Firm: Morgan Stanley
AUM: $739 million
Location: San Francisco
Age: 36
For Anthony Jones, a typical client is an entrepreneur or business owner in Silicon Valley.
Often, getting these clients to see the need for diversification—the transition from a concentrated position to a varied portfolio—is part of the process. “My clients tend to be risk takers,” Jones says. “They’ve taken large risks professionally, and [have] become extremely successful. Our task may be to help them understand what it might mean if they’re not able to sell the company stock they own at the price they expect.”
Part of Jones’ efforts to convince his entrepreneur clients to broaden their portfolios also involves getting them comfortable with giving up control, he says. Trimming positions in their own company in order to buy other types of investment assets means having less control over their finances.
Jones says that these clients also worry about what signals they might be sending, by diversifying their holdings. “They don’t want to let down their colleagues, and they don’t want anyone to question their loyalty to the company,” he says.
What’s more, the decision to retain a concentrated position is not always a poor one. “One of my clients had a very strong conviction he should hold on to his company shares,” Jones says. “The shares have tripled in value since then. There really is no strategy that’s right for everyone.”
Nevertheless, the events of the past few years have illustrated the potential downside and the advantages of asset diversification. “There have been no shortage of examples of how values can drop sharply in a short time period,” Jones says.
Economic uncertainty and market volatility have resulted in intensified client communications, according to Jones. “We do not need to speak to them every day, every week, or even every month,” he says. “Our clients are busy people, whose time is precious. However, we do want our clients to be aware that we are thinking about them.”
To build this awareness in a “useful, timely, unobtrusive” manner, Jones and his team rely largely on email. “We collect research reports and articles to put together in packages for individual clients,” he says. “From the responses we get, our clients like the idea that we’re thinking on their behalf.”
