Calendar of Events
Stores & Stories
It Happened this Week
Health & Wellness
Profile of:“Proper diversification is an important factor in achieving financial success”
By John L. Seitz – Courier Managing Editor
‘This is breathtaking! It must be the most beautiful place in the world.” Those were the words describing Beverly Hills from the lips of a young Lisa Ann Detanna upon her first day of work at a prominent Rodeo Dr. investment company back in the mid-1980s.
Since that time, nothing much has changed as she continues to carry on her two decade love affair with The City including a term as president and 10 years as a board member of its chamber of commerce. All of that in addition to serving as senior VP of investments at Smith Barney and before that, Morgan Stanley.
But she is used to carrying a heavy work load. When growing up, the native of Anaheim did what any self-respecting daughter of Orange County would be expected to do: get a job at Disneyland. “I was in the thespian division at the ‘Magic Kingdom’ from age 11 through 18 playing just about every part imaginable from one of Snow White’s dwarfs to larger roles in the Pinocchio and Fantasia sections.”
It must have surprised a lot of her family and friends when she bypassed the lure of Hollywood stardom and, instead, ended up in Westwood to pursue a BA at UCLA majoring in psychology with an emphasis in business.”
Once earning that degree in 1985, Detanna was recruited by Sears to join the retail giant’s management training program. The next four years were spent learning the appliance trade, computerizing departments and shuttling back and forth among various Sears’ stores around the area from Alhambra to Northridge.
However, the combination of her corporate experience in computer programming plus always having a profound interest in Wall Street led her accept an offer to join Drexel Burnham Lambert’s BH office.
“The people were so nice there. Right off the bat, they actually asked me if my office chair was comfortable enough, “Detanna exclaimed. “And getting to work here on Rodeo was a real culture shock for a former ‘died in the wool Anaheimer’ like me. As far my frame of reference was concerned, it didn’t take long to realize Beverly Hills was a lot more Paris than Newport Beach!”
Working 12-hour days, she set about automating the Drexel’s capital market group’s files, creating databases of information on current or potential customers, the high yield bonds and equities they owned, commissions generated by each account and a host of other vital research. She also became involved with issues on corporate finance and mergers and acquisitions.
In 1990, former Drexel executive Judy Resnick lured her across the street to join the recently formed institutional investment firm, Dabney Resnick (now Imperial Capital), where she remained for almost nine years. While there, she began taking night classes and earned an MBA from the Pepperdine Graduate School of Business.
A member of the Financial Planning Association and a personal financial planner from UCLA, Detanna joined the Beverly Hills office of Morgan Stanley until moving to her Smith Barney post in April 2001 as senior VP of investments, where she acts as a financial consultant to 100 high net worth individuals, families or businesses, plus institutional money managers and pension plans.
“Most busy investors lack the time to study, make the critical decisions affecting their portfolios and determine what best matches their specific, long-term financial goals to maintain or enhance the current lifestyle and look ahead to their retirement years. My job is to produce an efficient road map aimed at building and managing the wealth of these people or families and be there side by side with them for the next decade or two to assure the plan is carried out and periodically adjusted, as needed,” said Detanna.
“If it’s a family undertaking that often, though not always, entails interfacing with the children and grandchildren along the way. In fact, the younger they all get involved in the process the better because it affects everybody.
“One thing we always caution clients about is ‘putting all their eggs in one basket’. It’s a lot less risky for them to spread their money across different types of asset classes—such as stocks, bonds, and cash—in order to reduce risk and enhance long-range returns. Unfortunately, this advice is often ignored as investors may fall in love with a single stock or pour the bulk of their capital into a relatively narrow handful of investments.”
Detanna continued: “Proper diversification is an important factor in achieving financial success, which is often correlated by the relationship between rate of return and level of risk. It’s obvious the higher the risk, the higher the return. The same would hold true if the opposite were to occur as even asset classes with lower returns and higher risk may improve portfolio performance.”
She pointed out that the most properly diversified portfolios reflect the best trade-off between risk and return given the various possible combinations of assets. Combining assets this way historically has allowed investors to earn higher returns with less risk then they could by investing in any single asset class alone.
When asked how a prospect might go about selecting an investment manager, she said there were a number of factors to consider besides looking strictly at past performance. Carefully evaluated should be a firm’s overall investment philosophy and process, its capital base and ownership, buy and sell disciplines and the experience and qualifications of its key investment personnel such as their ability to work together. An inexperienced team, or one with a high degree of changes, may be unable to meet the challenges of a volatile investment climate.
Investment managers should have a plan that assigns qualified personnel to specific tasks, delegates duties appropriately and ensures adequate supervision with a defined process for the selection of securities. Sound portfolio construction rules may include specific diversification requirements, sector constraints or review procedures.
Detanna added: “More questions to ask are whether the prospective firm is able to produce original investment ideas or simply collects large quantities of information from other sources. A firm’s research capability and the quality of its output is an important component.
“With the strict regulations existing in the securities’ industry these days, we are required to go out of our way to assure our clients receive only the best available and unbiased information from unimpeachable sources. In that way, they have all sides of the picture before making any investment decisions.”
Capital markets constantly evolve due to global economic, political or other forces so what occurred yesterday might not happen tomorrow. With many different variables and strategies impacting diversification decisions, most investors may find it difficult to chart an appropriate course,” she said.
In order to make the best decision regarding an asset allocation strategy, past performance, expected returns and volatility, plus the correlation between the two influence portfolio performance and impact decisions on which assets to allocate. It also requires an examination, using statistical estimates, that includes a careful analysis of historic asset class performance and expected upcoming trends.
“It’s so rewarding to work with people and families in their planning for their financial future,” stated Detanna. In fact, she is already thinking ahead to the next generation with her annual lecture on the investment business to students attending “career day” at Beverly Hills High School.
She is past president of the board of the Westside Family Health Center, a preventive and education-based clinic in Ocean Park which provides comprehensive primary health care, testing and counseling for more than 8,000 at-risk women and their families. She is a volunteer coordinator the Women’s Clinic of BH, a member of the BH Rotary Club and of its Paul Harris Fellow.
Actually, it’s pretty hard to get Detanna outside the Beverly Hills limits anytime as she continuously sings its praises. “The City is world class and should be treated as a valuable brand all to itself.
“In fact when I was president of the chamber of commerce, Fred Hayman and Ali Kasikci helped me push this through this concept,” she exclaimed. “We even started to use the Beverly Hills shield as our official logo. It was designed back in the 1930s by the art department at Warner Brothers studio on the orders of Jack Warner, a longtime resident on Angelo Dr.
Detanna credits past presidents Lee Silver and Tom Koury with getting her involved with the chamber while doing a site visit to Dabney Resnick as part of The City’s Economic Development Council program. “This is where I concentrated my early efforts because we have a constant challenge to bring new businesses here and must keep promoting the ones we already have because they provide 80% of the tax revenue for our police, fire and other civic services. To this day, I still keep close tabs on our hotel occupancy because we are such a major tourist hub.”
She lives seven minutes from her Smith Barney office sharing a home with John Samokish, owner of Century City-based Unishippers Southern Express, his daughter Stephanie and her sister Tara.
Asked what she does for fun, Detanna admitted to being an avid Sunday biker having taken many a marathon ride between Santa Monica and Palos Verdes. “But I’m temporarily ‘retired’ from that after breaking my ankle and tibia in five places in 2003. Being out of work for three weeks was more than I could bear.”
Taking such a cycling hiatus, however, means Lisa Detanna just has that much more time to devote to her Smith Barney clientele and dream up new ways to promote one of the other major loves of her life—Beverly Hills.
| || |