How Salem Investment Counselors Take Advantage of Clients’ Personalization to Win

Remaining a throughout philosophy since its foundation in 1979, Salem Investment Counselors has successfully protects its empire by focusing on its clients.
Salem Investment Counselors leadership team
Courtesy: Salem Investment Counselors
By | 10 min read

Based in Winston-Salem, North Carolina, Salem Investment Counselors is a fee-only financial advisory firm, whose clients include a nearly even mix of average individuals and high-net-worth individuals, plus a small number of institutional clients, all of which are charitable organizations. With a proven 40+ year track record to wealth management services, the firm has secured steady growth amidst ups and downs as well as emerged as a leading voice within the spaces as the #1 Financial Advisory firm in the country for the second year in a row on the CNBC Financial Advisory 100.

This Winston-Salem, North Carolina-based firm has more than $1.7 billion in assets under management and has been in business since 1979. They serve over 600 high net-worth individuals, families and professional organizations in 19 states, totaling over $2.5 billion in assets under management.

The Strong Foundation of The #1 Financial Advisory Firm

Founded in 1979, Salem Investment Counselors’ mission was to provide financial management and guidance to a prominent North Carolina family. From its beginnings, this company has defined its focus is to help individuals and families realize their financial goals by providing high quality asset management and financial planning customized to each client’s specific needs.

And that is definitely right direction. Since opening its doors to the general public in 1982, Salem has grown to over $2.5B in assets under management. Salem’s dedication to client objectives as well as its success in providing reasoned wealth management and financial guidance to its clients has resulted in the growth of its client base, which was from one family to over 600 relationships.

Remaining the philosophy of “client centric”, Salem has become one of the largest privately-owned advisors in the country. Today, this company has successfully balanced technology with its expertise and experience to support clients across the country without sacrificing the personal relationships that have been integral to its growth. In 2021, its success in supporting it clients as recognized in an independent study conducted by CNBC which named Salem Investment Counselors as the #1 financial advisory firm in the Southeast for the third year in a row.

There are many reasons for the executive board to believe their firm has been ranked so highly – twice. For David Rea – President of Salem Investment Counselors, it was all about his passion in working.

By around 8 a.m., Rea is at his desk. One of his favorite parts of the job, he said, is researching different companies and sectors to invest in. “Whether it’s the aging population or the energy transition to renewables, all of these themes are interesting, and we try to think about them,” he said.

Despite the move by many firms to passive investing through index funds that mirror the market, Salem Investment Counselors still actively manages clients’ stock portfolios, and each client is typically invested in around 40 different companies at a time.

“We can bet on our themes,” said Rea, adding that doing so has worked out well for his clients.

“The belief in social media and the ability to make money on advertising caused us to invest in Facebook and Twitter,” Rea said. “The belief in the ease of e-commerce caused us to invest in Amazon.”

Although the firm buys and sells individual stocks, Rea said it usually stays invested in the same companies for a long time. His hero is Warren Buffett, who has said that if you’re not comfortable owning a stock for 10 years, you shouldn’t own it for 10 minutes.

“He taught us a lot about long-term thinking,” Rea said.

The Top Advisors’ Inspiration to Help Others Manage Money

Everyone loves a good origin story, whether it’s fictional, like Superman’s, or real life — think Warren Buffett or Steve Jobs — or even somewhere in between. Salem’s financial advisor is not the exception. What motivated them to work with numbers and balances and figure out how those figures impact people’s lives is fabulous.

Financial professionals sometimes get stereotyped as bean counters and calculator-button pushers, but in speaking with executives at Salem, it’s apparent that there are two themes common to most of their background stories: first, a fascination with the mechanics of money, math and markets — in short, “finance” — and second, a desire to interact with and truly help people — in other words, “service.” It’s no coincidence, then, they ended up in financial services.

With Dale Brown – Salem’s senior executive vice president, his background was all about his family business. This man grew up in a family business, and what he learned in the family business was perhaps as important in working with people as everything he learned in college.

“I guess it goes all the way back to when I was 17 years old. My father had been to see the family accountant and had been told that his business was in financial trouble. Dad was working long hours, and he said, ‘Son, I need your help in trying to figure out what’s going on.’ I had no background in accounting at that time but was able to develop what would be termed today a cost accounting system for that business to determine with reasonable accuracy what it cost on a daily basis, on an hourly basis, to run the business. In due course, we got the business back on sound footing.” – said Brown.

When he get off to college – it’s in the early 1970s – jobs were generally hard to come by. He asked a business school professor what can he get a job doing. And he said, ‘Well, it’s tough, but if you can do accounting, the Big 8 firms are still hiring.’

Coming out of college without a job was not an option for Brown. However, his experience in his father’s business taught him the terminology for what he was doing.

“I learned that a ‘cash in’ became known as a ‘credit,’ and a ‘cash out’ was a ‘debit.’ After school I went to work for one of the large public accounting firms, Deloitte, Haskins & Sells.”- said Brown.

Remain the Philosophy of Consistent Dedication

Salem Investment Counselors team collaborate on project
Courtesy: Salem Investment Counselors

In spite of the fact that investment strategies have come and gone over the past 40 years, Salem’s fiduciary duty is unchanged: the interests of its clients are paramount and must be served without conflict.

“Salem does not sell life insurance, annuities, mutual funds, or any other financial products. We believe selling products can result in a conflict of interest. As a fiduciary, we always put our clients’ interests first.” – said Salem itself on its website.

Follow this mission, this company begins by seeking to understand customers’ specific financial needs and goals, and then design a portfolio to meet their objectives. This Winston-Salem-based company investment process is as much art as science, and begins with determining each client’s financial goals, risk tolerance, investment time horizon and investment constraints.

“We do not believe that timing the stock market – anticipating periods of rising and falling stock prices – can be done consistently and successfully. And although our experience includes a wide range of investment expertise, we believe that common stocks should be the foundation of most investment portfolios.” – stated Salem. Indeed, this company has many ways to put its clients to the top with common stocks.

#1. Knowing The Customer’s Pain Point

Because customers need to be comfortable with their investments, Salem takes risk management to heart. Through its dynamic approach to portfolio management, Salem performs a continuous assessment of current holdings while also evaluating prospective investment opportunities.

As there are thousands of publicly traded stocks in the world, so it is essential to whittle down that universe of choices. This company’s research teams focus on themes that offer long-term investment opportunities across industries and geographies. With a forward-looking lens, they assess macroeconomic factors – where are we in the economic cycle – and then individual companies that they believe will prosper in this environment.

Through primary and secondary research, they could gain a thorough understanding of the accounting, financial reporting, management and business operations of the companies they invest in on behalf of their clients.

#2. Giving Out The Optimizing Solution

Salem knows that security is essential. It is obvious that when we can allocate our fixed income allocation, now only should we be provided with a steady source of income but also can protect our principal. Salem gets this point.

This company evaluates the vast array of fixed income investment options available to its clients, including a detailed analysis of quality, maturity, liquidity and suitability. Its custom approach focuses on securities issued by high-quality borrowers that offer competitive yields and cash flows. By this way, it structures each client’s bond portfolio with varied durations based on that specific client’s time horizon for cash needs and other factors.

Being Distinctive With The Client-Driven and Customized Service

Salem Investment Counselors team on air with CNBC
Courtesy: Salem Investment Counselors

So, how has Salem succeeded to thrived and ride on the crest of a wave? What sets this company apart with other competitors?

It’s the client-driven and customized service that matters the most. According to this company, the client is always first. This company has built custom portfolios placing special attention on the needs of each individual and family, while providing the highest level of personalized service.

“This is done with a focus on keeping fees reasonable and transparent,” shared David Rea, President of Salem Investment Counselors. Through this focus, this company has built long-term relationships with our clients.

“We feel our research methodology and portfolio construction is an advantage for Salem and directly benefits each client. Our advisers collectively have more than 300 years of investment management experience with many academic and professional distinctions.” – he added.

In terms of client relationships, David Rea did emphasize the importance of referral to Salem’s significant and sustainable growth. “From our beginning, referrals from existing clients have been the foundation of growth,” he added. “We are focused on giving the greatest attention to our client’s goals and ensuring the best service possible. This creates opportunity for good performance and low client turnover, all at a reasonable price.”

Besides, independence as a privately owned financial advisor without any conflicts of interest allows Salem to gain trust from clients from the very first start. This company is privately owned and do not have any affiliations with other companies.

As for the coronavirus pandemic, despite the fact “it’s been much worse than we had anticipated.” – according to Rea, this company remains hopeful about the future. Currently, Salem is paying more attention to tele-health and streaming services.

“When you’re interested in the stock market, you have to be an optimist.”

The Bottom Lines

It can be seen that Salem Investment Counselors has devoted itself with the mission of helping its clients. Having a typical system of research and solutions, this company has been brave to pave a way in the industry of financial services. Its philosophy has given an inspiring stories for other business in such this field.

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