From the July 2012 issue of Research Magazine • Subscribe!

June 27, 2012

A Seasoned Guide for Uncertain Times

Allen Rutledge offers advice informed by economic and historical perspective.

Allen D. Rutledge is a financial advisor for our uncertain times: the struggling economy, the high market volatility, the European debt crisis—everything holding back the post-global financial meltdown’s comeback.

What makes Rutledge so well-suited to guide clients are his deep knowledge about all things economic and historical perspective on market cycles, coupled with a fierce dedication to help clients navigate in the best way possible.Allen D. Rutledge

Different market cycles call for different investment strategies, Rutledge says.

“With a bear market, which can go on for 20 years, you might choose an active style of asset management, whereas in a bull market, you may choose index investing and lower your cost. This makes sense,” says Rutledge, 64, who is co-founder and senior partner of Capital Planning & Investments, in Powder Springs, Ga., which works with broker-dealer Cambridge Investment Research.

He has a master’s degree in finance, but much of his economics philosophy was picked up in an earlier career. As district assistant to Georgia conservative Congressman Lawrence P. McDonald, Rutledge received an education in Austrian economics, which calls for little government interference. This was in sync with Rutledge’s own conservative bent. In college, he’d been taught mostly Keynesian economics, advocating that government play a major role.

“Austrian has a focus on letting the markets decide and interact without the constraints of government intervention,” Rutledge says. “With Keynesian, it’s like the economy is on steroids—monetary or fiscal policy is used as a means of directing the economy. That’s a very damaging approach to our country,” says the soft-spoken, outspoken FA.

Rutledge and two colleagues opened CPI in 2008 after focusing on insurance products and some financial planning at Guardian Life Insurance Company of America’s Peachtree Planning in Atlanta. Two more Peachtree FAs joined them, and now Rutledge provides an OSJ for all the advisors, who maintain separate offices and individual practices in what CPI calls a “collaborative ensemble.”

Of course, launching a new financial planning shop at the height of the financial crisis took quite a bit of chutzpah. But Rutledge says the five had reached an untenable point at Peachtree.

“We didn’t like the dictates of the insurance company,” he says. “Even though we knew each of us was going to give up $50,000 to $70,000 in renewal income, we wanted to form a firm where we were truly independent and had the freedom to talk to clients about what was on their minds—not so much what was on our minds.”

All but one Rutledge client transitioned with him. After some prospecting and referral-based leads, he now has about $20 million in assets under management.

“Our goal is for each advisor to manage $50 million to $100 million in assets within the next 10 years,” he says.

The FA’s core philosophy is to serve clients, not sell them. A major way is applying an “income for life” strategy that segments retirement investments into functional compartments, each with a different time horizon. For example, one “bucket,” filled with low-level-risk investments, could be designated for income.Another, dedicated to securities with an intermediate time horizon, might contain bonds or other products that are liquid or semi-liquid.

“A third bucket,” Rutledge says, “could be for higher risk, more volatile, longer-time-horizon investments. If you’re going to buy and hold, you need to be aware that stocks don’t have a short investment cycle. They can be quite long.” Rutledge runs an illustrative software program for clients that shows return goals for each bucket.

An Army orthopedic surgeon’s son, he was born in San Francisco but grew up around the world. Then he traveled a few different career roads before finding his way to financial services.

His first job after graduating from East Carolina University with a bachelor’s in 1969, was working in the Louisiana factory of a boys’ apparel company.

By 1974, he’d picked up his MBA from Georgia State University. “But as an office manager-plant manager, I really wasn’t using it very effectively,” he recalls.

Prompted by his longtime conservative beliefs, the next year he took a job as a field sales coordinator for the John Birch Society. That led, eight years later, to an offer from McDonald, who had been the Birch organization’s second president.

“My viewpoint was highly in accord with his,” Rutledge says.

In September 1983, McDonald had just finished a speaking tour in Germany and Israel, stressing his opposition to Communism and what he perceived as the U.S. path to socialism, when the 747 in which he was flying to Seoul, Korea, was shot down by a Soviet fighter plane. All aboard were presumed dead.

There is conjecture that McDonald was targeted because of his beliefs. “Supposedly his 747 had been confused with an RC 135. I don’t know how that could be,” Rutledge says.“Maybe someday we’ll find out what happened.”

An insurance agency owner counseled him to make insurance services his next move. Rutledge thereupon joined Georgia International Life and Sun America Securities selling life and health insurance and a limited amount of securities. After six years, he moved to Peachtree, where he stayed for the next 18 years.

Today, Rutledge is far from shy about opining on vital issues. For instance, he views the financial regulatory overhaul as “closing the barn door after the horse has gone out. I’m not real enthused. Why give more power to an entity that has already shown its abuse of power? Where was the SEC when Bernie Madoff did those bad things?”

Off-hours, the grandfather of 20 relaxes by fishing for trout and hunting deer, wild pig and turkey. But he doesn’t have much luck with turkey. “They’re extremely wary,” he says. “The minute they sense you, they’re gone.”

That is certainly not the case with his financial advisory prospects.

“Clients like being served,” he says. “We’re here to serve a need that they have or help identify a problem and solve it.”

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