Advisory board members stick up for consultant

Last edited 4:52 p.m., May 20, 2013

Since launching the Nadia Cavner Group earlier this month, prominent Springfield financial adviser Nadia Cavner has formed a 10-member advisory group of veteran clients.

Springfield Business Journal reached out to six advisory board members and during interviews with three, an unwavering trust in Cavner’s handling of finances emerged.

Other current and former clients, outside of the advisory board, declined to go on record about where they’ll put management of their investments.

The client shakeup stems from an unclear fate of Cavner’s license to sell securities following disclosure of her April 12 felony plea to the Financial Industry Regulatory Authority.

Previously listed as one of the Top Investment Advisors in America by both Barron’s Magazine and researcher R.J. Shook, Cavner managed assets of $490 million for about 1,100 households before leaving BancorpSouth last month upon pleading guilty to a felony charge of interstate stalking – acknowledging intentions to injure, harass or intimidate her college-age daughter’s ex-boyfriend.

The three clients interviewed each said the personal matter did not cross ethical lines in handling their finances.

“I don’t know the details,” said Springfield attorney Dennis O’Dell, one of the advisory members. “I don’t know anything other than what I’ve read in the paper on the personal matter for her. If what is in the paper is true, that’s unfortunate, but I don’t see a connection between that and her abilities as a financial consultant.”

To retain her Series 7 license, Cavner will have to participate in eligibility proceedings with FINRA. Cavner declined an interview for this story through Sheri Hawkins, owner of public relations and marketing firm 2 Balance.

Advisory board member Ron Herschend of Herschend Family Entertainment, owners of Silver Dollar City, said he’s sticking with Cavner because he doesn’t believe she should be judged based on her handling of a family matter.

“Nadia is an amazing person in that she is always looking for ways to improve service and help people. She has a real servant’s heart,” Herschend said. “That’s what she is asking us to do – to find opportunities to improve service.”

He said he became a client of Cavner’s about nine years ago when she worked at U.S. Bank. He was impressed by the questions she asked and her conservative approach to building wealth.

“She is extremely personable. After I moved my investments there and had a little experience with Nadia, I moved the assets of my minor children there,” Herschend said. “Never has a day gone by when we’ve called with a question about our investments that she hasn’t returned our call.”

Cavner’s sentencing hearing is scheduled for Aug. 1, and the federal prosecutor has recommended probation. O’Dell of law firm Schmidt, Kirby & Sullivan PC said he’s confident Cavner will retain her license through the matter.

“I’m assuming by continuing and starting her own company that she feels that isn’t going to be an issue,” said O’Dell, a 10-year client.

Larry Allhands, a retired 30-year Kraft Foods’ employee who is also serving on the Cavner Group advisory board, said he and his wife have been clients for 20 years. He said Cavner immediately impressed him after his mother-in-law had died and the couple inherited her investment portfolio.

He views Cavner’s legal troubles strictly as a personal matter.

“I raised two girls, and I’m raising a granddaughter right now. Your kids are the most special thing that you have,” Allhands said. “I think this was a mother that was trying to protect her child.”

Allhands, along with the other two clients interviewed, said he had not discussed the details of the case with Cavner.

“This isn’t anything to do with investing, so I’m very comfortable,” Allhands said.

Each client interviewed declined to disclose the returns on investment Cavner’s advice has yielded during the years.

Stephen Evans, wealth management adviser and owner of Evans Wealth Planning LLC, said it is important that those who may be looking for a new investment adviser seek someone who is competent and required to work in the client’s best interest.

“I recommend certified financial planners – I, myself, am a certified financial planner – because we are held to a higher standard. We have a code of ethics that we have to follow, rules and procedures, a standard of conduct that is higher than the average person,” Evans said.

The U.S. Department of Labor offers this advice on seeking a financial adviser: “It is important to understand whether the adviser is acting as a fiduciary, meaning that the adviser is working solely in your best interest, and is not conflicted by compensation arrangements that may encourage him to steer you into investments that are more profitable for him.”  

Cavner holds Series 7, 24 and 63 designations and operates as a commissioned adviser.

Cavner was a top performer for Franklin Templeton Investments, through her brokerage firm, Cambridge Investment Research. For 12 years in a row, Franklin Templeton ranked her No. 1 in the banking distribution channel worldwide. Cavner remains "an independent, third-party financial adviser that distributes Franklin Templeton funds," according to Stacey Johnston Coleman, a spokesperson for Franklin Templeton.

As for banking partnerships, Evans said they are common in the industry. Evans partners with Ozark Bank for referrals. In his arrangement, Evans said if the partnership ended, he would maintain his clients.

BancorpSouth spokesman Randy Burchfield declined to disclose whether Cavner or the bank controls the rights to the accounts. Burchfield only issued the following statement for SBJ: “BancorpSouth in Springfield is continuing to meet the investment and financial needs of our clients through Cambridge Investment Research. Our East Sunshine office is open for business and is staffed with capable investment professionals. We have been gratified by the number of clients that continue to do business with us.”

2 Balance’s Hawkins said advisers Rod Stafford and Khulan Denny, previously with BancorpSouth, have moved to Cavner’s new firm.

Evans said many in the financial industry have great respect for the law, and he doesn’t believe those seeking financial advice should turn to those who don’t respect the law.

“You are not allowed to vote; you are not allowed to own a gun, if you are a felon,” Evans said. “It’s all about trust. And you can’t have untrustworthy people out there selling investment products.”

For Herschend, Cavner is a consultant he can trust.

“Nadia takes her responsibility with people’s finances and the emotions behind investments with the utmost seriousness,” Herschend said. “I don’t know about the charges. I do know that I trust Nadia with not only my finances, but with my children.”[[In-content Ad]]