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He Grew Up Wanting to Be a Financial Planner, but Soon Hated It

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Since Mark Matson was little, he always wanted be a financial planner.

“My dad was an insurance agent and then later a financial planner in the ’70s,” he told ThinkAdvisor. “Lots of kids grew up wanting to be firemen or football players, and I grew up wanting to be a financial planner.”

However, when Matson first got his start in the industry — as a financial planner with Chubb Securities in 1987 — he says he quickly found out that he hated the industry.

“I found out that it was largely commission-driven [and] product-driven, and that the funds and investments we were selling didn’t do what they were supposed to do,” he explained.

(Related: The Big Switch: From Country Musician to Financial Advisor)

He’d sell investments that had great money managers with 20- and 30-year track records to his clients, and then two years later he’d be sitting down with his clients trying to explain why all the managers he had picked with these great track records were underperforming the market by 3% to 5% a year.

“I thought that was totally unacceptable,” he said. “My clients were having a sub-optimal investing experience.”

Matson realized that if he continued to do commission-based financial planning for the rest of his life, he’d be “pretty worn down” with a “business that wasn’t worth anything.”

So, in 1991, Matson decided to go fee-based instead of commission-based, and he opened up a registered investment advisory firm, Matson Money.

“I knew I could never go back and do what I was doing before, using stock picking and market timing,” he explained.

So he formed a relationship with Dimensional Fund Advisors. Around the same time, he was introduced to the work of Eugene Fama, the economist and oft-called “Father of Modern Finance.” Matson then combined efficient market theory, modern portfolio theory and the three-factor model and started putting these theories into practice at his new firm.

When Matson started Matson Money in 1991, the firm had zero assets under management. He started it with two credit cards, racking up $30,000 in debt.

The firm now has $8.5 billion in AUM as of Nov. 20, and added $407 million in net new assets this year. The firm has also grown to have assets in more than 45 countries, and more than 17,000 unique holdings in their globally diversified portfolios.

After the firm added its first $100 million, Matson thought that maybe other financial advisors could use this.

“Maybe we could go out and show other advisors how to get out of the commission trap, [and] how to offer a prudent investing process that didn’t depend on speculating with money,” Matson said.

That’s when Matson Money started working with other financial advisors. Today, the firm has around 550 advisors that it works with all over the country.

The firm currently has 34,000 families and investors as clients, but Matson has ambitious long-term plans for the firm.

“We just created something called ‘Operation 2030,’ and our goal is to save 400,000 families from speculating and gambling with their money,” he told ThinkAdvisor.

The average client at Matson Money has about $250,000 in assets, according to Matson.

“400,000 families with $250,000 per family — you’re looking at $100 billion of assets under management,” he said. “The main purpose of our company is to empower families into discovering their true purpose for money and by transforming the investing experience leaving them with freedom, fulfillment and love with their family.”

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