forward with some tangible examples of how alternatives may be used in the context of a goals-based framework.
If you haven’t yet reviewed the full report or heard our fascinating conversation (below), I’d encourage you to do so now!
The Altered Horizon
Within any adventure, once the hero has crossed the threshold, faced challenges, and triumphed, it’s sometimes difficult to begin the journey home. In fact, some heroes want to stay in the new world and never return home, despite it being a necessary step to bring new knowledge and renewed purpose to those they left behind.
Regarding alternatives, the fun part is the ramping-up phase—learning new things, making new investments, and building new allocations. The difficult part is keeping everything running smoothly and clients invested after the ramp-up phase is over.
Shannon explored the post-investment phase in her section of the report and wisely noted “Mission accomplished? Not so fast. Getting an investor from zero to their target private markets allocation requires setting the right expectations about the experience of investing in these strategies.”
In a world where clients are accustomed to information on a daily basis for public market investments, a significant decline in information frequency may be jarring or cause many advisors to “set it and forget it” since there’s “nothing to talk about.” That’s why Shannon suggests establishing a cadence of communication that aligns with the fund’s lifecycle and using periods with no new information to continue to set expectations with clients.
Key to a Successful Return Journey
During our conversation, we spent a lot of time on this, but one of my key takeaways from the discussion is how the appropriateness and ongoing conversations around alternatives differ across client type. Shannon's extensive experience across diverse organizations underscored that the needs and perspectives of founders or entrepreneurs, traditional high-net-worth individuals, and those focused on generational wealth vary significantly, and tailoring conversations to each client's unique context is essential for effective wealth management.
Essentially, navigating the complexities of the post-investment phase is crucial for maintaining meaningful client engagement and working toward successful long-term outcomes. Our conversation emphasized that effective wealth management hinges on the ability to adapt conversations and strategies to each client's unique circumstances, ensuring that the journey home is as rewarding as the adventure itself!
About the Author:
Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP oversees UniFi by CAIA™, a learning platform dedicated to educating the private wealth management industry on alternative investments. He was previously responsible for leading and implementing CAIA Association's content agenda, thought leadership initiatives, and content development for the CAIA Charter Program.
Aaron is a frequent speaker and writer on various topics of alternative investments and his work has been published in CAIA’s educational programs, numerous academic journals, books, and industry publications. Aaron’s industry experience lies in private wealth management, where he oversaw asset allocation, portfolio construction, and manager research efforts for high-net-worth individuals and institutional retirement plans.
He earned a B.S. with distinction in Finance and a Master of Finance from Penn State University. He holds the Chartered Alternative Investment Analyst (CAIA), Chartered Financial Analyst (CFA), Certificate in Investment Performance Measurement (CIPM), and Financial Data Professional (FDP) designations, and is a CERTIFIED FINANCIAL PLANNER™. He is a Past President of CFA Society Columbus and serves as a board director and Programs Chair for CFA Society Philadelphia. Aaron is an adjunct professor and serves on multiple advisory boards for Penn State University.