BOOK REVIEW: Greycourt's Greg Curtis Stresses The Finer Details, Salutes Wealth Creators

Tom Burroughes

14 February 2014

There is now quite a pile of books explaining how wealthy families can protect their dynasties and assets from the ravages of markets, divorce, delinquent kids and plain old inflation and taxes. Do we need another one? If it is good enough, then yes. Author Greg Curtis, chairman and founder of Greycourt & Co, has written a crackerjack of a book that deserves to be widely read.

At its core is the point that attention to fine details, and taking pains about those details, is crucial. There are no shortcuts or quick fixes, or corny bromides about “keeping it simple” in this book. For example, Curtis explains that however much media razzmatazz there is about “star” fund managers able to beat an index, no-one ever was able to walk to a store and spend gross returns. It is the net, after-tax returns that count. He highlights the case of an index fund where, from time to time, the portfolio has to be rebalanced in line with adjustments to an index composition. Big pension funds and endowments, for example, do this all the time as a matter of routine. Trouble is, while many institutional funds don’t have to fret about the tax issues that arise when a rebalancing occurs , a private investor has to do so. Curtis goes into some detail about how clients must select money managers who are comfortable with this sort of issue.

While the bulk of this book takes readers through what should be familiar territory to readers of Family Wealth Report, there are plenty of nuggets – such as Curtis’s discussion of open architecture advisory models and how to avoid conflicts of interest – that will engage the most experienced reader. This was one of the highlights of the book for me. His account of the pitfalls of hedge fund and private equity investing is another.

Perhaps the most unusual and refreshing part of The Stewardship of Wealth: Successful Private Wealth Management For Investors and Their Advisors, is not the material on how to manage money. It is the first five chapters that focus on why wealth creation matters and why the Western capitalist system, for all its faults, needs to be made to work better. The book lauds the achievements of entrepreneurs; it also excoriates the villains and fools who, in varying degrees, Curtis says are responsible for the crisis of 2008 and its aftermath.

One criticism I have is that while much of what Curtis said is true, he does not do enough to explain why all these bad behaviors and conflicts of interest got worse, although he hints at it. Surely, one of the main drivers has been the era of ultra-low interest rates and the associated mis-pricing of risk that has bred much of the problem.

It is not very often that a book about wealth management will include references to the French philosopher and man of letters, Voltaire, or the German philosopher, Hegel, or indeed, make reference to the “moral basis of capitalism”. This is not about Curtis showing off about how well read he is. He’s trying, I think, to locate the wealth management industry in a broader debate about the kind of society that is acceptable not just for the rich but all sections of society. Credit to him for that. Too much of what is said about this industry seems to suggest it operates in a bubble.

In summary, I find that Greg Curtis has made a terrific contribution to understanding about the wealth management sector. While his book is pitched very much at a North American audience , the lessons are global, and enduring.