I have two partners, Jim Holmes and Kwen Griffeth. Jim Holmes is my husband's uncle. Then we have Brian Standage, an investment adviser, and Shawna Smith, who manages the office. Jim, Brian and I are all investment advisers, registered with our broker-dealer, USA Financial Securities. Brian and Jim ... typically meet with the clients, and I do a lot of the back-office trading, monitoring the accounts, research analysis, etc. It's definitely a team approach. Jim and Kwen had both been working together at Bankers Life and decided they wanted to be able to offer clients more diverse (options) as far as financial tools, and not be captive to an individual agency. So they started Holmes & Griffeth in 2001. We basically take a holistic approach to financial planning. We're not just concerned with investments or the financial aspect, but we are looking at estate planning, taxation, legacy planning, wealth transference, retirement planning and life insurance strategies. The larger part of our practice is individual clients, but we also do retirement plans for small businesses.
What financial planning or investing lessons should people take from 2009?
No. 1 is that you've got to have a plan in place, because the buy-and-hold approach that used to be the norm doesn't work well any longer. The reason for that is, if the market goes down 40 percent, you've got to have a 60 percent gain to recoup your loss. Some people may not have the time to hang on or hope that we're going to have a 60 percent gain. You've got to have a plan in place to control negative volatility. You've got to make sure that you've got defensive positioning in place to protect you if we go into another downturn.
How do you help clients determine what's best for their portfolios?
We're looking basically at two different aspects. We're looking at asset allocation from a risk standpoint - the cash and the fixed products, which are the safest, over to the equities and the most aggressive, and you've got to scale ... and within that, you've also got to look at correlation. Some people might say, "I'm diversified. I own six different mutual funds." But if all of those mutual funds are doing the same thing, that works well when the market's going great, but if the market goes down, then you're sunk. But then you've also got to look at it from a tax allocation standpoint ... so that when you get to retirement you've got choices on where you're going to pull your income from. It's a matter of fact that taxes will go up. We are still in the lowest tax environment that we've been in in many years, so we only have one place to go and that's up. You definitely don't want to pigeonhole yourself so that all you have to pull from is completely taxable resources, so you're getting 60 cents on the dollar because Uncle Sam's going to get 40 percent. We look at the age of the investor, their risk-tolerance level, the resources they have, how long they expect to work, Social Security - that's one of those things that you can plan for, but you probably shouldn't hope for in its true existence.
What strategies might you use to help clients reduce their taxes?
The Roth (individual retirement account) is a fabulous financial tool for being able to (use resources) tax-free in the future. There are other financial tools. Life insurance can be an effective tool for tax-free income. There are different types of fixed annuity products that create income in a very tax-efficient manner.
How do you think proposed banking and finance regulation legislation moving through Congress will affect your business?
Well, as we know historically, any time we've undergone some type of major market collapse, you typically see some pretty broad agendas coming in after the fact to try and prevent it from happening again. We saw it after the Great Depression with the securities acts of 1933 and 1934. ... Any regulation that is passed is meant to protect the clients in general. The good thing about it is if it passes, it's going to encompass a broader spectrum than just securities advisers. It will encompass the banks, it will encompass insurance agents in general. ... As investment advisers, we have to uphold the stringent requirements of the Financial Industry Regulatory Authority and the Securities and Exchange Commission. We're already maintaining and observing standards, and if this regulation passes, it's just going to increase the umbrella of coverage of who has to work within those confines. Again, the bottom line is that it's to the benefit of the clients, and that's our No. 1 priority around here, although we might have to sign a few more forms. I actually look at it as a good thing, because it's going to put some tighter scrutinization on those people out there who currently don't have to follow (such) guidelines as we do.
This installment of Springfield Business Journal’s Architects & Engineers Project Report showcases 26 endeavors by area design and engineering professionals.
