Invest Well, Be Well

Joe Smith: On Direct Indexing, Risk & Culture

Episode Summary

A podcast for wiser investing and stronger living. Success in the markets and in life requires sound investments — in our portfolios and our personal wellness. A weekly show, Invest Well, Be Well explores the principles of long-term investing, behavioral finance and peak performance with top-performing investment professionals and cross-industry leaders. Hosted by investment executive Rusty Vanneman and seasoned journalist Robyn Murray, each episode offers practical strategies for building wealth and prioritizing well-being, so you can make better decisions, grow your resilience and elevate your life. In this episode we spoke with Joe Smith, Co-founder and Chief Investment Officer of Parti Pris. Joe is also the head of Parti Pris’ Investment Strategy Committee. He has executive responsibility for wealthtech platform development, and thought leadership. In his leadership role, he brings deep expertise in applying technology and portfolio optimization tools to portfolio design and implementation issues specific to wealth management. Joe is the primary architect of Parti Pris’ investment approach including Parti’s proprietary Household investment management process and our Advisor SketchBook™ portal. Joe brings almost 20 years of financial industry experience to his position at Parti Pris. Previously, he served as Senior Market Strategist and later Deputy Chief Investment Officer of CLS Investments, LLC. He has held several other investment management and product development roles including Manager of ETF Product Research & Development at Russell Investments and Senior ETF & Index Product Specialist at Charles Schwab Investment Management. Joe holds a BS in Economics from the University of Washington and an MBA from the Tepper School of Business at Carnegie Mellon University. Joe has hosted several industry podcasts and authored several articles and papers regarding the investment management industry and trends, application of quantitative methods to portfolio management, and the role of ETFs in asset allocation portfolios.

Episode Notes

In this episode, we discuss the problem Parti Pris is solving for advisors and their clients, the non-negotiable principles of wise investing, how to achieve true diversification at a household level, the most crucial risk management tools, how Joe’s entrepreneurial journey has shifted the way he thinks, how the ETF and Direct Indexing landscape may evolve in the coming five years and much more.

What is the exact problem that Parti Pris is solving for advisors and their clients?
What is the core principle behind Joe’s personal investment philosophy today?
From Joe’s many years of experience leading multi-asset portfolios, what are some of his non-negotiable principles of wise investing?
How does Joe define, and measure, true diversification at the household level?
What tools does Joe think matter the most, in terms of risk management, for clients?
How does Joe think that behavior and process intersect? How does he design portfolios that investors can actually stick with?
How has Joe’s entrepreneurial journey affected the way he thinks?
Listen to a walkthrough on Parti Pris and how they save their advisors time.
What are “advisor sketchbook” and “advisor wealth design” on the Parti Pris platform?
If Joe has an RIA that’s starting from model portfolios and ETFs, what’s the pragmatic 90 day path to that household level of personalization that Parti Pris shoots for?
Are there trackable metrics that illustrate how personalization can create better client outcomes?
How does Joe see the ETF versus Direct-Indexing split evolving over the next 3-5 years?
What does Joe think the most underrated advantage of direct indexing is, beyond tax loss harvesting? What does he think is the most overrated?
How does Joe define “culture” within the context of an investment firm?
As an entrepreneur, what are some of the hardest lessons Joe has learned and does he have any advice for any potential founders listening today?
What does performance mean to Joe, both personally and professionally?
How does Joe strive to maintain his work-life balance?

Quote

“A lot of what we’ve done [at Parti Pris] is frankly years of consulting and working with both small and large wealth management organizations to really understand where do they find parts where the process breaks for them. [Then we ask ourselves] how can we come up with something that can alleviate that pain for them? Again, [we just want to] get them back towards saving time and focusing on working with clients.” - Joe Smith

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