Dan Wheeler remembered

Posted by TEBI on February 24, 2023

Dan Wheeler remembered



There have been a few key individuals who have revolutionised investing. You’ve probably heard of Jack Bogle. Gene Fama, Charley Ellis and Burt Malkiel are right up there as well. Dan Wheeler, who died last weekend, is less well-known, but his contribution to improved outcomes for investors was nevertheless considerable.

After serving in the US Marines, including in Vietnam, Dan became a financial adviser and founded a very different type of advice firm. “Quite simply,” he recalled, ”our job was to give investors the opportunity to have a more successful investment experience. How? First and foremost, we had to create a network of ‘fee only’ investment advisers, eliminating the inherent conflicts of interest present when a financial adviser is a sales person earning a commission.

“Secondly, we needed to educate investors regarding the failure of active money managers to consistently deliver returns superior to the capital market rates of return.”


Making a difference

Dan claimed it was never the aim of the Advisor Group to “make a lot of money”; the aim was to make a difference. He later wrote: “Most of the financial services industry was built and prospers on a commission-based distribution system selling high-cost active management, we realised it was going to be a challenge. But the challenge was the source of our motivation. When you achieve success doing the right thing, life is good.

“The active managers and commission-based distribution will no doubt always be with us; it’s simply too profitable for the financial services industry. But I get a lot of satisfaction knowing that thanks to all the fee-only advisers doing it the ethical way, investors have a choice.”


Launched a revolution

In 1989, Dan joined Dimensional Fund Advisors. Dave Butler, Dimensional’s Co-Chief Executive Officer, says it was in this role that Dan made his biggest impact, “launching a movement that revolutionised financial advice”.

“Dan was convinced that there were other financial advisers who would share his enthusiasm for marrying independent and conflict-free financial advice with cost-effective investment strategies grounded in a scientific approach. He just didn’t know who they were, and they didn’t know about Dimensional. With a larger-than-life personality and enough zeal to overcome the odds, he made this vision a reality.”

As head of Dimensional’s financial adviser business, Dan Wheeler achieved hugely impressive results. Robin Wigglesworth, writing in the FT, says: “In his first year Wheeler brought $70mn into DFA, $150mn in the second, and $325mn in the third. Today about two-thirds of Dimensional’s $584bn of assets under management come from financial advisers.

“We can argue all day long about whether markets are ‘efficient’ or not, but the ideas that DFA have helped spread are one of the reasons why Americans eventually embraced index funds with greater alacrity than the rest of the world.


Unstoppable optimism

Former colleagues describe Dan as an inspirational character who believed passionately in putting the interests of clients first. “Dan changed every room he entered,” wrote Sam Adams, now CEO at Vert Asset Management. “You could feel his positive energy and his unstoppable optimism.”

Bryce Skaff, co-head of Dimensional’s global client group told ThinkAdvisor that he could be “brutally honest – refreshingly so”.

“The conviction and the passion was unique,” Skaff says. “Dan always spoke about how important it was to deliver a better experience and a better approach for clients.

“His example shows that the financial industry is not just data and numbers and science. The reality is that this is a business built on trust. Nobody can prove to anyone what is going to happen in the markets in the future. What we can do is build trust and collaborate and work together to try and achieve shared goals.”


A true visionary

The final word goes to Dave Butler: “We have lost a great mentor, friend, and true visionary. Dan Wheeler was a legend who changed financial advice — and the financial services industry — for the better.

“At Dimensional, we often say we want characters with character. Dan was the first and set a high bar for all of us to strive for, each and every day, while having fun along the way. He’ll be incredibly missed.”



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