Paying even a modicum of attention to the investing world over the past couple of decades would reveal many changes that have functionally changed the systems therein. From cryptocurrency to financial crashes and the battles waged by financial systems in between, people like John Hailer have been necessary to help portfolios survive these varying onslaughts.
As the former head of Natixis, John Hailer worked to spearhead several initiatives that helped to transform the industry in its entirety, maneuvering toward a more product-agnostic investing approach.
Let’s explore how John Hailer has helped to machinate change during his time in the industry while better understanding the role that product-agnostic consultations can play.
Introducing the Prudent Man Rule
When John Hailer was first navigating through the education system and working his way up in the early years of his financial career, he adhered to something known as the Prudent Man rule. This rule focused on the idea that investors should never touch the principle, a simple enough investing process that can lead to solid returns.
Hailer said of the Prudent Man Rule, “The investment industry moved away from this and, frankly, lost its way a bit in the process.”
In 2008, investors saw the financial housing markets burst while simultaneously ruining their investments. Hailer was horrified at what happened, stating, “This never should’ve happened. If investors’ portfolios were properly diversified, we would’ve seen much more resilience.”
Using Information to Find Success
While working with Natixis, John Hailer would help to introduce a solution to the lack of a Prudent Man rule in day-to-day investing. To find long-term success for more clients, they needed to be educated by a professional who had their best interests at heart. This led to the foundation of the Durable Portfolio Construction Research Center. Without asking for any fees, Hailer’s team would offer product-agnostic consultations even if it led their candidate to a competitor.
Hailer says, “I took some grief over it because companies need to run on financials. The idea that we were going to give away a free service was controversial.”
Despite the controversial nature of his idea, it was important and, as such, followed through upon. Hailer was guided in large part by experiences he had before his work with Natixis, particularly while operating at New England Funds, to develop consultative investment management strategies. It was during this time that the dot com crash dramatically impacted the industry at large.
Hailer said, “The market crash allowed us to get in front of researchers and gatekeepers and say, ‘Look, we have a different way to approach this. We have a different model.”
The prevalence of the Research Center helped to catapult a new league of investors into the arena, and Natixis would watch its assets under management grow from $130 billion to over $900 billion in less than 15 years.