Stewardship: Integrating faith & finances

Jay Kready • Mount Joy, PA
Everence • ProEquities
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Proactive Advisor Magazine: Jay, talk about your transition into financial services.

I am a lifelong resident of Lancaster County in Pennsylvania and grew up in a traditional Anabaptist family that owned and operated a local farm. I embraced faith-based values at a pretty early age but decided farming was not something I was interested in, so I became the first child in our family to head off to college. I greatly appreciate having had that opportunity.

I worked in the hospitality industry for several years after college and met a lot of wonderful people who were our customers. One of these individuals worked for the firm that is now known as Everence and slowly recruited me into the financial-services business. He thought I had the right personality and work ethic. The rest is history. I have always had that service mentality, and it is very satisfying to be able to apply it on behalf of my clients in areas that are extremely important to their families’ futures.

How do you like to work with clients?

We provide a full-service approach to financial planning and investments. Everence helps individuals, organizations, and congregations integrate finances with faith. We put a lot of emphasis on stewardship, life planning, and a values-based approach, which is a somewhat different approach than you might normally find in the industry. However, we take the financial side of the equation very seriously and provide top-notch due diligence, products, services, and strategies across the board.

“Our job is not to make people rich and it is not to tell someone what their goals should be. It is to protect and grow assets.”

When I was first building my practice I primarily prospected through our church relationships. I realized I thoroughly enjoyed working with
people that have an “others mindset,” a service to others mentality. A lot of people in the traditional Anabaptist church have a culture of mission and volunteer service and want to serve others in their professions. A lot of my initial client relationships were with nurses, teachers, doctors, pastors, and so forth—people who were directly influencing the lives of others.

But my practice has broadened out now beyond the church. My prospects are generally pre-retirees and retirees from all walks of life, including many business owners. The bulk of my clients are over the age of 50 and tend to be more on the financially conservative side. Risk management is an important component of my work with clients in all areas.

Explain how you employ risk management for clients’ investments.

When I came into the business in 2002, the prevailing theory was traditional asset allocation, standard diversification models, and the efficient frontier. While markets suffered through the dot-com crash, all of that was forgotten fairly quickly. The markets in the years immediately after the crash seemed to be back to what we had come to expect in terms of returns.

A very different scenario occurred in 2007 through 2009. My primary thought then was how can we prevent this from happening again? I began looking for strategies that would help mitigate extreme market risk while still giving clients the ability to stay competitive in terms of returns. My investment philosophy has really switched to the idea that if we can avoid those large portfolio drawdowns, we do not have to take on nearly as much risk in bullish periods to achieve acceptable returns for clients.

I have never been one to passively stand still and just accept the status quo. So I sought out active money managers who could provide the type of risk management I wanted for my client base. Those managers and I share the same philosophy broadly speaking—the best defense tends to win the game over the long haul.

What risk-management issues do you discuss with clients?

As I said, they tend to be conservative in nature, but sometimes that can be a little misplaced. I try to educate them on several important concepts. This begins with our overall look at their financial situation and the goals they want to achieve. We get into a thorough discussion of their risk profile, and I put that into very tangible examples they can understand. How much risk can they truly tolerate in terms of a real dollar drawdown of their account? How much risk is necessary for them to take to achieve the returns that will help them meet their financial goals?

I also discuss what the appropriate benchmark is for evaluation of performance. This is not the S&P 500. If an index has the capability of going down over 50%, as it did during the financial crisis, how does that make sense as a standard they should be concerned with? A goals-based approach is far more appropriate.

 

We also talk about the full range of investment options. People tend to think bonds are the ultimate safe, conservative investment—and bonds do have their appropriate role. But in a low-interest-rate environment, and one which will slowly change, there are both opportunity risks and real risks associated with fixed-income investments. As we think through that equation and the changing environment, an actively managed investment approach may better provide conservative returns with a strong dose of risk management.

It all depends on the client’s needs: their risk profile, their goals, and their time frame.  I will often use a blend of passive, longer-term strategies, some of our own proprietary portfolio approaches, and more active strategies provided through third-party managers. So whether it’s tactical, trend following, or technical, there are all kinds of different strategies that we may use to complement a client’s core holdings. For clients that are interested in more of a values orientation to investing, we also have several ways to apply social screens to investment selections or use third-party funds that also do this.

What key thoughts do you want to leave with prospects and clients?

How can we help them be better stewards of the money they are currently earning or have accumulated over time? Our job is not to make people rich and it is not to tell someone what their goals should be. It is to protect and grow assets, to position assets in a tax-effective manner, and to help people move closer to achieving their objectives. Whether those goals include charity outreach, leaving a legacy to their children and grandchildren, or enjoying their own retirement, we want to walk with them and assist in that journey.

Jay Kready combined his background in service with his interest in finances when he became an Everence financial advisor at the Mount Joy office in 2002.  He is part of a larger team of advisors in the Lancaster region and appreciates “the great team approach and resources of Everence.” He also enjoys “working with clients in a faith-based setting.”

Mr. Kready has a passion for helping his clients set and accomplish financial goals, especially in the areas of retirement and tax planning. His relationship with Everence encourages a philosophy of giving back to the church and a shared worldview of being focused on the needs of others.  Mr. Kready says he is “committed to service” and desires to “help people find solutions to the stewardship opportunities and challenges they face.”

A graduate of Penn State, Mr. Kready pursued studies in the areas of recreation, hospitality, and parks management. He spent several years in the hospitality industry, including time as an institutional food service director. He says his career change into financial services “was the best decision I ever made and allows me to directly make a positive difference in peoples’ lives.”

Mr. Kready and his wife, Jennifer, have three children and attend Manheim Brethren in Christ Church. In his free time, he enjoys a variety of outdoor activities and coaching his children’s sports teams.

Disclosure: Advisory services offered through Everence Trust Company and Investment Advisors, a division of ProEquities Inc., Registered Investment Advisors. Securities offered through ProEquities Inc., a registered broker-dealer,
member FINRA and SIPC. Investments and other products are not NCUA or otherwise federally insured, may involve loss of principal and have no credit union guarantee. Everence entities are independent from ProEquities Inc.

Post-production note: In July 2021, ProEquities Inc. became Concourse Financial Group Securities Inc.

Photography by Jeremy Hess