Carlos Garcia Ciriza is a pioneer in the world of financial advice in Spain. Not in vain is the co-founder of the Navarra firm C2 Wealth Advisors, which is in the process of integration into Abante Advisors; and co-founder and vice president of ASEAFI, the Spanish Association of Financial Advice, which he has chaired in recent years. FundNews has spoken with him about the current market moment and his future plans as director of Abante in Navarra and La Rioja.
Question: How do you see investors, what do they convey to you when you talk to them?
Reply. We are experiencing a health crisis, which greatly affects psychology and emotions; Y investors are emotionally more negative. Although the wallets are good, because the year is being good and we are making money. But even if the wallets are going well, when you talk to the customer, their mood is low.
And, in the world of investments, to make decisions, rational and emotional factors influence. And the emotional ones make you wrong, but the rational ones make you right. Buying cheap is buying when it has fallen, but the emotional causes you to do just the opposite. People are emotionally touched, and now the work of the advisor, which is much more important, takes on more value. When I talk to clients, we spend 80% of the time talking about the current situation, and we talk very little about the portfolio.
The year is being good for you, but not for many others, what has been your strategy?
Our approach was centered on the 'quality growth' in equities, with a super 'growth' bias. We did not want oil or financial companies and it has worked for us. From here on, it may happen that there is a sectoral rotation from 'growth' to 'value', which is the logical thing to do. When is it going to happen? I do not know. It would be necessary to have a portfolio that is not so 'growth' and more mixed. Not much 'value', but they do start putting things in, because next year they can do it well, since there are sectors that are very punished.
Also, you have to have global portfolios, super diversified. Always looking towards United States. Always having a local overweight does not work, because the saying that 'the trees do not let you see the forest' is true.
And the part of Fixed rent we had it quite conservative. At the end of March, We spoke with the specialists of the Fixed Income funds and rotated, which was providential. Because they were telling us that a gigantic anomaly was happening. When there was a very large flow of sales in March in the United States, they sold the most liquid assets, which are the best. And the worst valued remained in the portfolio, and then everything fell a lot.
You have always defended the importance of financial advice, has the pandemic put it in value?
The Spanish financial system is very particular. It is very much based on product distribution and very little advice. And what is good for the financial health of Spaniards is advice: study the client, their knowledge and experience, their financial situation and their objectives to recommend the most appropriate type of portfolio for their profile.
There has to be a transition from marketing to counseling, and in that transition there is a lot of room for us. I am always very positive with the evolution of the sector because we have a long journey. It is very important that companies that do advice change the way people think.
Customers who come to us already know what they want. It is good that there is more and more because supply generates demand. If there is no supply of good advice, there is no demand. And that is very good for us because the advice weighs very little compared to all the immensity of products that are distributed.
In this scenario, how do you assess the integration of C2 Asesores in Abante?
The operation we have done with Abante allows us to integrate into a larger group. Because for the advisory sector to be large, there must be strong companies. We had already acquired a very good size, around 250 million euros advised, and there comes a time when you consider other formulas.
When you acquire volume, to be more efficient you must at least become a manager, but there is a lot of regulatory complexity. And we have had opportunities to merge with various entities. When Abante approached, we saw his style and it was the same as ours, but big. And we thought that we had to join someone who did the same as us, but better.
And Abante has the same culture, the same philosophy. We liked that, when we sat down to talk, Abante did not want to talk about corporate operations, but about philosophy. And we really liked that. They have a very well structured family planning, with a department focused on the process, the interview, the questions and the planning.
Abante differentiates very well between advice and management. Because when advising you get much more personal. With advice you get a lot in the person, and with management you get a lot in the markets. And it's not the same. Managing portfolios is not the same as advising people in which portfolios to invest. They are two different things. I advise where to invest, which portfolios and the style of the portfolio, but then that portfolio has to be managed. And the integration with Abante will allow us to grow in this aspect and in all areas.