Who are you, and what do you do?
My name is Eric Banhazl, Chairman, Mutual Fund Administration, LLC ( a mutual fund administration services company), Foothill Capital, LLC. ( a SEC registered Investment Adviser) and an Interested Trustee for two mutual funds.
What has been one insight or lesson that has been most helpful in your career?
Trust your own instincts and your own abilities. Nobody thinks or acts or processes information just like you do. No one will look after you or worry about your wellbeing better than yourself. That doesn’t mean there aren’t great bosses that you can learn from and respect, but at the end of the day, you are ultimately responsible for your own success and happiness.
What has been your favorite mistake? A mistake that in retrospect led to a great lesson and progress.
Per #2 above, I allowed someone else to determine my success and/or failure. For me, that didn’t work and ultimately, I was fired. Out of necessity, I had to trust myself and my abilities. I started my own mutual fund consulting business and flourished from that moment on.
Project forward ten years. How will your industry or field be fundamentally different then? What opportunities do you see?
The fee pressure in the mutual fund business is at an all time high. Competition and new financial products are squeezing profit margins to the point that if you don’t have scale, the old business model doesn’t work. The large banks and Private Equity Firms are taking over the business. Not unlike Amazon forcing the old bricks and mortar type companies out of business. Opportunities still exist as an Investment Adviser that can focus on bringing new or untapped products to market. Hence, that’s why I recently started Foothill Capital.
What are some bad recommendations you hear in your profession or area of expertise?
a. If you have great performance, your mutual fund will sell itself. Wrong, mutual funds are sold, not bought.
b. All mutual fund service providers are essentially the same and provide the same basic services, it’s the cost that differentiates each provider. Wrong, costs should not be the number one criterion when selecting a service provider. Quality of personnel, experience, financial stability, commitment to staying in the business are all of higher importance than just low costs. Of course, competitive, fair fees are still necessary.
In the last two years, what have you become better at saying no to?
If I disagree with what someone is saying or believes with respect to how mutual funds operate or what the best course of action may be, I have learned to more firmly give my opinion in a respectful way. I have learned that’s much more appreciated than simply agreeing with or not confronting someone if you disagree with what they are saying, particularly if you are an expert in the subject matter.
What is the one book you recommend most often and why?
It’s not a business or financial publication. It’s a real-world story about an underdog, who has to plow through a series of mishaps, mistakes, bad luck, yet keeps on plugging and ends up on top. The book is Laura Hillenbrand’s – Seabiscuit!!
What advice would you give a smart and ambitious recent college graduate? What advice should they ignore?
Seek to find your success in a job or profession that you are passionate about. Your passion will eventually lead to success. Do not take a job because the money is good, but you hate it. You will eventually crash and burn and may never climb out from under. If money is an issue, which it most often is, try to find something that allows you to make some decent money while pursuing what you really enjoy doing.
What is your favorite quote, one you aim to live by?
Easy – “when you put your head down on your pillow at night, alone, you know what the right answer is to an ethical question or conflict” Even if the right answer is difficult or uncomfortable to stand by – it’s the right answer and will always steer you in the right direction.