Diversity in thought and execution
Don Meredith, CRPC • Chesapeake, VA
Integrated Financial Partners Inc. • Lincoln Financial Advisors Corp.
Read full biography below
Including active strategies for risk management in a diversified portfolio calls for third-party managers who specialize in specific market segments.
Proactive Advisor Magazine: Don, tell me about your practice and how you started it. I feel in many ways we have the best of two worlds in our practice. I receive strong support from both Integrated Financial Partners (IFP) and Lincoln Financial Advisors (LFA). Each offers a wealth of resources and solutions designed to help clients meet their financial goals. Our associates work as a team to provide comprehensive planning strategies for individuals and companies.
Everything that has been valuable to me in life has come through forging relationships. I built many at Ameriprise. One of those individuals became a good friend, and we decided to set up shop together. We met the CEO of IFP and were very impressed with their process and capabilities, as well as their relationship with Lincoln. We opened our branch of IFP here in Chesapeake in 2011.
Given my background in working in the sciences, I was attracted to the strong disciplines IFP has developed for financial planning and investment management. We are financial planners at our core, and we do financial planning with virtually all of our clients.
Let’s talk about the last 15 years in the financial markets. It’s funny—and not ha-ha funny—how supposedly once-in-a-lifetime black swan events keep cropping up with some regularity. It is not supposed to be that way, but traditional financial planning and investment models were built under the assumption that these things would not happen so frequently. The standard model for managing assets has been turned on its head.
When you’ve dealt with these types of situations, you say to yourself, “There’s got to be a better way.” That’s where active management began to be a part of my tool kit. It is all about how you manage risk in a different fashion.
We try to provide strong thought leadership when it comes to retirement-income planning, how that relates to investment planning, and how that relates to diversification in asset management over different time frames. It all comes together in a time-release model that can combine elements of passive investment strategy with active management.
I manage clients’ expectations and the risk on the portfolios. Other than that, I have no control over anything. You’ve got to be humble enough to say that first, and then explain the benefits of the approach we have put together. We have what we call “the three Es” with clients: We manage expectations, we educate, and then we execute on the plan that has been created.
It is very beneficial to have frank discussions with clients about risk, and every week I see extremes with different clients that run the gamut of experiences. I just met with a couple who had accumulated their wealth through hard work, good incomes, and classic investing. They are about to enter retirement and have really exposed themselves to far too much market risk.
On the other side, I have clients who were so burned during 2008 that they are petrified of the equity markets and think all of their money should be in fixed income. For both of these cases, which are actually pretty common and not that extreme, we can demonstrate ways to manage risk reasonably while producing the returns and income their future lifestyle may require. I educate them on the different types of risks that they’re taking, what risk they may not understand they’re taking, or the type of risk they should be taking and managing. Then we can come to a mutual set of expectations that we can speak to and execute on their plan.
I have certain expectations of the portfolios that I put together and, more importantly, of the managers that are managing those specific portfolios. Layering in active management with the more traditional type of diversified portfolio helps to create those expectations. Then I educate myself thoroughly on understanding their methodology and how specific strategies can be expected to perform in different environments. As advisors, we have to be certain that the managers are consistently executing well against their strategies.
I believe in not only diversity of thought but also diversity of execution. We have managers that look at very specific segments of the market because there are well-defined clues as to the direction of that market. Sometimes, it’s in the high-yield bond space. Sometimes, it’s in some other asset class such as equities or other fixed income. They’ve developed very sophisticated ways of looking for the trends in those specific markets.
We have different types of managers with different investment philosophies that we can create what I consider the most highly risk-managed portfolio for the client. You’ve got to be able to understand that and be able to devise portfolios that work well for the specific needs of a diverse client base. You also have to be sure that clients understand what we are doing and why we are doing it, and are comfortable with it. Our firm has thrived by using that process, and I believe it serves our clients well.
Don Meredith is a registered representative of Lincoln Financial Advisors Corp. (LFA) and a senior-level financial planner with Integrated Financial Partners Inc. (IFP), based in Chesapeake, Virginia. IFP is a leading regional financial-services firm with representatives in offices along the East Coast.
Mr. Meredith is a graduate of the University of North Carolina at Chapel Hill, having earned a degree in applied sciences with an emphasis on biomedical materials. He was a three-year letterman for the North Carolina Tar Heels football team.
Before entering the financial-services field, Mr. Meredith had a distinguished and varied career in the pharmaceutical industry, including working for entrepreneurial startups in the venture capital stage. He changed career paths to pursue his love of the finance industry and financial planning, where his science and math grounding provides a disciplined framework for working with clients. Before joining IFP and LFA, Mr. Meredith was an associate vice president and financial advisor with Ameriprise Financial Services Inc.
Mr. Meredith and his wife have three children, 14-year-old twins and a 10-year-old. He says all three were “micro-preemies—a life-changing experience” that got his “priorities focused very quickly.” He says all three are very healthy and enjoy a wide range of sports and school activities. Mr. Meredith himself competes as a serious cyclist, saying, “It is quite a sight, I am told, seeing this 6’5” ex-football player lumbering through the pack.”
Disclosure: Don Meredith is a registered representative of Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Integrated Financial Partners Inc. is not an affiliate of Lincoln Financial Advisors Corp. CRN-1175785-041615
Photography by Chris Winton-Stahle
