Oxford appealed to Green for several reasons. Its giant asset base ensured that it wouldn't be locked out of opportunities in the hedge fund and private equity spaces. Moreover, Oxford was gaining market share in the underserved Midwest, away from the saturated markets on the coasts.
Green describes the firm's investment philosophy as "the disciplined balance between the art and science of investment management." That means the firm takes advantage of the "twin miracles" of compounding and rebalancing with a view toward both strategic and tactical asset allocation.
Over the years, Oxford's research departments have shared research ideas and held quarterly conference calls with the team at Convergent Wealth Advisors, a Washington, D.C.-based RIA with $14 billion in assets. Both firms have major manager overlap and a desire to guard against "group think."
"Lots of people in this business think that they have the secret sauce," says Steve Lockshin, chairman and CEO of Convergent, noting that the two firms' approaches to investments are very similar. "They don't. Jeff [Thomasson] knows that."
Oxford's investment forum is responsible for education, communications and client delivery. This is where Green and his staff can explain their decisions to and get feedback from Oxford advisors who are dealing with clients on the front lines. "During the depths of the [2008] financial crisis, feedback was critical," Green says.
Communicating with clients is an ongoing process. Because most of the firm's clients have more than $10 million in assets, they are more sophisticated than average. Green and his staff actively try to teach clients to think more like institutions.
Thomasson is stunned when he hears tales of 70-year-old clients at other firms whose advisor has 80% of their portfolios invested in equities (unless it occurs at the client's request). "Our clients do have diversified portfolios, but they do not have 80% of their assets in equities," he says. "We are much more inclined to dial it back to something closer to 35% past the age of 60 and even less when [they reach] their 70s and 80s."
The Look of an MFO
Rick Davis joined Oxford as a managing director in the summer of 2007, just before all the fun was about to begin. His timing was propitious in several ways.
Davis' background had much in common with those of many Oxford clients who owned private businesses. Before joining the firm, he had served as president of his own family's third-generation residential real estate company.
His legal credentials also proved to be an asset to a large RIA looking more and more like a multifamily office. After graduating from the University of Michigan, Davis spent years as a corporate attorney at the New York-based legal giant Sullivan & Cromwell. In a family business where his relatives possessed real estate expertise, Davis specialized in all the other activities, including the insurance, finance, accounting and legal work. "I almost ran a single-family office," he says.
He now devotes much of his time at Oxford to working with private business owners on issues like family succession planning, diversification, estate tax liabilities and asset protection planning. He confirms what Green says about how clients change their perspective once they become Oxford clients.
"The thing I hear almost daily with my clients is that when they joined Oxford, they quickly begin to think like an institution," he says. "They adopt a different mindset."
That doesn't mean the conversations are easy ones. One nettlesome subject the firm must often broach with clients is the idea of pulling some liquidity out of a private business or reducing a highly concentrated equity position to diversify. "We look at a client's net worth from 35,000 feet," Davis says.