$5 Billion Virginia RIA Says Bear Markets Don’t Kill Wallets – Bad Behavior Does

Stephan Cassaday, Chairman and CEO, Cassaday & Co.

Thanks to Stephan Cassaday

Name: Stephan Cassaday

Company: Cassaday & Co.

Location: McLean, Virginia

AUM: $4.6 billion

Forbes Ranking: America’s Best RIA Firms, Best-In-State Wealth Advisors

Background: Cassaday, 66, grew up in Alexandria, Virginia and graduated from Radford University in 1976 with a major in psychology and a minor in business administration. His first job outside of school was with the regional firm Johnston Lemon & Co. and then he did some work at several NYSE firms before leaving the brokerage model and becoming independent in 1993.

Investment Philosophy/Strategy: “We look for things that work,” Cassaday says, adding, “There is no system that works all the time – you have to accept that fact and pick the best options that are usually pretty good.” Over a long period of time “We spend a lot of time warning customers and emotionally preparing them for markets like this,” Cassaday says. What you need to remember is that it’s not the bear market that can destroy your wealth, it’s how you behave during the bear market.”

Competitive Advantage: He cites his company’s practical and “preventive approach,” in which an in-house team of experts — from tax and investment to estate planning — interact closely to discuss clients. This broad approach allows the team to notify customers in advance of any new details or changes. Cassaday says, “The integrated wealth management process doesn’t exist for most people — and that’s where most financial mistakes are made.”

Biggest Challenge: Cassaday’s describes how to learn to delegate early in his career. “When I started the company, I worked long weeks and hardly saw the family or went on vacation,” he recalls. After a moment of realization while on the phone with his then 4-year-old son, who now works at the company, Cassaday hired a consultant and expanded the team. “Hiring good people also gives me more time to talk to customers, which is the most productive thing I can do,” he adds.

Biggest Customer Misunderstanding: Cassaday says he learned the hard way to sometimes “be persuasive” with customers. Despite his warnings, a former client was heavily invested in technology stocks in the run-up to the dotcom bubble and suffered huge losses when the crash finally happened. The client left the company shortly after, telling Cassaday, ‘You should have been more persuasive’ — I’ll never forget that,” he recalled.

Investment Outlook: He recommends staying focused on the long term and rebalancing portfolios to take advantage of distorted valuations, which have fallen significantly amid the myriad uncertainties facing the markets. “Small incremental changes now make sense. . . buy when the news is worst,” Cassaday says.

Forbes

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