Ehren Stanhope, CFA of O'Shaughnessy Asset Management explains how custom indexing builds on direct indexing by integrating tax loss harvesting, ESG preferences, and quantitative equity factors. He discusses how platforms like Canvas enable personalized portfolio construction while maintaining benchmark alignment. Stanhope also shares insights on the implications of rising interest rates, inflation, and changing asset correlations for long-term investment strategy and risk management.

Marlena Lee, Global Head of Investment Solutions at Dimensional Fund Advisors, explains how her team bridges investment research with client needs through systematic, evidence-based approaches. Rather than chasing short-term market moves or stock-picking, Dimensional builds portfolios grounded in decades of academic research and practical data analysis. Lee highlights how the firm evaluates traditional factors—such as size, value, and profitability—while carefully testing new ideas to avoid data-mined results. She underscores the importance of looking beyond simple measures like correlations or Sharpe ratios, encouraging investors to dig deeper into underlying holdings, factor overlaps, and global perspectives. From the challenges of timing premiums to the distortions caused by mega-cap stocks, Lee emphasizes the value of strategic, long-term allocations over tactical shifts. Her remarks offer clarity on what true diversification means and how investors can navigate trade-offs between tracking error and long-term outperformance.

Welcome to the Financial Thought Exchange, where we bring you insights from the brightest minds in finance! In this episode, recorded live from the CFA Institute Annual Conference in Chicago, we are honored to sit down with Peter Lazaroff.

Peter is the author of "Making Money Simple" and the Chief Investment Officer at Plancorp Wealth Management, overseeing $7 billion in AUM. He is also the host of the fantastic "Long Term Investor" podcast.

In this deep dive, Peter shares his key takeaways from a panel on decoding investor behavior. We discuss how behavioral finance goes beyond just identifying biases, moving towards strategies that truly help clients feel more confident and content with their financial decisions.

We cover:

• The evolution of behavioral finance and its practical application in wealth management.

• How to tailor financial education across different generations, from Baby Boomers to Millennials.

• The distinct approaches to advice for inherited vs. self-made wealth, and why empathy is crucial.

• Peter's firm's philosophy of avoiding mistakes over chasing perfect returns, and the biggest "mistake" he focuses on mitigating: setting the wrong expectations.

• The role of risk aversion in portfolio design and how Plancorp customizes strategies based on a client's stock/bond split and liquidity profile.

• Why, despite advancements in behavioral finance, human errors will persist, and how technology might assist without replacing the essential human connection in financial advice.

Join us for a candid and insightful conversation that will change how you think about client relationships and investment strategy!