Brian sat down and spoke with Investopedia last month as part of its Advisor Insights program. A transcript of part of the conversation is below:
INVESTOPEDIA: What inspired you to become an advisor?
BRIAN: I think it’s really been a combination of two things: (1) having a keen interest in the subject matter…answering often life-changing questions like Will I be able to retire early? How can I use my resources to help make the world a better place? and (2) helping others…I think I may be genetically predisposed to service…I was an officer in the USAF for eight years before joining what I would call a very service-focused wealth management firm in Colorado. A big piece of the helping part is educating clients. Personal finance can be a rather daunting place without knowing the laws, knowing the jargon, and knowing the underlying math involved. Some of it isn’t very intuitive. One example I like to use is if you lose 40% of your portfolio’s value, you must gain 67% to get back to square one again.
INVESTOPEDIA: Can you tell us about your practice?
BRIAN: First things first…integrity is paramount at Sherwood. We set the highest ethical standards for ourselves and stick to them. Above and beyond that, we’re fiduciaries so we’re obligated to act in our clients’ best interests at all times. We take that obligation very seriously…it permeates all we do. If we’re not convinced that something will be good for our clients, we don’t get involved. Period.
Along those same lines, we’re completely independent. We’re not owned by a larger firm as many practices are these days. I think most people would be surprised by how many financial services firms are owned by larger companies that they probably haven’t heard of before. It’s similar to Yum Brands owning KFC, Taco Bell, and Pizza Hut. We’ve all heard of those mainstream brands…Yum not so much. That’s the way it often is in financial services. Anyway, our independence means that we’re completely free to do what’s best for our clients and that’s exactly how we…and they like it.
Additionally, I should mention that we’re fee-only. We never receive commissions for pushing certain investment products. That helps to keep our interests aligned with those of our clients.
I set Sherwood up as a boutique practice so that I could provide a select number of clients with superior service…the idea being when clients call, they get me. When clients provide sensitive information, I’m the only one at the firm who sees it. Larger firms are unable to offer those kinds of assurances. Further, our clients will never be targeted or accosted because someone saw them walk into a big fancy wealth management office because I don’t have one. I meet with clients at their homes, virtually, or in nondescript public locations. It’s all very low-key and relaxed. Our clients also find it to be very convenient for their often hectic schedules.
The second part of our service model is providing excellent financial advice. Having been in the industry for over a decade now, I’m well-versed in personal finance matters in general and investment management specifically. I’ve also earned two Master’s Degrees in finance as well as the CERTIFIED FINANCIAL PLANNER(TM) or CFP(R) designation. However, the degrees and designations themselves really don’t matter…they’re just tools. What matters is being able to advise clients from a position of knowledge…providing them with the highest quality advice so that they are able to realize the best possible outcomes…achieving their financial goals. That’s the real rewarding part of what we do here at Sherwood.
INVESTOPEDIA: What are your investing values?
BRIAN: We produce customized, tax-efficient, and in most cases diversified investment portfolios for our clients. Our basic philosophy is that financial markets in relatively advanced economies like our own are largely efficient. As such, we’re more apt to employ passive investing strategies like index funds when adding these types of exposures to client portfolios. On the other hand, where economies are less efficient like in emerging markets, we’re more likely to employ active strategies when gaining those types of exposures for our clients. The technical term for this hybrid type of portfolio construction is called core & satellite. I know, it all sounds very other-worldly and nebulous like a lot of financial jargon does, but I assure you it isn’t anything approaching rocket science…it’s just prudent investing principles being put into practice.
INVESTOPEDIA: What is the most important advice you routinely give clients?
BRIAN: Don’t watch your investment account balances on a daily basis. That’s our job. Go out and do something fun instead. Take the kids or grandkids out for ice cream. Play a round of golf. Start that hobby vineyard you’ve been thinking about. Sleep well at night knowing that we’ve got your financial future covered. The markets will fluctuate; that’s what they do. Together we’ll develop a thoughtful plan at the outset and stick to it through thick and thin times in the market. It’s kind of like marriage.
Brian Littlejohn is the Founder and CEO of Sherwood Investment Management, a fee-only financial advisor firm in Sonoma County, California. Brian is a CERTIFIED FINANCIAL PLANNERTM professional who specializes in investment management. He holds a MBA and a Master’s Degree in Financial Analysis. He has over a decade of experience helping clients achieve their financial goals and occasionally teaches investing and financial planning courses as an adjunct professor.