Financial Advisory in the Information Age (1Q22 Quarterly Newsletter)

Updated: Mar 11

January 15, 2022

To: Clients & Friends

From: Chris Weil


One of my kids gave me a gift this holiday season perfectly suited to my analogue instincts: a book called 100 Things We’ve Lost To the Internet, by Pamela Paul, editor of the New York Times Book Review.


There is an element of tease in this gift as my son (the “kid” who just turned 60, but that’s another story) is arguably the most technically savvy of my three children (my daughters endorse this assessment) and the one most committed to both early adoption and mastering all things that make the work of life more efficient and accurate. He is well aware that I frequently bemoan the devaluation of some things which have held primary value for me in my lifetime. The subtext of his gift is: “Here is something that will confirm your prejudices.”


Unless you have a copy of the book, you will need to accept my word that virtually all of the “100 things” have to do with the Internet’s dilutive effect on personal relationships and personal experiences generally.

I think many people would argue that the speed and connectivity benefits of the internet exceed its costs. Among those costs are the trafficking in drugs, guns, and human beings on the dark web and the toxic damage that comes from anonymity and the spreading of uncredible information. But for the sake of this piece, I am limiting my comments to the personal costs we pay in being distanced and depersonalized, and specifically, how I see that affecting the financial advisory industry.

It is obvious to me that one consequence of the internet’s ubiquity is to greatly expand the role that this intermediary (for the internet is an intermediary) plays in our lives. One of the consequences of expanding the role of an intermediary in any life is the loss of personal power and personal agency – capacities that usually accompany direct, unmediated experiences (of people, events, opportunities, threats, etc.).

Where, you may well ask, am I going with this?

At WEIL, we are in the wealth management and financial advisory business. Usually, when working with people or families of means, our services involve no intermediation; for example, when we respond to concerns, we provide financial advice based on your circumstances:

  • Should I make a sizable gift to my children or grandchildren?

  • Should I establish a charitable remainder trust?

  • Should I reduce my exposure to the equity markets?

  • Should I sell down my low basis, high value, concentrated position in a legacy stock?

  • Should I refinance my investment property?

  • Should I consider an ESOP for my business?

  • How do I hedge against a likely decrease in the estate tax exemption?

  • How do I hedge against a rise in interest rates?

  • Crypto? Gold? Dynasty Trusts? Venture Capital? Private Equity?

And so on and on.

Our advisory role does not lend itself to delivering generic pronunciamentos (much less boilerplate answers as is so often the case with internet-based responses); instead, we spend the time necessary to understand the context (that is, the client’s life circumstances) from which the question has arisen, as well as what has motivated the client to ask it. For it is almost always the case that no one of these or similar questions can be adequately answered until all concerned have a comprehensive understanding of “client life circumstances,” by which I mean family makeup and obligations, financial condition (assets, liabilities, sources and amount of income, insurance), estate plans, risk tolerances and longer term plans and objectives.

It is obvious that our business model and our culture (and those of many advisory firms) run directly counter to the spirit of the age, an age of which the internet is both exemplar and metaphor.

It is obvious that in many instances (ordering on Amazon, confirming a dental appointment, making a payment with ApplePay, etc.) the spirit of the age may actually be an improvement in the “old way” of doing things. But for any “service provider” (lawyer, CPA, architect, doctor, financial advisor) whose services, in order to be provided competently, require a comprehensive and nuanced understanding of buyer/client needs and circumstances, any degree of disconnectivity (I would argue) can translate into something less than optimum outcomes -- for the client whose needs go beyond the transactional.

Can this be proven? I wouldn’t know how to go about proving it. Unless, of course, you or I (to use a crude – and purely hypothetical – example) happen to be present when someone over 60 is trying to plan a foreign vacation on the internet (booking planes, hotels, tours, a rental car, etc.) without the assistance of a travel agent. In this case, the “less than optimum outcome” may only be frustration, undue costs, unsatisfactory accommodations, five-hour layovers, and so on. Let these outcomes stand for the much more serious consequences of undue reliance on non-human intermediaries when much more is at stake.

I can hear the voices of the younger generation ringing in my ears. “Wake up and smell the (21st century) coffee. If all you’re trying to say is that most people, at least most people with substantial net worths and complex affairs, would be better off with a personal financial advisor, why not just come right out and say it?” And, most tellingly, “What you have managed to avoid talking about is the reason so much in the way of business dealings have gone to the internet: transactions are cheaper, faster, more efficient and, for many applications, more powerful, effective and enabling.”

Yes, but ... even after admitting this last comment, I do not want a doctor, dentist, architect, CPA or financial advisor who is cheaper (if the cheapness is a marker for less than sterling capability). Nor do I want one who is faster (what corners are they cutting?). Efficient? Sure, but let the efficiency be in support of service provision, not a substitute for it, in those cases where a personal relationship is optimal.

With this said, most people are cost conscious (as they should be). One reason for this? Costs are relatively easy to assess. Benefits not so much. So, at the risk of sounding self-serving, let me say something about benefits and, specifically, the benefits of a personal financial advisory relationship.

1. I have said this before and I’ll say it again ... if you have the time, the temperament, and the skills to manage your own financial affairs then you may not need us, with this caveat: if you happen to be the “business manager” in the family and your spouse or others around you are more or less blissfully uninformed about the family’s affairs, you may need to worry about what happens should you become incapacitated or die, and what kind of chaos and confusion might result. So even if you can do it yourself, in this situation there is a place for an advisory relationship, if only to provide a third party who knows as much about your affairs as you do and can step in, when and if needed, to smooth a transition.

2. “The proof of the pudding is in the tasting.” Indeed. Talk is cheap. Promises abound. But if you have had a fruitful, long-term relationship with a financial advisor, one in which even a crowbar couldn’t separate, the issue of cost versus benefit is moot. The fact that you aren’t going anywhere obviously means that you are satisfied that benefits (however defined) exceed costs.

3. If you do not have a beneficial relationship with a financial advisor, or don’t have a relationship at all, the best way to go about curing the problem is to seek out friends or business associates, preferably ones older, more affluent and at least as financially sophisticated as you are, and asking them if they are happy enough with their advisor to refer them to you. If the answer is yes, then by leveraging the experiences of your friends/associates you have rendered the question of cost vs. benefit (almost) moot. “Almost” because there is always an element of chemistry in any advisory relationship. Well before the question of cost vs. benefit arises you will need to satisfy yourself that this is someone with whom you are going to be comfortable working.

4. Does the size of the firm matter (or, does size of the advisor’s firm somehow translate into an incremental benefit)? As a generality ... no. Years ago, the popular wisdom was that the big New York Stock Exchange firms offered some sort of add-on benefits (usually thought to be the quality of their research and/or access to opportunities not otherwise available to others in the business). Whether or not it was true then, it is not true now. Now it’s a more level playing field and most firms have equal access to everything on the field (yes, I admit, largely due to the internet). The information environment is data rich and accessible to all who care to look.

5. No advisor can know everything that is encompassed within the financial advisory economic universe. Client benefits are almost certainly enhanced, therefore, if the advisor is embedded in a team where the members have various specialties, specialties which taken together represent a comprehensive understanding of each of the elements of the universe - and which of these and to what extent they need to be integrated in the client life.

6. Any advisor worth their salt should bring benefits to the client representing large multiples of their cost. Sometimes these benefits are realized in terms of service capability. Sometimes in terms of successful investment management. Sometimes in terms of great ideas (portfolio management, tax planning, estate planning, risk management, philanthropic planning, deferred compensation, private equity). Sometimes all three. And if the client is not satisfied that they are enjoying the benefit of these large multiples, it could be that the client has the wrong advisor. It is also possible, though, that the client could be a source of the problem. I’m happy to say I know this largely through anecdotal evidence, but for every client that utilizes their advisor correctly there must be at least one who doesn’t. Incorrect utilization means under-utilization. It means client reticence to initiate contact and share current questions, concerns or problems and by doing so provide the advisor with an opportunity to bring to the client what the advisor is being paid for ... advice, as well as responses from across a variety of disciplines which will serve to enhance client wellbeing. Or, at the very least, alleviate client concerns. Issues arise in client lives on the client’s timetable, not on the timetable of the advisor. I can assure you that every advisor is thrilled when a client calls with questions, issues, problems, concerns — whether they be modest or monumental.

I have used up my four pages talking about the importance of human connection in the advisory relationship, and haven’t even touched on the vast importance of the human connection in other aspects of the client relationship. As you may know, our CEO has a particular talent for efficiency, and his first tool of choice has always been technology. So much so that the (many) times he hasn’t been able to find a solution out in the world, he wrote the code himself. At WEIL, we are able to do the work of a much larger firm because we leverage technology in every department. And yet, we have a robust, twenty-seven person team, all of whom are dedicated in some form to the wellbeing of the client. At WEIL, our people understand that they are the bridge between what a client needs and what is available on the many platforms we utilize to augment the client experience (in addition to the products and services our team builds and deploys here on our own platform). This process requires deep and nuanced understanding of financial services as well as relationship-building with counterparts on other platforms. All in all, a distinctly organic process.


Chris Weil


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Investment in mutual funds is also subject to market risk, investment style risk, investment adviser risk, market sector risk, equity securities risk, and portfolio turnover risks. More information about these risks and other risks can be found in the funds’ prospectus. You may obtain a prospectus for CWC's mutual funds by calling us toll-free at 800.355.9345 or visiting www.cweil.com. The prospectus should be read carefully before investing. CWC's mutual funds are distributed by Rafferty Capital Markets, LLC—Garden City, NY 11530. Nothing herein should be construed as legal or tax advice. You should consult an attorney or tax professional regarding your specific legal or tax situation. Christopher Weil & Company, Inc. may be contacted at 800.355.9345 or info@cweil.com.


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