Q&A with Andrew Hutcheson, Managing Director, The Hutcheson Group
The stock market has been on a steady surge since the economic downturn in ‘08, though over the last two years or so it’s been quite volatile. The market fundamentally remains a great investment vehicle, but how do you calm the nerves of clients who see wild swings in short periods of time?
I always find it interesting, the perception of the stock and bond markets, and then the daily reality. After the downturn in late 2007 through mid 2009 (which admittedly was quite drastic) the markets went almost in a straight line up. There were a couple of little blips, the taper tantrum etc. but it was rather uneventful, just daily positive numbers.
So, now we have the return of volatility in the markets and people are becoming anxious and uncomfortable. The reality is the market is cyclical and should go through a period of retraction and expansion. I really think that it makes the case for active management of portfolios and proper asset allocation, which will give investors a “plan” for the times when the market isn’t moving straight up.
You are also an expert on executive compensation and planning, and advise numerous corporations in that regard. Talk about your work in that space.
Early in my career I realized that one of the most important aspects of any company is the people that work for that company. I saw that there were not many advisors out there who were providing more than just the basic 401k solution to their corporate clients. I became an Institutional Consultant, which allowed me to go into these various companies and sit on the same side of the table as them as a co-fiduciary. In doing so, we utilize all of the solutions that are available to help companies recruit, reward, and retain talent. We also advise them on the proper utilization of the different benefits for all of their employees. So we can help the executives and, through proper financial education, the non-highly compensated employees.
You’ve introduced a range of investment vehicles to your clients including land opportunities, Real Estate Investment Trusts and pre IPO stock plays. Describe your strategy for proactively bringing such a diverse array of investment options for your clients that might be beyond the scope of a typical advisor.
Through my work as an Institutional Consultant, I am working with a wide array of companies every day. We discuss strategy and alternative forms of liquidity. And, my firm also gets introduced to a number of opportunities. These discussions often lead to interesting and alternative investments that aren’t the normal stock and bond type of investments. Therefore, we are able to show our clients investment ideas that they will not ever see anywhere else. These ideas don’t go out far and wide to the general marketplace. So, we are always looking for interesting, out of the box, investments that can ultimately add value to our clients overall portfolio. I think that a lot of people should have more access to these type of investments not just a select few.
You’ve interviewed some fascinating people on your Podcast, “What it All Means.” What’s your goal with the Podcast and what drove you to seek out success stories from other businesspeople and want to share them with your audience?
“What it All Means” came from a question that came up in a meeting I was having with the CFO of a technology company. She asked, after looking at a personal financial plan that we created for her, “so, what does it all mean?” And I asked her the question right back, “What does it all mean to you?”. The purpose was to find out what motivates people to succeed or flourish in their choice of profession. There really is no definitive answer to that question, it’s different for everyone. So, I decided it would be interesting to do a podcast with people who have achieved “success” and what was important to them. I found that for most people, it wasn’t simply making more money. They had a passion or desire that, for lack of a better term, forced them to do what they do. They were constantly learning and inquisitive. I think the guests we have are from diverse backgrounds and industries, so the listener can hear things from some different points of view. There is a lot of noise and information out there now, and I felt that speaking to people who have that spirit that can inspire, really can be interesting and influential.
You and your family have called Hancock Park home for many years; what do you love about the neighborhood?
We have lived in Hancock Park since 2004. What drew us to the neighborhood then, is what keeps us here now. I think it’s one of the few places in the city that has the old world feel of community and city. Many of us have kids of the same age, we feel safe having them go to Larchmont and going to dinner with their friends. Yet, we are in the heart of the city, so there is a lot of diversity from a cultural standpoint, which I feel is really important as well.
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