In my lifetime, I've met five people who I consider to be smarter than I am. Unsurprisingly, three of them are women, the fourth, quite sadly, is dead. I was best man at the other's wedding.
The three women are:
Georgine Cooper, editor, formerly of Bolchazy-Carducci Publishers
Marla Hegel, writer, teacher, student of comparative religious, honorary PhD from Cal-Tech in Environmental Studies, who wrote the book (and continues to update) that is used by the EPA in promulagating its regulations.
And NANCY EFFERT! Who was the heart and soul of the Actuarial Division of Bankers Life & Casualty for nine of the ten years I worked there (I started about a year before she did.) Nancy started as a clerk (after her dad kicked her out of the house and stopped paying for her college education - she was a pre-med major). She eventually went to work for Gary Stanton (formerly of the Actuarial Division) in the Data Processing Division, worked a while for PolySystems INC, an actuarial hardware, software, firmware, liveware company which developed computer programs for the insurance industry, and then finally she worked for CONSECO, the insurance conglomerate from Indianapolis. She was doing DP / IT work for CONSECO when 9-11 occurred, and like so many in the IT bidness, was laid off and had to reinvent herself, which she did, coming back as a financial consultant.
Nancy ALWAYS wanted to know how things worked. While she was still classified as an actuarial clerk, she picked up five different computer programming languages, and was doing work that actuarial students with 3 and 4 exams were doing. She wanted to know how things worked so that THE NEXT TIME, she could do it herself, and she IS and always has been a very quick study.
FULL DISCLOSURE: She was, is, and has always remained a very good friend, who remembers that, back in the day, before my first major depressive episode, I used to be a fun loving irresponsible drunk lacking a certain amount of savoire faire when it came to holding one's tongue in the presence of one's "superiors." I always let 'er rip. Nancy could too, she just never believed in burning bridges; I don't believe in burning bridges, either - I believe in dropping nuclear bombs on them so that they can't ever be rebuilt.
Nancy and I got together with some other very important people from my life this past Saturday. One extremely interesting and important thing she told me was that all the computer programming that has been outsourced to India, Pakistan, China, etc, has NOT been done nor maintained as well as it would hve been by American trained programmers. It seems like that while 23% of the foreign programmers who have gotten jobs at the expense of American-trained and based professionals, are qualified for what they do, the rest (77%) ore not! And thus, those hi tech programming jobs will be coming back to the USA!
HOORAY!
Wall Street comes to McHenry County
The thought of managing investments is a daunting task for most, and for many conjures up notions of utter frustration. A throbbing headache can occur from opening statements from faceless corporations, including your own company’s 401(k). However, the first institutional money management firm based in McHenry County, Crossroads Advisory Group, is determined to change those perceptions.
Based in Crystal Lake, the group combines the education, experience and energy of Meridith L. Hutchens, portfolio manager and founder of Crossroads Advisory Group, with the local talents of Sandra Briggs, chief financial officer, and Nancy Effert, financial planning specialist and client relationship manager adviser for clients of the firm.
“Most people come to us with a random assortment of investments purchased over the years, stocks, mutual funds and annuities purchased through discount brokers or a friendly salesperson,” Hutchens explains. “Couple this with their current company 401(k), IRA’s, and even money left with a former employer, and the result is myriad assets. Many are afraid or simply too overwhelmed to face the challenge of analyzing their investments.”
Hutchens has nearly 20 years of experience in managing portfolios. Her long list of credentials is impressive, and her approach is inviting. Her success in Chicago and later in McHenry County created an expanding business managing the assets of power players in the area. The institutional aspect of her core business is managing assets for corporate retirement plans 401(k), small banks, as well as other financial advisors.
Her money management prowess has resulted in explosive growth as word of her unique approach spread throughout McHenry County. “The phone has not stopped ringing, and I knew I had to get larger office space and bring qualified people to the firm,” she says.
During this growth period, Hutchens came to the realization that the same techniques that had been successfully applied for managing money for institutions could well serve the needs of individual investors.
“It was my commitment to make certain they got solid investment advice, and I was going to need qualified people to help,” says Hutchens.
Making the decision to expand her business did not come easily for Hutchens, however.
“To be able to use my acumen and instinct, I realized was something that I couldn’t reserve for limited clientele — I realized that was what my commitment was,” Hutchens says. “It’s just the art of what I love, which has been inbred in me since I was 15 years old — managing money. I follow over 300 indexes and I’m a little bit of a chart geek.”
The firm got bigger almost overnight. Sandra Briggs performs the role of business manager and chief financial officer for Crossroads Advisory Group. Her role is to help with day-to-day management, provide support to advisers as well as clients, develop financial budgets and forecasts, and maintain the accounting.
Nancy Effert, a wealth management adviser and owner of Effert Financial Solutions in Crystal Lake, was recruited to focus on the client-adviser relationship side. One of her main roles is to provide financial planning services to those who have indicated a desire to work with Crossroads.
Objectivity is a quality that is an integral part of Effert’s role with Crossroads. Effert Financial Solutions remains a separate entity from Crossroads Advisory Group. Not only does Effert serve as the initial point of contact for Crossroads’ clients, but she also continues to work with her own clients at Effert Financial Solutions to determine their needs, whether it be saving for college, retirement, selling a business or simply improving the performance of their current portfolio.
“Wealth management has become an overused buzzword, it’s really about bringing corporations and individuals into financial awareness,” Hutchens says. “And that was the aspect about (Effert) that made me realize that she was the ideal financial planning specialist for Crossroads. (Effert) does not have an agenda to sell financial products; her dedication is to guide clients into a realistic assessment before she recommends an investment strategy."
For Effert, her relationship with Crossroads has expanded her ability to help clients.
“Working with Crossroads is another tool in my tool kit,” Effert says. “When advising a client I may recommend that part of their portfolio be managed by Crossroads, but we may not commit all their investments to Crossroads. Managing risk can include diversification among money managers as well as asset class.”
Expert insight, proprietary tools
Working with Crossroads Advisory Group, not only provides personal service with years of experience, but the group also has access to a number of proprietary tools. One unique tool is the XRoads XRay™, which Hutchens explains, “We call it the XRoads XRay™ because most of the packaged investments, such as mutual funds and annuities, have anywhere from 100 to 500 positions that are constantly in motion,” Hutchens explains. “The software that’s available to the public or elementary financial planning firms is often data that has expired. It can be six to nine months old. With the institutional tools that we have, the data is current.”
Hutchens elaborates, “The XRoads XRay™ also examines asset class weighting which uncovers not only diversification problems but uncovers hidden fees that are built into most investment products. But the XRoads XRay™ doesn’t stop there. The monumental value to our proprietary software and analysis come in the form of analyzing risk exposure beyond historical rules of thumb.
“Our forward looking projection assigns a fiduciary score that drills down deeply into the stewardship and quality of the investments and then recommends eliminating out-of-favor asset classes,” she explains. “This differs significantly from what you will find at big name firms. We don’t have to keep investments we don’t like just to fill prescribed buckets. In other words, a ‘go anywhere’ approach allows us the freedom to capture upside potential while also hedging downside risk. We are not day-traders nor necessarily long-term investors. We seek high quality positions in the total marketplace while not limiting ourselves to stocks and bonds.
“Crossroads opens its analysis and viewpoint to offer alternative investments in such categories as commodities and real estate,” Hutchens continues. “Most investors are unaware that merely taking 25 percent of their portfolio into alternative investments would have significantly lessened the downward spiral of broad based stock and bond investments. In fact, some investment portfolios had positive returns in what many called a catastrophic year for investments. It’s our job to show people these strategies.”
In addition to the specialized tools, Crossroads Advisory Group also has a noteworthy list of clients, including many area accountants, attorneys and a country-western singer.
“I wouldn’t have the clients that I do if I didn’t produce results, so at the end of the day it’s all about producing results,” Hutchens says. “The first way to do that is to limit downside risk and utilize XRoads XRay™ technology to categorize your investments.”
“There are probably 10 economic benchmarks, we call them leading indicators or lagging indicators that the public knows about, but in reality, there are more than 300,” she continues. “And when those signals line up, the outcome, in my mind, is very easy to predict.”
Also, the XRoads XRay™ monitors trading volume as a core driver for all other investment decisions. “It tells us who is in the market on a given day to determine whether or not the activity is healthy or unhealthy for our clients,” Hutchens says.
“What’s really important is examining the quality of activity, what’s going on and where it’s coming from because that is really only based on 15 or 20 factors and that’s what I look at every day,” Hutchens explains. “Being able to determine if short-term traders are driving the market, large institutions, or everyday investors is what drives all of the other decisions. It’s not inside information, it’s just knowing how to read volume, and I don’t think you can buy it in a book and I don’t think you can be taught because it’s something that after 20 years, I know how to do.”
An individualized approach for everyone
The money management service provided by Crossroads is a departure from the widely held practice of owning investments from multiple providers without a centralized focus.
“Being in a mutual fund is a lot like being on a bus,” Hutchens explains. “When that bus comes to a stop, you get on that bus with a lot of people, everybody who got on the bus a mile back and everybody who got on the bus 15 to 20 miles back. You’re in there, you have their cost basis. You can actually buy a mutual fund in October, lose 30 percent and then get a bill for capital gains.”
In contrast, Crossroads’ approach is designed to provide a strategic, and more dynamic approach that is individualized by using separate accounting for each account, not just lumping all the money together, Hutchens says.
“Having institutional portfolio management with Crossroads is like riding in a limo,” she explains. “You get in, you’re by yourself. You have your own cost basis. You are not inheriting a mixed bag of investments….why would you want to buy into a group of stocks, some of which may have already reached their peak?”
While the independence is advantageous, their investments do not go unchecked. Crossroads works primarily with Charles Schwab to place funds in accounts that Hutchens manages. Their practices also are audited for added assurance by Morningstar and Associates.
In addition, both Hutchens’ style of money management, as well as Effert’s customer service, has left both of the women with complaint-free regulatory records at their respective businesses.
Crossroads’ services are open to those who might only require a financial plan to those who may want a more active institutional approach to managing their portfolio.
“The kind of asset management and attention that we provide has always been thought to only be available to the higher net worth,” Effert says. “Technology advancements within our industry have made separate account management available to lower asset levels.”
Clients also can determine their preferred level of involvement with Crossroads Advisory Group.
“People have a dial, they can control what they want here,” she says. “If they want one-time advice, that’s fine, they can turn that dial down. If they want a personal CEO they can turn the dial up, but there will never be a hidden charge or one that is not pre-approved.”
The company also offers a range of institutional services, Hutchens says, “We would really like to show the businesses in McHenry County that you don’t have to settle for a 401(k) plans with limited options and high internal costs. This will be the next mountain to climb.”
Thinking local
The women also remain loyal to McHenry County and are all long-term residents. They are dedicated to giving back to the community and maintaining their headquarters in the area. The combined experience and maturity of the group provides a well seasoned perspective.
Hutchens, Effert and Briggs also remain committed to Crossroads Advisory Group, as they sum up:
“We are highly motivated and excited to offer these services to our community,” Briggs remarks. “We have a passion for what we do, and I believe it shows.”
Effert continues, “If the last 18 months have proven anything it’s that the mathematically perfect world does not exist.”
Hutchens concurs, “We have witnessed a paradigm shift; no longer will investors accept a pretty 100-page financial plan that paints a rosy picture. Now, more than ever, it’s essential to have active monitoring with institutional level tools.”
For information on Crossroads Advisory Group contact Meridith L. Hutchens and Nancy Effert, 8600 U.S. Highway 14, Suite 2E, Crystal Lake, 815-455-1777.
Copyright © 2011 Northwest Herald. All rights reserved.
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