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Piedmont Wealth Advisory – Who Are You?

Piedmont Wealth Advisory – Who Are You?

 I recently relived a bit of my youth and attended a live concert by The Who at the MGM Theater here in DC. As lead singer Roger Daltry’s “whoooo are yoouuuu?” refrain rang repeatedly in my head for a few days - and I do mean rang – I took the opportunity to apply the question to Piedmont Wealth Advisory (PWA). What started out as a cloudy vision to create a uniquely 100% client oriented wealth advisory firm in the fall of 2016, PWA was officially launched on Friday March 3rd …. not quite the “Ides of March” but a Shakespeare scholar I was not!

 

After nearly 25 years of working in the “Firm Profit First” mentality of the largest and most well-known National Brokerage Firms, I set out to create a small firm with a personalized business model that made sense – both for the clients and the advisor! Due to high fees and a steady diet of advice that was mutually beneficial (advisors fee generation and generally suitable for clients) more and more investors were heading towards extremely impersonal software algorithm generated portfolios “robo advisors” or “1-800 #” firms to get their financial “advice”. Realizing that national advertising featuring smiling multi-generational family members could not overcome the monthly news release of yet another financial scandal adversely impacting clients – it was time for a fresh approach. Acting upon this, I took a page from the movie “Jerry McGuire” and following my moral epiphany - launched Piedmont Wealth Advisory.    With this as a backdrop – we set out to offer clients the following:

Full Financial Fiduciary Approach – Unlike what is offered at the national brokerage firms, at PWA We are Full Fiduciaries for ALL client assets.

Understandable, Predictable and Transparent Pricing – PWA has introduced “Annual Flat Fee” pricing. Our client fee is fixed and is not tied to a % of assets managed. Why should investors see a hard dollar increase in fees charged by the advisor simply because they have added more money? How and why did the financial services industry arrive at 1+% of client assets being the default Advisory fee (oftentimes with high internal investment expenses quietly added into a client fee)?

Conflict Free Advice – we are not beholden to any product use, referral or revenue generation goals or quotas – we have no incentive to “sell” investment products.

Low overall internal investment costs – PWA has invested over 120 collective hours of due diligence, fund manager interviews, portfolio screening and modeling to arrive at efficient and productive investment portfolios. As a result, we now have ten portfolio models blending active and passive management with overall internal expenses below 50 basis points.

Risk Managed Approach – thorough extensive work with Blackrock’s renown Aladdin Institutional Risk Management process has enhanced our conviction in the risk management present in our models.

Comprehensive Financial Planning Capabilities – Jamie Sexton is a Certified Financial Planner and this service is offered to all PWA clients.

 

What does it mean to be Full Financial Fiduciary & why does this matter to a client?

Full Financial Fiduciaries have two primary obligations:

  1. Adhere to the “Loyalty Rule” – the duty to act exclusively for the benefit of the client.
  1. Place the Clients “Financial Interests first” – during every conversation, every recommendation, every time.

At Piedmont Wealth Advisory – we are Full Financial Fiduciaries – for all assets in all accounts – all the time!

This pure client focused approach differs significantly from the “Suitability Standard” being used by advisors employed by the National Brokerage firms. The Suitability Standard merely holds an advisor to the belief that the recommendation is suitable for the client based on their age, risk tolerance etc. with no obligation to ensure the clients financial interest comes first! This vague standard permits the advisor to use higher fee products which generally ensures higher advisor compensation. As an advisors’ overall annual revenue generation increases, the percentage of revenue paid to the advisor by the firm increases – producing the undeniable conflict of interest existing between the investor and the advisor.

PWA – Firm Update

With our 6 -month mark right around the corner – we are pleased to share our progress with you. With our unwavering commitment to the client (vs. continually chasing new prospects) we have taken a very measured approach to adding clients to the firm. Currently we have strategically welcomed 63 client / household relationships representing over $75+ million in assets to Piedmont Wealth Advisory.

Additionally, we have just completed a second round of comprehensive due diligence with the management teams of the funds & ETF’s we are using at our investment partner firms: Blackrock, iShares, Putnam, Federated, First Eagle and Hartford. This process (including office visits to Boston on the tail end of my annual Cape Cod trip) was completed to ensure we know exactly how the managers included in our models are structuring their portfolios and why. We owe our clients this level of understanding. Most enjoyably after a day of due diligence meetings, Jamie and I enjoyed a night at Boston’s Iconic Fenway Park with my family watching the Red Sox soundly defeat the Cardinals – and execute a rare Triple Play.

With our business process now worked out and much of the “heavy lifting” that comes with a company launch in the rear-view mirror, we are in the process of thoughtfully adding additional advisory relationships to our practice. Please feel free to share our story with anyone who you feel may benefit from our approach.

I will be writing periodically (I assure you - much shorter in the future) to keep folks abreast of what’s happening here!

Thank you for your time and confidence.

Douglas Birnie