There is an old proverb: “A fool may earn money, but it takes a wise man to keep it.” You deserve honesty and respect when it comes to investing and to rest assured that your hard-earned savings are being properly managed.
When it comes to investment and wealth management there is another saying, “Failing to plan is planning to fail.” So, what’s your plan? Are you making wise decisions or are you banking on hope?
In today’s interview I speak with David Savage, a wealth management professional located right here in Ashland. David’s absolute dedication to detail, along with his company’s fee-only structure, allows him to operate freely with full accountability and responsibility to his clients.
Hello, David, thank you for speaking with us today and welcome to LocalsGuide.
Hi, Shields. Thanks for taking the time to get to know my business, and for the great service you provide the community by publishing the LocalsGuide.
To begin with, will you please introduce yourself to us and tell us a little bit about your professional background and training?
When I was an undergraduate at the University of Oregon, my intention was to go to law school. While working as a paralegal for a Boston law firm after graduating, I decided that the adversarial system of law was not for me. However, I liked the process of applying a detailed body of rules to a particular client’s situation in order to help them. I was later able to use this in financial planning.
Later, I earned a Master’s in Teacher Education and taught school for two years. When I entered the financial planning profession it was clear to me that I wanted to take a collaborative, educational approach to working with clients.
I started out in this business by working for American Express Financial Advisors for five years at their Bend office. At that time, the company had the best financial planning training in the industry and that appealed to me. I then worked for Morgan Stanley for four years and got a solid background in investments. A colleague of mine, my assistant, and I took a hard look at the practices of Wall Street firms and decided that it was time for us to go independent. So, we left Morgan Stanley and started an independent Registered Investment Adviser (RIA) firm. Changes in my family situation took me to San Diego, where I worked for another RIA. I wanted to return to my native Oregon, and I considered going back to Bend but after visiting this area several times, I fell in love with Ashland, as many of your readers did. Four years ago, I moved to Ashland and opened my own Registered Investment Adviser firm.
The financial services industry has historically been sales oriented. In the past, stockbrokers worked on commission to sell their clients investment products. There was little or no advice on other aspects of finances. Then, in the 1970’s a movement to professionalize the industry began with the creation of the Certified Financial Planner™ designation. To become a Certified Financial Planner Professional®, as they’re called, applicants must pass courses on insurance, investments, estate planning, retirement planning and financial planning, pass a two-day national board exam, adhere by a code of ethics and take continuing education courses on an ongoing basis. To be a financial adviser the CFP® designation is not required, but those who have earned it tend to be committed to giving comprehensive advice to clients, as opposed to focused on selling investment products.
Please tell us about your practice here in Ashland.
I offer two services: financial planning and investment management. Financial planning is for those who don’t want help with managing their investments, but need advice on areas such as when to retire, minimizing taxes, how to withdraw funds from their investments, selling real estate, whether to get a will or trust, etc. For investment management, I create a written plan that encompasses all of the client(s)’ accounts, taking into account their income goals, risk tolerance, tax bracket and whether or not they wish to invest in a socially responsible way.
Your practice is fee only. What does this mean and what are the benefits to your customer?
Registered Investment Adviser firms cannot accept commissions. If an adviser receives no commissions on any investment or insurance products, they can call themselves “fee only.” Fee only advisers are paid only by their clients. For financial planning, I bill on an hourly basis. For investment management, I charge a percentage of the assets being managed. The benefit to the client is that they know there is no conflict of interest on the part of the adviser to recommend one product over another, and also that RIA firms are required to act as fiduciaries, putting the interests of their clients ahead of their own.
When it comes to helping your clients invest, what is your philosophy?
I tend to see myself as an advocate for my clients, making sure that they receive the best investment advice possible, to prevent them from making big mistakes and running out of money. I work hard to diversify their investments via asset allocation and to pick the best investment vehicles I can find.
What would you describe as your core skill set?
I’m very detail oriented, and I like to help clients make sure their finances are organized so they won’t have any surprises down the road. I am good at understanding how they think about their money and what their preferences are regarding investing. This all results in a customized plan.
Investing either too conservatively or too aggressively. Making decisions without getting the facts, such as taking Social Security at age 62 without considering how much they would gain by waiting. Also, many people have inadequate estate plans—either no will or trust, or outdated plans.
What is some of the best advice you have to offer?
To consult with a fee-only CFP® and to not assume that your average broker is working in your best interest.
David, what would you define as the dream of your customers?
Most of my clients are either retired or about to retire. They want to feel that they have a secure plan so that they’ll be able to enjoy the rest of their lives without worrying about running out of money. People often come to me saying things like, “We need a plan,” “We need to get organized,” or “We want to make sure we’re not making any big mistakes.”
Please talk about your socially responsible portfolios. What does this entail?
Many people in Ashland want to be sure that where they invest their money matches their values. This often means avoiding big oil companies, polluters, nuclear power, gambling, alcohol, firearms, human rights violators and pharmaceutical companies. Socially responsible investing (now called environmental and social governance) also includes screening in companies that treat their employees well, such as having good family leave policies and paying women equally. Depending on a person’s preference, I can design their entire portfolio to be socially responsible.
What are some of the issues and decisions that people have to make when they come to retirement?
It has been said that there are more irrevocable decisions one must make at retirement than at any other time in life. When to take Social Security, whether to take a pension or a lump sum, whether or not to roll over your 401(k), how to withdraw funds from your investments, whether or not to purchase long-term care insurance, how to minimize taxes, whether to do a will or a trust– the list is long.
David, your work often crosses over into how to minimize and limit taxes. Please say more.
Let me first say that I do not give tax advice or prepare tax returns. That falls into the realm of my client’s tax professional. However, how investments are managed inevitably affects taxes, so I take great care to pay attention to this. Ways to manage taxes include harvesting tax losses, delaying distributions into a low-income year, putting growth vehicles into Roth IRA’s, drawing money from IRA’s prior to age 70 ½ to minimize required minimum distributions, etc. In all cases, I try to involve the person’s CPA to coordinate such issues.
David, when is the best time to come and work with you?
Whenever “organize finances” rises to the top of your “To Do” list. (Laughs)
You are also teaching classes at OLLI. Please say more.
OLLI is a great local program and I’m thrilled to have been part of it for four years now. I teach three classes: “Get A Plan!” (covering the basics of a financial plan), “Fundamentals of Investing” and “Inside Wall Street”. For more information on OLLI, see: https://inside.sou.edu/olli/courses/current.html
David, is there a minimum amount that you require to work with you?
Yes. All RIA’s have minimums. Since they don’t get paid commissions, RIA’s must impose minimums because there’s quite a lot of work that goes on behind the scenes no matter how big or small the account. My stated minimum is $250,000. However, I can make exceptions. Also, because I believe that everyone is entitled to receive quality investment advice, for those who don’t meet the minimum I can work with them under a financial planning agreement and give them some simple investment strategies they can do themselves.
On the lighter side, what kinds of activities do you enjoy in your off time?
I love to hike, bike and cross-country ski. I’m also a folk musician, and play guitar, flute and a multi-stringed instrument called the hammered dulcimer. I’m getting a Celtic music group together—look for us in the coming months!
Finally, are there any last thoughts or comments you would like to share with our readers?
It has been a pleasure talking with you, Shields. I feel fortunate to live in Southern Oregon and I love helping the great people I have met here.
Savage and Company Wealth Management, LLC