There’s never been a shortage of sporting euphemism in business, but Dimensional Fund Advisors co-CEO Dave Butler’s take on the shift of professionalism in independent advice in the US offers a unique perspective.

Butler is a towering figure to most people at 6’8” (203cm in an actual measurement system) and was drafted into the NBA by the Boston Celtics in 1987. An injury sustained while playing professionally in Turkey meant he retired without playing a pro game in the States.

However, it was his college days at the University of California (based near San Francisco and colloquially known as ‘Cal’) where he draws on his sporting experience and how it relates to driving change in the financial advice market.

“When I was in college, Cal hadn’t beaten UCLA for 26 years in a row,” Butler says referring to the rival college campus located in Los Angeles. “This coach came in and took over and he put a poster on the front of the desk that said ‘the streak stops here’.”

In the first match-up against UCLA under new coach Lou Campanelli, Cal defeated UCLA 75-67. Amongst the opposing players on court that day was future NBA Hall of Famer Reggie Miller.

“I always look back at that and translate that into some things I’ve seen here with the client experience and re-defining investment advisers,” Butler says.

Butler is alluding to the lesson he learned from his mentor Dan Wheeler, who started the adviser business at Dimensional.

“He was very clear over what he wanted to create,” Butler says. “His mission was really about re-defining investment advice and changing the client experience.”

It’s a story that resonates in the Australian market; Butler compares the current landscape in the US now to what it was previously which had a similar commission-based structure.

Unlike in Australia, Butler says there was no regulatory moment that shifted the landscape and change was instead driven by client demand for independent financial advisers charging a fee for their service.

Referring back to his mentor, Butler says Wheeler’s goal was to “re-define” investment advice by changing the dynamic from selling product to end clients. The streak of a commission-based industry would stop there.

“The bottom line was the adviser was working for the client – that was a big change,” Butler says.

“The client paid the adviser a fee and that gave the adviser the incentive to give their best advice. That was the change and that was his rallying cry.”

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