Echelons Capital
2078 Prospector Ave, Suite 4
Park City, UT 84060
John, the CEO and Managing Partner of Echelons Capital, is an alumnus of the United States Military Academy at West Point, NY. Subsequent to commissioning into the Army as an Infantry Officer, he remained in service for 12 years, achieving the rank of Major and dedicating the majority of his career to the Special Operations Community as a Commander in the Special Forces and the nation’s top-tiered Special Mission Unit. His leadership style today is a reflection of this dynamic and formative period in his life, during which he was continuously deployed overseas in combat.
Upon departing from the military, John embarked on a career on Wall Street, working in Foreign Exchange for Goldman Sachs & Co. at their global headquarters in New York City, where he covered hedge funds, pension funds, endowments, banks, and brokers. A year and a half later, John was elevated to the position of Vice President and, leveraging his astute understanding of the FOREX markets, he commenced managing investment portfolios as a Private Wealth Advisor to ultra-high-net-worth families located offshore, across the United States, and throughout Canada.
Nearly seven years later, John established his own firm with a singular focus on managing portfolios for US-based entrepreneurs, families, non-profits, trusts, and corporations. John’s philosophy and management style are firmly rooted in established methods and processes, ensuring that redundancies exist, and risks are identified and mitigated where possible. He consistently emphasizes responsiveness and lucidity in communication. John’s investment philosophy is derived from his foundational years in Wealth Management on a team that collectively managed $7bn in AUM.
Outside of work, John is an ardent problem solver who works with several small startups to tackle significant issues close to his heart. In his leisure time, John is an outdoorsman who relishes nothing more than embarking on wilderness adventures with his family.
As the CEO of Echelons Capital, John’s vision for the firm remains resolutely focused on forging partnerships with select clients where a mutual level of professional respect can exist and a natural rapport can be cultivated over time.
Brett, the Chief Operating Officer of Echelons Capital, is a distinguished graduate of the University of Notre Dame, where he majored in finance and earned his commission into the United States Army. As a Lieutenant and Captain, he demonstrated exceptional leadership skills as an infantry officer within the renowned 101st Airborne Division.
Following his passion for finance, Brett joined Goldman Sachs’ Securities Division, where he honed his expertise in the field. Subsequently, he co-founded and spearheaded a technology and micro-mobility startup in California, further expanding his knowledge and experience in operations.
Brett’s dual proficiency in finance and operations, coupled with his fervor for markets and people, make him an invaluable COO and strategic partner for Echelons Capital’s clients and wealth advisory practice. His unique combination of skills and experiences enables him to provide unparalleled insights and guidance to the company and its clients.
As COO of Echelons Capital, Brett is responsible for overseeing the company’s day-to-day operations and ensuring that its strategic goals are met. He works closely with the rest of the executive team to develop and implement strategies that drive growth and success for the company and its clients.
Brett’s dedication to excellence, combined with his extensive knowledge and experience, make him an integral part of Echelons Capital’s leadership team. His contributions to the company are invaluable, and his unwavering commitment to its success is evident in everything he does.
The firm recognizes that discerning the signals of underlying trends amidst the noise of data while managing a diversified portfolio of assets can be daunting, given the seemingly infinite number of decisions involved, ranging from the appropriate level of risk, the list of eligible asset classes, their respective weightings, the optimal rebalancing frequency, and the most suitable benchmark, among others.
However, there is a silver lining. Of all the insights gleaned from studying the past century of market history, one stands out above all others - “investing is simple, but not easy.” The lessons derived from history all reinforce this central tenet. Over the long term, markets reward the patient; those who are conservative in their return assumptions, cautious in their portfolio withdrawals; those who overcome emotional biases, refrain from chasing past performance and - perhaps most crucially - those who consistently adhere to their plan and allow mean-reversion and long-term compounding to work in their favor. These are simple concepts, yet remarkably challenging to consistently execute.
Setting investment goals necessitates an understanding of historical asset class returns and volatility and selecting an investment strategy that provides the highest likelihood of achieving those goals. However, it is imperative to comprehend that markets do not conform to investors’ goals. Goals must be grounded in what markets can reasonably produce in the future, not what they have accomplished in the recent past. Investors must also account for the inherent uncertainty in markets and construct a strategy with sufficient flexibility to withstand the tremendous volatility that markets have exhibited in the past - and are likely to in the future.
Building and managing a successful portfolio is as much about avoiding major mistakes as it is about making astute strategic and tactical decisions. If markets can be said to reward the virtues of patience and discipline, they mercilessly punish investment transgressions.
The major mistakes associated with suboptimal long-term returns include taking more (or less) risk than one’s risk tolerance permits; engaging in procyclical changes in asset allocation that negate the benefits of buy-low, sell-high rebalancing; overpaying in fees, particularly for asset classes where a low-cost index solution may be more efficient; and excessive withdrawals relative to a reasonable long-term return goal. Many of the gravest mistakes in investing can be traced back to situations where emotional decision-making based on recent performance disrupts the long-term plan.
There are numerous approaches to strategic asset allocation, each with its own benefits and drawbacks during various economic or market regimes. However, over the past century, few have surpassed the volatility-adjusted returns of a simple, diversified, and passive portfolio comprising 60-70% stocks and 30-40% bonds.
That being said, the firm believes that there is an opportunity for investors audacious enough to endeavor to outperform. Tactical, valuation-based modifications to a traditional balanced portfolio and the introduction of at least a modest allocation to diversifying asset classes, particularly when they are out of favor, have the potential to both mitigate risk and enhance returns. In addition to tactical asset allocation, active management at the underlying strategy or fund level should be considered in less efficient asset classes for patient investors who are comfortable applying a contrarian manager selection process.
While the merits of tactical asset allocation and selective active management are acknowledged, they are neither prerequisites for long-term success nor are they suitable for all investors. We believe that these decisions are less consequential than the selection of the long-term strategic asset allocation.
After a portfolio has been constructed, it should be monitored, reported on, and adjustments should be made when there are material changes in the financial condition of the investor, especially if these impact their long-term risk tolerance or liquidity needs. Performance should be tracked relative to a simple, low-cost investable portfolio of proxy index funds that are broadly representative of the long-term strategic asset allocation.
Echelons Capital incorporates these lessons into its asset allocation and manager selection processes.
(1) When determining which index to use and for what period, we selected the index we deemed a fair representation of the characteristics of the referenced market, given the information currently available. For U.S. stock market returns, we use the Standard & Poor’s 90 Index from 1926 to March 3, 1957, and the Standard & Poor’s 500 Index thereafter. For U.S. bond market returns, we use the Standard & Poor’s High Grade Corporate Index from 1926 to 1968, the Salomon High Grade Index from 1969 to 1972, and the Barclays U.S. Long Credit Aa Index thereafter. For U.S. short-term reserves, we use the Ibbotson U.S. 30-Day Treasury Bill Index from 1926 to 1977 and the FTSE 3-Month U.S. Treasury Bill Index thereafter. Past performance is no guarantee of future returns. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.
There are six steps in the portfolio management process:
Echelons Capital’s principal custodian of client assets is Charles Schwab, the leading entity in supporting independent Registered Investment Advisors (RIAs) for over three decades. Schwab furnishes a comprehensive range of services, encompassing securities brokerage, banking, money management, and financial advisory services. Schwab’s unwavering commitment to RIAs like Echelons Capital constitutes a fundamental business of their firm, and Echelons reaps the benefits of dedicated investment, technology, and client service teams.
Advyzon endows Echelons Capital with all-encompassing technology solutions, including portfolio management, billing, secure document management, and client reporting. The company was established by the erstwhile chief architect behind Morningstar Office and concentrates on product innovation and superlative service.
AdvisorLaw, LLC is an industry leader in full-service wealth management compliance and oversight governance. Staffed by securities attorneys and certified securities compliance professionals (CSCP), AdvisorLAW imparts expert guidance on extant and developing regulations to help ensure our practices are current and fully compliant.
Avanessians & Kaufman, LLP is a CPA practice that focuses on tax preparation, planning, bookkeeping, and accounting needs for high-net-worth individuals and small businesses. Their shared client-type and experience across states’ tax codes provide a synergistic partnership with Echelons Capital.
Morningstar is an integral partner in providing Echelons Capital with access to extensive market data and autonomous research. Our partnership accords us access to one of the largest contingents of independent equity and managed-product analysts globally.
Springtide Partners is a boutique investment consultancy firm that delivers objective and independent research support to RIAs and family offices. Through our partnership, Echelons analyzes comprehensive evidence-based expectations for forward returns and volatility across public and private asset classes.
Halo provides access to protective investments such as Structured Notes, buffered ETFs, and annuities. Their platform accords Echelon’s access to Wall Street’s derivative providers and enables the firm to strategically allocate risk in client portfolios while customizing Structured Notes aligned to client-specific goals & objectives.
SIMON assists financial advisors in constructing comprehensive portfolios by granting them access to an abundance of investment opportunities. The SIMON platform proffers Echelons Capital a marketplace for risk-managed and alternative solutions.
eMoney Advisor provides technology solutions and services that assist people in comprehending their finances. Rooted in holistic financial planning, eMoney solutions fortify client relationships, streamline business operations, enhance business development, and drive overall growth.
At Echelons Capital, advisors are not encumbered by mandated use of proprietary products or other requirements imposed by our relationships that may affect the selection of investments.
The products we utilize encompass a broad selection of Alternative Investments, Separately Managed Accounts, Exchange Traded Funds, Mutual Funds, Stocks, Bonds, Notes, Options, Derivatives, and 529s (qualified tuition plans).