To say that playing with stocks and investing is a risk would be an understatement to anyone who lived through and experienced the 2008 bubble burst. John Hailer is the former President and CEO of Natixis Global Asset Management and he is the current Chairman of Diffractive Managers Group. In both positions, Hailer served as a uniting and insightful presence that helped to invoke industry-wide changes concerning how consumers invest.
With so much on the line for the average investor, and portfolios as volatile as ever, John Hailer took time out of his day to share some key insights from his time in the industry so as to better serve those following in his footsteps.
Creating A Defensible Portfolio
After departing from Beloit College, Hailer would turn to a storied investment firm in Boston where he would learn to adhere to the Prudent Man rule, never touching the principle while diminishing volatility.
Hailer says of this method, “The goal is to get some good solid returns but do it in a way where you’re not risking your livelihood. You’re not risking all the things that are important to you.”
Unfortunately for many within the industry, firms began to move away from the Prudent Man rule and the 2008 bubble burst was not far behind. Hailer said, “The investment industry moved away from this, and frankly, lost its way a bit in the process.”
Hailer added, “We failed people.”
To better create a portfolio that can survive and thrive, Hailer knew that he and his team at Natixis would have to take a dramatic step and that would include offering free portfolio services.
Building a Better Portfolio For Free
According to Natixis’ John Hailer, too many investors had been sold bold investment strategies without regarding how they would fit in with the rest of the portfolio of their client. Hailer added, “A basket filled with every type of fruit is still just a basket of fruit.”
To better offer expansive systems that could help prepare clients, Hailer would establish the Durable Portfolio Construction Research Center where they would offer sophisticated consultations without any charge. Rather than selling customers on the idea of a stock, these consultations were product-agnostic and fitted for the client, regardless of what they were offered.
Hailer says with a smile, “The idea that we were going to give away a free service… At the time, I took some grief over it, because companies need to run on financials.”
As a result of John Hailer’s professional efforts, Natixis would grow from more than $130 billion to a whopping $900 billion in assets under management within just 15 years. The program launched by Hailer would serve as an integral piece of the puzzle in building such positive returns.