Iconic investor Warren Buffett’s legacy has reached beyond investment, as it has influenced how advisers handle client conversations.
During the annual general meeting of Berkshire Hathaway earlier this month, Buffett announced he would be stepping down as CEO and retiring by the end of the year.
Often referred to as the “Oracle of Omaha”, Buffett is known for his long-term, measured approach to investment and preference for value stocks. He started investing at 11 years old and is now worth over US$150 billion ($233 billion).
Wellbeing Wealth managing director and adviser Gareth Colgan says he likes to use Buffett’s quotes in his practice.
Colgan tells Professional Planner one of his favourite quotes is “price is what you pay, value is what you get”.
“I use that in my business, not necessarily just about investment, but about how financial planners have to sell their services and price their services to clients,” Colgan says. “So really driving home that value piece, as opposed to just focusing on the price.”
Colgan adds much of the value of financial planning is from the intangible elements of advice, like having somebody who can be there when needed. The adviser often references some of Buffett’s wisdom and experiences in client conversations as this can provide a beacon of reassurance for clients.
Pursue Wealth financial adviser Alexander Strempel agrees with Colgan that Buffett’s legacy includes the influence he’s had on the way advisers communicate with their clients.
“The core values of the way he invests are consistent to the way I shape my conversations with clients daily,” Strempel says.
“Buffett gave us language and real-life examples to reinforce long-term thinking, especially during volatile periods.”
Marin Wealth managing director Pedro Marin Ramirez also uses Buffett’s wisdom in client conversations. He says he uses Buffett’s insight when educating clients.
“His wisdom goes towards the education of the client and the client making an informed decision,” Marin Ramirez says.
The tortoise wins
Buffett’s long-term, patient approach to investing and his longevity in the investment market is central to his legacy.
Viola Private Wealth founding partner Charlie Viola says his legacy will be “that we have a baseline for every investment decision we ever make”.
“His longevity was a testament to his message,” Viola says.
“His themes were timeless and always will be. He advocated simplicity and sensibility, which are key fundamentals we should all apply to every investment decision we ever make. He wasn’t just a visionary, he was a titan.”
Buffett’s extremely early entrance into the investment market – at age 11 – and the fact he built most of his wealth in later life has proven the value of patience and staying the course.
Strempel says Buffett’s career is “an extraordinary reminder and lesson of the value of time in the market, not timing the market seen through the true impact of compounding” and it shapes how he communicates with clients.
“His clarity and consistency help us shift client focus away from short-term noise and toward enduring and long-term strategies,” Strempel says.
Marin Ramirez says his business has hugely utilised Buffett’s wisdom, as he tailors his investment philosophy to Buffett’s.
“Most investors nowadays are an extension of him,” Marin Ramirez says.
‘The first influencer’
Several of Buffett’s quotes have been circulating around the industry for years – Arrow Private Wealth associate director Ryan Synnot says he is likely “the most quoted and misquoted man in finance”.
Marin Ramirez says he is likely the first “influencer”.
“Nobody has that many quotes, nobody has that much influence,” he says. “Now, anybody can influence with a camera and quoting everyone else.”
Buffett’s ability to influence so many without modern media, such as social media, is testament to his impact on the industry.
One of Buffett’s most famous phrases is “be fearful when others are greedy, and greedy when others are fearful”, which has become investor folklore.
Colgan says he chooses to remind clients to stay the course by using this quote, as when people invest money, they go through “an emotional rollercoaster”, while Buffett was patient and calm.
Synnot also references this particular quote and says Buffett has had a significant influence on investor psychology.
“His overarching philosophy extends beyond Berkshire Hathaway and has allowed more clients to focus on the long term but also recognise that opportunities do present themselves from time to time.”
Colgan says much of the wisdom Buffett has imparted over the years has been very valuable to his business, and expects many other advisers to have also taken his learnings and applied them to their own business.
Capital Partners Consulting associate Nick Menegola says Buffett has been “a lifelong teacher” about investment strategies and consequently improved the financial literacy of the broader population.
“Having the pinnacle of active management so vocally advocating for index funds and just good investment practices cannot be understated,” Menegola says.
“This has led to a better educated general population [both US and Australia] which puts pressure on advisers to be better which is undoubtedly a good thing.”
