Morningstar Advisor - April/May 2013 - (Page 12)

Advisor Profile Driven to Succeed for Clients and Family By Kate Stalter Luke Wiley wants to write the book on helping clients reach their potential. Don’t tell Luke Wiley something can’t be done. For the Cincinnati advisor, that would only be a challenge to help him achieve a new goal. Wiley grew up in a military family. He credits his parents for instilling a sense of possibility in their three sons. “My parents never said, ‘Don’t do it,’ or ‘What if you fail?’ They always said, ‘Give it a shot.’ ” That guidance propelled him to earn a soccer scholarship to the University of Cincinnati and triple-major in finance, accounting, and real estate. An accounting professor introduced him to a friend at Merrill Lynch in Cincinnati. Wiley joined the advisory in 1997, at age 22. He stayed there until early 2009, when he and his brother Zach joined UBS and formed Wiley Wealth Management. The firm has about $260 million in assets under management. Focus on Client Service During their years at Merrill, the brothers grew to appreciate the importance of client service. Today, their client base consists largely of Procter & Gamble employees, retirees, and their families. The firm uses what is called the Supernova client service model, pioneered at Merrill Lynch and detailed in the book The Supernova Advisor, by Rob Knapp. Wiley acknowledges that getting up and running with the Supernova model is labor 12 Morningstar Advisor April/May 2013 intensive, “but once you do, you have the whole year mapped out. My clients know the exact date and time I’m going to call them. It creates a tangibility of service. What we do is a little gray, so we wanted to take client service to a whole new level. That’s allowed us to build a special brand within the Procter & Gamble community.” Ninety percent of Wiley’s clientele are P&G families, and he says the firm’s retention rate is nearly 100%. Every new client in 2012 was a P&G family. Referrals are a key component of Wiley’s marketing. “I ask clients what they value the most about working with us, and then I talk with them, brainstorm with them, to identify other people who could benefit from the same value,” he says. “Thankfully, they don’t keep us a secret.” Behavioral psychology is among Wiley’s interests. He says that people have beliefs and thought patterns that limit their potential. He strives to overcome them himself and to help his clients do the same. His study of psychology also applies to his research into investor and market behavior. Wiley cites the influence of writers such as Oaktree Capital Group chairman Howard Marks, Harvard Business School professor Michael Porter, and hedge fund manager Seth Klarman, author of a hard-to-find 1991 investing book called, Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor. Buying the Beaten Down The Klarman book was instrumental in the development of Wiley’s trademarked “52-Week Low Formula” for identifying beaten-down stocks with good potential for price appreciation. He appreciated Klarman’s view of stocks trading at new lows and began doing his own research into the potential for such companies. That led him to a proprietary five-step filter for uncovering small-, mid-, and large-cap stocks that showed particular strengths, but were trading at 52-week lows. That research in turn led him to Morningstar and its ex-research director, Pat Dorsey. Dorsey, who is now director of reseach at the Sanibel Captiva Trust Co., and a group of researchers at Morningstar helped Wiley back-test his strategy. Satisfied with the results, Wiley began using the 52-Week Low Formula in client portfolios. Today, about one third of his clients’ equity positions are in the strategy. Wiley is writing a book about the strategy. He is in discussions with publishers and expects the book to be released by year-end. Mary Buffett, author of Buffettology and other books about the investing methods of her former

Table of Contents for the Digital Edition of Morningstar Advisor - April/May 2013

Morningstar Advisor - April/May 2013
Letter From the Editor
The Pursuit of Happiness and Financial Advice
What Strategies Do You Use to Control Risk?
Driven to Succeed for Clients and Family
How to Assess a Portfolio’s Bond Risk
Luck, Skill, and Investing
Investments á la Carte
Investment Briefs
Investing’s No- Brainers Have Costs
A Defensive Ride
Risk On/On Risk
The Risk of Being Overconfident
Year of Living Dangerously
The Risk-Parity Approach
A Guide to Mutual Funds Running Risk-Parity Strategies
What Moats Tell Us About Risk
Risk’s Wake-Up Call
Seeing Is Believing
Why Investors Lag the Returns of Their Funds
Liquidity Signals
Pump Them Up
Golden Oldies Keep on Truckin’
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
Our Social Blind Spot

Morningstar Advisor - April/May 2013