Even before the U.S. killed Iran’s mastermind military leader last week, clearly investors worried over geopolitical threats and protecting their assets in the event of another war or terrorist attack. In “The Prepared Investor,” a book about crisis investing — both systemic crises and perceived threats — financial advisor Christopher Manske provides 20 “action steps” to help protect and grow net worth before and during the next calamity. The founder of Manske Wealth Management discusses his insights in an interview with ThinkAdvisor.
Written for FAs and clients alike, the book, due later this year, includes this action step to prepare for a potential systemic crisis: “Know the major social currents to identify a sudden surprise versus what is inevitably building.”
The FA, formerly with Merrill Lynch for 12 years — and often in the top fraction of 1% of advisors — argues that clients can be better prepared, and indeed profit from, learning about investor behavior in past crises, a pattern that has consistently repeated, he maintains.
Retiring from the U.S. Army as a captain after serving for six years in Germany and Bosnia, among other locations, in 2000, Manske decided to become an advisor and joined Merrill.
In making that career choice, he saw similarities in the work of Army officer and financial advisor. The main one: identifying what could derail a challenging mission from being accomplished.
Now running his own Houston-based practice, which he launched right after leaving Merrill, Manske, 47, focuses largely on a consulting-industry clientele, which includes Ernst & Young and PricewaterhouseCoopers.
He describes his business — with about $300 million in assets under management — as two “different practices”: one for clients with $1 million to $10 million or more to invest, the other, for those with a minimum of about $200,000. Average account size: $1 million.
The hybrid FA, however, applies the same high-touch service model — including a once-a-month phone call — to every client no matter their asset level. In fact, Manske has even trademarked his “Every client, every month” service slogan.
Born in a small Missouri town, he had a peripatetic childhood — or rather, his father, a special agent for what is now the Bureau of Alcohol, Tobacco, Firearms and Explosives, had a peripatetic career (“He went undercover to catch the bad guys; so then we’d have to move.”)
ThinkAdvisor recently interviewed the West Point graduate and certified financial planner, who was speaking by phone from his Houston office:
THINKADVISOR: Tell me about your upcoming book, “The Prepared Investor.”
CHRISTOPHER MANSKE: I’m saying that investors don’t have to be scared of that next unknown terrible calamity and just ride the wave with it. In the military, I saw how people act when they aren’t prepared or trained to handle [a crisis]. That’s exactly what we see in the market: a crisis occurs, and the universal reaction is a pullback, followed by “Let’s get back in!”
How do you suggest that investors prepare, then?
The next crisis is going to look a lot like past crises. In fact, we’re doomed to keep repeating history — and that’s, kind of, a good thing. When you look at past crises, you see a very clear pattern of investors’ response to the threat: almost a lopsided U-shape. Advisors can show this to their clients and say, “We’re going through some difficult times, but we’re going to try to take advantage of what we know is a part of investing during crises and be prepared.”
What’s your client niche?
The biggest one is the consulting industry. Firms such as Ernst & Young, PricewaterhouseCooopers, KPMG, have a very tough standard for compliance to make sure they don’t profit from the companies they’re consulting with. They have inside information — they know what’s going on at their [client firms], so they have to make sure the partners aren’t doing anything that can come back and make the company look bad. We do a thorough review on a regular basis on their requirements and portfolio holdings. We have a dedicated financial advisor who focuses only on the needs of the consulting world.
When you retired from the military, why did you decide to become a financial advisor?
The job description was pretty similar to what I was doing in the Army: I had to make sure that the troops assigned to my unit were trained for a particular mission. I had to identify obstacles and make sure we increased the probability of getting to the top of the hill. Now I’m doing the same thing, but I’m doing it with numbers instead of being out in the elements. I’m helping people define their objectives and identifying where the risks are and what could derail accomplishing their mission.
You started at Merrill Lynch, where you helped trained advisors across the country. Tell me about that.
The higher-ups at Merrill wanted the advisors that had grown extremely well to talk to new advisors about how they had achieved that. I was one whose growth had come very easily, and they asked me to give my insights to well over a third of the entire brokerage force. They flew me all over the country. I answered questions about [work-life] balance and talked about specific situations in detail.
What do you think of the SEC’s Reg BI (Regulation Best Interest)?
It doesn’t pass the simple test of basic integrity. That isn’t going to serve our industry well. The longer we leave the loophole open for people to do something that’s a conflict of interest and it’s quote-unquote OK because let the buyer beware, it’s hurting our industry — and it needs to stop.
What’s the biggest challenge facing financial advisors today?
The first thing that comes to mind are the technological changes that are in front of us. But another challenge is managing connectivity and what people see [about you] online. It used to be that you would ask for a referral and then just go talk to the person. Nowadays, a referral looks you up online first. I don’t think regulations — including the standards of our boards, like the CFP Board — have caught up to that. How much longer till we’re dealing with fake news where someone sees something that’s not real about John Smith, advisor?
What makes that a big challenge?
Because our industry is built on trust. So when someone’s online profile doesn’t link up with their real-life persona, it means there’s going to be a blockage in trust.
Why is your firm’s slogan “Every client, every month”?
That’s our mantra about our service model. When this market does pull back and everyone is jumping up and down, we’ll be talking to our clients just like always — every client, every month. There won’t be any hiding. In the middle of a bear market, some advisors leave their career, for good.
In your off-hours, you’ve taken some risks — like running with the bulls in Pamplona, Spain. That must have been scary!
Yes, it really was. Nothing happened to me. So I got very lucky. But I did see a couple of nasty serious injuries in the race that I ran. I was in my 20s and an officer in the Army. It was a once-in-a-lifetime thing. I’d never do it again!
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