What Is A Behavior Investment Consultant & Why It Should Matter To You

CJM Wealth Management

When I first decided to get into the business of advising and guiding clients as it relates to their family’s financial future and security, I read a book from Nick Murray titled, Behavior Investment Counseling. That book had a lasting and powerful impact on my life and my business. It’s how I shaped CJM Wealth Management. The book focused entirely around the cold hard fact that the number one determinant of an investor’s success or failure is directly related to the behavior of the investor themselves. Many may disagree, but I can tell you from over 30 years’ experience, as the book points out, it is absolutely the case. Here’s why…

I had two different paths in my career which can illustrate why Nick Murray’s book created a lasting impact on my life.  My first path was at the big-wirehouse firms such as Merrill Lynch and Smith Barney, where profit was put before anything else; I was acting as anything but a behavior consultant. This goes back to the late ’90s, right before the tech bubble burst. I based my actions solely on what the firm was telling me to do and where their fees were coming from, not based on any discipline or behavior at all.  I would purchase all the tech names, because that is what my clients and my firm requested based on the hysteria in the media. The feeling clients felt from purchasing one of these tech stocks in the morning at $100 and watching it soar to $500 overnight was an incredible high for everyone involved. However, when the tech market crashed, most of my client’s portfolios at the time were loaded with these names, with many of them going out of business.  This impacted my client’s financial future and made me feel like I had no control.  That experience alone inspired me to start looking for a more disciplined approach to investing.

When I left Smith Barney to start CJM in 2003, I decided to dust off Nick Murray’s book and practice as a Behavior Investment Consultant (BIC) on behalf of my clients. As a BIC, I would concentrate my time and energy on attempting to control variables which:

  1. Can be controlled (as opposed to short/ intermediate-term movement of the economy or markets, which cannot)
  2. Have the most pronounced effect on the long-term, real-life return of my clients; and it has nothing to do with beating an index.

My experience as a wealth manager and Behavior Investment Consultant has taught me that there are six variables that dictate the overwhelming majority of a family’s lifetime investment return. Three of these are principles or basic attitudinal approaches to goal-focused long-term investing which take place in the mind of the investor rather than inside the portfolio. The other three are practices or methods of managing the portfolio itself.  Please find them listed below.

  1. Faith in the future
  2. Patience
  3. Discipline
  4. Asset Allocation
  5. Diversification
  6. Rebalancing

Acting as a BIC has not only helped me be a much more effective and valuable advisor to my clients, it’s also helped my clients become a much more successful and calmer investor. If you have an interest in learning more about these six variables and how they can help make any investor a much more successful one- please reach out to me – I would love to discuss it further.


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