Greenwood Gets Into Planning

Mary Ann Greenwood was taming bulls and bears long before the 1990’s dot-decade brought Wall Street to Main Street. Now, the chartered financial analyst is working to help both her traditional client base and the nouveau riche keep the wealth they built when returns flowed like Starbuck’s mocha frappaccinos.

It’s a labor intensive job.

That’s why M.A. Greenwood & Associates Inc., a Securities and Exchange Commission-registerd investment advisor in Fayetteville, has launched a new executive financial planning division. Greenwood Financial Planning will actually target four growing demographics — young professionals, corporate executives, retirees and entrepreneurs.

The goal is to help them maximize their after-tax returns by bringing a holistic approach to wealth management.

Sam Scott, a Huntsville native and CPA, will head the new division as director of financial planning. He joined the staff a year ago when Greenwood said she began formalizing a service her firm had provided on the side for 20 years.

“Many of our clients want someone to help them manage the assets they have built,” Greenwood said. “We also have a number of high-income individuals, young professionals and doctors or mid-career executives, who want to build their net worth the right way.

“Many of them didn’t know they could talk to us about this stuff, so what we’ve really done is formalize and emphasize now something we’ve always done.”

Greenwood & Associates, with $135 million in assets under management and about 300 clients, is a fee-only, noncustodial, discretionary investment counselor. In English that means the firm will manage investments for a fee and, under a limited power of attorney, buy and sell investments for a client without actually taking possession of the assets.

The firm never makes commission-based investments, Greenwood said, or delves into “soft dollar work” which she said creates conflicts of interest.

The firm has always started new client relationships with a sit-down discussion about financial obligations and goals. The difference is Greenwood & Associates’ core competency is in research and managing investments. Greenwood Financial Planning will help manage, or quarterback a team of professionals who will manage, a client’s entire financial portfolio. That could include trusts, estate planning, exercising stock options, saving for college and a variety of other tax-sensitive financial vehicles primarily for tax-managed clients.

One other adjacent business is Greenwood Group Ltd. Founded in 1992 for tax-sheltered clients, it provides qualified retirement plan design and third-party administration services to about 40 local businesses and business owners.

The firm has nine employees including a lawyer and two interns from the University of Arkansas’ Walton College of Business.

Planning Makes Perfect

A 1999 Boston College report estimated the generational transference of wealth will be from $40.6 trillion to $136.2 trillion (in 1998 dollars) with about 87 million estates moving to future generations by 2052. Research firm American Demographics said the numbers won’t be quite that high, but the point is baby boomers will pass along big bucks.

Scott, who has 25 years in the accounting industry, had a Rogers practice in 1997 and said many of his clients were desperate to talk to someone about complicated tax issues. They also wanted objective opinions about investments and strategies to build wealth.

He passed the “Series 7” exam and began selling securities as an affiliate of HD Vest Investments (now part of Wells Fargo). Scott found that he enjoyed the work, and admiration for Greenwood’s firm made him look into financial planning. Pretty soon, he sold his practice and went to work in Fayetteville.

He said all four groups targeted by Greenwood Financial Planning are a byproduct of the dynamic market that exists in Northwest Arkansas. Young professionals and other high-income potential people are accumulating assets they will need to manage.

Mid-career executives at local Fortune 500 firms and the vendors who serve them often have unique stock option considerations. Scott had developed a template to help that group maximize its options and minimize its tax liabilities, and, he said, that will be an important part of Greenwood’s new division.

“Many of those folks also might have 100 percent of their retirement money in one company and are looking to diversify,” Scott said. “That’s where Greenwood & Associates can come in and help, too.”

Retirees, prevalent locally in communities such as Bella Vista, which is projected to have a population of 30,000 by 2010, also have financial needs. Local entrepreneurs, the last group, have fueled the area’s growth in the past and continue to bring promise for the future.

“All of these people have really gotten confused because so many financial products are offered out there,” Scott said. “They want to as much as possible find one financial advisor who is gong to at least understand, if not implement, a financial plan that’s right for them.”

Making Sense, Dollars

Wayne Lee, chairman of the finance department at the University of Arkansas’ Walton College of Business, said diversifications like Greenwood’s are taking place throughout the financial industry. He favors the holistic approach, he said, because it just makes sense.

“Ninety-nine percent of us have always evaluated our investment returns before taxes,” Lee said. “But we should factor in tax considerations. If you’re in a high-income tax bracket, you might want to consider being in municipal bonds, which are state and federal tax free, rather than in taxable bonds. If you’re heavy in real estate, you probably shouldn’t hold a lot of real estate stocks.

“There’s also gifting plans to consider, and what it comes down to is making a comprehensive plan for the client, and that’s what it sounds like Mary Ann is doing.”

Jack Butt, a partner with the Fayetteville law firm Davis Wright Clark Butt & Carithers PLC, focuses his practice on business and tax law. He refers some of his clients to Greenwood and also gave a nod to her financial planning offering.

“If you’re making an investment decision that Mary Ann disagrees with she’s not afraid to tell you it’s the wrong thing to do,” Butt said. “She’s not always made the most quick money but she makes money when the market’s up or down. She’s sound for the long haul.”

Still The Same

Greenwood said her firm’s strategy of looking long term will not change a lick.

After interest rates broke from the 17 percent range in 1982, the ensuing bull market run (with a couple corrections) lasted until the dot-com bubble burst in the first quarter of 2000. The Nasdaq alone was up 85 percent in 1999.

But if the bear market from 2000-2002 has done anything it’s reminded investors that free lunches are far and few in between. Greenwood, who holds a Ph.D. in economic finance from the UA, said patience and prudence are even more important as life expectancies carry people into their nineties and higher — often 20 years longer than most expected to live.

Greenwood’s many affiliations include memberships with the Institute of Chartered Financial Analysts, the New York Society of Security Analysts and a board seat with the National Association for Business Economics. She’s on the Walton College Dean’s Executive Advisory Board and numerous UA development committees. She chairs the UA Foundation and keeps a schedule of philanthropic work that could comprise a full-time job.

To read about Mary Ann Greenwood’s experience on Sept. 11, 2001, click here.