The following are excerpts from an interview with Edward A. McDonough BSME, MBA, CFP. This interview will be most informative and insightful and should help explain why so many individuals have decided to let Ed handle their Investment Portfolio and Financial Planning needs.
Q1) Ed. I’m looking at the package that you sent and I noticed that the title is "McDonough Capital Management". Is there a story behind this?
A1) When I went independent, "On Wall Street Magazine" interviewed me and wanted to know why so many of the top producing advisors were seeking independence. I explained to them that there are several reasons for this evolution. First the clients are increasingly uncomfortable with the conflict of interest that so many wirehouse advisors experience. Are they making recommendations for the good of the client or for the bonus they receive on "in house" products? Are they merely making recommendations based on commissions or meeting quotas? Having worked in the environment for 12 years, I can tell you first hand, the conflict is real. As an independent financial advisor with Triad Advisors, Inc, there are no in-house products and no quotas. Our goal is to give the client the absolute best advice at the absolute best price.
Over many years of investment experience and education, I developed various investment approaches, which act as my foundation. These concepts have been tried and tested on innumerable real world situations. I’ll get into these shortly. Meanwhile ,most advisors today carry titles like Financial Consultant or Account Executive. These titles may be used by new stock brokers that have just passed their exams and are beginning to give advice. In sharp contrast is the C.F.P.® The rights to use the marks CFP® and Certified Financial Planner™ is granted, by the Certified Financial Planner Board of Standards to those persons who have met it’s rigorous educational standards, passed the CFP® Board’s certification examination, satisfied a work experience requirement, and agree to abide by the CFP® Board’s Code of Ethics and Professional Responsibility. CFP® certificates and licenses are issued only by the CFP® Board. The CFP® includes a six part testing in the areas of Retirement Planning, Taxes, Insurance, Investment Planning and Estate Planning.
Today, we are bombarded daily with investment advice from TV, the Internet, Radio, Newspapers and magazines. We have mail arriving daily promoting all sorts of investment schemes. We have 800 numbers telling us to buy their investment products. We even have beloved Uncle Jerry or even our next door neighbor giving us the hot tip for the day. Clearly, recommendations seem to be awaiting us in every direction. The key questions become, who are we to believe and how are we to sort all of this out?
Given this current environment, my whole approach to investment management can be boiled down to the following 4 major components. I have been able to differentiate myself by focusing first on providing superior first class service, secondly providing professional and timely detailed investment advice, thirdly scheduling regular contact and providing continuous monitoring and lastly being highly cost competitive. Providing all four of these components is what separates me from the rest of the field. For those of you that may find one or more of these components missing in your current situation, or for that matter even if you are happy, I urge you to read further. I think I can do a great job for you, but more importantly, the reason I put together this website was to explain the services that I provide which set me apart. My goal is to be the most client focused consultant in the industry, building long term client relationships that are characterized by quality, value, integrity and professionalism. Let me say up front, I appreciate the time you have taken to review this information and I really hope you’ll review it more than once.
Q2) Ed, you mentioned that one of your keys to success is providing superior first class service. Perhaps you can take a minute and explain how you treat your clients.
A2) I want my clients to know that they are extremely important to me and that their business is certainly appreciated. Without them, I am out of business. They do not have to buy these investments from me; in fact they can buy them just about anyplace in town. But they choose to do business with me because of the added value that I bring to the table and the services that I provide. I really want them to know that I appreciate their business.
I take great pride in what I do and I consider my business to be a tiffany operation. My team consists of 2 outstanding administrative assistants and myself all using state of the art computer technology. By investing heavily in sophisticated computer hardware and software and by surrounding myself with 2 outstanding administrative assistants. We can provide the most timely and accurate service available today.
My assistants use our advanced technology to resolve any and all administrative opportunities that may arise in the course of our business relationship. All too often today, advisers lack the proper staff to follow up on common questions like statement or dividend questions. That is why I have dedicated one full time service assistant available from 8 am to 5 pm to help resolve these "opportunities". You notice I refer to these as opportunities and not problems since I see these questions as opportunities to provide better service. My assistants maintain computer databases and help generate on demand portfolio profit/loss and income statements. For those clients that wish, we can generate these monthly, weekly or more often, and totally free of charge. We can even send them directly to your accountant.
Through the use of this improved technology my team can provide the quality service and added value that my clients are looking for. We can handle problems and get questions answered immediately. My team members each have their specific responsibilities. I spend my time watching the investments and making appropriate recommendations. They spend their time with the opportunities and in turn we provide the professional service my clients want.
Q3) Ed, because of the uncertainty in today`s environments, many of us are putting our money into the banks and savings and loans and back into money markets. For the person who wants to follow that type of philosophy, what can you do for them?
A3) I am glad you asked that question because right now there is a tremendous amount of uncertainty. I employ a multiple strategy approach depending on the clients risk tolerances. For people who want to have a more conservative type of an approach I employ a conservative strategy and philosophy that I believe is an excellent match. I am not trying to be Babe Ruth with this strategy. Everyone knows that Babe Ruth was a home run hitting king however, very few realize he also led the majors in strikeouts. Quite frankly, my conservative clients cannot afford to strike out and for me to try to hit a home run for them, I have to subject their money to more risk than I am comfortable with. If a client wants to take less risk, we have a number of investments that can potentially provide a guarantee of principal and offer very competitive rates. For the client with large pools of money in the money markets, there are a number of things we can do for them. Most people do not realize that we offer FDIC insured CD’s from many of the largest banks in the country. In fact we also offer Treasury Bond Ladders and AAA Insured Municipal Bond Ladders which act to help hedge your portfolio in both rising and falling interest rate markets. I think the bottom line here is we have the flexibility and capability of providing the client with virtually any investment style they are interested in.
Each account custodied by Triad Advisors & Associates is protected for the net equity of the client’s securities and cash positions.
Triad Advisors & Associates is a member of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $100,000 for claims for cash). An explanatory brochure is available upon request or at sipc.org or by calling (202) 371-8300.
Triad Advisors has purchased excess SIPC coverage through various syndicates of Lloyd’s, a London-based firm. Excess SIPC is fully protected by the Lloyd’s trust funds and Lloyd’s Central Fund. The additional protection currently provided has an aggregate firm limit of $750 million, including a sub-limit of $1.9 million per customer for cash above basic SIPC for the wrongful abstraction of customer funds.
Account protection applies when a SIPC-member firm fails financially and is unable to meet obligations to securities clients, but it does not protect against market fluctuations.
Q4) Ed let me ask you, why should I take $100,000, $500,000 or even $1,000,000 out of my bank or wirehouse and invest it with you? What are some of the things you can do for me?
A4) There is a tremendous amount of money that is sitting in banks and wirehouses today not earning the rates they deserve. Remember banks earn money by loaning your money out. The lower the rate they pay you, the more they make. When bank rates were up as high as 10-12%, money market funds were outstanding. Today this is not the case. Rates have dropped dramatically and those rates are no longer available and may not ever be available again in our lifetime. As a result, many people are looking for ways to increase their income and certainly reduce their taxes today. We have got a number of investments that may offer similar capital preservation features and additionally provide excellent tax benefits that in essence may give you a much higher after tax return. I would strongly suggest for those people who have money sitting in banks or wirehouse money markets, at least let us show you some of the things we can do. Ultimately, you are the one that must make the final decision. However, I think you atleast need to be made aware of what’s available. Many of my clients tell me they wish they had been better informed years ago because they just didn’t know of the alternatives that existed.
Q5) Ed, what do you say to the person that has recently moved into the area and does not know who to trust or more importantly, what do you say to the person that has been burned by his investment advisor.
A5) First let me say the following. I plan on being in this business a very, very long time. I entered this business in 1987 during one of the most difficult and challenging markets in over 60 years. In order for me to accomplish my goals, I set out to establish long term business relationships that worked. I could not have survived had I not used this approach. I have a vested interest in my client’s financial success. Providing sound long term financial advice has been the key. Fundamental to successful financial planning concepts is proper diversification and asset allocation. Be aware that diversification and asset allocation do not assure a profit and does not protect against loss in declining markets. Many money managers would lead you to believe that track record is the only criteria through which to invest. Although track record is critically important, it is but one component in the investment selection process. Investing solely based on track record is like driving your car while looking out the rearview mirror. Picture if you will the master chess player preparing his next move. He is never distracted by the move being played, but rather his concern is about the strategy three moves down the road. This is the same thought process that must be used in structuring a portfolio. We must understand that an investment portfolio needs to be structured for the coming years in a forward thinking manner. Portfolios need to be structured based on quantifiable goals, objectives and risk tolerances. Do not let yourself be fooled by track record alone, many have demonstrated that last years big winners more often than not turn out to be this years losers! Additionally, my motto is knowledge, integrity and trust. Everything about my business revolves around these three concepts. Without them, a professional client business relationship cannot exist.
Q6) For the individual or corporation that has a larger sum of money which they would like to invest using a more sophisticated approach or even a managed money approach, what can you do for them?
A6) This is a critical question and one that more and more serious money is asking today. For these individuals or corporations I can offer the following investment approaches. Without getting into all the detail let me give you a quick description of each.
First, I can offer a guided portfolio management program using various model portfolios based on customized risk tolerances.
Second, I can offer a multiple investment asset allocation approach using virtually any investment across many asset classes.
Third, I can offer my own portfolio management program, which I find many clients feel most comfortable with.
Lastly, for those individuals requiring one on one customized asset management, I am in touch with many of the leading institutional money managers available today through Triad Advisors, Inc.
In short depending on your needs wants or desires, as an independent, I have the flexibility of resources to satisfy almost any need or requirement, and I can do it at attractive prices.
Q7) We have been hearing a lot about the discount brokers today. Why shouldn’t I take my business and go to a discount broker instead of staying at a independent firm like yours.
A7) Let me tell you, the discount firms definitely have a place in the investment marketplace. For the people that do not need any professional advice, any recommendations, and any investment information and who call all their own shots, I think the discount broker is definitely the place to be. If you have the time, knowledge and desire to do it yourself, by all means you should. The direct/nohelp model can work for these people. However, what I have found is that there is a high percentage of individuals, corporations and small businesses that because of the uncertain, complex, volatile and changing investment environment we live in today they need and want to rely on a knowledgeable professional that knows what they are doing. Information overload is everywhere. Many people do not have the time, knowledge or desire to do it themselves. The do it yourself concept has a definite place in our market but when we begin talking about large sums of money, retirement plans, estate planning or people’s nest egg and life’s savings, I have found that in general, individuals do not feel comfortable relying solely on an impersonal 800# telephone conversation. For example, I have a degree in engineering and I might intuitively feel I could capably design and build my own house. However, a good friend and client of mine builds homes for a living and I know from my conversations with him that if I want to avoid the infinite number of builder landmines that await me, I’ll let him handle it or at least assist me. In today`s rapidly changing investment landscape, people want and need solid professional recommendations.
Q8) Ed, It is obvious that you have invested a lot of time, money and dedication to help you achieve your success. Primarily Ed, to what do you attribute your success?
A8) First and foremost, I love what I do. Long before I ever decided to enter the investment or financial planning business, I was always fascinated with the financial markets. I viewed them as a means of helping achieve my financial future. What started out as a hobby grew rapidly into a full time profession. When you love something, you do not view it as work, but rather you look forward to it, and the daily time commitment becomes a pleasure rather than a burden. I enjoy meeting and surrounding myself with other successful people and I am willing to go the extra mile. This in turn is what makes me more successful. I am confident that I can help my clients create plans designed to achieve the goals they have set for themselves.
This concludes the interview. Naturally the benefits that you will derive from this website depends entirely on you. What you have read is a small sample of the services that set Ed apart. If you have enjoyed and benefited from the interview highlights featured here, and if you would like to find out how Ed might be able to help you, we cordially invite you to call or write Ed today. He welcomes your questions and comments and looks forward to working with you and your investment portfolio. If you have any interest in getting together or at least finding out about the types of things Ed can help you with, feel free to call him at (407) 248-9647 or (800) 781-0380 or email him at email@example.com . For those of you that would like an appointment, please contact one of his assistants. Again, thank you for your time in reviewing this website.