Name: Camilla “Cam” Neri
Firm: Retirement Capital Strategies (LPL affiliate)
Location: San Jose, Calif.
AUM: $200-plus million (out of a total $400 million for the group)
Clients: 200 fee, 200 commission
Industry experience: 27 years
Cam Neri considers herself a protector of wealth. As the senior advisor, and one of five that make up Retirement Capital Strategies, Neri watches clients' mutual funds very carefully. The big red flags? Style and size drift, of course. In fact, she's experienced so much of it, she's turned to index solutions.
“With all the research showing the vast majority of active managers don't beat the indexes, it wasn't a difficult decision,” she says. Neri, whose book is split half fee and half commission, says she's been using ETFs (mostly Barclays iShares) as portfolio solutions for more than five years now. She uses them primarily for the growth portion of her equity allocation, and chooses Dimensional Fund Advisors' passive funds for the value side. As much as 50 percent of a client's portfolio will be in ETFs, but it depends on the client's risk profile and number of assets, she says. And she hasn't ditched active management entirely — she's still wary of the track record of the comparatively new bond ETFs, so she uses traditional bond managers (PIMCO for instance). She also sometimes uses active managers in emerging markets, international equity and REITs.
“For the most part I'm really quite boring,” says Neri, referring to her no-nonsense wealth-preservation style. As a financial planner and as a fiduciary to many of her clients, Neri says she's more concerned with getting clients what they need than beating the market with unnecessary risk. “I like the benchmark performance without the style or size drift and the low costs of ETFs,” she says. She doesn't hedge or speculate on sectors or market moves with ETFs like some advisors, and she isn't rushing to jump on the fundamental indexing bandwagon just yet. Neri says she still remembers “enhanced bond funds” from the 1980s, a now-defunct, superior-yield-touting product that underperformed and sank. “I looked into those but jumped ship very quickly.” Boring or smart? Her clients — most of whom have been with her for more than 10 years — seem to think the latter.