Morningstar Advisor - Fall 2007 - (Page 24)

Advisor Profile It’s All About Location By David Harrell Bill Campbell fills the investment needs of clients in two cities with a low-cost serving of ETFs. He’s not bicoastal, but Bill Campbell, the principal behind Slayton Lewis Wealth Management, maintains offices in close proximity of two large bodies of water— one in Salt Lake City, Utah, and, in sight of Lake Michigan, a Chicago office. After leaving his previous firm, Campbell opened Slayton Lewis in his hometown of Salt Lake City in December 2000. While his former firm cast a wide net when looking for new clients, Campbell decided to take a more targeted approach with Slayton Lewis. He chose to focus on a “sweet spot” of clients with investable assets in the range of $2 million to $5 million. Below that amount, he says, the annual fees don’t support the level of service Campbell wants to provide to each client. On the other side, once you get to the $10 million level, Campbell says, you’re competing with far too many other companies who want to serve that wealthy market. He launched the business with a minimum balance requirement of $500,000, then raised it to $750,000, and now requires a minimum of $1 million for new clients. Drawn to a New City idea of tapping into the Chicago market. Acting as an ad hoc consulting group, his U of C classmates were blunt. They told him to succeed in Chicago, he’d need to have a physical presence. Hence, a second office in Chicago’s Lyric Opera building, which opened early in 2007. Campbell now splits his time (and his staff) between these two locations, but he tries to maintain a seamless appearance for the sake of his clients. Continuity is important to Campbell, as he believes that clients react poorly to change—even alterations in the appearance of reports and other communications from an advisor. (He’s a fan of Morningstar’s Snapshot reports, which present a unified design for different security types.) So the Slayton Lewis Web site lists a single phone number. The Salt Lake City-based receptionist who answers calls can patch them through to either office or to Campbell’s cell phone. Sam Miller, CFA, a portfolio manager for Slayton Lewis, works from the Chicago office, and two other staff members are based in Salt Lake City. The Right Exchange Fama-French studies, Campbell says, “The numbers don’t lie. And rather than bet on somebody who’s ‘smarter than the market’ I want to bet on the market.” However, that preference doesn’t mean he’s running market-neutral portfolios. Campbell will make modest strategic moves in terms of sector exposure, though he makes it a point to stay within a “reasonable statistical distance to the S&P 500 overall.” His clients benefited from an overweighting in REITs during their run in the 2000s, and Campbell is currently overweighted in international stocks. He doesn’t work from a list of predefined asset-allocation pies. He comes up with a specific mix for each client, but once an allocation is set, for the most part he fills it with ETFs. One major appeal of ETFs for Campbell is that they allow him to execute a desired strategy as precisely as possible. Unlike traditional mutual funds, there’s minimal worry of style drift or of residual cash holdings affecting the overall asset allocation of a client’s portfolio. “I don’t have to explain to anyone that their portfolio allocation is out of balance because Bill Gross decides to keep a cash stake in a fund.” There’s also a cost advantage. A fee-based planner, Campbell charges clients an annual fee of 100 basis points for the first $1 million of assets he manages, with breakpoints for larger While building his practice, he also was commuting to Chicago each week to attend the executive MBA program at the University of Chicago, and, as he puts it, “fell in love” with the Second City. Campbell began exploring the When it comes to locating his clients’ assets, Campbell is a huge proponent of index investing and exchange-traded funds. A firm believer in the University of Chicago’s 24 Morningstar Advisor Fall 2007

Table of Contents Feed for the Digital Edition of Morningstar Advisor - Fall 2007

Morningstar Advisor Fall 2007 Features Departments Letter from the Editor Inbox 10 Years After: Developing Markets Make Progress Research Briefs Investors Should Adjust Their Home Bias Few Mutual Funds Exhibit Serial Correlation Valuating ETFs, the Equity Analyst's Way It’s All About Location See the World (Differently) The Return of the Global Flexible Investor Map of International Value Sound as a Loonie? Fair Exchange In Their Own Worlds A Good Read Putting Their Heads Together Buying Protection Scoping Out Easy-to-Use Funds Finding Good Stewards Consumer Firms Go Global Mutual Fund Analyst Picks Undervalued Stocks Most Popular Variable Annuities New at Morningstar The Whole Wide World

Morningstar Advisor - Fall 2007

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