The greater part of advisory work is declining opportunities — not selecting them. We explain how we decide.
In any given week we are presented with between four and a dozen opportunities. They arrive through different channels: client referrals, protocol announcements, manager pitches, regulatory windows, intra-family events. Most of them are reasonable. Some of them are excellent. We accept perhaps one in ten.
The mathematics of declining opportunities is the unglamorous part of our work, and the most consequential one. We share our criteria here in the spirit of transparency clients have come to expect.
The first filter is whether the opportunity belongs in a household's portfolio at all. A 14% APY on a structured DeFi product may be excellent. It is not excellent for a household whose stated objective is intergenerational continuity at low operational complexity. The mandate determines what is admissible long before we evaluate merit.
We will not allocate client capital to protocols whose teams cannot be reached, whose governance is opaque, or whose audit history is too short. The threshold has tightened over the years. A team we would have approved in 2022 we would now ask additional questions of. This is appropriate. The industry has matured; our diligence should mature with it.
We are conservative about positions where the upside is bounded and the downside is unbounded. Stablecoin yield surfaces sometimes resemble this profile. We allocate, but modestly, with sizing that reflects the asymmetry rather than the headline yield.
A position that requires unusual key management, jurisdictional gymnastics, or constant attention is, all else equal, worse than an equivalent position that requires none of those things. We allow operational complexity only where the expected return demonstrably compensates.
Every position added to a portfolio consumes a finite resource: the attention of the advisor responsible for it. We size our books deliberately, including the number of distinct positions per household. A larger book is easier to sell; it is harder to steward.
If a position survives all five filters, it is admissible. If it does not, it is declined. Declining is the default state.
We are aware that this stance forecloses opportunities a more aggressive advisor would capture. We have made our peace with that trade. So have the clients who have been with us long enough to compare.