Collaboration and innovation in serving client needs
Collaboration and innovation in serving client needs
Proactive Advisor Magazine: David, what was your path to founding your firm?
I attended parochial schools through high school. I feel they provided an excellent education and inspired me to be intellectually curious. My father was a TV and radio production engineer who put in long hours and encouraged me and my siblings to have a strong work ethic. I always worked during high school and college and was able to save a little money. When I was about 12 years old, I started reading books about investing and was fascinated by the statistics and analysis. My first investment in high school was very conservative, taking advantage of the high interest rates at the time by putting money into a CD that was paying about 10% interest. I wrote a paper in high school that took a look at the Super Bowl indicator and how markets are correlated to the winning team. It was not the most serious investing topic, but it was fun and involved statistical analysis. The bottom line is that my interest in the markets and investments started at an early age.
I attended Rockhurst University in Kansas City where I earned degrees in economics and marketing. My economics professor was very accomplished and highly rated in his field. At one point, he had worked on economic policy for the Nixon administration. He took me under his wing, and we remained good friends after college. Following graduation, I briefly worked for a bank trust company and a brokerage firm before joining A.G. Edwards. That was an excellent experience that provided strong training and mentorship. I was at the top of my training class and went on to build a significant book of business in my five years with the firm. My proudest moment was when that same economics professor decided to open an account at A.G. Edwards. For an individual like that to place their trust in my efforts was very gratifying.
In 1995, I decided I wanted to become an independent financial advisor and have control over my firm’s business model and the manner in which I would serve clients. I wanted to fully transition from a more transactional role with clients to a true wealth advisor guiding clients in multiple areas of their financial lives. To this point, I earned the designation of Certified Estate Planner (CEP) and took additional graduate-level coursework in finance. I also successfully completed the Accredited Investment Fiduciary (AIF) program in 2007, and I adhere to the high standards of being a fiduciary. I later rebranded my firm as Promillennial Wealth Guidance and have put together a team that is focused on meeting the diverse needs of our clients.
Talk about the mission of your firm.
The team at Promillennial Wealth Guidance is committed to providing superior service for clients and businesses, calling on our three decades of experience and knowledge of wealth management. Our clients are successful individuals, charitable foundations, small businesses, and corporations. They place a high value on developing long-term relationships with their financial advisors. We make it our mission to surround our clients with service regarding all aspects of one’s financial well-being. Being client-centric means we customize financial and investment-strategy plans that seek to grow, preserve, and conserve the wealth of each client.
Comprehensive planning for the future and dealing with the challenges that life brings is an important part of our service. Having experienced the loss of loved ones too early in their lives and seeing both friends and family members face serious health issues, I am a great believer in the importance of having a resilient attitude and overcoming adversity. That can cover anything—from the issues I just mentioned to business setbacks, loss of a job, a divorce, or other personal or financial issues. With the right attitude and the willingness to seek out sound guidance, I think people can overcome most challenges in their lives. I like the phrase, “Turning resilience into brilliance.”
However, this philosophy is not only applicable to adversity. I encourage all clients to take an optimistic and forward-looking point of view as we develop our relationship. The most important thing to me is to make sure the big picture of their financial situation is predicated on sound planning principles, appropriate and timely solutions, and high-quality products and services. I am passionate about guiding clients in today’s complicated and challenging investment environment and providing an innovative, sophisticated, and customized approach for each client—creating a strong personal relationship as we do so. We want to develop strategies with clients that will create a foundation for financial success and help them build and preserve their wealth.
Describe your overall investment philosophy.
As an independent advisor and fiduciary, I am unbiased when it comes to specific investment solutions for clients. We develop a custom investment strategy that meets each client’s planning goals, risk profile, and time horizon, while taking into consideration any investment preferences they may have. We make sure that every element of each client’s plan work together. The major categories may include equities across different company sizes, geographies, and sectors; various fixed-income approaches; insurance and/or annuities; real estate, including REITs; and some types of private equity.
“I believe risk management and diversification are paramount.”
For a client’s core portfolio, I believe risk management and diversification are paramount. We have excellent results from our relationships with third-party investment management firms that focus on dynamic, risk-managed portfolio strategies.
What does that mean? Each of their strategies is designed to take advantage of measurable opportunities in the market—and to avoid specific observable risks. They use sophisticated quantitative models and signals based on algorithms to make changes to investment positions based on the risks and opportunities of any given investment environment. They seek to optimize upside return while minimizing the potential for large drawdowns through full market cycles. That does not mean that every strategy will be in an optimal position all the time. That is why I support their philosophy of building highly diversified portfolios with multiple strategies, enhancing the probability of taking advantage of specific market conditions.
I often use a simple analogy to explain the philosophy of dynamic risk management to clients. Imagine you were going on a fishing boat fairly far out on the ocean. We know that the weather at sea can turn on a dime, going from a sunny day to an extreme storm. Wouldn’t you want the most sophisticated technology on that boat—something designed to provide an early warning and the storm’s likely path? And wouldn’t you want that same technology to help you avoid the worst of the storm—by either making minor adjustments or fully changing your course? That is precisely what I think dynamic risk management is all about.
How do you see your firm growing in the coming years?
One step we are taking is expanding in the area of financial planning. This will allow me the opportunity to focus more on current client relationships and developing new clients. A good amount of our new business activity in the near future will come via the creation of a brand and service we are rolling out, called 401KUSA. Working in tandem with our partners, we can now provide sophisticated, risk-managed investment strategies to eligible 401(k) plan participants at many companies and professional firms. We help these participants take full advantage of their retirement accounts through the benefits of investment strategies using dynamic risk management. We are excited by this opportunity to serve current and future clients by helping them mitigate market volatility in their retirement accounts while seeking growth opportunities through full market cycles.
David Schmidt, CEP, is the founder and registered principal at Promillennial Wealth Guidance, located in Kansas City, Missouri. Mr. Schmidt’s firm offers a variety of financial-planning, investment, insurance, and risk-management services. He also is developing a new brand, 401KUSA, which provides sophisticated investment management to eligible 401(k) plan participants.
Mr. Schmidt was born and raised in Kansas City. He says it has been “a great place in which to grow up, attend school, start a family, and become a business owner.” He attended parochial school throughout his childhood. During high school, he was a strong student and an accomplished athlete, playing varsity football. His father, a World War II veteran, was a chief production engineer for a local TV network affiliate station. His father put in long hours and “always encouraged a strong work ethic.” His mother was a homemaker and “focused on our family,” says Mr. Schmidt. “Along with my father, my mother was a great role model for me and my four siblings.”
Mr. Schmidt earned bachelor’s degrees in economics and marketing from Rockhurst University. He says he developed many strong friendships during his college years, including professors “who remained mentors and friends beyond college.” He was president of the Junior Executive Association, a networking and service organization. He worked briefly after college for a bank trust company and a brokerage firm before joining A.G. Edwards. He was at the top of his training class and went on to build a significant book of business in his five years with the firm. He says that early experience was excellent, providing strong training and mentorship for his future.
Mr. Schmidt founded his independent firm in 1995 as an independent investment principal and registered representative with LPL Financial. He later rebranded his firm as Promillennial Wealth Guidance. Mr. Schmidt has earned the designation of Certified Estate Planner (CEP) and successfully completed the Accredited Investment Fiduciary (AIF) program in 2007. He has also been nominated several times for Best Wealth Manager in the Kansas City Area, sponsored by the Kansas City Business Journal. Mr. Schmidt is an active member of the Rotary Club and the Financial Services Institute (FSI), a professional trade association.
Mr. Schmidt and his wife have a teenage daughter and reside in Kansas City. They enjoy traveling and a variety of outdoor activities. Mr. Schmidt plays competitive racquetball and enjoys recreational golf and skiing. Mr. Schmidt and his wife support several local charities, and Mr. Schmidt was a past president of the local chapter of Sertoma, which promotes hearing health.
Disclosure: Securities offered through Securities America Inc., member FINRA/SIPC. Advisory services offered through Securities America Advisors Inc. Promillennial and Securities America are separate entities. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with professional advice.
Photography by: Steve Puppe
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How active management can benefit retirement plan participants
David Schmidt, CEP, is the founder of Promillennial Wealth Guidance, located in Kansas City, Missouri. Mr. Schmidt’s firm offers a variety of financial-planning, investment, insurance, and risk-management services. He also is developing a new brand, 401KUSA, which provides sophisticated investment management to eligible 401(k) plan participants.
Mr. Schmidt says that for participants there are many benefits of using professional investment management for retirement accounts. He has relationships with third-party investment management firms that specialize in investment management for 401(k) participants. Their approach, unlike traditional target-date funds, can provide the following:
- Strategies that are not only age appropriate but also actively managed.
- Strategic diversification that responds to shifting market environments in real time.
- A customized strategic blend of investments based on the participant’s risk profile, reflecting their individual suitability.
- Personalized investment objectives and an investor-friendly visual process for tracking investment progress over time.
- Sophisticated quantitative models that help remove emotion from the investment process.
- A team of experienced investment strategists that monitor strategy performance versus stated objectives.
- Turnkey investment experience for the plan participant.