Helping Clients Navigate Volatile Financial Markets: Polaris Capital Advisors, LLC
Author: Debbie Szpanka | Photographer: Photography by Anne
It can be difficult to focus on the future when the immediate reality seems daunting. One glance at the news or the Internet and you receive a stark reminder of the challenging state of the American—and world—economy. In fact, one look at the number of “foreclosure” and “space for rent” signs locally, and you get the message. How are we—the American consumer and investor—supposed to respond? We can panic, or we can choose to acknowledge the difficulties and stick to a plan.
The need for a plan—a dynamic, comprehensive, frequently reviewed financial plan—has never been more important. Polaris Capital Advisors, LLC, aptly named for the North Star on which sailors have relied for centuries for guidance, is addressing the challenges of the current economy and financial market head-on.
“Without question, these are volatile financial times,” said Emily Johnson, founder and managing director of Polaris, “but we’ve been here before, in 2000 and again in 2008-09. You can choose to freeze, or choose to focus on the factors you can impact, namely your long-term financial plan, and to make adjustments as needed.”
This is familiar territory for Polaris, established in 2009 by Johnson in the midst of the financial crisis that roiled not only people’s 401(k)’s, but their confidence as well. As investors’ belief in the financial system was shaken, Johnson’s goal was to establish an independent financial planning and investment advisory firm that focused squarely on the client, not proprietary products or funds.
“I’ve worked as an investment banker and a private wealth advisor for the large global banks and wanted to build something different,” she said. “We have access to and use all the same mutual funds and fund managers as the large institutions, but we are not compensated for or handcuffed by promoting a specific offering.” Investment management, tax planning, estate planning, retirement and income planning, and education planning form the foundation of Polaris’ services.
Though Polaris is different things to different clients depending on their needs, the client engagement always begins with a clear plan. “No two clients are the same,” Johnson said. “We work with a range of clients, including individuals and couples who are retired or considering retirement, families needing to plan for future generations, privately held companies looking for tax-qualified investments, and individuals faced with the challenge of managing finances independently for the first time due to death or divorce.”
Johnson, a certified financial planner (CFP) with an MBA in international finance who also holds her Chartered Financial Consultant (ChFC) and Chartered Life Underwriter (CLU) designations and now teaches CFP courses to other financial advisors, loves the challenge of working with clients to identify their financial objectives and help them to define a clear path of action. “Of course, every plan has to be adapted as life throws its inevitable curves—and that’s why it’s so important to have a baseline from which you adjust and an advisor you trust to help you determine next steps,” Johnson said. “The plan has to be dynamic.”
Todd McGarity, who joined the firm in early 2010, brought a complementary skillset to Polaris. With his 20 years of experience as an active equity portfolio strategist and manager in Atlanta for Merrill Lynch Private Client Services and IJL (later Wachovia), McGarity shared Johnson’s vision for an independent, transparent wealth management firm. Through his expertise as a technical portfolio manager, he enables the firm to differentiate itself from the traditional financial advisory practices that solely outsource the job of equity management.
“This is a traders’ market,” McGarity said. “Volatility favors active management. The need to move in and out of a position when the market turns is essential. The standard ‘set-it-and-forget-it’ practice can be dangerous given the current market gyrations.” In addition to standard equity management, McGarity will often utilize options as a means of reducing overall portfolio risk and adding income, which can be a challenge for investors seeking cash flow in the low interest rate environment in which we find ourselves.
“Having Todd on board not only adds another dimension to our practice, but also energizes the discussions we have on the market, the economy, and investment strategy,” Johnson said. “It’s motivating to have someone with his experience and expertise to go back and forth with in discussing market strategy.”
“I think we definitely challenge each other to expand our skills,” McGarity said.
The firm continued to grow with the addition of Tammy Mauldin, office manager, in the spring of 2010, and Harriman Lee, financial analyst, later that fall. Mauldin brings tremendous operational, organizational, and service skills and experience to Polaris. She oversees all service and process related issues, such as account opening, transfers, and IRA distributions. She is the first line of communication for the office, and most importantly, “she keeps us all on task,” Johnson said.
Lee joined Polaris shortly after graduating from Michigan in May 2010. Lee assists with building financial plans, client presentations, fund and manager performance reviews, and the analysis of individual stocks and ETFs (exchange traded funds).
One thing all members of Polaris seem to really value is teamwork, not only within, but also outside the firm. Johnson stresses the importance of each client having a team of trusted advisors and experts to assist them in meeting their unique financial planning needs. “Typically a client’s team includes accountants, estate attorneys, insurance specialists, mortgage experts, and bankers,” she said. Because each financial plan includes many moving parts, “it’s essential that we work with our clients’ team of advisors to make sure we’re on the same page and that the clients’ comprehensive needs are covered.”
This team focus also extends to a very unique expertise of Polaris: divorce financial strategies and services. What are “divorce financial strategies” you might ask? “It is much more than simply dividing assets,” said Johnson, who has established an expertise in this specialty over the past six years and has earned the designation of Certified Divorce Financial Analyst (CDFA). “It’s education, it’s helping clients understand what their assets are and how to make them work so that each party can move forward with confidence and peace of mind. I work with attorneys, mental health specialists, and other experts depending on the clients’ needs,” Johnson said. Divorcing spouses often have complex financial pictures—they have 10-20-30 years of history building a financial life together. And often each spouse has played a specific financial role in the marriage. When a divorce occurs, these roles are highlighted. The “bill paying” spouse often lacks confidence in his/her ability to understand and manage assets alone. The “wage earner” spouse may not fully grasp the costs of running the household, let alone two households. It’s complicated financially and emotionally. Johnson has assisted divorcing spouses and their attorneys in all forms of divorce, including litigation, mediation, and collaborative divorce. “The one question that everyone asks during a divorce is ‘Am I going to be okay?’” Johnson said. “While I can’t ensure that the answer will be yes, I hope to provide my clients with the tools to emerge from the divorce with financial confidence.”
Financial confidence and peace of mind is what Polaris strives to provide for all clients. Service, performance, transparency and integrity form the foundation of a firm that strives to help clients navigate challenging financial waters. Whether it be the current gyrating financial markets or the inevitable personal financial changes that each of us experience, the Polaris team is there to help clients protect and grow their assets and guide them towards their long-term financial objectives.