We believe there are six primary reasons to consider Orcam:
1. We are truly different from the standard Wall Street financial management firm. We are very low fee at just 0.17%-0.35%. We use truly outside the box thinking in all of our economic and portfolio modeling. We are a client first, profits second business.
2. You can obtain access to our unique financial and monetary expertise for one of the lowest fees in the asset management business. The average management fee in the asset management business is 1% relative to our extremely low fee of 0.35%. This low fee is likely to add tens of thousands and perhaps even hundreds of thousands to your portfolio relative to similar alternative approaches over long time periods.
3. Our approach is unique in that we personalize portfolios to account for the dynamic risk landscape of the adaptations in the business cycle in order to create parity between your perception of risk and the underlying risk of the financial markets. We call this countercyclical indexing because it helps to maintain the way you actually perceive risk with the portfolio’s underlying exposure to asset class risk. This allows us to adjust portfolios on a cyclical basis to account for the changing relative risks of different asset classes. This results in a high probability that your perception of risk will be aligned with the actual riskiness of your portfolio throughout the ups and downs of the business cycle.
4. We run sophisticated, but tax and fee efficient portfolios providing you with the confidence that an expert is optimizing every aspect of your money. We do the heavy lifting and obsessing over your portfolio so you don’t have to. This gives you the ability to focus on what you’re an expert in so you can rest easy knowing an expert is watching over your portfolio over the course of the changes in the business cycle.
5. We treat your portfolio as though it is our own. We align our risks with those of the client in a way that forces us to manage the assets as though they were our own. Not to mention, we eat our own cooking so our personal assets are invested in the same types of strategies that we provide for clients.
6. We are human advisors customizing and organizing your financial life. Vanguard has found that the value add of a human advisor is as much as 3% per year.¹ This is due to the fact that most retail investors don’t profile themselves correctly, pay high fees, fail to rebalance, don’t properly diversify, don’t withdraw funds efficiently, don’t tax minimize and succumb to a laundry list of behavioral biases. We help optimize every component of these potential inefficiencies.
Additionally, study² after study³ has shown how biased investors are. We are not properly equipped to handle complex systems like financial markets. All of these biases leave us selling low, buying high, chasing performance, biased by recent history. Orcam’s approach is designed to alleviate this problem. Not only is our approach extremely systematic, but the use of an outside advisor helps to reduce the risk of biased portfolio intervention. In many ways we act like a personal trainer for your portfolio. We help keep you on track, avoid succumbing to bad temptations and help you intelligently navigate the many tough decisions that our financial lives entail.
¹ – Quantifying Vanguard Advisor’s Alpha, Vanguard, March 2014
2 – Nagel, Mimendier, Investor Biases, https://www.econ.yale.edu/~shiller/behmacro/2007-11/malmendier.pdf
3 – Shiller, Robert, From Efficient Markets to Behavioral Finance.