Jonathan Farber: I spent nearly two decades on Wall Street, deeply involved in institutional equity research, filtering our research department for their best money making ideas in various industries to help our institutional clients – mutual fund managers, banks and trust accounts and hedge funds to beat their benchmarks.  What struck me was how often our clients – even with all the smart buy side and sell side research analysts adding value – the vast majority of them failed to meteor beat their benchmark on an annual basis. This realization led my colleague Scott and me to found Passive Capital. Our goal was simple: capture  asset class benchmark returns in their entirety, less our advisory fee, and consistently outperform the majority of active Wall Street managers.

Our journey began in 2007, and since then, we’ve grown our assets to over $900 million. What drives us every day is the knowledge that we’re genuinely creating value for our clients. We set out with a clear understanding that controlling factors that we can control – asset allocation, diversification, costs and  fees, and tax efficiency could significantly impact investment outcomes.

Unlike many competitors, we’ve never imposed a minimum requirement for our services. Whether managing a small Roth IRA or a multi-million-dollar account, our focus remains on delivering value. Hence our name, Passive Capital Management – as boring as it sounds –  reflects our commitment to eschew active management strategies and instead capture the broad market returns consistently.

Over the years, our approach hasn’t changed. We stick to our core principles, focusing on what we can control and letting the markets do the rest. Our pitch hasn’t altered much either, as the facts and truths behind our strategy remain steadfast. Since 2007, we’ve remained true to our expertise, and that’s something we’re proud of.

Jonathan Farber: Maintaining a balance between my professional and personal life has been integral to our approach at Passive Capital. From day one, we’ve remained steadfast in our values and strengths, which has kept our message consistent over the past 17 years. This consistency is not only refreshing but also liberating. Knowing that our investment philosophy and portfolio strategy remains unchanged means we don’t have to constantly come up with new ideas or change our story to fit the current headlines or investment trends.

Having a clear and concise message that we stay true to has made it easier to navigate both aspects of my life. It means I can focus on delivering value to our clients without constantly worrying about reinventing the wheel. Ultimately, this approach has helped me strike a healthy balance between my professional commitments and personal well-being.

Jonathan Farber: Professionally, we’ve distinguished ourselves by placing our clients at the forefront of everything we do. From the outset, our service model has revolved around prioritizing our clients’ needs above all else. This commitment to client-centricity has been the cornerstone of our success.

Our approach is grounded in honesty, integrity, and the cultivation of strong relationships. We believe in building trust over time, both within and outside the workplace. Whether it’s bonding over shared hobbies, enjoying leisure activities together, or embarking on adventures like hunting or fishing trips, we understand the importance of nurturing these connections beyond the confines of the office.

By investing time and effort in building genuine relationships, we ensure that when the opportunity arises for clients to entrust us with managing their finances, the foundation for a strong partnership is already in place. Our dedication to servicing our clients goes above and beyond, ensuring that they feel like valued members of our team.

Ultimately, our consistency in delivering successful investment outcomes has solidified our reputation, with clients expressing a desire to be part of the Passive Capital Management team due to our unwavering commitment to their financial well-being.

Jonathan Farber: The trend that excited us 17 years ago—passive investing and controlling what we can control—is still the guiding force behind our approach today. Unlike active managers who try to beat the market by stock picking or market timing, we’ve remained steadfast in our commitment to controlling what’s within our power – asset allocation, diversification, costs/fees and tax efficiency. This consistent message has served us well, allowing us to stay ahead of the game by never overpromising or under-delivering.

Jonathan Farber: Our personal and professional development are intertwined, with consistency being our hallmark. Whether in our personal lives or professional endeavors, we remain steadfast and unchanging, day in and day out, year after year. Our focus is on serving our clients and delivering the returns of the global capital markets as a whole.

Building relationships is paramount. Once onboard, our commitment to service is unwavering, aiming to serve them to the fullest extent and maintain long-term relationships.

In our line of work, personal and professional spheres often overlap, with many clients becoming close friends or acquaintances. Referrals play a significant role in our growth, with a vast majority of new business stemming from them. This underscores the trust our clients have in us, as they refer friends, family, and colleagues to our services. These relationships and the trust they entail are invaluable to us.

Jonathan Farber: If I could advise my younger self, I’d say to start pursuing our business model earlier. While it might have been challenging to gain traction before, especially considering the financial crisis we launched into in 2007, the timing ultimately worked in our favor. Despite the challenging market conditions in the 2007/2008 time period our passive investment philosophy was well received as many PCM prospects and clients were losing faith in traditional brokerage relationships. Our approach to passive investing gained momentum. While it wasn’t easy, navigating those initial 18 months was worth it in the end. So, my advice would be to embrace the challenges and seize opportunities, even in uncertain times, knowing that perseverance pays off in the long run.

Jonathan Farber: Having a functional and loving family with three children and now three grandchildren, along with a patient and supportive wife, has been the bedrock of my life. Family comes first, always. Clients come second. Also, transitioning from a successful Wall Street career to starting a new business venture has been both challenging and rewarding over the past 17 years. I am also grateful for the team we have built at PCM. I have tremendous confidence in my teammates and we have successfully built a foundation of trust and support.

Jonathan Farber: My primary source of happiness and inspiration is my family, which always comes first in my life. Following closely behind is my business, where I find fulfillment in helping clients achieve their financial goals and the fact that PCM is adding value on a daily basis. What’s truly special is that many of our clients have become friends over the years. This interconnectedness is vital to us, as more client referrals often come from these close relationships. We’re not just focused on one generation; we aim to build multi-generational wealth by serving clients of all ages, from grandparents to grandchildren. By prioritizing family and friends, we foster a network of trust and support that leads to valuable referrals down the line.

Jonathan Farber: One quote I often rely on is “Diversification is the only free lunch in investing.” While I didn’t come up with it, I find it encapsulates the essence of our value proposition and underscores the importance of diversification in our portfolios. Another quote that resonates with me is Warren Buffett’s wisdom to “be fearful when others are greedy and greedy when others are fearful.” These quotes guide our approach to investing for  the long term and our consistent rebalancing approach.

Jonathan Farber: My typical day starts with checking emails and texts from the night before, and I make it a priority to respond promptly to clients and prospects, ensuring they know they come first. Quick responsiveness is key to maintaining strong relationships and staying top of mind. I also believe in leveraging these relationships to help others in the future.

In my correspondence, I often involve my partners to ensure we present ourselves as a cohesive team. Teamwork is essential to me, and I want everyone to know the importance of our relationships and collaborative approach. This mindset extends to our meetings and calls, where we strive to present ourselves as a unified team to clients and prospects.

Jonathan Farber: The best $100 recently spent would actually be more than $100. It was allocating funds to give raises to our partners at the end of the year. At Passive Capital, we prioritize treating our partners well because they’re integral to our team and our goal of building a successful franchise. Investing in our team, both financially and through hiring new employees, is crucial for our growth. In fact, we recently brought on two new team members in both our Syracuse and Baltimore offices, which is exciting for us.

Jonathan Farber: Two books I highly recommend are: “The Investment Answer” by Daniel Goldie and Gordon Murray and “A Random Walk Down Wall Street” by Burton Malkiel. “The Investment Answer” explains the fundamental principles of investing and is a quick read, perfect for gaining insights into our approach. On the other hand, “A Random Walk Down Wall Street” offers timeless wisdom despite being written decades ago. Its message remains relevant today and is essential reading for both our employees and clients alike.

Jonathan Farber: When introducing myself and Passive Capital Management to someone unfamiliar, I often start by acknowledging our rather boring name, and contrasting it versus the other option – active managers who think they can add value through individual stock selection, active manager selection – picking managers who they think can beat the market – or market timing. However, I emphasize that our name reflects our steadfast commitment to a consistent investment philosophy that has stood the test of time.

Our approach at Passive Capital Management is simple yet powerful: we focus on controlling what we can control: asset allocation, diversification, fees and costs, and tax efficiency. By prioritizing these factors, we aim to stay ahead of the ever-changing investment landscape while letting the markets do their thing.

We’re not in the business of trying to outsmart the market or chase the latest trends. Instead, we believe in the power of compounding and the importance of staying invested for the long term. Whether it’s through teaching the significance of compounding or adhering to the Rule of 72, we strive to empower our clients with knowledge and guide them toward sustainable wealth accumulation.

Ultimately, our goal is to add value for our clients by helping them navigate the complexities of investing with clarity and confidence. We believe in getting rich slowly and staying disciplined, regardless of the market’s daily fluctuations. At Passive Capital Management, it’s about buying, holding, and rebalancing for the long haul, ensuring our clients’ financial well-being for years to come.

Jonathan Farber: Building the culture of our company at Passive Capital Management centers around the principle that the team comes first. No individual is more important than the collective strength of the team. This belief has been ingrained in our culture since our founding, when Scott and I joined forces, recognizing that our combined strengths were vital for success.

Our culture starts with a simple rule: no egos. We prioritize hiring teammates whom we genuinely want to work with. Throughout my years on Wall Street, I’ve been known as a good team builder because I’ve always sought to surround myself with people smarter than myself or with strengths complementary to mine. Together, as a team, we are stronger than any individual.

When we assess potential hires, they must pass the “smell test” of fitting seamlessly into our team. We value unity, consistency, and a shared commitment to our mission. Whether it’s an institutional pitch or a one-on-one meeting with a client, I always ensure that at least two teammates are present to reinforce our united front and consistent message of “team first.”

Our success over the past 17 years is a testament to the strength of our team and the culture we’ve cultivated. It’s not just about individual accomplishments but about working together towards a common goal, delivering a consistent message to our clients, and maintaining a unified front in everything we do.