Andrew Zorovich • Huntsville, AL
Infinity Tax and Financial Planning • American Portfolios Financial Services Inc.
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When I began in the financial-services business, I spent about five years working with a firm that had a business model that offered clients tax services, financial planning, and investment guidance. I feel fortunate to have gained tremendous training and experience working for the owner of that firm. After some time learning my craft under his mentorship, self-study, and taking advantage of training resources in the industry, I was promoted to branch manager for the firm, running an office in Largo, Florida.

I later decided I wanted to open my own firm and incorporated many elements of the business model I had been trained in. This was in the late 1990s when the fee-based advisory model was starting to gain traction in the industry. That is what I transitioned to over time.

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However, I feel our firm is different from many advisory practices. In the traditional way of doing business, most clients have a tax professional, an investment advisor, an insurance agent, and an estate planner—all in different locations. Most of the time, the advice that one professional gives impacts the advice of the other professionals—but rarely do these professionals ever talk with each other. At our office, we have access to bookkeepers, tax preparers, accountants, financial planners, investment managers, insurance agents, and estate-planning advisors. Our clients receive guidance from various professionals who can work together in a cohesive fashion.

We believe this provides a well-rounded approach to a client’s overall financial health. Our goal is to help clients protect, grow, use wisely, and—over the long run—effectively bestow or transfer their assets. The Infinity financial process is formulated to act as a road map for a client’s life journey.

I use a distinct financial-planning process and employ sophisticated software as part of that process. But, as good as the software might be, the end result is dependent on getting high-quality input from the client. If, for example, someone has a strong interest in planning for college funding for their children, it might take 10 questions on that issue before we can start thinking about it in the context of their overall financial plan.

Normally, the first step is an introductory meeting where we spend 20 to 30 minutes with a client, getting to know each other and seeing if we have a basic compatibility. I also want to ascertain if they are a candidate for a full financial-planning process or are looking for a specific service, like investment management. We can work with clients in a variety of ways, and it is important to understand what their goal is in seeing us in the first place. That said, it is preferable, I believe, for both the client and our firm to pursue a full financial-planning relationship. An advisory relationship with a financial advisor, in my opinion, should be far more than just a transactional or “numbers” relationship, and finding positive chemistry is very important.

Assuming we have a good match, we will next spend a good amount of time discussing personal or family financial and life goals, both short term and long term. That will include the beginning of the discovery process of understanding their current financial situation and their attitudes and behavior in handling their money and investments. I will describe my planning process, which I touched on before. This includes the four broad areas of protection, growth, using assets, and bestowing them, with a focus on tax efficiency throughout the process.

We will then move into a series of meetings that will include further discovery and, finally, my presentation of the outline of a financial and investment plan. This will cover opportunity areas or gaps where they could be doing a much better job in having their money work for them. That will likely generate a good deal of discussion before we are ready to move into the implementation phase. I stress to clients that their financial plan is not a one-time document that will gather dust on the back of a shelf. In fact, it is an interactive and “living” planning process that can be periodically updated as they encounter changes in their lives or perceive that their goals need to be revised.

We work with clients across a full range of ages and occupations. In our Huntsville, Alabama, office, many of our clients reflect the types of employers prevalent in the area. These include clients with engineering, military, defense-contractor, or science backgrounds. They tend to be still working and in their 40s, 50s, and 60s. In our Largo, Florida, office, we see a greater percentage of retirees, which is natural for Florida.

No matter what the type of client or their background, we think our four-part planning process works well, though there are, of course, planning distinctions in emphasis for those in the accumulation phase versus those looking at distribution. But though our process is customized for each individual or family, the core needs are fundamentally the same for everyone. All clients would like efficient tax planning, a competitive return on their investments, risk management across their investment and insurance planning, and disciplined planning for their retirement and legacy needs.

We approach the area of asset allocation and the selection of individual investment vehicles based on our clients’ specific goals. It all depends on the client’s objectives, time frame, and attitudes about risk. Each goal, in many cases, might have its own asset allocation.

Asset allocation also goes back to the concept of protection. I am not a believer in a heavy reliance on passive investment strategies, though for a specific client they may play a role in the portfolio. We use Monte Carlo simulation to develop asset-allocation strategies and assess the probabilities that a client will reach their goals in a way that is within their comfort zone. By this, I mean that there is a realistic and achievable path to their objectives that incorporates risk management consistent with their risk profile. I tell clients that their investment plan is not going to rely on a “buy, hope, and pray” planning methodology. Of course, there are no guarantees with any investment vehicle or strategy, but we would like to put the probabilities of success in our clients’ favor in a tax-efficient manner.

We also want to add value for a client. Anyone can develop a traditional asset-allocation strategy. We are not restricted in how we construct allocations or the types of specific investment vehicles that are used. These might be basic asset classes, or they could be more sophisticated investment strategies. The question is always, “What will help our clients reach their goals?” Some part of an allocation might use traditional fixed assets such as CDs, bonds, or fixed annuities. Some of it might use equity assets, whether it’s individual stocks or mutual funds, variable annuities, or a managed stock portfolio.

For the managed portion of the portfolio, we work with third-party money managers. I see our firm as the quarterback of the team, helping direct the different elements of an investment plan. The investment managers we work with tend to have different areas that they are highly experienced in. It could be a manager specializing in disruptive technology stocks, or a manager who primarily employs bond strategies, or a manager that specializes in tactical asset management. I have been in the business long enough to have seen two severe market declines. I believe the diversification benefits and risk-management focus of tactical asset management can be important components of our clients’ investment plans.