Can a diverse group of advisors offer meaningful insight into portfolio allocations? A new HighTower crowdsourcing project is trying to determine just that.
The advisory firm's new "Weight of an Ox" project surveys HighTower partners and employees -- as well as board members and corporate staff -- each month to understand how they would allocate a theoretical $100.
Respondents are asked to make an allocation that's not linked to a specific client, or a suitability need, says Matthias Kuhlmey, the project's primary architect as well as a HighTower managing director and the head of its Global Investment Solutions department.
With 70 to 80 respondents each month, the survey is intended to give HighTower a way to tap into the firm's growing intellectual capital, Kuhlmey says. "It gives us another way to recognize the enormous potential of the collective wisdom," Kuhlmey says.
The name comes from an early 20th century crowdsourcing experiment. During a British village's livestock fair, a contest to guess the weight of an ox yielded no correct answers -- but when the responses were averaged, they came within one pound of the correct weight.
"The central thesis is that this needs to be a diverse collection of independently deciding individuals," Kuhlmey says.
The most recent survey, in November, showed a "good taste" for U.S. equities, a higher than usual allocation of cash, and an increasing exposure to international and emerging market equities, he says. Over the year, Kuhlmey says, he's seen the allocation to U.S. equities leveling off, while other markets are still increasing.
HighTower doesn't plan to develop an investment product based on the survey, he says: "It will never be the basis for a binding view. But it will be an informational data point. It lets people see: What are my partners doing? What is the collective opinion?"
And the survey's structure -- fast, online, available on mobile devices -- makes it easier for HighTower to gather insights from throughout the rapidly growing firm, Kuhlmey says: "All of a sudden you have the opportunity to hear all these voices, which otherwise could get lost."
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