Jack Salzman – Kings Point Capital Management

When it comes to the finer things in life—a brilliant diamond, a top-shelf glass of scotch—having an “old-school” approach is usually considered a good thing. The term implies a certain reverence for tradition, an air of expertise often lacking in today’s increasingly automated, derivative-driven world.

Jack Salzman wonders why wealth management should be any different.

“We don’t want to be everything to everyone; our services are based on finding clients that appreciate our approach,” Salzman says. “We know what we’re good at and how to match our skills to our clientele.”

In 2007, following a 40-year run with such industry giants as Standard and Poor’s and Goldman Sachs, Salzman—together with partner and fellow Goldman alum Jeffrey Bates—launched Kings Point Capital Management (KPCM), a fee-based registered investment advisor with offices in New York and Nashville, Tennessee. The goal: to give high net worth individuals a more personal, future-focused approach to maintaining their wealth.

If it ain’t broke

It starts with a handful of tried-and-true principles. The first: to understand the client’s goals, needs, risk tolerances and effective tax rate. Doing so, Salzman says, is critical in determining appropriate asset classes—and the appropriate allocations therein.

The second KPCM tenet: to gauge the specifics of each individual security, debt or equity, and why it fits within the construct of the client portfolio. Combining aspects of growth and value investing, the resulting research-driven approach favors companies with superior business models, strong cash flows and earnings, without overly high valuations.

Third: Whether you’re dealing with debt or equity, if you buy good companies and stay with them, they’ll always bounce back from a bear market; it’s the bad companies that don’t come back.

“We take volatility as a given in long-term capital investment,” Salzman explains. “If you know the company executes along the right lines, the long-term compounding effect in equities can be fantastic. But you have to have the patience to see it through.”

Accordingly, the firm’s core portfolios seldom exceed 30 stocks, and never include mutual funds—a strategy stemming from Salzman’s time at Goldman Sachs. This allows KPCM to focus more on asset allocation and fundamental analysis, thereby limiting any subsequent adjustments to small-scale tweaks and changes where needed.

In addition, the firm will often perform due diligence on the companies themselves: conducting comprehensive research, meeting with management teams and working with some of Wall Street’s most respected research firms.

“Because we have all of these technologies and capabilities at our fingertips, there’s a temptation to want to cast as wide a net as possible in terms of picking stocks,” Salzman says. “But if you look at our track record, we’ve succeeded, in large part, because we’re focused on the fundamentals. It’s an old-school strategy, but it’s one that works.”

Strategic tech

Salzman, Bates and their team are no luddites, however. Using Wealthscope™, a proprietary software platform launched in 2015, KPCM is able to aggregate all of a client’s investments—including those managed by other private investment firms and hedge funds—to better avoid strategic redundancies—say, too many investments in one company or sector.

Beyond providing real-time indicators for each portfolio, the software can also use customized benchmarks to chart the portfolio’s overall performance against initial projections, letting clients know that their investment is doing what the portfolio manager said it would—whether that manager works for KPCM or not.

According to Salzman, while most are content with a one- or two-page performance summary, the number of clients engaging with Wealthscope’s deeper analytics has surprised even him.

“We have people coming in to spend half a day on the details,” Salzman says. “Because we limit the number of stocks, there’s a bit more incentive for clients to keep pace with how their investments are performing.”

Already, Wealthscope has proven to be a crucial differentiator for the Long Island-based firm. But while KPCM’s approach to data is nothing if not forward-facing, the firm’s values are proudly old-fashioned. Some might say refreshingly so.

Service economy

From low-risk stock picking to high-tech analysis, sound portfolio stewardship is merely the crux of KPCM’s client strategy. The firm takes a holistic approach to wealth management, working with estate planners, accountants and other advisors to assure that strategy is executed as smoothly as possible.

For example, let’s say you acquire a sizable capital gain through the sale of a business. One option would be to use that money to counteract losses within the portfolio, thereby maximizing the tax efficiency of your wealth.

“We’re not just offering service, but customized service,” Salzman explains. “Our motto has always been: You’re rich, and it’s our goal to keep you rich. It’s all about capital preservation.”

More recently, the firm has begun offering private investments as a supplemental feature for certain clients. As they’re seldom correlative to traditional stocks, such assets can help diversify one’s portfolio while providing robust returns along five and 10-year tracks.

But it’s in the firm’s fundamentals—forged at Goldman Sachs, tempered with decades of combined experience—that Salzman sees the greatest potential.

“We’re uniquely team-oriented, and we make sure our clients have access to everyone,” Salzman says. “More importantly, we’re service-oriented. For clients that understand our approach and can work with us, the experience can be a tremendous one.”

Call it old school, if you must. Sometimes, the most successful ideas are the ones that never went away.