No Value Added in Wealth Advisory? Yale’s Class of 1954 Might Not Agree

Barely a year out of the University of Pennsylvania’s Wharton Business School, Joe McNay was working in Boston as an analyst for Old Colony Trust Co. He spotted Syntex Corp., a drug maker seeking regulatory approval for a birth-control pill, and persuaded his employer to buy 1 million shares.

Old Colony acquired shares at $17 each and—get up, get outta here—sold them six months later at $600 apiece, about 35 times the original investment.

The year was 1961. Mr. McNay has been picking winners ever since.

Today, he is the chairman of Essex Investment Management Co., a Boston registered investment adviser that manages about $643 million in assets, primarily for high-net-worth investors.

“It’s so much more interesting doing what we’re doing than sitting on beach,” says Mr. McNay, a gifted raconteur who enjoys retelling some of the great stories from his career. Like why the Yale University class of 1954 was so happy at its 50th reunion. Or what it was like to manage money for Bill and Hillary Clinton.

Here’s the real story. Inside wealth management, a growing herd of asset-gathering sheep dismiss investment management as a commodity. They say, no value added, money-management fees are going to zero. I say, not so fast. Mr. McNay’s career, 55 years and going strong, underscores the importance of deep investment expertise. It wins clients. It instills confidence. It proves that financial professionals know what they are doing no matter what the markets bring.

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