Morningstar Advisor - Spring 2008 - 16

Advisor Profile Dan Roe, Chief Investment Officer, Budros, Ruhlin & Roe, Inc. few years,” he says. He’s also heartened by the fact that some of his favorite managers have reopened their funds to new investment. While Roe typically maintains low turnover within his investment lineup, he keeps a sharp eye on both absolute and relative performance. A former Morningstar Principia subscriber, he since has gone online with Morningstar Advisor Workstation. Morningstar. com is also part of his arsenal for monthly reviews. While the impetus for any changes will come from Roe, input on the investment side of things can come from any of the four partners (or the seven planning teams), and as in all areas, all four partners sign off on major decisions. Not for Everyone How he caught our eye: His firm’s nontraditional organization. Career path: Received a bachelor of science degree from Miami University in 1987 and worked for a fee-based financial planning firm from 1987-1992. In 1992, he moved to an insurance company in a training and management role to help agents act more like financial planners. He started his own fee-only financial planning practice in 1996. Personal: 43, married with two children. Some favorite funds (and one stock): Dodge & Cox Stock DODGX, Longleaf Partners Small-Cap LLSCX, Longleaf Partners International LLINX, Loomis Sayles Institutional Bond LSBDX, and Berkshire Hathaway, Inc. BRK.A. While Roe is a strong proponent of this team approach, he understands why other firms might not embrace the structure. One issue might be how a planning firm has grown. That is, unlike some firms of similar size, Budros, Ruhlin & Roe arrived at its present size mostly because of organic growth, as opposed to growth via the acquisition of other planning practices. Hence, the firm doesn’t face many thorny client legacy issues. There’s also the ego factor, something that Roe believes is firmly under control at his firm. “You’re never going to hear ‘the client is mine and is best served by me’ or that sort of thing,” Roe says. “We’re all going to take credit for the client. We simply agree, that as a point of our partnership, we’re all on equal terms.” Is this lack of outsized egos in keeping with the firm’s Midwestern roots? Perhaps so, but despite a location that isn’t too far from the farm country of Central Ohio, the firm has found success by staying out of the silo structures that often dominate the rural landscape. K David Harrell is a former Morningstar fund analyst and has had various editorial and product development roles at Morningstar. index fund) diversified offering that has performed well within a specific investment style or asset class. Roe then counters that position with another offering where a manager has shown some ability to add alpha, generally with a more concentrated portfolio, and he is willing to pay up a little more in expenses for this follow-up punch. Overall, though, he tries to minimize investment costs. “Expenses can easily be controlled, and should be controlled, in a portfolio mix,” he says. In the large-cap value area, for example, he has blended Dodge & Cox Stock DODGX (switching into DFA U.S. Large Cap Value DFLVX when the Dodge & Cox offering closed) with the Clipper Fund CFIMX. All of these offerings boast below-average expenses. In terms of ongoing management, Roe keeps things steady and is unlikely to make major strategic changes such as large assetallocation shifts in the short term. But he will make adjustments when he believes they can benefit the portfolio. “We have strategic allocations for policy purposes, but we have the ability still to be tactical at the margins,” he says. “For example, in the last two years, we’ve made changes within our fixed-income allocation in terms of dollar-based versus non-dollar-based debt. But we’re not going to do something like go from our standard 20% in small-cap U.S. stock and take that stake down to zero.” Roe maintains a long-term view, but he is currently somewhat bullish on the market: “The recent market declines have created many opportunities that should pay off in the next 16 Morningstar Advisor Spring 2008

Morningstar Advisor - Spring 2008

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