Victor Gadoury, CLU, ChFC • Woburn, MA
Heritage Wealth Managers LLC • LPL Financial
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Wealth management is not just money management. It is about helping clients use their assets to fulfill their self-defined purpose in life.

Proactive Advisor Magazine: Victor, why did you become a financial advisor?

I have always been interested in quantitative things and was a math major in college. I started in the business on the insurance side and then moved to financial planning and an investment advisory practice.

One of my motivations for working with individuals approaching retirement came from what I saw happen to my parents. They owned and operated five different businesses in their lifetime, but they had not really set aside any money for retirement. They always reinvested it into their businesses to keep them going. When they did finally retire, they had to rely almost exclusively on Social Security or support from the family. My message to clients is rooted in that experience. I emphasize that it is never too early or too late to plan for retirement needs, and how important it is to invest wisely and safely.

Let’s focus on that last point, your investment philosophy.

That is a more complicated question than you might think, since so much depends on a specific client’s objectives and what we jointly can agree upon in the discovery process with them. But in the final analysis, it comes down to the answers to some basic questions: What do they want and need to do in the future? And how much risk can they safely afford to take on to meet those needs and desires? Do they need to be more income-oriented or growth-oriented? From there, we will help them construct a portfolio that’s best going to work toward accomplishing their purpose, with risk management always at the forefront.

The higher the return of an asset class, the more susceptible it is to volatility. In a down market, that can be a portfolio killer.

What tools or techniques do you use to manage risk?

Although I have been in the financial-services industry for over 40 years, the development of new portfolio approaches for risk management is a constantly evolving process that is very impressive. I have been aware of third-party active money managers probably since the mid-1990s and have used several over the years, each with a fairly specific area of expertise. But it is only recently that I have moved more client assets to broader portfolio approaches that employ active management.

While my clients were able to come through both the dot-com and credit crises in relatively decent shape, those two experiences in the space of 10 years has definitely had an impact on my thinking. In terms of the goal, it is really to minimize the effect of the inevitable declines in the market. With most of my clients ending their work careers or already retired, we are primarily concerned with capital preservation more than trying to knock the ball out of the park in terms of returns.

To steal a phrase from one of my fellow LPL advisors, the key is to “advance and protect” client assets. What that means practically is using actively managed portfolios that strive to smooth out volatility while also allowing for a reasonable rate of return over the long term. Given my grounding on the insurance side, I also tend to use a variety of annuity products that can protect assets while providing for guaranteed income. (Guarantees are based on the claims-paying ability of the issuing insurance company.)

The higher the return of an asset class, the higher the risk or the more susceptible it is to volatility, and in a down market that can be a portfolio killer. So we are very glad to have access to third-party managers who can utilize a variety of techniques—according to market conditions. While I cannot recommend to clients a specific strategy based on my own personal investment preferences, I do think it is permissible to say that I use active managers and their strategies for my own portfolio. They do a good job of protecting for the downside while still delivering competitive returns when the market trend is bullish.

What other advantages do you find in using third-party money managers?

My focus is on doing right by my clients. We are trying to be problem-solvers and solution providers, and that covers a wide range of financial-planning matters. Having access to managers who have expert full-time staffs monitoring the markets, assessing the trends, and running their analytical models is something that frankly is just not feasible for me—or just about any advisor—on my own. That is a tremendous resource that allows me to put my focus on the client and their long-term needs.

Third-party managers provide tremendous resources that allow me to put my focus on client needs.

How would you summarize your broad philosophical approach with clients?

We have an operating mission statement we share with our clients that we call the three principles of “Wisdom, Insight, and Education.” While those three words are far from unique, we think applying them to a family’s financial well-being is critical. We believe building wealth without purpose is meaningless, and we want to ascertain what is important to our clients’ lives and to help them achieve those goals.

What differentiates us is how we work so diligently to obtain those insights. We want to know about a client’s perspectives, values, experiences, and hopes for the future. As we dive into gaining those specific insights, we hope to build a unique and meaningful connection in the way we work together going forward.