The Portfolio Isn’t the Patient
A Final Fusion Newsletter, and a Look at the Future of Wealth Management
As I sit down to write my final newsletter under the Fusion name, the emotion I feel most is gratitude. Gratitude for the families who have trusted us, many for decades, and for the friendships that grew from those relationships. And gratitude for our extraordinary Fusion team. Many of us have worked together for decades. Our advisors, client service professionals and colleagues haven't simply served our clients. They've cared deeply about them and about one another.
The truth is, we love our clients and we love our team. That has always been at the heart of Fusion. Which is why choosing what came next was about much more than finding a larger firm. We wanted greater resources and capabilities to help ensure the long-term strength and sustainability of our team, our clients, and their families. But we also needed a partner where the culture felt familiar. As we got to know Waverly, we saw the same emphasis on relationships and genuine caring for clients and colleagues that has meant so much to us at Fusion. That was critical to our decision.
I also wanted a partner willing to embrace and help champion a philosophy I've spent more than three decades developing. I believe we've found that partner in Waverly. And I believe that philosophy is about to become more important than ever.
What If Conventional Wealth Management Is Managing the Wrong Thing?
For decades, much of conventional wealth management has put the portfolio at the center of the relationship. Asset allocation. Security and manager selection. Tactical adjustments. Private investments and alternatives. Modern Portfolio Theory. There are extraordinarily smart, hardworking people dedicated to these disciplines, including many friends and colleagues of mine. My question isn't about the people. It's about the paradigm.
What if conventional wealth management has become incredibly sophisticated at managing the portfolio when the investor was the real patient all along? Think about a master navigator decades ago who spent years learning celestial navigation, charts, compass bearings and how to use a sextant. Those were extraordinary skills. Then GPS came along. The navigator didn't suddenly become less intelligent. Technology changed which skills were most valuable.
I wonder if wealth management is approaching a similar moment. Because after more than three decades of counseling investors, I've come to believe something very simple: The portfolio isn't the patient. The investor is.
Timing, Selection and Prediction
Much of conventional investment management ultimately depends on three things I've questioned throughout my career: Timing. Selection. Prediction. Select one stock because you expect it to outperform another and you've made a prediction. Select one manager over another and you've made a prediction. Favor one asset class or investment style because today's conditions appear more attractive and you've introduced prediction and timing.
We can surround these decisions with sophisticated research, models and technology, but the fundamental question remains: Can we consistently predict an unknowable future well enough to improve investor outcomes? I believe investors are better served by focusing on the things we have some ability to control, rather than continually reacting to variables we can neither reliably predict nor control. And that leads to an even more fundamental question.
What Do We Really Mean by Risk?
Our industry has become very good at measuring volatility. How much might a portfolio fluctuate? How far might it temporarily decline? How can investments be combined to moderate those fluctuations? Those aren't irrelevant questions. Volatility matters, particularly when money will be needed in the near future. But I've never believed that volatility alone adequately defines an investor's real risk.
For a family funding a retirement that could last decades, the objective isn't to own the portfolio that fluctuates the least. It's to maintain enough purchasing power to fund the life they've planned: housing, healthcare, travel, family, philanthropy, legacy. A bear market announces itself with frightening headlines and falling account values. Inflation can work much more quietly. My concern is that in trying so hard to protect investors from the risk they can see and feel today, volatility, we can underappreciate the purchasing-power risk that compounds over decades.
So the better question isn't: How do we construct a portfolio that fluctuates the least? It's: What combination of planning, behavior and investment strategy gives this family a reasonable probability of funding the life they want to live? The portfolio should serve the plan. The plan shouldn't serve the portfolio.
The Portfolio Doesn't Behave
And even then, we've left out what I believe is the most important variable: the investor. You can optimize asset allocation, select managers, add private investments, and run thousands of sophisticated technical probability planning simulations. But the portfolio doesn't panic during a market decline. It doesn't decide this time is different. It doesn't chase whatever performed best last year. People do.
And if an investor abandons a sound long-term strategy at precisely the wrong moment, much of the portfolio's sophistication may become irrelevant. That's why I've increasingly thought of myself not simply as an investment advisor, but as a behavioral investment counselor. Our job isn't merely to help build better portfolios. It's to help build better investors.
And Then Comes AI
Artificial intelligence makes this distinction even more important. Much of conventional financial advice begins with inputs: assets, liabilities, income, taxes, spending, goals, risk tolerance and investment allocations. Sophisticated probability-based planning tools can process those assumptions and model a wide range of potential outcomes. Investment systems can analyze enormous quantities of market and portfolio data. As AI advances, I believe much of this analytical work will become increasingly efficient and scalable.
Which raises an important question: What happens when technology becomes extraordinarily good at solving a problem we've defined incorrectly? AI may become remarkably capable at delivering elements of portfolio-centric wealth management. But producing a sophisticated financial plan isn't the same thing as helping someone live through it. Even the most sophisticated probability-based projection can't stop an investor from panicking during a bear market. Portfolio analysis doesn't prevent someone from chasing yesterday's winner.
Technology can provide information. Counseling helps people make better decisions with that information. That's why I believe AI may ultimately make behavioral investment counseling more important, not less. As technology gets better at what can be calculated and standardized, the uniquely human elements of great advice become even more valuable: judgment, perspective, empathy, discipline, trust. Technology will undoubtedly change. Human nature probably won't.
Why Waverly, and Why Now?
And that brings me back to Waverly. As we considered Fusion's future, we weren't simply asking where our business could go. We were asking something much more personal: Where could our clients and our team feel at home? We have colleagues at Fusion who have spent much of their careers together and clients whose families we've come to know across generations. We didn't want to lose that. We wanted to build upon it.
What attracted us to Waverly wasn't simply greater scale, resources, or capabilities. We recognized a culture that values relationships much the way we do. People who genuinely care about their clients. Colleagues who care about one another. And a shared belief that wealth management, at its best, is ultimately a relationship business. That cultural connection gave us confidence that the parts of Fusion we cherish most could continue to thrive.
And philosophically, I didn't want the ideas we've developed at Fusion to disappear inside a larger organization. I wanted to give them a larger stage. I'm incredibly grateful that Waverly is giving me the opportunity to continue developing and championing behavioral investment counseling within a much larger organization. We're not leaving the best of Fusion behind. We're bringing it with us: our team, our relationships, our philosophy, our commitment to the families we serve. And now we can combine those things with Waverly's broader resources and capabilities and a culture in which we believe they can thrive.
A Final Thank You
So, yes, writing my final newsletter under the Fusion name is emotional. How could it not be? But what we've built together was never really about a company name. It was about people.
To our clients, thank you for trusting us with far more than your portfolios. You've trusted us with your families, your fears, your aspirations, and your hopes for what your wealth could make possible. To our Fusion team, thank you for your loyalty, friendship, and professionalism, but above all, for the extraordinary way you've cared for our clients and one another. Fusion could never have become what it is without you. And to Waverly, thank you for recognizing not just what we've built, but how we've built it, and for giving us the opportunity to carry it forward.
As I look ahead, I couldn't be more optimistic. AI will change our profession. The tools will become more powerful. Portfolios will become easier to analyze and financial plans easier to produce. But one thing won't change: The portfolio still isn't the patient. The investor is.
That's the philosophy we built at Fusion. It's the philosophy I'm proud to carry forward at Waverly. So, I don't see this as the end of the Fusion story. I see it as an opportunity to take the best of what we've built together and give it an even greater future. The name is changing. The relationships aren't. The caring isn't. The philosophy isn't.
And neither is our goal: Helping families behave their way to wealth.
As we enter this holiday season, I hope we can all take a moment to reflect on how fortunate we are. In that spirit, I wish you and your families a wonderful Thanksgiving.
