Satovsky: An Advisor Should Be Like a Family Doctor

Advisory firm takes a holistic approach to serving clients for multiple generations.

Reviewed by: Advisor Views
Edited by: Advisor Views

Jonathan Satovsky

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





Jonathan Satovsky has been in the financial services industry for 30 years and started his firm Satovsky Asset Management in 2007. A big believer in the investment style of Warren Buffett, he favors factor-based ETFs in his client portfolios. 
 Would you give me an overview of your firm? 

Jonathan Satovsky: I moved to New York in the early ’90s from the Midwest. I started with American Express, [where they asked,] who's looking at the big picture for you? Everyone has an insurance agent, stockbroker, attorney, accountants, a mortgage broker, a banker, six or seven professionals—and nobody speaks to each other. And mistakes happen. 

American Express sold me on the notion that the goal was to build a lifetime relationship with a knowledgeable and trusted advisor. I had big shoes to fill because I wasn't knowledgeable [at the time], and I didn't trust myself.  

My only three pluses were statistics, calculus and logic. I told people, “I don't know anything, but I'm going to work very hard to build that lifetime relationship, cradle to grave, and find a way to help in not just your lifetime, but for multiple generations.” 

I went independent in 2007, and set up my own RIA after two years of meeting with every firm on Wall Street and independent firms.  

Everything just didn’t feel right. If I go to a doctor, I don't want a pharmaceutical salesperson to walk out and prescribe whatever they're getting incentivized to sell. I want him to look at me, take my blood, feel my pulse, know my family history and all the things I'm allergic to and really diagnose the root of how to make me healthy. So I always viewed it like [being] a family doctor. 

I want to provide the kind of advice I would want if I needed someone to take care of me and my family financially, like family doctors.  

Now it’s 30 years later and I've been fortunate to have built a team of CFAs, CFPs, attorneys, financial planners, investment analysts—a loving, compassionate and kind group of people that take care of more and more families as they grow and evolve.  

[We have] somewhere in the vicinity of $700 million or $800 million that we have discretion over, but we’re probably advising on $2 billion to $3 billion. How do ETFs fit into the portfolios you provide for your clients? 

Satovsky: I've been keen on behavioral finance, and I was a very early adopter of using roboadvisors for clients. I thought it was more important to be able to control client behavior and dial them in to a speed limit or path that they can relax at than to have them anxious. 

Only 3% of people do for their clients what they do for themselves, so I really wanted to align interests. We've operationalized things through robo advisors and through Fidelity where we use whatever we think is the best instrument to achieve people's sustainable lifetime goals.  

Often, ETFs are a lower [cost and] tax-efficient instrument and way to execute for people. The industry has been evolving in that direction. What kind of ETFs do you use? 

Satovsky: I would say factor-based ETFs. Instead of market cap tilting, we’re factor tilting toward cheap, small and profitable companies in general. I happen to have a preference to lean on the profitability factor. In a very difficult time, when conditions are tight—whether interest rates are tight or you have recessionary conditions—don't you want to just own a profitable business? 

As long as it's ethical and something that we morally believe in, that seems to be a safer, more relaxed way to invest [such that] I can convince clients to chill for not just decades, but for multiple generations in a sustainable way, and to live through good and bad times with a philosophy and a process that not just intellectually makes sense, but academically makes sense. Your philosophy sounds like it meshes with the one that underlies Dimensional Fund Advisors. 

Satovsky: I loved what they were doing. They've had a massively successful ETF launch—it's probably the most successful launch in history. In two years, they’ve grown like weeds. How can you go wrong if it's cheap, profitable and it's growing? Unless it's cheap and profitable and about to be out of business. 

I’m issuer agnostic—I don't want to get too caught up in getting addicted to [the equivalent of] a really hot pharmaceutical company and just use their stuff and ignore everything else. I'm continuing to do research that can enhance the experience.  

We use Dimensional, Avantis, some Vanguard and other ETF issuers like BlackRock and Schwab to do tax loss harvesting and to be able to help operationalize some replication so that you're not dependent on one institution or one firm.  


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.

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