Personal Benchmark

CHUCK WIDGER is the Founder and Executive Chairman of Brinker Capital, an investment managment firm with $17 billion in assets under management. Chuck is currently Chair of the Villanova University School of Law Board of Consultors. Chuck is a past Chair of the Gettysburg College Board of Trustees and is chair-emeritus of the Money Management Institute's Board of Governors. The Money Management Institute is the industry association for the $3.5 trillion managed solutions industry. He served as a Lieutenant in the U.S. Navy. DR. DANIEL CROSBY is a psychologist and behavioral finance expert who helps organizations understand the intersection of mind and markets. Dr. Crosby constructed the "Irrationality Index," a sentiment measure that gauges greed and fear in the marketplace from month to month. His ideas have appeared in print and online, and Daniel was named one of the "12 Thinkers to Watch" by Monster.com and a "Financial Blogger You Should Be Reading" by AARP. Dr. Crosby's well-reviewed first book, You're Not That Great (2012), applies elements of behavioral finance to the pursuit of a meaningful life.

• Preface xiIntroduction 1PART 1 WHY DO WE NEED TO LOOK AT INVESTING DIFFERENTLY? 7Chapter 1 Freedom in the Market and Advisor Responsibility 9Chuck WidgerThe Financial Markets 10What We’ve Been Up to as Advisors 15What Investors Really Want and Need 18A New Investment Advice Delivery System 26Brinker Capital and Personal Benchmark 29Summary 45References 46Chapter 2 Investor Emotions and Financial Decisions 49Dr. Daniel CrosbyThe Origins and Evolution of Behavioral Finance 50The Myths of Efficiency and Rationality 52A Definition and Framework for Behavioral Finance 57Summary 77References 79Chapter 3 Risk, This Time It's Personal 83Dr. Daniel CrosbyFallacy 1: Risk and Return Are Systematically Correlated 85Fallacy 2: Investors Have a Single, Static Level of Risk Tolerance 90Fallacy 3: One Man’s Risk Is Another Man’s Reasonable Probability 96Behavioral Risk and You 102Summary 104References 105PART 2 WHAT IS THE PERSONAL BENCHMARK APPROACH? 107Chapter 4 Brinker Capital's Multi-Asset Class Investment Philosophy 109Chuck WidgerA Brief History of Investing 110Our Multi-Asset Class Investment Philosophy 119Applying Our Philosophy 122Implementing Our Philosophy 137Summary 151References 152Chapter 5 The Power of Buckets 153Dr. Daniel CrosbyIntentional Framing 158Framing with Purpose 160Mental Accounting for Increased Rationality 161Goals-Based Mental Accounts: A Case Study 164Summary 166References 166Chapter 6 Selection of an Active Investment Manager 169Chuck WidgerPassive versus Active Management 170The Successful Investment Firm 172The Successful Investment Manager 175An Effective Investment Management Process 176Monitoring and Assessing Performance 179Summary 187References 187PART 3 HOW CAN WE EXECUTE A PURPOSE-DRIVEN INVESTMENT STRATEGY? 189Chapter 7 Using a Goals-Based Approach 191Dr. Daniel CrosbyThe Allure of Determinism in Economics and Psychology 193The Economy of One 200Our Inner Demons: A Field Guide 202Let Your “Why” Teach You “How” 209Summary 211References 212Chapter 8 Pursuing Your Personal Benchmark 215Dr. Daniel CrosbyThe Difference a Frame Makes 217Limitations in Our Decision Making 219The Joneses, Jealousy, and Missteps 221The Anatomy of Better Decisions 226Summary 235References 235Chapter 9 Providing an Easy-to-Understand Explanation 237Chuck WidgerYour Best Investment 238Once More, with Feeling 240Changing the Conversation 247The Brinker Capital Personal Benchmark Solution 251Summary 258References 258Chapter 10 Leveraging a Scalable Offering for Investors and Advisors 259Chuck WidgerUsing Personal Benchmark 259Reaping Benefits for Advisors 280Summary 282Conclusion 283The Centrality of Purpose 288Finding Meaning in the Mundane 292References 293About the Authors 295About the Companion Website 297Index 299