The Adviser Who Joined a Fund Manager to 10x His Impact | David Swanwick, Dimensional Fund Advisors

David Swanwick is Head of Client Communications EMEA at Dimensional Fund Advisors, but he didn't start there.

He began his career in banking, moved into independent financial advice in Brisbane, helped merge 14 firms into a single national group managing $10 billion AUD, then made the leap to London to join Dimensional in 2011. 

Whether you use Dimensional or not, this episode is packed with practical thinking on how to run a better advice business, communicate more effectively, and position the value of what you do with confidence.

If you want to see what life in Hoxton Wealth is like, please visit:  / @hoxtonlife 

For more information on Hoxton Wealth careers, please https://www.careers-page.com/hoxtonwealth.com

For my videos by Chris, please visit his Youtube:  ⁨@ChrisBallHoxton⁩  

Transcript

Welcome And Who David Is

SPEAKER_01 0:00

So today I'm joined by David Swannick, he's head of common communications at dimensional fund advisors.

SPEAKER_00 0:07

He just comes through one trillion US dollars in assets under management. It just felt like it'd be relevant being able to be based in this part of the world. If you kind of learned from firms that that operate across the full. Do I turn around to my client and speak to them in language that they would understand? We did the uh merger in the middle of the global financial crisis in April of 2008. Price is the spice of life, isn't it? You start to understand where people get zealous uh about the approach because there's really nothing like it that's out there.

SPEAKER_01 0:41

So today I'm joined by David Swannick. He's head of client communications at Dimensional Fund Advisors. He started his career in banking before moving into independent financial advice in Brisbane with the international uh aspect as well as uh that we put through here at Hoxton and eventually becoming a partner and helping to merge several like-minded businesses into a single national group listed on the Australian Stock Exchange in 2011. Um he moved to joined Dimensional in London, so left Australia and moved to London. Uh, and now he's here talking to us, which we're very uh which we're very thankful for. So thanks very much for joining us today, David, and I'm really looking forward to our conversation.

SPEAKER_00 1:29

Yeah, well, thank you. I'm delighted to be here and likewise really looking forward to the chat today, Chris.

From Banking Into Independent Advice

SPEAKER_01 1:34

Yeah, me too. Me too. So first off, I would love to dig in a bit more about your uh you know, your kind of the start of your career or you know, where you came from. Because I think, you know, most people imagine that people in fund management have been in fund management all of their life, but you obviously started off uh on the on the on the light side, not on the dark side.

SPEAKER_00 1:55

Yeah, well, that's exactly right. And I mean, even I think finance just more broadly. I mean, you don't meet too many toddlers who are sort of walking around saying that they, you know, want to be in you know business development with an asset manager. You know, I've got a I've got a seven and a half-year-old boy, and he he's convinced he wants to be a you know a pilot or a zoo keeper. So we've got all those other ideas in our minds when we're young. And I I think it was pretty much the same for me. I mean, I left school and university not knowing at all what I wanted to do, but I came from a family of people who'd always been in banking. So my dad was in the bank, uh, my mum was in the bank, they met in the bank, both of their parents had backgrounds in banking, so you kind of get the picture here. There was something fated about me doing the same thing, and I just thought, well, I'll go and learn about the world through that lens. And I joined, you know, a fantastic organization. It was the Commonwealth Bank of Australia, one of the largest banks there, having no idea what I was doing, no idea what I wanted to do, but I thought this is going to be a way to get exposure to so many different parts of the world of money and investing and lending and all of those kinds of things. And it was great. I had four really happy years there. I found financial advice in the course of that banking journey, and that's what then led me into independent advice because I thought to myself, you know, that the the work that I was doing at the bank was wonderful and beneficial, but it did seem to me that it every solution to uh a customer's needs in the bank seemed to be met by a bank product only, and I thought there must be people out there doing this privately. And, you know, when I entered the world of independent advice, you know, the word customer really got replaced with client, and the whole nature of the relationship sort of changed. And I was learning, you know, in broader and deeper ways by then being in independent advice in this little sort of four-partner firm in Creek Street, Brisbane, way back in 2000, just to give everyone a sense of carbon dating here. Uh, but it was uh it was a really interesting journey uh to then be on the independent side of the business. Um joined there really as a power planner and an associate advisor. And within three years, had sort of worked my way up through to become an advisor and a partner in the firm and uh you know, working in you know fantastic parts of the business and with amazing clients. It was uh it was a really interesting start to the journey, and I could have never really predicted it. You sort of just had to go where the where the flow took you.

Merging Firms During The GFC

SPEAKER_01 4:24

And obviously, you know, from your journey into the independent space, you then, you know, as as we discussed, you kind of found like-minded people and as part of your as part of your journey and merged into one. Talk us a bit through that, because I think that that was really interesting.

SPEAKER_00 4:42

Well, I mean, it's uh it's an extraordinary thing because you know, the the merger that we did in 2008 was really started or had its genesis as a project where we had a little alliance in Brisbane with a couple of other firms who were close to us. They didn't necessarily have the same investment philosophy as we did, but they had the same attitude about how to treat clients. And so we shared a lot of information between us. We, you know, did our uh team trainings together to try and leverage that a little bit more. And we uh, you know, just just all the things that were common to our business that maybe we could we could share and leverage uh better as an alliance than individual firms we did. What then ended up happening was that we found similar kinds of firms in other parts of the country, so in Sydney and Melbourne and Perth. And again, the investment philosophy was not the same, but the commitment to financial planning, uh the sort of the global thinking around advice, you know, the idea that people have international lives and they deserve to get really good professional, high-quality help. That that was that was definitely there. And then just client experience. How should clients be treated? Uh and so as we got talking to all of those guys, we started to realize how much we had in common. And I give credit in particular to not only all of the partners at the time for having the foresight and the the kind of the temperament and the willingness to sort of you know be a be open to the idea of getting together. But one particularly singular guy, uh uh whose name was Tony Fenning, and he's sadly since passed, but he was a really, you know, fairly singular individual. He was a former corporate lawyer, had been in investment banking, and he'd just come free from uh a business that he had helped grow up hugely. And he looked at our businesses and said, You've got something really amazing here. You know, if you were to get together as a single practice under one roof, spread across the country, you'd be able to do something quite remarkable for families, and it would be quite an incredible business. And so over a few years we talked extensively about that, and then you know, Gulp, you know, made the big decision that we were going to do this. And uh, if you can believe the timing of it, just to prove we've got a sense of humor, we did the uh merger in the middle of the global financial crisis in April of 2008. Wow. And it all happened in a day. I think there were 65 underlying legal entities, 14 practices, more than 100 staff. Uh, and at that point, I think we were managing circa 10 billion Australian dollars. So I was a very small cog in a very big machine, uh, but we all sort of played our part. You know, we all had a role to play in bringing it together and make it work, and it's since gone on to, you know, be a very highly regarded business across the country. It's owned by a much larger financial services business now. That happened in 2014. Uh, but it's something that we all feel very proud of because, you know, we wanted to build a the kind of advice business that we'd all be happy to send our friends and family to, and that's exactly what's happened. I mean, my parents are clients of that business now. Oh, wow. And I feel completely at ease uh, you know, with that. And uh we've sort of lived up to the promise. Yeah. That's really, really cool. Do you still keep in touch with the guys from the that you did that with? Oh, closely. Yeah, absolutely. I mean, we've uh we've remained friends. Uh, I get back to Australia regularly. The weird thing for me though is that I have the uh fantastic luxury of now going back and as as a dimensional employee, I often go back into the office that I used to work in with some of those folks and deliver, you know, training on communications or investment philosophy or practice management and those sorts of things. So I'm back amongst the team, but you know, in a very different capacity. And I've had the opportunity to do that with uh with the the folks in the Sydney and Melbourne and Perth offices as well. So yeah, very cool.

Moving To London And Scaling Impact

SPEAKER_01 8:38

So so you you know, let's touch on that next. So obviously you left, um, you know, you you you sold the business, um, you decided that was a good point to exit. I think at that point you said that you went over to London, and I I can't remember whether you said that was four-dimensional or whether that was um, you know, actually you just love London as a city. Um, but you know, you could have a bit of both. Yeah, okay, fine. Yeah, we'll we'll we'll we'll yeah. You you didn't you fancied cold, uh you fancied cold and rain uh as opposed to beautiful sunshine.

SPEAKER_00 9:09

Yeah, I mean it's uh it it's uh it's the standard joke over here, you know. Presumably you moved for the weather, of course, you know. But uh look, I've been coming to London for years and years as a tourist, and for me it just felt like Disneyland for adults being able to be based in this part of the world, you know, being able to fly one, two, three hours and just have this absolute array of different places and cultures and experiences. Uh, and and so I it was something that I always had on my mind to do. And I guess after the merger, we spent a couple of years earnestly trying to make sure that the client experience across Australia in this new business was as similar as we could make it so that we could, you know, normalize and unify the client experience. So if someone was seeing us in Brisbane or in Perth or in you know Wollongong, it it didn't matter. The client experience was going to be the same. And I think we largely accomplished that. But I did get to a point where I thought, you know, I've known Dimensional now for, you know, I was thinking back then, it's yeah, it's probably about 10 years, absolutely enamored with the investment philosophy and the ideas and the execution. I just watched it work in client portfolios so well. And I had this little moment, Chris, that I've since kind of labeled the arithmetic of impact. And I it just occurred to me that, well, if I stayed a financial advisor, I'm gonna have a fantastic career in this new business we've built, and I'll probably be able to help circa 100 families live a better life and have more peace of mind, which is fantastic. But then it occurred to me, it's like I really love this dimensional thing. I've spoken at a few of their conferences as an advisor, and it's gone down really well. I love what they do. Imagine if instead of looking after 100 families as an advisor, I stood in front of a hundred families at a conference who each looked after a hundred families. And once I thought about the leverage of that, I thought, well, maybe I should talk to Dimensional about joining their team, but why not bring these two ideas together and do it in London? And so after some discussions, you know, all the lights were green, and um I I made the move. I came here in August of 2011, so I'm coming up to 15 years this August, and it's been fantastic. You know, I work with wonderful people, amazing firms, and I think because of the nature of my role and the nature of London, the work that I get to do is global. I get to speak with businesses and clients, you know, all over the world, not only in in our region. And I love that. I love that variety, and I love the reach of it and uh the stimulation of just meeting so many different and interesting people.

SPEAKER_01 11:43

Variety is the spice of life, isn't it? Um what made what what what you know what made it different from what else was out there for you? You know, like let's talk a bit about that in terms of dimensional because obviously it is a very different proposition to most fun management businesses. Um, highly regarded by those who who know it. Um, you know, I joke with some of the guys that that love dimensional, uh Jonathan J, uh, who worked with us, um, he you know, he was a big advocate of it, um, and various other people that I know within our business uh absolutely love it. Almost cult-like following, I think, is sometimes uh is sometimes how we would describe it. Like, what made it different for you? What makes it different for them? You know, like what stands out?

SPEAKER_00 12:27

Well, uh, I I think you're right about that because what I observe and what happened with me is that when the penny drops with these ideas that dimensional talk about, it doesn't just drop, it thuds. And it's very difficult to sort of unhear some of these messages and unsee some of the data. Um, there was a there was a magazine article a long, long time ago, or a newspaper article, and it said, I and I think this sort of sums it up, it's like dimensional funds, you know, hard to buy, easy to own. And what what that meant was that you kind of got to go looking and you've got to put a bit of work in to understand what we talk about. But once you do, the benefits are pretty amazing. Now, if you go all the way back to 2000 when I joined that little four-person practice uh in Brisbane, we were at the time proponents of active management, and we genuinely felt that was the right thing to do for our clients, that that was the reason that you know they were paying us a fee. It was a big part of our job. And so that's what we did. And we we had an investment committee, we even had it in the alliance with some of the other firms in Brisbane, and we had some successes. You know, we found some firms and some uh, you know, some investment management firms, some fund managers, some funds that delivered some really good results. But Chris, two things were also absolutely the case. We more often than we would have liked, and more often than we were comfortable with, felt that the promises made to us by active management just were never delivered on. And of course, the the fund manager was rarely in the room to explain that to our client. So it was all downside for us. But secondly, just the nature of it was that you couldn't kind of get to everyone at that point. So there were there were names in the filing cabinet who didn't necessarily get the same great fund or great fund manager that someone else did. And we had no way of we had no way of sort of reconciling the the problem with that. You know, it just didn't feel virtuous, it it lacked a certain nobility that we couldn't get to everyone, and so we thought, well, we need something that's going to be more systematic. So traditional active had a problem. It was expensive, the turnover was big, the results were patchy, so there was all of that. Now, of course, the other end of the spectrum was a thing that we didn't necessarily feel that comfortable with because it was just tracking. And we just thought, if if our clients hear us say we're taking a passive approach to managing your affairs, they're gonna get the impression that we're just being that we're inert, that we're just lazy and sitting there and you know pocketing the fee for not doing anything other than copying the market. So we didn't really like that. But when we looked at it, we realized that actually it thumped traditional active management like a surprising amount of the time. So we thought, well, we'd better pay some attention to this, and it's cheap and it's diversified. But look, both of these things had problems because indexing's got its issues. Indexing forces you and your portfolio to buy and sell certain securities at certain times on certain days where common sense might tell you, for goodness sake, don't do this. And fortunately, one of the partners in our business happened to know one of the people who was responsible for starting Dimensional in Australia. And um, and so we had a meeting with him and with uh another one of the Dimensional team, they both came up and they just started talking to us about investing in a way that was different, and in a way that to us instantly seemed to conquer the flaws of traditional active or traditional indexing. Now we had to do some work to get our minds around it because it's a fairly cerebral, but it the the feeling that we were left with was that hang on a minute, instead of feeling like investing's got to be either this this sort of sporting-like behavior in active management, or this simple process of just following lists over an indexing, actually, there's some kind of scientific thinking that can go into it. And the academic community's been giving us all of these answers about how markets work for about 70 years. We can do something with that, and we can do it in a way that's systematic and low cost and diversified. And it ended up being an approach that we used almost entirely uh for client portfolios in our practice, and you know, it was kind of coined as you know, we sort of felt of it as being an approach you've never got to say sorry to a client for, because you know, you you're following the best science and then you're giving all the heavy lifting over to markets to do their good work. Now, uh even better, because of the way dimensional investing works, you actually end up do beating the market over these long-term periods, or you're much more likely to anyway. Um, but you've got all the benefits of it being low cost and diversified. So, you know, take that monologue and you start to understand why people get zealous uh about the approach, because there's really nothing like it that's out there. People try and put us in the category of smart beater or quant or they still call us passive or something like that, and none of those things are right. I think we sort of stand alone. And it had a big impact on our business. And you know, when we did the merger, we had to make a decision about what was going to be the central investment proposition of this now this now entity now managing more than$10 billion. And everyone brought their beliefs and opinions and philosophies and analysis and data to a kind of a two-year process in equities and fixed income. And everything was up for grabs. But what I can tell you is that Dimensional ended up being that central investment proposition, even though many of the 14 firms that were in our merger had either not uh uh gone with dimensional having done their own analysis or had never heard of it before. But but in the end the ideas you know won the day.

Dimensional 360 And The 4S Framework

SPEAKER_01 18:12

Interesting is yeah, it's the it's the factual-based approach that that wins it, isn't it? And you know, I think I think what's really interesting is it blends the two as well. You know, that that I think that's just a pure, you know, it it seems like real common sense that you know you don't have to be active or passive. In fact, if you can get something in the middle that combines the two, then surely that would be a you know a really compelling proposition. But also what I think makes it even more compelling for provision, we can you know we can cut we I think we can loop back round to you know what makes dimensional dimensional, but is also the support that you as a you know as an asset manager go above and beyond just coming in and sitting with someone and you know kind of discussing, you know, giving them a few snippets on the market. Obviously, you've got Dimensional 360, which is you know a fantastic resource for people that want to use it. Maybe you could talk a bit more on that and and help educate people that don't really know you know what that is and and the tools that you know you're able to offer um planners and you know to assist with their daily activities and ultimately their business growth as well, which is you know super, super important and super key to most people.

SPEAKER_00 19:19

Yeah, uh absolutely. And you you're spot on that we have always wanted to go beyond just the you know the espousal of these ideas and then delivered through some kind of investment strategy. I think the best way to think about dimensional and the client experience that we're wanting to provide is to understand our mission. You know, and Dimensional's mission has been to change the way that people think and feel and act around investing. When you know that's our mission, it's then logical that we're not just going to talk about investing, uh, but it's where the three pillars of 360 ultimately came from. So we've got a lot to say about investing, obviously. But you know, the next question that people financial professionals logically have of us is great, you've taught me about the science of investing. I sort of, in fact, you've taught me about five-factor regressions, so thanks for that. Um, I understand this Nobel Prize winning level. How on earth do I turn around to my client and speak to them in language that they would understand? And so it's natural for us then to do um a whole body of work on how financial professionals can speak more effectively and have conversations more effectively, communicate more effectively with their clients. And we've been doing work for years, principally through a thing called the 4S framework, which we created here, uh designed to help professionals with that communication challenge. And the 4S framework comprises, unsurprisingly, four things beginning with the letter S, which are scripts, stories, sketches, and supplements. And so uh we will run full-day workshops, in some cases, two-day workshops, where we'll just talk about the S's, uh, scripts, stories, sketches, and supplements. We might run sessions on listening or asking high-quality questions. And, you know, that event may not mention a single-dimensional strategy. So it gives you a sense of the kind of support we're offering there. But I think lastly, the third pillar of 360, so you've got investments, you've got client communication, then you've got business strategy or what is sometimes called practice management. And I think that's just the the last piece of the puzzle if we're going to live up to our mission of helping people, you know, sort of think differently about investing and act in better ways. Because what we're trying to do there is really study the profession, study financial professionals and study their clients. We want to understand both sides of the coin. So we've got the global advisor study that we run every year, and we get hundreds and hundreds and hundreds of firms across the world. In fact, it may be, if not these, then certainly one of the largest and most diversified global studies of financial advisors in the world. We get amazing data points on. Uh, what's going on inside those practices, their various metrics, but also understanding what their goals are, what their challenges are, what their aspirations are for maybe their people or their business or their clients, their client experience. And we break down those answers into trying to understand the big five pillars of a great advice practice: strategic planning, human capital, uh, business growth, investment and operations, and client experience. And we've got enormous data sets and bodies of work, workshops that we can do helping to address some of the aspirations but also challenges that advisors have. But like I said, it's like one side of the coin. The other side of the coin is to understand what's going on in the minds of clients. You know, the people who are end investors doing work with advisors who choose to do work with dimensional. So we've got a second study, the Global Investor Study, which is open all year, and uh advisors can send that out to their clients through a specialized link, and they get feedback from their clients anonymized on all manner of things about why they work with their advisor, their preferred service methods, how it is they value the relationship with their advisor, any number of things. But what it does is it allows us to marry those two data sets together and to do some interesting comparing and contrasting. Now, we have come to call that whole thing between investing, client communication, and business strategy Dimensional 360. And we call it 360 because we think it's a conversation that goes on in perpetuity. Every year we come to you and we say, Chris, you know, what's on your mind? What are you wanting to accomplish, either yourself, your team, or your business? What are the things that are in the way? And then, you know, we we'll try and a regional director at Dimensional is going to try and uh understand how to cobble together a set of resources or conferences or workshops or um, you know, digital supplements that are gonna help address those goals, uh, improve the likelihood that you achieve those goals, or maybe try and swipe some of these challenges out of the way. And we draw on those three bodies of work around investing communication and business strategy in order to do that. And then every year the conversation is going to change. Uh, but we think those three areas really do what our our co-CEO, Gerardo Reilly, uh, who's you know uh comes from a storied background in academia and research, he talks about the idea of surrounding the problem. And I think what Dimensional 360 does for financial professionals is it surrounds the likely problems and goals that people have on their desk. And um, you know, out I I I think Dimensional has been uh you know a true friend to financial advisors and wealth managers. You know, we we we we don't have a uh we don't intend to sort of deal with the end investor, the end client uh that much because we know that you'll always know them better than we ever can. So if we can help financial professionals do better, grow more strongly, have better businesses, deliver a better experience, we know that two things are going to happen. One, the effect of that is gonna be felt downstream by your clients. And then secondly, we know that we'll be beneficiaries as well.

Referral Growth Without Feeling Icky

SPEAKER_01 25:08

Fantastic. Can you give us like a real life example of a firmware and individual whose practice change because of because of because of all of that that you've implemented for them? I think that'd be really useful.

SPEAKER_00 25:21

Yeah, I mean it would be it's it's it's kind of an embarrassment of riches, that one. I'd have to refer to my scroll to sort of give you a list of the examples where it just there's just so many different ways that you can kind of add value through this through this service experience. But uh there's there's the most obvious one, which is the firms that we encounter who are tearing their hair out about their investment proposition for the reasons I described about our firm in Brisbane earlier. The promises are not being met, the costs are high, the clients are cranky, all of those kinds of things. Being able to tidy up someone's investment proposition and deliver to them something that has a true uh foundation in evidence and science that is going to lower the cost of the portfolio to the client and give them more diversification and kind of put the investment conversation in the right place in the meeting, which is as a kind of commoditized piece, freeing up other time for advisors to have great conversations with their clients about their favorite topic, which, you know, spoiler alert is them, right? They they want to talk about their families, they want to talk about their lives. They don't, they're not as interested in the portfolio as as sometimes we might think. So that's the first one. But to get to a really specific sort of non-investment example, we've dealt with a lot of firms, and I can think of one recently, that where they've said, we want to grow our business, and the way that we uh but but we don't really know how. We we think that we know how new business is coming to us, but what have you learned about other practices and how they're attracting new clients? And then, you know, what can we do about that? And it's a classic example of something that sits at the nexus of the meeting point of client communication and business strategy in Dimensional 360. Because the first conversation we're going to have with them is sharing data that we've learned from the Global Advisor Study and the Global Investor Study about where new business comes from, and overwhelmingly, it's from referrals from existing clients and from centers of influence. Now, what can we learn from our studies and from external consultants about why clients and centers of influence do refer or don't refer? Because they're pretty specific lists on each side. And then how can we develop a communications plan that trains people how to ask for referrals from either clients or from centers of influence in a way that doesn't feel icky, because that's often the big barrier. We don't like to do it because it sounds terrible and it feels awful. But actually, there's a plethora of ways, if you use the 4S framework correctly, to make referrals an acceptable uh topic of conversation and one that is actually positive and energizing and not one that has this negative connotation attaching to it. Now, when we've run those kinds of programs with firms and we've shared with them really the science of referrals and what we've learned from our studies, the things that we can glean from overseas consultants who do work with dimensional, and then putting those communications plans in place, you know, in some cases working one-to-one with advisors and saying, you know, let's let's let's develop some good scripting around that, or, you know, even things like, do you know the story of your own firm? And can you tell it in 30 seconds in a way that makes people lean in and say, tell me more? Uh, we can do all those kinds of training programs with firms and with individuals. And what we hear back from those firms and those individuals is that it has a transformative effect on their ability to generate new business in that particular case. So we've got countless examples around that.

SPEAKER_01 28:51

That's super interesting. And it's really interesting how you don't take the kind of just investment approach, like through the whole of what we've just talked about, not one, you know, not one thing has come on about, you know, but we invest this way and we do this and we do that. You know, it's it's more around how can you build a skill, how how can you help the planners build the skills to ultimately bring in more clients, which you know is obviously going to help benefit you, but also benefit them and get that messaging across as well. I am gonna have to ask, what are the is it the four S's that you said? What are they?

SPEAKER_00 29:26

Scripts, stories, sketches, and supplements.

SPEAKER_01 29:30

Fantastic.

SPEAKER_00 29:31

And they're quite difficult. There's a lot of detail in all of them, which is why we've got to run conferences that sometimes last a day or two days. Because we sort of go into the theory about why these things work, and then we provide the people who are attending the conferences the opportunity to do workshop exercises and and leave with some things that they can start using that day. So it's uh it the conferences are very highly rated, which is great.

SPEAKER_01 29:54

And was that the reason that you guys built out the conference center uh in your offices, you know, to specifically hold them?

SPEAKER_00 30:02

I think partly because we were born out of the academic community as a firm, because that's how Dimensional was really founded in 1981. I think it's partly that. It's just in the DNA of the firm. But secondly, I think Dimensional is is becoming more and more well known for the quality of the education that we provide. And so it is just natural that we have a forum environment as we do here in London, as they now have in Sydney, and of course in the United States offices as well, where people can come in and have a truly first-class learning environment. So, you know, the the forum here in London is is kind of a is a is a is a raked arc theatre for 64 people uh that allows them to sit there for a day or two in complete comfort, being able to see everything, hear everything, and have this kind of multimedia, multidisciplinary learning process because people do learn in different ways. And again, we're we're we're blessed because I think the fortunate that the feedback that we get is is is truly amazing about those conference experiences and and the setting as well. So, you know, for us it the investment in in that centre makes total sense.

SPEAKER_01 31:16

So we obviously talked about the theatre there, and obviously that kind of also you know goes into your documentary as well, which again most fund managers don't have. Um I've not actually seen it yet, so I'm at I'm definitely gonna have to uh I'm definitely gonna have to watch it. Um but maybe you can you can tell us a little bit more about that and you know how someone walks away after they've watched it and what they're thinking about, you know, that that would be uh that would be good.

SPEAKER_00 31:42

Well, uh we're definitely going to conquer the problem of you watching it because I think you know in in seconds after this broadcast, we'll be getting you a QR code and a link so you can see it. Because it's freely up on YouTube now for well many of the markets that we do business in. Uh, but the story of the the movie is is just another proof statement about how we think differently. And you know, we are a bit quirky, but we're very, very committed to trying to better the outcome for investors. What we kept hearing from financial professionals that we work with all over the world was look, it's it's great doing work with the existing clients, and we've got new prospects coming in at a faster rate than ever. But one of the things we consistently hear from people is where have these ideas been? Why have I not heard more about it? So, can you improve the awareness of this stuff out there in the world? Now, maybe some other fund managers would have approached it differently and just turned to traditional advertising. That's never been our bag. Usually we've just poured our profits back into more research about the question of where returns come from. So we thought, well, what are we gonna do about this? And there was a there's a there's a chap in our Austin office who works in our uh marketing department, and uh, you know, Robert's a really interesting, fantastic, creative thinker, but he also has a background in film school, uh, prior to dimensional. And so he was pondering this question and he was chewing on what ways we should potentially go, and then he did something that is uh quite Robert-like. He just said, Well, I I I think there's a there's a documentary in this, I'll just email my favorite documentarian. Let's not matter that he's you know an Academy Award winner, and uh and just tell him about this. Didn't get permission, of course. And uh anyway, he didn't expect to hear back, but he did. About a you know, a couple of hours later, this director called Errol Morris, who won his Academy Award for the fog of war. Uh, he's he's got many other productions, Thin Blue Line, um, you know, more recently, The Pigeon Tunnel about John Macare, uh, you know, absolutely storied documentary. And he came back and said, okay, this sounds interesting. And, you know, Errol's got two sides to his business. He's got a commercial filmmaking side, which is where businesses just pay him to make a uh a film, but it is effectively, you know, it's a commercial uh uh contract. And you, you know, they they the the the person paying has the control. I I think Errol was approaching us on that basis, but after he started talking to David and Rex and you know Gene Farmer and Ken and Mac McCowan and all of these other incredible people, he said, Well, well, hang on a minute. Uh, we're gonna switch to the other side. This is gonna be an Errol Morris film. That's a big thing because we then kind of in some ways relinquished control to Errol to tell the story. And what emerged is this absolutely beautiful piece of film art, 90 minutes in length, um, as uh produced as well as any documentary you may find in terms of you know cinematography and audio and music and so forth. But what it does, I think most powerfully is it allows people to be in direct conversation through the camera with some of the people who came up with the great ideas in finance who helped us understand how markets really work and helped redefine what a successful investment experience is and then delivered it. Now, not all of the people in the film, incidentally, are attached to dimensional, many are because that's kind of how dimensional came to be. But we wanted it to be uh really an expose of the power of markets, the power of information finding its way into prices, and that we investors should probably trust prices. That's an idea that still holds true today. And uh, you know, along the way you just meet some of these really interesting, quirky characters as well, and they're they're incredible stories of I think, you know, humility because many of the people in the film start from absolutely nothing, but end up being responsible for ideas and thinking and practices that were seismic in investing and have just completely changed the world of finance. So we're very proud to be attached to it. Anyone who wants to see it just needs to go to YouTube and type in tune out the noise, and they'll quickly see the black and white logo and they can watch it for free. And 90 minutes later, to come back to the other part of your question, they're gonna walk away thinking not only have I learned a lot, not only have I been entertained and learned something about investing in finance in these interesting characters, uh, but I probably have a real confidence now in understanding why I should probably go and seek professional advice and why I should work with an advisor who is using an evidence-based approach, because the science around some of the ideas about how portfolios should work is just is so compelling, and we've now seen this kind of work around the world and in and out of different time periods as well. So we we have polled feedback on them on the movie, overwhelmingly positive, and uh yeah, I'd better stop there because I just keep gushing about it otherwise.

SPEAKER_01 36:59

No, I you've you've definitely compelled me to uh to go and give this uh a watch. So I've got my kind of evening viewing or morning viewing when I'm uh I'm uh I'm on the treadmill and and uh and uh and and looking for interesting things to to watch. So I'm definitely gonna be uh definitely tuning into that. So that'd be great.

SPEAKER_00 37:18

Um I was gonna say we'd send you a popcorn box, but uh that's not gonna work if you're gonna be able to do that.

Cross-Border Advice And Consistent Portfolios

SPEAKER_01 37:22

I'm on the treadmill, I'm kind of I'm trying to uh I'm trying to go against that. Maybe I can eat popcorn while I'm on the treadmill, that'd be interesting. Um a lot of our in a lot of our listeners, uh David, are you know international financial planners you know have lived who work uh lived and worked in in multiple countries? You know, what what have you learned from obviously dimensional works with firms that work across borders, you know, that's that's not unique. What have you kind of learned from firms that that operate across cross-borders and how does the dimensional approach you know look at, you know, work with those businesses and look to work with those businesses?

SPEAKER_00 38:03

I I've probably learned two things across you know my my career. One goes back all the way to my time and advice because when I was an advisor in Brisbane, part of my practice was helping uh Brits actually who had decided to emigrate to Australia and wanted to transfer their pension out to the Australian superannuation system. So, you know, for a long time I was working in the world of QROPs and so forth and all of its twists and turns. And it just it it just struck me time and time again that you know people might come from Australia or they might come from the UK or other places, but they just want help and they just want to live a life where they have peace of mind and where they have this sense of security that everything is going to be okay. So that that that is a human idea that crosses borders. And so it's something that struck me, you know, very early in my time as an advisor. But what I've learned since moving over here with Dimensional, because as I said, I do work all over the world, you know, not just in this region, but you know, this year I'll be in Singapore, I'll be in Australia, I may get to the United States again later this year. And so I get to talk with a lot of advisors all around the world. And what I've learned is that there in some cases are some cultural nuances between advisors and advice firms, and obviously there's going to be differences in regulation, but absolutely what strikes me time and time again is that advice is a global profession, and the kinds of things that you are wanting to accomplish at Hoxton are just the kind of things that other firms are wanting to accomplish or overcome, you know, if if they're located in Sydney or Singapore or San Francisco, that provides actually something of an opportunity because it means, and this is another thing that I think Dimensional's done quite well, is we can create cohorts of people that come together around specific topics or ideas or challenges or goals. And regardless of their geography, we try and get the best ideas in the room. And so I think we've been able to help do a lot of work with firms on that basis kind of globally, and you know, all of them have been net beneficiaries of that process of bringing what we call communities and study groups together. So that's been very, very effective. But I think it goes further, and you know, we've not talked a lot about the investing piece necessarily, but in some cases, what we've been able to do is we've been able to help firms who've got you know uh clients in different parts of the world uh and and maybe with capital and assets in different parts of the world end up with portfolios that are in concert with each other. And so it wouldn't chime with us that you might be a uh you know an advisor who's got uh a client who's got assets in Singapore, London, and Sydney, let's say, but they're you know their UK assets are managed according to a dimensional philosophy, but in Singapore it's active management and they've got a bunch of index funds in Sydney. And that that doesn't that that doesn't sort of chime very well. So I think what we've been able to do, because we are a global business, because we think globally, and because we've wanted to make sure there's consistency in so much of what we do, we've been able to help businesses who've got this cross-border experience and help them end up with portfolios that have this fantastic consistency about them and are true to the philosophy across the globe.

SPEAKER_01 41:23

Yeah, fantastic. It's yeah, it's it's great that you work for a global business that's able to offer that as well. I think it's you know I think you were telling me before that uh Dimensional is the largest provider now of US active ETFs, which is which is pretty cool. And then obviously you've got the you know European funds, the uh the uh Australian funds, the UK funds. So, you know, dealing with clients across the border, having access to those, you know, all of those different domicile um yeah, all the different funds that are domiciled in different regions is uh is is is is really important.

SPEAKER_00 42:00

Um we just wanted to give people I think as many access routes as possible to to what we do. And clients come to us and say, well, this kind of thing might be helpful to us, and if it makes sense and we can see that there's going to be a bit of net benefit to clients, then that's something that we're gonna explore. I think that's really where the ETF thing, you know, in in part came about.

SPEAKER_01 42:20

What was the um I think you were telling me before as well about you know the the business being the size it should be. Maybe you can elaborate on that for views, because I think that was a really interesting concept as well. That rung accord.

SPEAKER_00 42:34

Well, I mean, I I think all of us would just like a dollar for every nugget of wisdom we've heard from David Booth, our founder. I mean, he he just he just has a way of packaging uh ways of thinking that you know really stick over time. And I think one of the things that he said that I've always loved is that you know, dimensional is a firm that is as big as it's meant to be. In other words, we're not really we've never been the sort of firm who's been, you know, chasing a specific number. We've been interested to think about what our growth might look like, and I'll tell you a story about that. But we're we're not the sort of, we're not, you know, we're not classically target driven. And we would just want to work with the right people, provide them with the right experience, do the work that is needed by people like yourselves, the financial professionals of the world and your your clients, and do it to the highest standard possible and only go where the evidence takes us. Uh, and so what that means for us when we think about growth is you know, I I go back to a story again related to David Booth, and um he'd just been through, and the firm had just been through an experience where they'd grown from you know next to nothing then to to managing five billion US dollars, but then they went from managing from five billion to fifty billion. And David David sort of quips, he said, We never expected to be that big. And he said, That's yeah, it's been kind of amazing. But he posed this amazing question, and this is often what he does. He said to the Team around him at the time, they said, he said, okay, so we've gone from five to fifty. He said, what would have to be true about our firm if that were to happen again? In other words, if it was kind of if it was going to happen to us again, the growth was just inflicted on us. What would have to be true inside the firm? And it got everyone at the point at that point thinking, well, then we're going to need the kinds of infrastructure and human capital and systems and technology and scale and thinking and reach to be able to deliver on the promise of looking after 500 billion US dollars in assets. And of course it did happen. And you know, it's on the way to happening again because, you know, most recently we've just passed through one trillion US dollars in assets under management, which is an incredible. Um I think it's an incredible number and it's an incredible responsibility. But you know what? I think the other thing is that it's an incredible statement of trust that the financial advisors and wealth managers and institutions that we work with have have got in dimensional and the ideas and the ways that we invest and deliver a service experience.

SPEAKER_01 45:11

So yeah. Trillion dollars is no uh no small amount of money. That is uh that is for absolutely sure. That's um that's really cool as well. Um and it's crazy to think that the kind of business was born, you know, it's not like it's hundreds of years old, you know. I mean, obviously it's you know the 45 years. Yeah, it's it's got a significant, you know, you've been around for a significant amount of time, there's no denying that, but you know, that's a hell of a lot of assets to gather over 40 plus years.

SPEAKER_00 45:41

Um, particularly in a world where well, yeah, sorry to cut you off there, but I think particularly in a world where, as I said earlier, we've never really relied on traditional advertising. You know, our business has grown because existing financial professionals who work with us generally go and tell others, and then we deliver some conference education that says, well, here are the ideas, here's what we believe, here's how we think markets work, here are some suggestions about how you communicate this to clients. Here's what we've learned about the world of advice and wealth management and the institutional space, here's the latest research. And if these ideas are warm to you, then we could do work together. And if not, no problem. And that's a lovely way to do business.

Career Lessons Value And Closing

SPEAKER_01 46:24

It is for sure. Um I'm I'm also very mindful that you know I've uh I I've got you for I've only got you for a short period of time, and I want to eat you know, I want to be respectful of that as well. So maybe we can get in that it get into part two. But I've got a couple of quick fire questions to finish up with. That's all right. Um what what do you know now that you wish you'd known at the start of your career as a planner?

SPEAKER_00 46:48

Oh, I mean, everyone that we talk to, and myself included, says, I wish I had known about these ideas sooner. Because I can just think about the impact it might have had on the families we were looking after. And in a way, I'm very grateful for the experience I had trying to be part of a committee and a group of firms running active managed, actively managed portfolios, because you get a very visceral firsthand sense of how challenging that is and how frustrating that is. So, you know, I'm I'm grateful for that experience because I'll never forget it. But I do wish that we'd come across these ideas even sooner. And that's someone that's someone who's you know, I'm saying that as someone who uh first came across those ideas. It'll be 25, 26 years ago uh this year, but sooner would have been better.

SPEAKER_01 47:38

It always is. Hindsight's always 2020, though, isn't it? I think it's uh I think it's important that you know about them now, huh? And what what what do you think the profession gets wrong when it comes to communicating the value of what advisors do?

SPEAKER_00 47:51

I think we've got a bit of an anxiety crisis as advisors in talking about value. We get a bit either or shucks about it or uh we get kind of defensive about it. You know, a client says, Yeah, what am I getting for the fee that I'm charged? And there's a kind of a reflex, reflexive, sort of autonomic reaction to get defensive on the part of a lot of advisors who haven't actually stopped to actually study the topic. And so they start just listing off a scroll of things that they do, and they sort of use the volume approach to try and demonstrate that advice. Whereas I think a more nuanced approach that is viewed through the lens of the person they're talking to is not only quicker, easier, but is much more effective as well. And uh so that those are the kinds of things that we teach in in our communications workshops and masterclasses. It comes up every time. Fantastic, David.

SPEAKER_01 48:44

Look, that was really, really, really good. Um, I really, really appreciate you taking the time to come on. Thank you very much again. Um, yeah, really, really great podcast. I hope uh everyone enjoys it at home. And if you do, please give us a like and a subscribe. And uh we shall see you soon. Thank you very much. Thank you. Cheers, Chris. Cheers, Dave.