Chuck Bigbie • Tulsa, OK
Woodland Wealth Management • Geneos Wealth Management, Inc.

With family generations rooted in America’s heartland, Chuck Bigbie understands the history of boom-and-bust in the oil industry. Financial markets, like the oil industry, have cyclical natures of their own. The tools that are available today to protect investor assets are a huge improvement from those of his father’s generation.

Proactive Advisor Magazine: Tell me about your background, Chuck.

I have always been very inquisitive, scientifically minded, and into math. I was proficient with computers early in the game and worked in computer programming during high school. I ended up majoring in chemical engineering at the University of Tulsa and have also studied nuclear physics and nuclear chemistry.

I spent a bit of time after college working as an engineer, but when the energy business hit a rough patch here in Oklahoma back in the 1980s, I decided it was time to switch careers. And financial services has always been in my blood, starting with my grandfather and then with my father, who both worked in the insurance business.

My grandfather was a huge influence, as I saw firsthand the positive impact he had on the lives of clients and their families. He had originally moved to Tulsa back in the 1930s, after researching the rapid growth of the energy industry here and figuring that there were probably more millionaires per capita than anywhere else in the U.S. at that time.

What did you learn from your family?

They both were retired by the time I got into the business, but there was certainly a lesson in the boom-and-bust cycle of the oil business and the same cyclical nature of the stock market. They were dedicated to protecting the assets of their clients, and so am I, although the tools we have today are obviously much more advanced.

When and how did you first become involved with active investment management?

First, let me give you the big picture. We work on a holistic and highly individualized basis with each and every client. We use a very specific discovery process that looks at their goals, values, risk profiles, and financial and retirement objectives. We then quantify that using our customized software and develop the appropriate long-term financial strategies.

When I first started in the business and some years after, everything was asset-allocation-driven and rebalanced. There were no tactical strategies. There was no active management. It was pretty much “set it and forget it” with the occasional rebalance. And then we saw some market corrections in the 1990s. In the early 2000s, there was absolute decimation of many of those traditional portfolios.

There was no mechanism to say, “It’s time to go cash,” or switch from stocks to bonds, or move from Europe to Japan. There was no intelligent system—there was no active management. As a result, when there would be huge downturns in the market, and in clients’ accounts, the recovery period was long and protracted, if they recovered at all.

What was your answer to that?

When we switched to the independent advisory channel, we utilized active-management firms that had strategies with the ability to move to cash in dangerous markets, or to be strongly allocated to equities when the trend was right, or to change the asset class or mix of asset classes. We found that there was more downside protection. If clients didn’t lose as much, they didn’t have to recover as much. It would be a much smoother, more controlled ride, with an emphasis on risk management and taming volatility.

Going beyond theory, how did that play out in your practice?

When we began moving client funds to active management in the late 1990s, it was a gradual process. We had to explain the concept to clients, and it was very new to many of them—and in fact pretty new to us as well. One of my larger clients was part of that first move to active management, and his account represented almost one-third of our actively managed portfolios. When the 9/11 tragedy and the dot-com bust both hit the markets—and most of his money was in cash or defensive mode—he became an even bigger believer in active management and has remained so ever since.

How do you evaluate the active managers you now use?

There are three main criteria. First, I look for firms that have strong customer support for me and my staff and clear communications for clients.

Second, I select companies with a clear statement of their investment philosophy and the methods they use. I want this not only to be transparent, and with a deep level of sophistication, but also to have a history and track record that can fairly easily be explained to my clients.

Third, I don’t think it is very efficient to work with a great number of third-party managers. I have probably evaluated close to three dozen and generally choose to work with a handful who can deliver multiple active strategies, so that different client needs can be met.

What are some issues you see with clients today?

Most of my clients fall into a fairly affluent segment, and many are approaching or are already in retirement. It’s interesting to see the wide split among people of relatively similar income levels on how they have approached financial planning over the years before engaging our services.

About half of them have been very prudent stewards of their wealth. The other half might be asset-rich but cash-poor, with very counterproductive financial habits. We know our wealth-management process can work for just about all of them, and active management plays a big role in that.

For each and every client, we create an investment policy statement that memorializes their risk tolerance, time horizon, and investment goals. We work closely with third-party managers to then build a risk-appropriate portfolio that meets the client’s needs. Like my father and grandfather, I want to have a positive impact on people’s lives, and I believe we have the tools to do just that.