Lesson learned: There's no 'bulletproof' formula
Claudio Chisani, principal of Chisani Wealth and portfolio manager at BlueShore Financial in Vancouver, says it’s important to note there’s a huge difference between mistakes and misconduct.
“You have to differentiate between the mistakes that are critical, when you really lost people’s money and people went to jail for doing illegal things,” says Chisani. “Those are not mistakes. Those are value-driven things.”
Chisani is happy to admit the mistakes he’s made over his career have often been learning opportunities for him — in fact, he says he is where he is today because he was able to learn from what worked well and what didn’t.
As for his biggest mistake? Chisani says in his early days, he wasted so much time overanalyzing every move.
“You're looking for the bulletproof formula that's going to get your clients the most positive outcome,” he says. “So you're analyzing a couple of hours a day, you're going back and forth … but on many of those occasions … I was not as fast at putting [that information] to work in client accounts.”
With more experience, Chisani learned to streamline his process.
But he also changed his goals: He’s no longer trying to be right every single time, instead, he’s focused on being proactive and following through with his convictions right away.
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Mistake: Borrowing money to invest
Lesson learned: Don’t assume you can beat the market
For Yamada, that tendency to overanalyze also characterized his early career, which began informally as a teenager, but in earnest as a summer job in university.
He learned quickly that information was essential — but the trick was being able to decipher what’s important to know and what’s just noise.
When he was working for a hedge fund, his job was to find information that would help the company invest in and profit off of acquisitions. It wasn’t until he was on the other side of the equation one day that he realized how futile that had been.
“It was frightening how wrong they were much of the time,” he says.
What makes it extra frightening is when it’s your own money on the line. Yamada says the mistake he learned the most from was personally borrowing money to invest in a deal that didn’t pan out.
He found himself seven figures underwater with a young family and a mortgage to worry about.
“I had to remortgage the house and sell a few things,” says Yamada. “It took a while, I think maybe two or three years after that event, before I could pay back all the money.”
“There's no greater ‘come-to-Jesus moment.’”
But like Chisani, Yamada says all the sleepless nights in the wake of this epic mistake taught him a lot. He likes to say 80% of your returns are based on 20% of the information you have when you make a call.
Looking for more information, or better information, doesn’t always pay off. Yamada had all the best information available when he ended up on the hook for a seven-figure amount.
“The odds changed because the market environment changed.”
Mistake: Saying yes to everything — and everyone
Lesson learned: Don’t spread yourself too thin
Tina Tehranchian, a certified financial planner and senior wealth adviser with Assante Capital Management Ltd. in Ontario, Canada., says her biggest mistake was also due to inexperience.
At the beginning of her career, Tehranchian tried to be everything to everyone. But when she analyzed her books at one point, she realized that the clients she enjoyed working with the most were business owners and entrepreneurs.
Pivoting to focusing on work that was equally challenging and enjoyable for her also made Tehranchian’s business more profitable.
“This was a very eye-opening exercise,” says Tehranchian. “Saying no is as important as saying yes and you actually need to say no more often … if you want to build a focused and successful practice.”
But while wealth managers are learning these crucial lessons, what does it mean for their clients? No one wants to be their surgeon’s first patient or their lawyer’s first case. And yet every professional has to start somewhere.
Even with very experienced wealth managers, Yamada says it’s important to remember no one has a crystal ball. So if you’re looking for help, seek out someone who’s humble enough to admit they’re always learning at every stage of their career — but most importantly, that they understand what’s at stake for you.
“People have to live off the money that you're either making or not making,” says Yamada. “I consider myself fortunate that I made the mistake when I did. If I made the mistake yesterday, it would make a great deal more difference.”
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