YouSaid · the spoken record

Fran Kinniry

lines on the record: 102
first: 2019-10-18
most recent: 2019-10-18
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Yeah, I would say that the market does not know or care what my valuation, a fair value is. I remember my first job, we'd say the fair value of this company, it's selling below book value, it's selling below cash value. And it's kind of Keynes' quote that the market can stay irrational longer than you can stay solvent. And there's never a truer quote than that, right? So the market doesn't know, care what my valuation or my assumption is. The market's going to do what it's going to do. And I think having that sense of humility, I think I probably wasn't as humble and have it as much humility in my earlier days than I have today.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say it's hard not to see what technology and machine learning and AI are doing to asset management. And so maybe getting a little bit out or less in the STEM or IQ and more into the EQ side. Because I think what is going to be left standing is behavioral coaching and relating to clients and working with clients, which is a different skill set than sitting at a terminal and trying to figure out should I buy stock X or Y or Z. So I think there's going to be somewhat of a shift from IQ to EQ in the space. So if I were a millennial or talking to my son who's trying to enter the space, I was talking about making sure these world-class and relationship management on the EQ persuasion and influence side as much as he is on the math and analytical and technology side.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm very optimistic about the continued democratization for investors. And what I mean by that is, you know, 10, 20 years ago, we talked a lot about access. You really needed to be a large institution or a very high net worth to get world-class investments and world-class advice. And so I'm very optimistic for end investors to get world-class outcomes. And so, you know, whether it's seen”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so live shows and then five kids. My five kids, and to me it is a hobby, you know, going to all their sporting events and their extracurricular events. I'm also a big workout person. So I've always been into weight training and running and anything outdoors. To me, that's my hobbies.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“No, it's a progressive. So I'm a mix of indie rock progressive. But I see I've been to 50 Cent and Eminem to seeing Adele's opening act. So I saw, I was lucky enough to see Adele before anyone knew who she was in a small arena, 2,000 people. So I probably go to... 20 live concert events, and I'm also a big live sporting event person, you know, mostly Philadelphia fan. So I love live events.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I'm a huge music buff. I love going to live events. And as a teenager, I so wanted to have a career in music. So I took guitar lessons. I was the one who didn't fail easily. I failed a lot, but not easily. And so I kept trying and kept trying for years. I just did not have the music gene. I think I have the music ear. So I can identify maybe talent early, but I just, as hard as I tried. So the idea of grit and persistence, you know, I really tried my hardest, but I just missed the musical gene.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. So those would be what I've read consistently. I'm a consumer of reading books over and over again. Oh, really? Those are books I probably have read multiple, multiple times.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“For sure. Probably my most favorite, but then back to judgment under uncertainty. One of their very earliest books, so 1982, is when they wrote that book. Annie Duke. Thinking in Beths. Thinking in Beths, you know, just an incredible way to think about resulting. So I'm a big believer. Before she actually framed it in that way, thinking about what is your process. And does your process seem sound? And then, you know, not necessarily resulting or always thinking about, you know, was your decision right and changing your process. If your process is right, you're going to get results that, you know, it's not 100% probability.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so on the valuation side, certainly Graham, Dodd, read all the work on Graham and Dodd. Mario Gabelli is his name. So again, being a deep value monger buffet. So I think of them really on the valuation side of the house. But then on the behavioral side, you know, Kahneman, Tversky, Thaler, huge readers and consumers of all the work that they've done.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“So my career, well, first my parents, my parents, they think, really gave my brother and I an unbelievable head start and that we came from pretty modest means, but they really stressed education. And so I would be remiss without talking about them. My kids, I've learned as much from my five kids as probably pretty much anybody, just the good nature and humility of them. And then maybe my first boss, my first boss coming out of business school was Terry Gabrielle. He's the individual who ran the billion dollar RIA firm that was executive investment advisors was the name of our firm.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, yeah, so Tim and I worked together very closely. So Jack Bogle's assistant, then he was in the IT and then became the chief and CIO chief investment officer, then actually ran our whole retail and it really has a big hand in our advice, Tim's hand in our advice offer, his hands are all over that and his vision to see advice then became the CIO and now he's the CEO. One of the smartest Jack Brennan and Tim are probably two of the smartest people I've ever been blessed to be around.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“My first car, and it wasn't a classic yet. So it was a 1967 Mustang. But at the time, that was, you know, I bought it for under $1,000 with my landscaping money. Yeah, had I known what would eventually come to be. It wasn't a job.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's probably a stereotype, but it probably does hold to some extent. If you didn't grow up with technology or you didn't grow up with taking advice from an app, then maybe you're less inclined that if you actually grew up in that environment. So I think it's an overgeneralization. So will there be a demographic that is in retirement in their 70s and 80s that are very comfortable using digital? Absolutely. And are there millennials who would more than want to sit down face to face and work with a human? Absolutely. But on average, I think it's kind of what you're used to and what you grew up with that will probably have a big pull on who will select what.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“And there's not that one is better, or it's really what does the client want, and how do they want to engage in your services is the key point.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and I still think this debate on Robo versus hybrid versus high-end service gets, again, maybe out of context. I'm a big believer of what does the client want, right? And I used my son and my brother already in this story. My son has a cell phone, but he never talks on it. He's all into the apps and he might be more comfortable in a robo automated digital advice than actually coming in and sitting down with you or Josh, right? My brother, who's our age, you know, he's used to probably wanting to sit face to face and have a coach help him through things on a couch or in a conference room and talk through that. So, you know, I think it really gets back to what is the investor's experience? What do they want? Do they want a digital offer, meaning all robo? Do they want to work with a CFP or a CFA?”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think we've always kind of had that stewardship as the word of, you know, we've been through many cycles at Vanguard. And so I think every cycle is different. But again, if you like stocks in 07, it was hard not to like stocks in 09. And so the theme of staying the course and rebalance, I think was a very, very good advice for investors who followed that.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, the good news is at Vanguard, a lot of investors read our education and back to the role of an educator or the role of advice. So our behavior at Vanguard was certainly not, we weren't seeing huge flows into equities and out of bonds, but it was much more balanced, much more muted relative to what we saw in the industry.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“So I do believe that the fee is, let's say if you have a million dollars with 1%, that's $10,000 a year, are you earning $10,000 every single year? Maybe, maybe not, depends on what you do. It's episodic. It's episodic and it comes in huge waves.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Investment. All investors in 40 Act funds. And then if I just had stayed in that position, now this is a hypothetical situation, but if it did happen, you know, the returns differential between doing that, you keeping me 60-40. It's about 100%. You would have earned 100 years versus your 1% fee in one phone call.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“09, right? I show this in the advisors alpha paper that if you were 60, 40 and you were unable to keep your investor, I called you up, I was a client of Rithole hypothetically and I'm 60-40 and I call you up and I'm like, you know, Barry, I just can't take it anymore. I just lost 50% and you weren't able to influence and convince me to stay and I went to money market. I went all out. And a lot of clients did that. We saw money markets reach about 50% on household balance sheets in February of 2009.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“It's hard to scale. And I also think that advisors earn their money episodically. And what I mean, here's what's an example.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“It from you? Yeah, I think back to our earlier conversation. I think the reason why indexing an ETFs are so tax efficient is back to the original structure of owning everything without a lot of ads and deletes. What you're talking about is a very, very, very small advantage. So I don't see it changing much the landscape of helping or hurting either complex, the industry in general.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, it's a share class of the funds, so they would end up sharing in that because the ETF is a share class off of the mutual fund.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“So that's where indexing and ETFs, whether they're in mutual fund form or in ETFs, have been very tax efficient over the last 20 to 45 years.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And so why indexing is so tax efficient in general is because they own a market and the ads and deletes are quite small only due to this merger.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Growth to value gotcha stuff like that. And that's where I even active has some tax inefficiencies relative index because if I no longer like stock A, I don't necessarily care what my cap gain is because I also have tax exempt clients. I'm really just trying to add excess returns, not necessarily thinking about.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's where you see some capital gains. But so those are more of the rare instances, you know, where you see more inefficiencies would be the niche sector ETFs. So there you have graduations. And that's why active sometimes...”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think what happens with an index fund is that ads and first off it's broad indexing, right? Because there's not a lot of ads and deletes. And when you are getting deleted, you're almost getting delisted.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“No, no, I mean, a couple things on that is why indexing in general is very taxient doesn't really necessarily have to do with its structure or our patent because others, you know.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“This idea that it's more tax efficient, we've done some work on that. It actually isn't, it would actually be a little less tax efficient because you get locked up in your basis and the market moves away from you. So indexing has been extremely tax efficient. ETFs have been extremely tax efficient. So a lot of the direct indexing things we hear out there are very niche or actually they're actually not correct.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“And you can with broad indexes. Right. Yeah, a couple things I would say. One is what is the cost? If you can get an index, a broadly based, let's take the Apple example. I'm an employee of Apple, Apple's 20% of my portfolio. Do I really want more Apple? Well, if I were to just buy the total Vanguard US stock market, my position in Apple is only adding another two and a half, three, three and a half percent. And do I want more of it? No, but that's like a pretty small amount. And I guess it would really be what is the cost differential to do self-directed indexing? And then how do I keep that rebalanced through time, right? Because the great news about an index, an open index fund is we can use other investors' cash flow in and out to keep that portfolio rebalanced. The minute you're now creating a separately managed direct index, the market's moving all over. You may have cash coming and going. It becomes much more complicated. And that's where you lose some of the tech.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, we've looked at it a lot. There's other reasons to you mentioned the single stock risk like Apple, there's been some people believe that it's more tax efficient, other people that may want to think about excluding certain sectors of the market. Well, the ESG.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Totally agrarian. That's why I think this is really the golden opportunity for investors. Because we talked about access in the past, it was really a reserved space for clients of the ultra high net worth and the institutional marketplace. And they had a very high touch and they probably, the advisors added a lot of value from some of the things you mentioned of succession planning, making sure your will and your state is in good order, all of those things. But now for the average individual that doesn't have all those needs, advice is here for the masses. And I think it's a very good value for those who want to employ an advisor.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I do believe that the vast majority of clients would benefit from advice. The good news is the access to advice 10 years ago, 15 years ago, access to high quality advice was pretty limited, right? You needed maybe a million or two to get access to world-class advisors such as yourself. But as technology has come around, I know your firm is offering different solutions. It doesn't have to be high touch. It could be more tech automated advice. So advice is now becoming much more tech enabled. And so the ability to get advice for a $50,000 or a $10,000 investor is here and the cost of come down on that. So I think, you know, given that change, a huge opportunity for self-directed investors to use advice.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Piled in. At the top, absolutely. We talked about how changing cash flow never in the history of the markets that we have five years in a row with 20% returns”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and so I think outside of your own personal health, Barry, think about what's most important. You have health, you know, your family, and then your wealth, right? And so wealth destruction or wealth in the moment, it's not just on the downside. Look at all the mistakes people made in 98-99 in the internet tech”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Overstating this? No, absolutely. And I follow all the behavioral literature and all the behavioral finance stuff. And sometimes I think it's quite critical on investors. But I actually reframe that. I actually think how would any other intellectual person decide to put their money in the worst performing asset class? And that's what rebalancing is, right?”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“The investment market, asset classes, strategies, there is not that same persistence, right? You see almost some reversion and no patterns to it. And so most investors, you know, it is a rare person that who in 2008, 2009, back to my analogy earlier, you have a million in stocks, a million in bonds, 50-50 investor, you just lost $500,000 in stocks. You're going to sell bonds that are actually doing well and buy $250,000 in February. There are obviously some investors who can do that, or maybe some investors will use a single fund solution. We talked about target retirement funds or balanced funds that do it for you. But if a lot of investors would be benefit from working with an advisor to not only help them with emotions, but retirement income, tax planning, you know.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Because he studies this analytically like he would study anything else you would study in school. And what we know, I wrote a paper several years ago about decision making, right? And so decision making, there's a lot of credibility on persistence, meaning that if you top doctors, top hotels, top restaurants tend to stay top.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Christ and he calls me and he says I'm like literally the worst investor ever. I study this. I put so much time into it. Vanguard has the 401k. So he's in the right place. Sorry. He's in the right funds, right place, but he himself who studies it is shooting himself in the foot. Right.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, I'll give you a great little story of my brother, and hopefully he doesn't listen to the show, but I'll throw one of the smartest individuals I know. He's head of medicine at Penn. So, you know, Columbia Med School, Penn Med School, very, very smart. Yeah.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, and not to be too curt with it, but I do think if you're human Because of emotion, you probably most, the vast majority of clients would be well served working with an advisor.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“I can't confirm the exact number, but I would imagine we have a high percentage. So, you know, I think that's probably true. Again, I think context is in order. We're probably one of the largest employers in that area. In finance, in financial services. So we're likely to have maybe 97% of the CFAs in the community and maybe even 97% of the phone representatives in financial services. So I think it's our size. And it's also our dedication to advice and why we think advice really matters and our commitment to it, you know, having professional advice.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct, but I just wanted to give a context when you're talking about broadly diversified portfolios. The asset allocation allocation drives everything. Timing decisions in which mutual fund or securities you selected get almost to be, you know, decimal places relative to the policy portfolio.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and so going all the way back to Brinson, you know, so Brinson has covered this work, Janky has covered this work, me and my team actually covered the Brinson Jankie debate, which is really about how much of the return is coming from policy, asset allocation versus security selection and timing. And so both of the arguments are right, right? So, and this is where context is important. If you're 60, 40, Barry, but you only have two stocks and I'm 60-40 and I have two stocks, but those stocks are different, then security selection drive, the policy doesn't quite matter.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so whether it's target retirement funds, advisors such as your firm and the firms out there, the amount of money that are in these systematic auto rebalance programs, ETF models, that by definition, if stocks are up, they're going to sell stocks and put them in bonds.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“And to me, that's a complement to the education, to the advisor community, to back to target retirement funds. I think what has really changed is it went from a fun picker world. Where people were picking stocks and building a portfolio bottom up to a top-down way, meaning an asset.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I was actually going in to fix income. So who would have ever, I would have never thought in my career that we'd be in one of the largest and longest bull markets in equities, 20% trail in six months, and you have negative equity flow year to date in equities year to date August, and all the money going into fixed income. That's a big deal.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“The church of what's working now, and so investors would, you know, whether you want to use pro cyclical or momentum based, wherever the hot hand was or the asset class, that's where the flows have gone. The last five to six years, we've seen behavior, believe it or not, contrarian to that, which is hard to think about. So right now you think about the top performing category in the US is large cap growth. It's actually one of the bottom cash flow categories.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source
“To not only the funds, but the categories, let's say growth, value, US, non-US, emerging stocks and bonds. And that was a theme that was pretty much as, you know, the sun coming up tomorrow. The church.”
2019-10-18 · Masters in Business · Fran Kinniry Discusses Diversified Portfolios · IDENTIFIED FROM THE TRANSCRIPT · source