In Life and in Financial Planning
Plans change and often must be adjusted
Our Philosophy
I believe our highest calling is to help others, to place other’s needs ahead of our own. Does that matter in financial planning? Yes, it does.
In recent years a lot of publicity has been generated around the concept of being a fiduciary. Some companies even make television advertisements about it. Talking about being a fiduciary does not make anybody a bona fide fiduciary. Being a fiduciary basically means doing what is best for the other person or placing their needs ahead of mine. I am a fiduciary. In practice, in philosophy and in perspective, I have always been a fiduciary with clients and their assets. I believe it is a moral issue, and as such it is more significant than any statutory or legal requirement.
Our Philosophy
I believe our highest calling is to help others, to place other’s needs ahead of our own. Does that matter in financial planning? Yes, it does.
In recent years a lot of publicity has been generated around the concept of being a fiduciary. Some companies even make television advertisements about it. Talking about being a fiduciary does not make anybody a bona fide fiduciary. Being a fiduciary basically means doing what is best for the other person or placing their needs ahead of mine. I am a fiduciary. In practice, in philosophy and in perspective, I have always been a fiduciary with clients and their assets. I believe it is a moral issue, and as such it is more significant than any statutory or legal requirement.
We are invested in you
Meet Our Team
Greg Covalt
Financial Advisor
I love working with clients to achieve individual financial goals. I achieved Series 7 licensing in 1995 and began providing full-time investment advice and financial planning in the year 2000. In 2008, I became a Certified Financial Planner® certificant. You can be better informed about the significance of the CFP® credentials by visiting www.cfp.net .
I am a Christian, and I believe the Good Lord above offers hope and healing to every person no matter what we might have done in the past. Being a Christian impacts all of the choices I make – especially choices related to my professional life and the practice of financial planning, investments and insurance.
My academic experience includes a Bachelor of Science degree in Engineering Physics from Southwestern Oklahoma State University and a Master of Science in Aeronautical Engineering from Wichita State University.
Generosity should be encouraged. Whether you are generous with your time, your talents, your money or all of the above, please accept my affirmation and support for the sacrifices you make. Quoting the Bible, “we love because He first loved us.” It is my belief that we are called to be generous, too, because God and Christ Jesus were generous to us long ago – and today. With that context, I want to point out a few ministries that are important to me. Those are:
Breaking Chains – Honduras
Eastern European Missions
Southern Africa Bible College
Middle East Asia Missions – Phillip Ganta (Naperville, IL Church of Christ)
Check the background of investment professionals on FINRA’s BrokerCheck.
Char Stroh
Office Manager
Char has been affiliated with the Investment industry for over 15 years, and has provided personalized sales support and marketing for several Financial Representatives. She assists Greg with any client service issues, technology support and helps coordinate marketing efforts. Char is a graduate of Minot State College with a Bachelor’s Degree in Business Information Technology and a Minor in Management Information Systems. Char, Neal, and their four children reside in North Dakota. The family loves to enjoy the North Dakota outdoor activities and recreation.
My Approach
The concepts in financial planning are usually not complicated, but most people would rather take the time to pursue other interests. Like hunting or travel or golf or tennis or boating. As an advisor, my objective is to provide guidance and information to you in language that is easily understood – simple. In the process of creating your financial plan we may use a variety of tools, each one designed to help you accomplish a specific part of that plan. On subsequent pages you can read my description of the tools and my philosophy on how best to use those tools.
To work with my clients best interests in mind, the following statements define my approach:
Cost
Costs for my services (planning, asset allocation and management, commission products like life and long-term care insurance) are important. If my fees seem high, then I have not stated my value proposition clearly enough. In other words, while I firmly believe the work I do is valuable, we will always work to keep costs reasonable.
You are the Owner
The resources you entrust to me are your’s. They are not mine and never will be. You have the right to do whatever you want with them, and if we do not agree I will be honest and tell you that I do not agree.
Taxes
Tax management can contribute a great deal to the aggregate value of your assets. We are diligent in our efforts to minimize taxes, saving you money in the long run.
Trust and honesty
You must trust me, and I must be able to trust you. If I call or email you with a request, I expect a response within a reasonable time. You absolutely should expect the same from me. To help your financial plan succeed, I need to know where your assets are (all of them) and what their value is. If you ask me a question, you should expect me to tell you the truth… always… even if the truth hurts due to market downturns or decisions made by us or something else.
Common Values
In evaluating products or partners that we use in our work – that being financial planning, investments, asset management – we use reputable firms and their associates with long records of success and solid business practices. We choose to align our financial planning practice with others who share values that are similar to our’s and the values of our clients.
Managed Money
Investments fluctuate because economies are not stationary. Things like costs of materials, leadership, product acceptance, and taxes change forcing businesses to adapt. Knowing about the fluctuations and the need for businesses to adapt, I insist that my clients embrace the idea of managed money. Managed money is a term used to describe funds that are entrusted to professionals who make day-to-day investment decisions. Contrast that style of investing with index funds that are created to track indices like the S&P 500 or Russell 2000 with no variation. With managed money or active money management, the professionals choose the investments and make all buy/sell/hold decisions rather than investing by replicating a particular index. So, active managers are able to take advantage of opportunities that may arise because of the ups and downs of business cycles and investments.
Managed money includes many types of products. Among them are mutual funds, annuities, unit investment trusts (or defined portfolios), exchange traded funds (ETFs), permanent life insurance, structured products, separately managed accounts, 529 plans, and more.
It is my job to filter the available investment options down to a few that might fit the needs of a specific client. Often, I present at least two investment options for clients to consider. Occasionally, in working with a client we conclude that the client will be best served by using two or more specific investment styles or accounts. To me, it is important that clients know that I spend the time necessary to evaluate investments in depth and that my experience enables me to select what is appropriate for that person.
I tend to view clients as the architect or designer of the structure. As the architect, clients work with me in my role similar to that of a general contractor on the project. Clients define the financial plan they wish to pursue (or the “big picture” view of the structure). Once the plan is developed, I select and guide the subcontractors and monitor their performance. Those subcontractors, really money managers, are checked against their specific peers over time for cost management and performance. Money managers are easily and quickly replaced if their performance is determined to be sub-par.
Managed Money
Investments fluctuate because economies are not stationary. Things like costs of materials, leadership, product acceptance, and taxes change forcing businesses to adapt. Knowing about the fluctuations and the need for businesses to adapt, I insist that my clients embrace the idea of managed money. Managed money is a term used to describe funds that are entrusted to professionals who make day-to-day investment decisions. Contrast that style of investing with index funds that are created to track indices like the S&P 500 or Russell 2000 with no variation. With managed money or active money management, the professionals choose the investments and make all buy/sell/hold decisions rather than investing by replicating a particular index. So, active managers are able to take advantage of opportunities that may arise because of the ups and downs of business cycles and investments.
Managed money includes many types of products. Among them are mutual funds, annuities, unit investment trusts (or defined portfolios), exchange traded funds (ETFs), permanent life insurance, structured products, separately managed accounts, 529 plans, and more.
It is my job to filter the available investment options down to a few that might fit the needs of a specific client. Often, I present at least two investment options for clients to consider. Occasionally, in working with a client we conclude that the client will be best served by using two or more specific investment styles or accounts. To me, it is important that clients know that I spend the time necessary to evaluate investments in depth and that my experience enables me to select what is appropriate for that person.
I tend to view clients as the architect or designer of the structure. As the architect, clients work with me in my role similar to that of a general contractor on the project. Clients define the financial plan they wish to pursue (or the “big picture” view of the structure). Once the plan is developed, I select and guide the subcontrators and monitor their performance. Those subcontractors, really money managers, are checked against their specific peers over time for cost management and performance. Money managers are easily and quickly replaced if their performance is determined to be sub-par.
Products
Life Insurance
Someone said to me once, “Not everybody that has hair needs life insurance.”
If you ever sat long enough through the movie Groundhog Day, you were reminded of a sort of caricature of life insurance sales people that shows them to be a bit too persistent.
Perceptions that exist about life insurance are probably too simplistic, and life insurance is another financial product that sometimes gets a bad rap. If someone sells your eighty year old grandmother a variable universal life policy, your entire family may have the “come aparts” so to speak. Admittedly, such a sale might be entirely, 100% wrong. More troubling, that sale could rise to the level of being unethical or immoral, but not all sales of life insurance to investors who are elderly are out of bounds. If Grandma has a large enough estate or base of assets, it might be wholly beneficial to her and her family for her to own enough death benefit to pay estate taxes and other final expenses at her passing.
Life insurance can be a perfect fit for cases like deferred compensation plans for key employees. It can also help fund mutual buyouts when a partnership exists or when property is owned by more than one individual or entity. There are many other ways to use life insurance that are very helpful to owners and beneficiaries. In consultation with me and as we develop a plan, you will make the final decision as to whether life insurance fits for you and also what type of life insurance would be most useful in your situation.
Annuities
If you have been persuaded that annuities are NEVER appropriate for anyone to invest in, you do not want to work with me.
On the other hand, if you have listened to podcasts or radio programs or any other media hyping annuities as the only acceptable way to minimize or eliminate investment risks, it is not likely that you need me.
Annuities can be an important piece of your overall investment lineup. Annuities are not appropriate for every investor all of the time. However, your specific financial plan might have a place in it where an annuity would fit nicely. You and I can make that decision after we gather the facts and design a plan tailored for you.
There are several different kinds of annuities, and they can be complicated. They can feature market based performance or fixed payout rates or some combination thereof. They can have long surrender periods or no surrender period. I often equate the fees associated with surrender periods to early withdrawal charges for certificates of deposit. Those are not exactly the same, but the concept is, at least, similar. Annuities may include enhanced living benefits or death benefits or both.
Rarely, if ever, will you be given personal financial advice by anyone you see on television or in the media. The individuals appearing on TV cannot possibly know what makes sense for each person that listens to them. Those people may be right that costs for annuities are generally higher than costs for other types of investments. Annuity costs are not ALWAYS higher than other investments, and frequently those higher costs are associated with features that are desirable to investors.
Annuities can and do provide income that an investor cannot outlive. In other words, buying an annuity can guarantee that money is paid out to you each month or calendar quarter or year as long as you are living. Sometimes, that sort of certainty appeals to investors.
When all is said and done, you make ALL FINAL decisions about the design of your plan and the money managers that we employ. Annuities might be of value to you, and you get to make that call.
Mutual Funds
While mutual funds have been part of the investment landscape for many years, we use specific tools and insight to select funds we believe to be most beneficial to our clients. Our analysis of mutual funds evaluates cost, manager tenure, longer-term performance, investment style, manager’s personal funds invested, and parent company reputation among other characteristics.
Expect us to provide you with mutual fund investments and ideas that we have become familiar with over twenty-plus years of experience.
Defined portfolios (Unit Investment Trusts - UITs)
Most often, I describe defined portfolios like this: they lie somewhere on the continuum between individual stocks and mutual funds They are bought or sold at the close of each trading day like mutual funds, and like mutual funds, defined portfolios are diversified (i.e. defined portfolios combine a group of stocks or bonds to build the overall investment). Generally, defined portfolios are less expensive to own than some other investments due to the fact they are not managed on a daily basis. Once the investment is offered, it is fixed or defined until it matures. So, an investor in a defined portfolio always knows exactly what she owns. There is no active trading of investment positions.
ETFs (Exchange Traded Funds)
Exchange-traded funds are packaged products that are provided by large, and usually well-known money managers. We use ETFs on a fairly limited basis, but some of our favorite and most profitable investments have been made in a few specific ETFs. ETFs usually contain a group of stocks or bonds that are selected and included in the portfolio based on a particular set of criteria. They trade like individual stocks during each trading day when markets are open.
Fixed Income (CDs, Bonds, Packaged Products and Fixed Annuities)
I group a variety of important products together under the very generic heading of “fixed income”. Most of the money in the world is invested in fixed-income assets. In other words, much more money is invested in bonds than is invested in stocks. Full stop.
That said, we use equities (or stocks) more frequently than we use fixed income because of the massive growth potential of stocks compared to bonds.