Episode 123: This week, Kyle Van Pelt talks with Tim Thomas, Chief Investment Officer and Wealth Manager at Badgley Phelps Wealth Managers. Tim joined Badgley Phelps in 2008 and brings more than two decades of experience in financial planning and portfolio management. He specialized in security analysis and selection, portfolio construction, asset allocation, and alternative investments.

Tim shares with Kyle about the mechanics of modern portfolio construction. He discusses why the financial plan must be the north star for investment strategy, how to navigate the noisy and rapidly democratizing world of alternative investments, and how AI is changing the backend of advisory work without replacing the human connection.

In this episode:

(00:00) - Intro

(01:33) - Tim's money moment

(02:57) - Marrying financial planning with investment strategy

(03:56) - How investing has changed over time

(06:18) - The rise in alternative investments

(09:55) - Understanding alts as more than one asset class

(16:24) - How Badgley Phelps helps clients navigate the nuances of alts

(18:27) - Managing M&A and the acquisition of Marshall & Sullivan

(21:45) - How Badgley Phelps approaches holistic planning

(23:40) - Tim's thoughts about the future of the industry

(27:25) - Tim's Milemarker Minute

Key Takeaways

Planning is a strategy. Investments are implementation.  The most effective portfolios are built after the cash flow model is complete.  By understanding the client's lifestyle needs and success rates first, you can determine the specific hurdle rate required to achieve their goals. 

Democratization of alts is exciting, but operational risk is real. Alternative investments are booming, but they shouldn't be added to a portfolio just because they are trendy or accessible.

Customization beats cookie-cutter strategies. Whether it's equities, fixed income, or alts, thoughtful leaders build client portfolios around client-specific needs — income, growth, risk tolerance, or liquidity — instead of defaulting to one-size-fits-all recommendations.

The quarterback model vs. the generalist. There is a massive industry push to bring tax, legal, and estate planning in-house. Sometimes, building a bespoke team of external experts serves the client better than a one-size-fits-all internal department.

Quotes

"Planning has really come to the forefront, and the investments are critically important because that is the implementation of the plan. But the planning has definitely risen in prominence, and it has a much bigger role than it used to." ~ Tim Thomas

"It's just incredible to see how fast alts have grown in prominence and how big an allocation they're getting in portfolios these days. We're missing out on some opportunities by not having them." ~ Tim Thomas

"When you think about technology, computers are really good at crunching a lot of data, sorting, and solving a lot of different things at the same time. What they can't replace is that conversation with a client." ~ Tim Thomas

Links 

Tim Thomas on LinkedIn

Badgley Phelps Wealth Managers

Vanguard

iCapital

CAIS

Focus Financial Partners

Marshall & Sullivan, Inc.

Chip War: The Fight for the World's Most Critical Technology

Boom: Bubbles and the End of Stagnation

Connect with our hosts

Milemarker.co

Kyle on LinkedIn

Jud on LinkedIn

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