Markets Work: Improving the Client Experience

On episode 35 of The Wealth Cast, Chas speaks to Dimensional Fund Advisors co-CEO, Dave Butler. Following a brief career in professional basketball, Dave worked at a Wall Street financial services firm. After a few years, in which he became disillusioned with the then-prevalent industry model, he moved to California and joined Dimensional, which was pioneering a new investment model based on academic research and a scientific approach. His stories and insights into this transformation paint a vivid picture.

Listen here:

The summary below has been created by a professional transcription vendor upon review of the recorded presentation. Please excuse any typos as well as portions noted to be inaudible.

Hello, and welcome to The Wealth Cast. I’m your host, Charles Boinske. On this podcast, we bring you the information that you need to know in order to be a good steward of your wealth, reach your goals, and improve society.

Today, my guest is Dave Butler, co-CEO at Dimensional Fund Advisors. I asked Dave to be on the show today to share his experiences career-wise and offer his insights in terms of management, being a good team player and making a mark in your company and in your industry. Dave, in his role as co-CEO at Dimensional Fund Advisors, oversees the management of approximately $650 billion with a team of 1,400 employees in 13 offices around the world. Thanks for joining us, and I hope you enjoy the show.

Dave, welcome to The Wealth Cast.

Thank you, Chas. It’s great to be here. It’s fun to be chatting with an old friend.

Well, thanks a lot—I feel the same. You know, in thinking about our conversation, I thought maybe it’s just best to start at the beginning. You know, you and I met, I don’t remember what the year was, but it seems like a long time ago, when you first came to Dimensional. So why don’t you share with the listeners, how you sort of got to where you are today? Because I think that’s an important perspective for some of the other questions I’m going to ask you.

Okay, yeah, happy to do that. You know, so anybody that sees me in person obviously realizes I’m a basketball player. So I’m about six-foot-nine, and I played basketball at Cal, out in Berkeley, in California. During my career there actually, I hurt my knee one year, so long story short, I played five years. In my fifth year, I was able to go start my MBA, I was one year through my MBA, I had finished up my basketball career, I got drafted by the Boston Celtics, and was getting ready to go be an NBA player, and they had a strike the year I came out, so they decided that they weren’t gonna have a season. My understanding at that point in time, I decided that I would look overseas to Europe, and I ended up taking a job in Istanbul, Turkey to play basketball in Turkey my first year. Did that for a year, came back the following year, ended up going to Tokyo, Japan, played a year in Tokyo. Then I came back after that, I injured my calf to some degree, and my basketball career felt like it was kind of on the downslide.

So I ended up coming back to Berkeley, finished up my MBA that second year, and then when I was getting ready to look for a role or a job, I still had the itch to go play basketball. I had interviewed with a couple of big Wall Street firms, but I decided I wanted to finish out my basketball career, make sure I didn’t miss something. And so I end up going to Birmingham, England, to play my last year of hoops.

And as I tell the story of my—I was probably a month into the season, and my calf was really bothering me, and I was just not enjoying the experience and felt like my, again, my career was going in the wrong direction. And one of the firms had called me and said, “Oh, we’ve got a job for you on the desk.” And so, you know, being in the mid-1990s, being on Wall Street, one of the big investment banks is where you wanted to land. So I went to the coach and I just said, “Hey, Coach, I’ve got this chance to fulfill a dream, which is to work on Wall Street.” And I said, “I’m going to be you know, leaving the team.”

And that was a Saturday morning. I got a flight on Sunday, flew to New York, went to my brother’s apartment who happened to be playing with the Knicks at the time, and he’s a seven footer. And so I went to his apartment, borrowed a suit, and I showed up at work the first day Monday morning. So that was the transition. And people always asked, you know, how was your transition from sports to business and it was about a 24 hour transition. So that’s how I landed in New York to start my career in finance.

That’s really interesting. And so you worked on the desk for an investment banking firm for a period of time. And tell me about that experience, and what you liked, what you didn’t like, and sort of what caused you to change.

Yeah. I was probably about three and a half years into the role and I just, I came to the conclusion that I didn’t really like specifically what I was doing. And I’d also had some experience, personal experiences, on the investment side that sort of changed my perspective. And my perspective there was that, you know, I had a broker, his name was Tom. And my broker would call me each day and say, “Hey, here’s this great stock, you should buy this. This stock is gonna go to this price, that stock is gonna come down to that price.” You know, the whole concept was is this high transaction, you know, high commission, turnover type of environment.

And you know, and Tom didn’t know anything about me—didn’t know my net worth, didn’t know my future plans, didn’t know my retirement thoughts. And so I would get these stock tips from Tom, you know, oftentimes would execute on them—and it was interesting, I got a tip from him at some point in time on a stock called Boston Chicken—and some people might remember the restaurant called Boston Chicken—but the idea was, it was an $18 stock, it was going to go to 25. That’s what the analysts said at the investment bank, and Tom liked it a lot.

I personally would do my own work … so I did all my work, I thought it was a great stock. Basically, I took all my net worth, put it into the stock, I went out to a business trip in Utah, and back in those days, there was no cell phones and so forth. So I woke up in the morning, I wasn’t able to get ahold of Tom. I went down to the newspaper shop, pulled out a newspaper, Wall Street Journal, open it up, looked up Boston chicken, thinking it was gonna be 25, 26 bucks, and it said 8. And so instead of 18 going to 28, it was 18 going to 8. And I had this kind of sneaky feeling I just basically lost all my money.

But I had a ray of hope—I looked, I noticed there was a crease in the paper. So I kind of pulled the crease apart hoping there’d be a one in there. And there wasn’t. 

So that was my, you know, my big “aha” moment, if you will. And I used to have a mentor/boss, Dan Wheeler. He would talk about how the stock market would often give you high tuition bills, because you had to learn some things by doing it yourself. And then that was my big learning moment, learning experience.

So about a month later, I was on the desk—I had just decided I was going to leave the financial services industry. I thought that was kind of the norm, and there wasn’t anything that was good or better from my perspective. So I was gonna go back to California, and go be a teacher and a basketball coach, and I was on the desk and opened up the Wall Street Journal one morning, 17th page, bottom right hand corner, I saw an ad that said “Money Manager, Santa Monica, California,” and sent a résumé into this money manager. I didn’t know who it was. It turned out to be Dimensional. And I can give you some background when I showed up there, but that was the big moment, that kind of career shift, if you will, and that was 27 years ago.

Yeah, that’s time flies, doesn’t it? You mentioned tuition; I had a similar experience with a client that’s unfortunately no longer living, who used to say to me—and I learned a lot from this particular individual when I was young, in my 20s just starting out—and he used to say, “The key to being a successful investor is never paying the same tuition twice.”

I like that.

And I think that, you know, that really resonated with me is learning from mistakes, whether it’s a mistake that’s due to a systematic issue, which is kind of what you described with the industry, or if it’s a mistake that has a specific route—trying to tie markets or whatever the case may be. I think that’s really good advice.

I think, if memory serves, when you first joined Dimensional, I guess the first maybe the first day you interviewed, you had an interesting elevator ride, or you had an interesting lunch companion. Am I remembering that correctly?

Yeah, very much so. That was the beauty of that moment—I was, to your point, I’d made a mistake, I had kind of hit the valley and I didn’t feel good about what I was doing, and I was open. And luckily enough and sometimes in life, you know, there’s preparation and there’s, you know, luck and a lot of things that kind of get combined into, you know, opportunity.

And I got this chance to go out to Santa Monica, California, and I took the elevator up to the 11th floor where this firm called Dimensional Fund Advisors was located. And when I got off the elevator, Dan Wheeler, who I mentioned was the first financial advisor to use Dimensional Funds, was there to greet me. And then off to the left was David Booth, founder, chairman of Dimensional, and a board member named Merton Miller. And Merton Miller is a Nobel Prize winner—was a Nobel Prize winner in finance.

And David said, “Well, hey, Dan, I’ve got something else I need to do, another meeting, can you take Merton with you to lunch?” And Dan said, “Of course I can, but I’ve got this new recruit, so if Merton doesn’t mind?”

Merton was terrific, and one of the most modest, you know, smart people I’ve ever met in my life. And he went out to lunch with me and he started to talk about all these really simple capital market tenets. He used to say, you know, “Diversification is your buddy. You know, costs matter, you know, markets work.” And I started hearing this stuff and thinking to myself, you know, what he was saying was so interesting and so unique. I wanted to learn more.

And then we finished up the lunch, we went back to Dan’s office, and Dan, you know, took the other side of the equation and said, “You know, there’s a new kind of profession that I’m involved in, it’s called independent financial advisor. And it’s an advisor who’s actually working in the best interest of the client, who’s acting as a fiduciary to the client, sitting on the same side of the table,” if you will, as Dan used to say. And he said, “This combination of this independent advisor, and this entity called Dimensional Fund Advisors, that is able to efficiently access the capital markets,” he said, “the combination of those two would deliver this great client experience.”

I remember when he said that, you know, “deliver the great client experience,” again, contrasting to what I had just gone through in New York a couple of months before, I thought to myself, “Hmm, now this is really interesting.” And I kind of scrapped the plans to go be a high school teacher and coach. I went back to my house and got my corporate finance book and looked up, you know, Merton Miller, and Fama, and French, and Scholes, and, you know, on and on and on. All these guys were in the corporate finance textbook from from my MBA program, and these guys were all on the board, and they were all part of this firm called Dimensional. And I just thought, wow, this is something special.

So people always ask “When you’re young, what’s your advice to younger people?” I always tell them just, you know, “Find something that you think you can be very, very passionate about, and motivated by an interest in, and you’re gonna be fine; things are going to work out. Don’t follow a certain compensation or certain title or anything else, because that becomes a job, it doesn’t become a passion.” And so I thought to myself, “Hey, if I can do this for ten years, that seemed like a long time at that period of time I thought about, that’d be terrific.” And again, here I am, 27 years later, same firm, but more importantly, the same passion and same same mission, just like you’re on, I think, Chas.

Well, thanks. I think it’s the same firm, obviously, the same firm name, but a lot of stuff has changed, right, in 27 years. Why don’t you just for contrast, talk about a little bit about the size of Dimensional when you joined it, and sort of the entrepreneurial? Right, what I remember about those days, having interactions with Dimensional was just the entrepreneurial spirit that was there.

Yeah!

It was infectious, right? It was really contagious. And then growing into a large organization. I think one of the challenges I’m sure you faced is keeping that, as much of that entrepreneurial spirit intact, as you’ve grown. Let’s talk about scale. First, how big was Dimensional when you joined, and how big is Dimensional today?

Yeah, just to just put in context, when I joined, we were about nine and a half billion, and today, we’re about 675 billion. And then the advisor business—the business that Dan Wheeler who I’d mentioned, started, you know, when I started, was about 1.2 billion total from financial advisors. I think now we’re at 485 billion from advisors, something like that. So I think the important point that you noted, which is really about being an entrepreneur—it wasn’t just me, it was Dan Wheeler, it was a guy named Bo Cornell … all of these guys and gals who worked there at the time, we’d all come out of this environment, which I would call the commission, transaction-oriented, active environment, that was really what investment advice was all about at the time. And we and we all in different ways, we all had experiences similar to mine. And we got to this place called Dimensional, and Dan, again, laid out this new model, which really was wrapped around independent advice, associated with low-cost, efficient access to the capital markets, and each of us in our own way, you know, had that “aha” moment.

And to your point about kind of the infectious kind of aspect of it, you know, we went out as pied pipers. But, you know, we always said, there was really no business there, we just had an idea. And we thought the idea was great. And we thought the idea was great for the client. And we thought, “Well, if the client has success, then then the advisor who’s delivering that to the client is gonna have success as well. And that’ll be a business.” And we didn’t have any grand master plans, and we didn’t have half a trillion dollars from advisors, you know, over X number of years. 

I never saw a business plan near Dimensional. The only thing I’ve ever seen, is this sort of this pursuit of truth: Can we do it in a way that’s going to be the right answer for the end client? And if the answer is yes, and we think we can do it in a consistent and cost effective way, then we’re going to do it.

That’s the beauty of great businesses. It’s never about some strategic plan that has metrics around certain revenue goals or targets or this or that. It’s always about an energy and a mission that people grasp onto. And once that momentum and that infectious, as you commented, infectious kind of sense of, “Hey, we’re doing something good here, and we’re making some change.” And I always used to say, “If I can, you know, look myself in the mirror and feel good about what I’m doing every morning, I’m going to be okay. I’m going to have a long and healthy run, doing whatever I’m doing.”

Yeah, it’s interesting. I think so many people today, you know, just because they haven’t experienced the—what I might call the old world of investing, or the old world of financial services—they don’t really realize how different today is compared to the past.

Yeah, that’s true. You know, I look back and people say, “Well, have you, do you feel like you’ve made an impact?” Not me personally, but do you feel like we collectively have made an impact? And I say, “Absolutely, we’ve made a massive impact. Because, you know, when I look back at my days at the investment bank—and I pulled out an old trade ticket a while back when I was cleaning out my garage—and a commission that I had on a $10,000 stock trade was $450. So basically four and a half percent. And that was one way. So you figure if you buy and sell, you’re at 9%. 

So in those days, investment advice cost about 9 to 10%. And it was about trying to, you know, elevate the number of trades that somebody would make so that they could capture, you know, the commission could be captured by the broker. That was what we called investment advice, which was not the right answer.

So I look today, and you look at what the client has access to: they have access to funds from Dimensional for instance, that have a, you know, expense ratio in the 20 basis point range, which is 1/5 of 1%. They have advisors who are again, delivering all kinds of wealth management services and investment allocation services, at a very reasonable price for all of the services that are put out there. And so I think that the solution set for the clients has gone way up.

I will say, as you know, it’s not like the whole financial services world has come to this great conclusion, and that any client, my mom can go out and find this incredibly good independent advisor / low cost provider, Dimensional capital market solution, because there’s still a lot of product, and still a lot of commissions and a lot of sales orientation in the industry. But you know, at least there’s a, there’s a kind of a beachfront that, that allows somebody to go out and find that right solution for themselves, which I think is important, and wasn’t there, you know, 15, 20 25 years ago, for sure.

Yeah, the solution’s not hidden any longer. And it’s been clearly executed by lots of folks in the industry. In the old days, it just didn’t exist.

I mean, I remember from, from my own personal experience, that when I first started in the industry, which was 1984, a portfolio that had roughly 20 to 30 dividend-paying stocks was considered a widows and orphans portfolio. In other words, it was suitable for even widows and orphans. And today, that would be considered malpractice. Not only were all the stocks in the US, but it was all one type, the diversification was minimal, but that’s the best we had to offer in those days. And the change between then and today is enormous: the amount of academic research, etc. That’s as stark a contrast that I personally can share.

Well, and I would also say, markets work, and so clients are attracted to a model. And I think it’s competing so strongly that the market has had to shift. 

Yeah, it’s been really interesting. I think it’s worth talking about for a couple of minutes, you know, what caused that shift beyond the desire of folks like yourself to do a better job for clients. There was a tremendous amount of academic research that provided the evidence that you needed to make to support the change, right? So it would be interesting, I think, to hear from you, how Dimensional was able to leverage that academic exposure, and that’s part of the secret sauce, as far as I’m concerned.

Yeah I think there’s really two buckets there. One is the capital market side—kind of this introduction of the concept of indexing, you know: buying every stock in the market and doing it at a very low cost—versus, you know, going out and picking the 20 best stocks or 30 best stocks that was kind of considered to be “asset management” at the time.

But you know, as you know, all of the folks that are involved at Dimensional you know, David booth and, you know, Wells Fargo, Mack McLeod, who’s on on the Dimensional board, he was the the proponent, if you will at Wells Fargo, who, you know, organized the academic data and research that suggested that this naive stock portfolio—this index portfolio—outperforms an actively manager, stock picking portfolio on a very regular basis.

So there’s all kinds of academic research that started coming out in the 60s and 70s. That translated into index funds in the early 70s. As I said, Rex Sinquefield at American National Bank, David Booth and Mack McLeod at Wells Fargo. That was a huge step forward. And obviously, you know, Vanguard eventually got in the game in ‘76, I think, after—as the first retail index fund—after the two institutional index managers. And so then that sort of just moved the ball forward on the capital markets side.

Dimensional, then, the folks that were at Wells Fargo and American National Bank, who started the first index funds, then started Dimensional in ‘81. And they launched the first small cap index stock portfolio. That was the start of Dimensional. And then as we moved forward, there was things like value stocks that showed higher performance, versus growth stocks, and Fama and French who also are board members here at Dimensional, they published a kind of a landmark paper on value stocks that suggested that premiums existed, that was ‘92, and Dimensional came out with a bunch of value portfolios in ‘92. 

So there’s this kind of progression, if you will, from the idea of indexing, and that you could buy every stock and hold on to it and do it in a very cost efficient way, then translated into some of these, what people now call “smart beta,” or “multi factor type” portfolios, that Dimensional was really the pioneer in that space, 40 years ago, in 1981. And that business now has become massive, and has overtaken really every other type of asset management type of an approach the last forty years.

And then on the other side is the independent advice piece, which again, you and Dan Wheeler, when I heard it from Dan Wheeler, you know, 30 years ago, that was an exciting aspect to like, “What is advice?” You know, how do we redefine financial advice away from commissions and transactions and turnover, to something that was really about, you know, putting the client’s best interest at heart—keeping their fees low, being very diversified globally, and then eventually kind of translate that into like, what does that mean to their retirement? What does that mean to their charitable pursuits? What does that mean to their estate plans, and so forth.

So there’s an extension of all this that’s made, again, the outcome for the client, has been incredibly well served by both—call it the revolution in the capital market space, and then this kind of revolution / evolution in the financial advice space.

Yeah, it’s interesting that the whole world hasn’t progressed at the same rate. So you know, the US, I think the US was the leader in this right. And as you well know, I’ve had the opportunity to speak to many German advisors over a decade or so. And what was really fun for me in doing that was getting a taste of that same opportunity that you felt, that we felt together, back in the ‘90s, but doing it in a marketplace that may be 20 years behind the U.S.

It’s always been amazing to me that it’s taken so long for these other systems to catch up. And it’s usually due to regulatory or societal bias, or whatever the case may be, but it’s an unstoppable force. Capital markets work, it’s eventually going to force everybody to do, you know, take a particular course that’s in the best interest of the clients.

Yeah, that’s so, so true. And I think you nailed it, it’s an unstoppable force. And, like you, I’ve been around the globe, in so many different countries talking to advisors, and it’s all the same. I mean, you know, at the end of the day, clients want to be okay. And that’s the bottom line, like, whatever, “okay” is in their mind, they want to get to that. And if an advisor / coach /  you know, mentor in the investment space can help them get there, that’s going to be an outcome that’s going to be a positive one.

So, you know, it takes time. To your point, in each location, there’s sometimes, there’s regulation, and there’s sometimes, there’s just societal, you know, viewpoints around markets and how they work, you know, and how often people should be trading and so forth. But, you know, like you said, sometimes ideas take some time to get some traction, but once the momentum around that idea becomes significant, then it’s tough to put that genie back in the bottle.

So the beautiful thing about all this is, I’m confident this is the right idea for my mom, or for any client. And you know, as long as we just keep, you know, pushing on it, and pushing the ball, you know, either up the hill, or eventually down the hill, I mean, people are going to get a better outcome, which is what we all wanted, why we all got into business in the first place.

Yeah, it’s interesting, when you think about it, the investing process in the U.S. was basically—and this is an overstatement, I realize—but principally the same for 200 years, and then it changed. You know, those people would not recognize, you know what I mean? 

Yeah.

The first 200 years it was “buy stocks and create a 20 stock portfolio, maybe.” I don’t know if you remember this, this might have been before your time, but years ago, there was a concept called diversification, and the idea being that, why would anyone diversify their portfolio instead of just concentrating in their absolutely best idea. And obviously, the academic evidence has come out and been very clear that concentrating your investments is potentially pretty dangerous. It doesn’t have a higher expected return associated with doing it. But it’s just indicative of how much things have changed over the last—in my career, let’s say 35 years.

Yeah, that’s so true. And I think, you know, the reality is like, we’re all humans. So we all have a behavioral bias, and we all, you know, we want to buy a lottery ticket, because there’s a chance that we’re gonna win the lottery. So we do a lot of things that are, you know, quote, unquote, “irrational.” So sometimes, what I found is, even if you put rational data in front of somebody, there’s still an emotion that people have to get around, to be able to get to that rational answer. And I think that takes some time, and it takes some repetition oftentimes, and sometimes it takes a high tuition bill, as I described earlier, for somebody to kind of like, step back and wake up to that idea.

So, you know, look, we all have opinions, you know, I have an opinion about what inflation is going to do next year, I have an opinion about, you know, what the economy is going to do, what the stock market’s gonna do. But as Dan Wheeler would always say, you know, “God forbid I ever invest your money based on my opinion.”

So you’re better off with your investment portfolio, looking at very rational views of the market, and deploying your assets in the capital markets in a way that’s going to deliver those rational expectations. And look, if you want to speculate, and you want to have that fun, and that excitement from an individual stock—one, you could go to Las Vegas and gamble a little bit, that’s fun. Don’t take your entire portfolio and put it in play in Vegas. But the other option is you know, I remember Merton Miller said this to me, too. They said, “Well, you sound like an efficient market back Shinato. Do you ever pick stocks?” And he said, “Yes, yes, of course.” He goes, “I have I buy two or three stocks every year because it’s fun. And it’s exciting.” And so in his view it’s like that was a speculative part of his portfolio. He said “It’s never more than 2 or 3% of my net worth, but I do it because it’s fun.”

So I think sometimes we, you know, we’re trying to coach clients and coach people to get to an answer that we think is the right rational answer, I think we have to also be aware that people have an interest in rolling the dice, and that’s why Vegas thrives, and it’s why people bet on sports and everything else. So you know, it could be that somebody’s completely rational, is able to take their entire portfolio and put it in low cost, diversified solutions. But it might be that somebody goes, “Yeah, 90% of my net worth is going to go that direction. But I still want to buy Boston Chicken with 10% because I just, I need to have that, that fun, and that energy and emotion.” So but as long as they go into it thinking and knowing that they might go from 18 to 8, and they’re willing to take that risk, then, then that’s okay.

But the problem with the old model, the old version was, again, “We’re gonna look into the crystal ball, I’m going to tell you something that’s going to happen in the future. And the reality of that future was completely unpredictable, and that broker had no right telling me or any other client that there’s this outcome that he fully expected, because he couldn’t, and he didn’t.

So there’s a difference in setting expectations, and then having the ability to meet those expectations on a regular basis, and I think what, the model you’ve used for those years is you set expectations properly around stock market returns and everything else, and guess what, you meet those expectations. And so clients are, they don’t want to see negative returns, but they’re not upset when, you know, there’s an outcome that they understood that there could be an expectation that that outcome wasn’t a positive one.

Yep, that makes sense. You know, and you’re sort of transitioning now to, from the investment specifics, to more about thinking about running a business and, you know, your experience there—you’ve had the unique opportunity to see from sort of the catbird seat, lots of successful entrepreneurs operate.

Yep.

Right? That’s, that’s a huge benefit of being in the position that you’re in, working with all sorts of advisors around the country, around the world, seeing how they operate. Are there any lessons that you’ve—you know, sort of principles that you’ve taken out of that where you’ve seen 200 people be really successful? What are the commonalities?

Yeah, you know, I think it’s, a lot of it is leadership. And, you know, I’m just super happy that I had a chance to be an athlete because I look at a lot of the sports oriented lessons I’ve learned and they’re applied over a very short period of time. It might be a three month season or six months season, but all the lessons are all the same, you know, when you get into businesses and corporations.

And so, you know, I would say the few things that I see from the really successful leaders that I’ve watched over time: You know, one is they’re very clear about where they want to go. So their ability to articulate a goal or an objective, in a very concise way is excellent. You know, I think number two is, you know, you always want to make someone else look good. And so I think the great leaders are not the ones that want to wave their hands and tell people how great they are, or what they’ve done. They’re always quick to defer the credit to somebody else, talk about the team, talk about again, you know, the goal. And I think when you do that, you know, you have a lot better ability to build out a team that’s going to basically kind of function in one direction.

And the last part of that, I think, is, I use this line from, I think it was Phil Knight in the shoe, Nike story about him, it’s called “Shoe Dog.” And he says, “None of my heroes are micro managers.” And I’m a big believer in that, like, the great ones, the great leaders are all macro managers. You know, they basically recognize that there’s a lot of people with skills that are better than theirs in certain categories, and they want to basically elevate those people, allow those people to run with it, have ownership of a decision, and then, you know, basically kind of sit back and be a mentor and a coach to those folks, rather than trying to be the the all-controlling all-knowing person that’s quote unquote, “the leader,” who really isn’t.

So I think those are, I think those are probably three categories. You know, don’t be a micromanager, make somebody else look good—defer the credit. And then just kind of simplicity of your vision and your goal and where you want to go with your leadership.

That’s really helpful. Thank you. One last question for you, Dave: Any recommendations from you in terms of a book or a couple of books that you might recommend to younger folks starting out there, for inspiration for guidance, that you think may be helpful?

Yeah, my favorite book that I’ve read a number of times, and I’ve had my kids reading it now—it’s called The Little Book of Talent by an author named Daniel Coyle. And, you know, it’s probably 45 pages of just small snippets of thinking about how you should work on a daily basis. A lot of things about habit, about athletes who have gotten great at something, you know, watching somebody who’s really, really good, trying to take things in small chunks, you know, and basically, applauding your success for actually, you know, repeating something in a small way, and not trying to get to this big kind of outcome that that everybody wants. But it’s a great book. And you know, you literally can read one segment of the 40, you know, each morning and try to make that part of your daily routine. So I love that book, The Little Book of Talent by Daniel Coyle. That’s one of my favorites.

Well, that’s that’s great. We’ll put a link to the book on Amazon in the show notes on the website, so people can find that really easily.

Dave, it’s been a pleasure to have the conversation. I really appreciate you taking the time to do so. And we’ve known each other a long time now. And it’s been great to see your success at Dimensional, and sort of go on a parallel journey with you through the financial services industry. And, again, I just appreciate your time.

Well, thanks, Chas. 

Well, it’s been a pleasure. And importantly, it’s been a lot of fun and very satisfying to do. So I hope that we have a chance to have a conversation in the future. We’ll get an update from you on what’s what’s transpired. Hopefully, it won’t take another 30 years before we see those results. But it’s really been fun. So thanks. Thanks again, Dave.

Yeah, thank you Chas has been great. And it’s great point, fun is always at the another key of having success in anything. So it’s been fun all along the way. Thank you.

You’re welcome.

I hope you enjoyed the conversation with Dave Butler today. I hope the ideas and opinions that Dave shared will help you make better decisions, either as a manager of a business or as a team member in a business. Thank you so much for listening to today’s podcast. Please visit our website for show notes and a complete transcript of this interview. Thanks very much. Have a great day.

About Dave

Dave Butler serves as Co-Chief Executive Officer of Dimensional Fund Advisors LP. He joined the firm in 1995 and was named Co-CEO in 2017. Along with Co-CEO Gerard O’Reilly, Dave guides Dimensional’s vision and strategy, inspiring innovation and growth, with a focus on helping clients develop perspective on the markets so that they can have a better investment experience. Dave frequently interacts with professional investors and industry leaders around the globe. In the 25 years since Dave joined Dimensional, the firm has grown from roughly $10 billion in assets under management to more than $653 billion.

Prior to becoming Co-CEO, Dave led the development of Dimensional’s financial advisor business, building a global team of Regional Directors and client services professionals. Throughout his career, Dave has been closely involved in the evolving field of investment advice and the strong community of professionals redefining wealth management and enhancing the investor experience.

Dave attended the University of California, Berkeley, where he earned a BS in marketing and finance in 1986 and an MBA in 1990. He received the CFA® designation in 1998. Dave played basketball while attending Cal and was later drafted by the Boston Celtics. In 2011, he was inducted into the Cal Athletics Hall of Fame, and in 2014, he was named to the Pac-12 Basketball Hall of Honor. Dave was also a Rhodes Scholar candidate.