There are many advisory firms that place a premium on continuing education and professional accreditation. Depending on its business model, it's not uncommon for a firm to have one or more CFPs in the planning department, maybe a CFA heading up the investment team, and if there's a special orientation toward tax efficiency, there might also be a CPA in the mix. Occasionally one might come across a practice headed by an individual with multiple accreditations and a veritable alphabet soup of initials after his name. But a firm with four partners--each of whom is a certified financial planner (CFP), certified public accountant (CPA), certified investment management analyst (CIMA), and a personal financial specialist (PFS)--has rare bragging rights indeed. Brightworth Private Wealth Counsel, the Atlanta-area firm that began life in 1997 as Polstra & Dardaman, can make just that claim. The firm also counts three additional CFPs on its planning staff, one of whom is also a chartered life underwriter, denoting her specialization in insurance and estate planning. The head of the investment team is Brightworth's eighth CFP; he also is a CFA. "One of the things we like to do is provide cutting edge advice to our clients. To do that, we have to be what we call lifelong learners," explains firm founder and chairman Dave Polstra. "We have a passion for learning and for always aspiring to be better."
"We place a lot of value here on continuing education and learning," adds co-founder Chris Dardaman, who acts both as CEO and CIO for the firm. In addition to his already impressive roster of credentials, last summer he was part of the first alternative investment certificate class conducted by the Investment Management Consultants Association (IMCA) at the Wharton School.
In addition to the founders, Brightworth has two other partners--Alan Gotthardt and Ray Padr?n. All four started their careers as CPAs with large accounting firms but were attracted to the advisory profession by both its entrepreneurial aspect and the high level of interpersonal contact with clients.
Polstra is the senior member of the group, having started in the audit and tax departments of a Big Eight CPA firm where he found he had a passion for working in individual tax returns, in the late '70s. In 1980, after two years as a CPA he joined a financial planning study group with other young professionals from different arms of the financial services industry. When he ultimately decided to leave the accounting firm to become a financial planner, the managing partner of the tax department warned him against the move, advising that he'd never make it. Feeling slightly daunted, Polstra joined a firm in the Atlanta suburbs that he describes as "mainly independent contractor-type reps." He says it gave him great experience and excellent training, but following the enactment of the Tax Reform Act of 1986, he felt that the business was about to change and that a commission-oriented business would not be the way of the future.
In 1992 Chris Dardaman also joined that firm and, with Polstra helping to mentor the younger planner, they began working together on retirement workshops and other projects. The two found their skills extremely complementary. Dardaman is a natural networker and his people skills, combined with Polstra's flair for public speaking, made them an excellent team. In 1997 the pair struck out on their own and to build a service- and client-oriented business that would be fee-based. For lack of a better suggestion at the time, they named it after themselves. As is the case with many fledgling firms, it took a little bit of time for Polstra & Dardaman to get their business model running the way they had envisioned. Initially "fee-only" applied just to the investment portion of the business, but by the end of 1999, they had dropped their insurance licenses. Shortly thereafter they became members of NAPFA and today they are completely fee-only with no other compensation, including any kind of soft dollars.
The same year they started the business, Polstra and Dardaman were joined by Alan Gotthardt, who though only in his mid-20s was already a senior manager in Ernst & Young's tax department working with high-net-worth clients. Polstra credits Gotthardt with providing the firm's strategic direction and design. In the same vein he describes Dardaman as the firm's visionary. "He's our idea guy. He is always asking the question, 'Why do we do things this way? How can we do it better?'"
The fourth partner in Brightworth, Ray Padr?n, joined two years ago from Deloitte & Touche in Atlanta. "Ray is our execution guy," says Polstra. "He has an HR heart, he can develop teams, and he has a technology-oriented mind, so he heads up our IT as well. He's our chief operating officer and what he does is take the ideas and strategies that Chris and Alan come up with and he builds them into systems and processes.
"It's almost like there's this jigsaw puzzle that fits together the way your hand would fit in a perfect glove, taking the key attributes of each of my partners and putting it together into a unique team," he continues. Of his own role in the company, Polstra says he spends a great deal of time working on the development of the planning staff. He's also often the public face of the firm speaking to professional groups on wealth management and IRA distribution planning.
But for all the partners, the big driver is still client contact. "Each one of us has clients that we're responsible for and then each of us has specific duties in managing the firm," Polstra explains. "But we've also got four planners in our planning department--three of them have MBAs in planning or finance and the other is working on his MBA. That's the group that does most of the planning work and then prepares reports and strategies for us to go over with our clients. We leverage our time by having very skilled, highly competent planners that are in a role to serve the client."
Once an Accountant . . .
Although all of Brightworth's partners are CPAs, they no longer function as accountants in preparing tax returns, but an awareness of the tax situation is always present. "I'll give you an example of how our tax expertise would come in," offers Polstra. "For an executive that's thinking about retiring in a few years, we lay out a roadmap for them on how to deal with the tax implications on their non-qualified stock options or their deferred comp plans. We help them figure out the most tax-efficient way to get from working to retiring without Uncle Sam taking a big chunk of their cash."
They may be accountants, but the partners at Brightworth are cognizant of the fact that their clients' lives encompass much more than finances. One of the firm's goals is to provide comprehensive life planning, not just investment advice.
When the advisors at Brightworth develop a strategy for a client, Polstra explains, they look at six components of the individual's financial picture: the tax situation; cash flow; wealth transfer plans; estate planning; risk management; and philanthropy. "We design their investment plan and their financial strategy around their life goals and values, taking into account those six things."
The last of those six is important to Polstra and his partners and they wanted to share it with their clients. "The first thing we want to do is address their personal financial needs and make sure that we've prepared them to face the future," he says. "We also want them to experience the joy and satisfaction of investing in others either through their time or through philanthropy. Our clients are at different stages when it comes to philanthropy and we want to empower them to whatever extent they're willing and interested in that area."
Like his partners, Chris Dardaman started as a CPA and it was in that capacity that he got his first exposure to the investing side of the business. "People need good investments to be able to fund their retirement income. It's a very important part of what we do," he says. "We build out very diversified portfolios for clients using a number of different vehicles such as separate accounts, mutual funds, hedge funds, and other private vehicles. We want to build what the people need to achieve their life objectives. We spend a lot of time on asset allocation, on manager selection. We are very sensitive to the tax management issues as former practicing CPAs. We overlay the tax piece as it relates to our investment strategy as well."
The firm calls its approach to investments the "global investment solution," but it actually consists of customized portfolios depending on the assets the client has to invest, the time horizon, and the individual's life goals. "It's what we call disciplined innovation," explains Dardaman. "It's a very disciplined process that we follow to achieve consistent strong returns for clients over time so that they can achieve their life objectives. Obviously we look at quantitative performance, but we spend a lot of time looking at the qualitative aspect of how managers get their performance--who they are. We need to be able to trust the people that are there. We want to see consistent performance in what they do."
Brightworth's investment team seeks to find the best managers in the world in each space, whether it's small-cap, large-cap, hedge funds, or real estate, although they've found that many of the best managers end up closing to new investors once they reach a certain size. When the portfolio calls for mutual funds, Dardaman notes that the firm favors funds that are institutional in nature with no loads and low expenses. "It's a way to get the optimal solution for the client--the most diversification at the least amount of cost," he says. But ultimately he says, when it comes to investments the firm is absolutely "vehicle neutral," and chooses what's best for the individual client.
A Bright Future
Every firm has to find its own identity, and in talking about Brightworth's, the partners point to what they identify as their four corporate values: integrity; excellence; service; and teamwork. "Our objective is to give the advice to our clients that we would want to receive if we were the client, explains Dardaman. "It's great to be trustworthy, but if you're not any good at it, it doesn't matter. We want to be excellent at what we do. Service is all about taking care of, and doing a good job for, the client."
When it comes to teamwork, Dardaman says the firm is built on "group genius," where the best idea wins the argument, not the job title of the person who puts it forth.
The approach must be working. Since they began keeping track in 2000, the firm claims a 97% client retention rate. The partners also see their relative youth as an advantage. "The average age of our partners is 44 , with 22 years of experience in financial services and financially related businesses," says Dardaman. "It allows clients to get a tremendous amount of value from our experience, but we're still young enough that we're going to be here as they grow older."
"We're building a business for the future. We plan to be around for the next 20 or 30 years," adds Polstra. "It's important to us to work with people that we like and who like us. I want to enjoy what I do and I want our staff to feel very comfortable with the clients that we have."
"I think we're just getting warmed up. We're growing the business and we're looking for clients who understand and appreciate what we do," says Dardaman. "We believe that there's going to be way more clients than there are great advisors for them to work with. What we're trying to do is help people get the right fit. If what they are looking for is a good match for what we do, both they and we are going to be very happy working together. If it's not a good match, we'll refer them somewhere where it will be. Our underlying belief is that there's going to be more people that want what we do than we are going to have time to take care of.
"For the industry, I think one of the challenges is going to be developing enough experienced advisors to do a good job taking care of the flood of people that will be retiring. As the baby boomers retire, we're going to see the need for personal financial advice accelerate at a tremendous level, so I think our industry is in for growth like none of us can imagine. The macro demographic trends are huge and it's going to be a great opportunity."
Managing editor Robert F. Keane can be reached at firstname.lastname@example.org.