Keeping Asset Management Simple

James Osborne’s firm doesn’t get fancy, and that suits him—and his clients—just fine.

James OsborneThis article is part of a new series from highlighting financial advisors. 

Bason Asset Management, based in Lakewood, Colorado, is content to be boring. A flat-fee asset management firm, it focuses on offering low-cost beta exposure, financial planning and tax management to its clients. James Osborne founded the firm in 2012.  

He spoke recently with about the role exchange-traded funds play in his portfolios. Would you give me an overview of your firm and how it operates? 

James Osborne: Our firm is super boring—two advisors with no support staff. We have $500 million in assets and 120-130 clients. Our average client is probably pretty average, maybe somewhere around 50 in age. The average portfolio size is maybe $2 million, but there's some pretty heavy skew in that, as is true with most practices, I imagine.  

Our clients own portfolios of pretty straightforward funds and ETFs. It's not super fancy. I definitely can tell you more about what that means. But we're pretty straightforward asset allocators—low cost, tax efficient, etc. What are you using to construct portfolios? 
Osborne: Lots of Vanguard ETFs, but there are also some iShares. We still use some DFA funds; some Schwab ETFs sneak in there with tax-loss harvesting and things like that. But if you looked at it percentagewise, Vanguard is definitely the biggest name in the portfolios. It sounds like you’re pretty much using broad-based, low-cost products. 

Osborne: For the most part, yes. There's a small value tilt across the portfolio. And there are some emerging markets, international real estate, things like that, but the core positions are definitely total market stock positions. How did you decide to lean into boring? 

Osborne: It works, and all the other stuff doesn’t seem to. Before I started the firm more than 10 years ago, I was at a traditional financial advisory wealth management firm, and we were doing the “find the next best” manager, tactical manager, best mutual fund, active management, separately managed accounts, etc.  

I was responsible for doing a lot of the research and due diligence on those products, which also meant I was largely responsible for telling clients when it didn't work, and we had to fire someone and bring in someone else.  

It seemed like it wasn't working. We were a pretty intelligent group of people sitting on that investment committee, and there was still lots of turnover and lots of taxes that went along with that—and obviously, higher internal costs. It just seemed pretty clear to me that maybe all the academic data is right and the ability to beat the market is a giant waste of time.  

You're sitting around on the investment committee asking, “How much longer do we give these guys?” There's no way to academically or accurately or systematically make that decision. Are they underperforming because what they like is out of style right now or are they underperforming because the manager was hot and now isn't, and the coin flips went the other way? 

[The amount] of brainpower and mental energy that went into that to get nowhere is astonishing and a huge waste, when you could spend that time actually talking to clients about things that matter in their lives. 

We stopped trying and started focusing on things that we have control over like fees and taxes and investor behavior, financial planning—all the things that actually matter. It's better on this side. How are you answering the concerns of your clients right now given the uncertain market environment? 

Osborne: You always get questions. I think that our client base is by and large pretty well-educated and generally gets the more passive philosophy. But people still watch or read the news, and the news right now is fear mongering about financial institutions, even though no depositors have lost $1 yet, though investors in SVB lost money. That's how capitalism is supposed to work.  

Things are always tumultuous—that's my sense. I was sitting down with clients having this conversation. We always think that this time seems scarier than last time, or different than last time, or things are worse than before. I think we just don't remember last time.  

This is certainly nothing compared to how terrified people were when we were shutting the entire world down for COVID. And that was nothing in comparison to the financial crisis or the tech crash. We have these little hiccups, whether it's SVB or SARS, and everybody's asking, “What do we do?” And the answer is: probably nothing.  

[With the banking crisis,] there's a handful of people who are convinced that their custodian is going to disappear into the night with their retirement portfolio. Our job is to help them see that that is not how this works. And hopefully, we can be successful in that and help people not make silly decisions or irrational decisions or potentially expensive ones. 


Contact Heather Bell at [email protected] 

Advisor Views is a bi-weekly Q&A-style series that features voices from across the financial planning industry sharing insights on investment strategy and portfolio management as it relates to the current economic environment.

The format enables advisors to respond in their own words to specific questions designed to provide readers with practical tools and tactics that can be applied to managing client portfolios.