Jack Ablin, CIO Of Cresset Asset Management, a RIA with $27 billion in AUM, has seen just about everything over his roughly 40 years in the investment world, and his finance-focused experiences in education, technology, and mass media, among many other fields, led him to Cresset Asset Management, where he took over the CIO role in 2018. As such, Ablin functions as Cresset’s thought leader, strategist, philosopher, and guru. His favorite role, however, might just be mentor.
Ablin, who was name RIA Intel Award’s 2022 CIO of the Year, sat down with RIA Intel to talk about the lessons he has learned during his long career. (Nominations for the 2023 RIA Intel Awards are now open!)
Responses have been edited for length and clarity.
Some people in the industry consider you a legend. Why do you think that is?
(Laughs) That’s a great question. I think there are really two things. One is, I’ve been at it for a long time. I started in the business in the early 1980s, so longevity is probably one factor. I think the other one is a little more unique — I believe I’m probably one of the oldest investment professionals who knows how to program a computer. The IBM desktop computer first rolled out around ’81, and I majored in math and in computers. I was part of the generation that was probably the first to be offered computer science as a major, something they never really did before.
What are some of the important lessons that you’ve learned over the years?
One is to take a bigger-picture view of the markets, because if you can pan out far enough, things tend to appear more methodical and less random. The second, which is tied to the first, is that individual investors have really gotten caught up with their investments to the point that it has begun to influence their psyches. I mean, it creates mood swings and a loss of control, and I blame the industry for that. I’ve really tried to spend my entire career insulating my clients’ lifestyles from the vagaries of the randomness of the market.
Can you expand on that? Why do you blame the industry for that?
I think it really began just as I was starting my career — the entire industry moved from a defined-benefit pension program, where you worked for a company your entire caree, and when you retired, you were “guaranteed” some portion, some share of your paycheck every month for the rest of your life. Did you really care whether you owned IBM or Dell Computer or Walmart or Target? No. You just knew you were going to get a check every month for the rest of your life. So, in the early ’80s, companies got out of that business and said, “Okay, here’s the money — you figure it out.”
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Most people would not have made that choice. That was foisted on them. Then everything moved to the brokerage world, where it’s like, well, I’m a seller. Everything you buy, you’re the buyer. So, it’s buyer beware, and we’ll have the disclosure, but I’m not really advising you — I’m just selling you stuff. And then, of course, the advisory world developed out of that. But even there, I think clients really had to understand the investment markets to be able to help put a program together, and I don’t think it was really fair.
The RIA space has expanded enormously since then. Talk about the growth you’ve seen.
Absolutely, and it’s evolved. Obviously, costs have come down and efficiencies have gone up. So, there are certainly a lot of benefits that have gone on in the background that favor investors.
There are two parts to the business. There’s the investment part and then the advisory part, and I think the investment part has become pretty well commoditized, at least on the public market side. But there isn’t a ton of differentiation on the public market product side, so the differentiation there really comes down to advice. How do you structure things? How do you help people plan? How do you guide them to save? On the investment side, I think the ball has shifted toward private investing, and that’s an area that is vitally important to me and to Cresset. That’s where we’re trying to downscale what were pension-type investments and sovereign wealth-type investments for individuals and families.
What are some of your guiding principles when you’re building your own teams?
I always prefer the math and engineering people, rather than the economists. I’ve always said that I can teach economics to an engineer. It’s hard for me to teach quant to an economist, and I’ve tended to focus on the quant-oriented side of things.
And then, when we’re building a team that has to make investment decisions, I like diversity — not just of people, but of ideas. I want to make sure that we’re hearing all sides of the story, and I want accountability, so that when we make a decision, we can’t hide behind a bad decision as a group — it’s a person who’s really focused on it and has a vested interest in making sure that the idea has worked out.
Looking ahead, how do you see the profession evolving?
I want the people that I’m looking to bring on as advisors to really be more interested in the client and in the relationship than in the execution and the product. We operate a goals-based investing program. We can handle the tangible part of the goals, which are just, “Here are the cash flows I need for the next whatever number of years.” That’s the easy part. Where we really need the advisors is for the intangible part of the goals, and sometimes, clients may not even know what their goals are, beyond just receiving these checks every month. So that’s really more of the right-brain side of the firm, where we’re trying to communicate and relate to clients and understand them and provide broader solutions. That’s where I think the business is going.
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