B|O|S was formed over 30 years ago as Bingham, Osborn & Scarborough, at a time when our Founders perceived the financial services industry to be fraught with conflicts of interest. At that time, and even today, many investment management firms remained largely structured around selling products to their clients (such as stocks, bonds, mutual funds and limited partnerships). With an eye toward generating firm revenues from commissions, loads or spreads, these firms pushed revenue-generating sales rather than adhering to and honoring their commitment to fiduciary responsibility. Consequently, their Investment selection typically emphasized market timing and stock picking, without consideration of the risks inherent in such strategies.
In this landscape our firm’s founders set out to establish a wealth management firm that emphasized the building of lasting relationships with clients where services were based on fiduciary responsibility, integrity, and comprehensive, personalized service, rather than sales commissions. To accomplish their goal, the founders focused on three fundamental principles – principles that were considered progressive at the time, and are still fundamental to our approach today:
- No Bias or Conflict of Interest: Rather than focusing on selling products to clients in order to generate commissions, the founders strongly aligned the interests of the firm with their clients by charging a percent of assets fee. To this day, that fee is our only source of compensation for our services.
- The Advisory Relationship & Integrated Approach: The founders of our firm believed that it was not possible to manage a client’s assets effectively without completely understanding and addressing their unique goals, circumstances and concerns. Accordingly, they developed a comprehensive advisory approach that integrated financial planning with investment management. There was no name for this process at the time, but today it is what we call Investing with Vision.
- Modern Portfolio Theory & Efficient Markets: The founders believed strongly in the theory of efficient markets and the importance of understanding and managing risk in designing portfolios. Accordingly, instead of picking stocks or attempting to time the market, they focused on maximizing the risk-adjusted return of portfolios by combining non-correlating asset classes, and emphasized the understanding and control of risk by studying markets, not companies. These beliefs are still at the core of our investment philosophy today.