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An Investment Philosophy That Places Clients First

“We’re in a business of trying to do the right thing for the client”

This quote came from David Butler, Co-CEO of Dimensional Fund Advisors (DFA), on a recent interview he did with Bloomberg Radio host Barry Ritholtz. This sentiment is core to what we believe at Cardinal Point Wealth in working with clients like yourself. As you know, we are a Registered Independent Advisory firm, which means that we are always looking out for your best interests. Unlike some major Wall Street or Bay Street Firms or banks whose advisors are sometimes highly encouraged to push their own product, we are able to look across the investment landscape and choose those investment options that we believe are in your best interests.

DFA shares our belief in putting clients first and their investment options reflect that. Because of this, we’ve been incorporating their funds into client portfolios since Cardinal Point’s inception.

We thought you may like to hear firsthand many of the reasons we’ve found working with DFA to be in client’s best interests. The wide-ranging conversation between David and Barry can be found here in podcast and transcript form.

Below is a summary of the points which resonated the most with us:

  • David left Merrill Lynch 24 years ago for DFA when he felt he had found the right investment answer for clients.
  • Early on, DFA decided it did not want to employ pushy commissioned salesmen to sell products to clients.
  • Today, DFA manages over $600 billion worldwide, but does no advertising, preferring to service just those investors who align on investment philosophy.
  • DFA has a rare track record of additional inflows from investors, including positive quarterly inflows, during the 2008-2009 downturns.
  • The firm focuses on educating investors about what to expect from markets and not to over react to good or bad market returns.
  • Many leading academics have helped influence the investment philosophy of DFA, including Nobel Prize winners Gene Fama, Merton Miller and Myron Scholes.
  • Smart Beta is a marketing term you often hear today- but in many ways DFA was the original smart beta firm, launching the first small cap fund in 1981.
  • Ongoing research into factors as well as continually refining the implementation process are keys to success going forward.
  • The firm has not worried about growth goals, instead using the mindset that if they do the right thing and do it well, success will come.

The conversation ended with the sentiment that the original reason the firm was started was to make the client experience great, and wanting clients to feel good about their retirement and feel like they’re going to be OK. We at Cardinal Point couldn’t agree more.

If you have any questions related to your investment positions or anything in the interview above, don’t hesitate to ask us.

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