TERRE HAUTE —
Being a graduate of a non-Ivy League school, a young Joe Evelo was worried about competing in a financial workforce full of smart, well-educated people who did not attend his alma mater, Indiana State University.
But through the years, Evelo said he realized that the essence of success is being honest and fair, and doing what is right — rather than what is easy. And his education at ISU prepared him for that.
Evelo spoke about “Ethics and Integrity in the Real World” on Wednesday during the 8th annual Ethics and Corporate Responsibility Conference at ISU.
The native Terre Hautean is now the founder and senior investment strategist for the Evelo/Singer Group, and was recently named as the Top Advisor in Ohio on financial magazine Barron’s “America’s Top 1,000 Financial Advisors.” He has also been recognized as one of the top 100 wealth advisors nationally since 2000 by Barron’s Winners Circle.
Speaking to a student audience, many from the Scott College of Business, Evelo said he was asked to speak about Wall Street’s economic troubles in 2008 and 2009 at the conference. While many people want to find someone or some firm to blame for the financial crisis, he said, an overall negligence in how Americans conducted their financial business contributed most to the hard times.
“I think it was more of a systemic thing,” Evelo said. “I think more people were culpable than just the titans of Wall Street, and we all pay for that.”
Investors were taking too many risks. Clients were being talked into too many risks, and many were allowing their incomes to be manipulated, he said. Lenders were approving home mortgages to people who did not have the finances to pay their bills. And even real estate agents were sometimes too eager to make a sale without seeing the financial consequences down the road.
It all boils down to telling the truth, Evelo said.
“It’s easy to be ethical and honest if you tell the truth,” he said. Though it may be harder to do what’s right, rather than sell what is easy.
When a client wants to make an investment that looks good on the surface, Evelo said he has had some tough times trying to convince people that the future of that investment is a bust.
He recalled that one couple advised by his firm was spending too much of their investment proceeds rather than saving for the future, and he told the couple that. When the economic downturn came, they found that they really had been spending too much, and now in their retirement, they do not have enough money to get by.
Too many financial advisers will bend to their investors’ will, and make a commission on the investors’ money, rather than pointing out that a financial bubble cannot last forever, he said.
The principal of Reversion to the Mean — or averaging out over time — holds true in the financial world, as evidenced when the stock market bubble burst. When the stock market was making 20 percent gains, but technology was making 40 percent gains, many people invested too heavily in technology, and were then hurt financially when the technology market stalled and returned to the “mean.”
Evelo said his firm took most of their investments out of technology and put it into investments that were staying steady. That was a hard sell to clients, he said, but in the end it was beneficial and reduced losses when the bubble burst.
“The lesson in the story,” he said, “is you are going to be presented with things that are easy to sell but not right. I think your clients are going to expect you to inform them of what is the right thing.”
Another thing that happens in his business is intimidation, he said. When he was younger, the Schulte High School graduate admits that he was easily intimidated by slicker, well-educated co-workers.
But he recalled his experience with a client who was wanting to invest in a promising barge business, which was all the rage at the time with young hot-shot brokers. Evelo said he talked with an actual barge owner, who projected that a bust in the industry was coming. In two years, there was a downturn in the barge business, and many people lost their investment. But Evelo had talked his client out of the investment, though it wasn’t easy.
The firm he worked for was sued over those barge deals and had to pay for it, Evelo said, and that was when he realized that if he did his homework on investments, he was as smart as the next guy.
Evelo said he breaks people down into thirds. One third will work smart. Another third will work hard. And another third have integrity and positive attitudes. He likes to hire people with all three characteristics to work in his firm now, he said, and that pays off.
“Our minimum level of acceptance is above-average. Our minimum is hard work, and our minimum is good attitude,” he said. He cautioned the students that they will see a lot of negativity in the world, but keeping a focus on people who are positive has helped his business succeed.
“What I did was found people who were positive, who had a good track record,” he said. “Negative people always forget the enthusiasm of the American spirit. If gas prices are high, they will find an alternative. If gas prices drop, people buy gas. People adapt. Negatives don’t predict the Internet, or anything. Everything is in stasis for them.”
He encouraged the students to find positive influences, people who are upbeat and have a positive spin on the world, since they are more likely to get positive results.
He also encouraged the students to put a lot of time into philanthropy, since that will make them better people.
Reporter Lisa Trigg can be reached at 812-231-4254 or email@example.com. Follow her on Twitter @TribStarLisa.