Writer: Eleana Teran
4 min read March 2024 — The business and technological landscapes continue to shift under the influence of emerging trends and economic challenges, and financial consultants like Robert Turner and Mark Yusko are leading the charge in redefining how companies access funding, leverage technology and address current challenges.
Speaking with Invest:, Turner and Yusko shared insights into the present economic climate. They highlighted the increased difficulty in the current market, yet noted a positive shift in investment sectors during the recovery from downturns. Turner discussed alternative investments, whereas Yusko discussed the growth in the RTP region. Both emphasized the ongoing changes in technology adoption and regional development, which are significantly transforming the business landscape.
What are the key strategies or developments in technology to address current challenges or opportunities in your field?
Robert Turner, President & CEO, Capitol Financial Solutions: The key is that we don’t have any specific product or service in mind when we meet with a client. We start with a comprehensive financial review. We go through a discovery process with our clients, and based on their goals, we create a financial plan to help them achieve those goals. Any service or product becomes secondary to the financial plan. It’s what the plan dictates that they need and want to focus on. We are very much focused on the idea that our process is our product.
Additionally, we’ve benefited from online tools that assist in financial planning, like assessing clients’ risk tolerance and making it easier for them to view their financial status. The financial planning software we use now is extremely interactive, allowing clients to see their entire financial picture at any time. Technology has definitely made it easier for us to serve our clients.
Mark Yusko, CEO & CIO, Morgan Creek Capital Management: As we look forward to 2024, technologies like blockchain will begin to make their way into every business model and the growth potential is exciting. Blockchains eliminate the need for a trusted third party when exchanging goods or services. We don’t have to trust that the accounting is done the right way as we now have a decentralized system that establishes recordkeeping truth and eliminates the frictional costs of intermediaries. The trust industry extracts about $7 trillion per year globally, made up of bank fees, brokerage fees, insurance, auditing, and accounting costs that ensure that money and things of value are exchanged properly. Blockchain technology allows us to exchange anything of value without that $7 trillion of slippage.
History has shown us that as technology evolves it creates opportunity. Another example of that evolution can be seen in data storage as we move from analog and electronic toward digital and distributed. It has been said that in the Digital Age, data is the new oil, and the ability to manage it effectively and efficiently is creating tremendous opportunities. Eric Schmidt of Google said in 2010 “that from the beginning of time until 2003 there were only 5 exabytes of data created globally” and today, every day, we create nearly 300 exabytes of data. Traditional technology solutions are struggling to manage the volumes and the future is distributed solutions running on blockchains.
Considering the economic landscape, how does this impact your clients and services?
Turner: Financial advisors must adapt to today’s increasingly complex financial landscape. Unlike thirty years ago, when there were fewer financial products, we now face many options that can add significant complexity. In this environment, clients rely on us not only for traditional services like stockbroking and investment management but also as holistic financial coaches.
Our role extends beyond mere product recommendations; we assist clients in leveraging technology to optimize their financial strategies. For instance, we integrate tools such as e-Money for financial planning, Riskalize for asset allocation, and Asset Map for comprehensive asset organization. By leveraging these technologies, we empower our clients to navigate the intricate financial landscape more effectively.
Yusko: The investment industry entered 2023 on a more upbeat note after enduring a very challenging 2022. Investors came into the New Year a bit beaten up by the Bear Markets, but 2023 has been surprisingly positive, with much better performance across the industry than many had expected. It has been a year of reacceleration of economic and business growth, particularly here in the Triangle region. Going into 2024, things are looking particularly attractive in the asset management business as investors look beyond the difficulties of earnings, stock price, and company valuation recession and anticipate more robust markets in the future.
What emerging trends are you looking to leverage?
Turner: Alternative investments cover a broad area. Products like real estate investment trusts have been successful for clients. Others, like those useful in 1031 exchanges for commercial property, can be beneficial. However, when it comes to cyber currency, I am more cautious. Its value is perceived, rather than based on revenue generation like traditional stocks. Cyber currency, to me, is more akin to gambling. It should be viewed as speculation. If someone wants to speculate, they should use money they can afford to lose. Otherwise, I don’t see it as a crucial part of a portfolio.
Our advice remains consistent: understand your risk tolerance. We educate our clients about what to expect and aim for a rate of return that matches their risk tolerance. If a client is not invested appropriately, they tend to make poor decisions. So, we determine their risk tolerance through discussions and questionnaires, then build a portfolio that aligns with that. We emphasize sticking to a systematic, long-term approach regardless of market volatility. Educating clients about the inevitable ups and downs in the market is key, encouraging them to stay the course. This approach has proven successful over time, as opposed to chasing speculative investments like Bitcoin. We focus on developing and adhering to our process.
Yusko: There has been a rapid acceleration of growth in the RTP region as people have relocated to the area from all across the country. Several companies have announced plans to build regional presences here and that economic flywheel is fully engaged. Morgan Creek is an asset management and venture capital business, so like many service businesses, we are asset-light and run a relatively lean operation. While there is certainly a trend in the region of new workers flocking here due to the work-from-home phenomenon, we do not need to grow staffing at the same rate as we grow assets. We can manage the money just as effectively if we have $100 million or $500 million in a fund with the same number of people. While the population growth trend is certainly positive for RTP, we are not perhaps the best reflection of that trend.
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