After more than 15 years in the financial services industry, Kevin Floyd has opened Pomona Wealth Management, calling it a “next generation” wealth management firm that’s fully independent and based in the Tri-Cities.

“I think people are missing that personal touch, and that’s what I’m betting on. That they value a relationship more than the box the advisor is sitting in,” Floyd said. His home-based office is in south Richland, where he meets with clients in person or over the phone.

“I always thought bigger was better when it came to firms,” Floyd said, who also came to realize that “as firms get bigger, generally, the profit margin decreases, and as the profit margin decreases, you typically need to have more clients. As you have more clients, you kind of develop a standardized offering to folks. Once I came to realize that, I got the itch that there’s something different you can do, and bigger isn’t always better.”

This realization led him to open his own firm to focus on fewer clients and a more personalized offering for their investment strategy.

“I’m trying to do a 180 and focus on a smaller group, rather than a mass offering for everyone,” he said. “This way I can charge less. I don’t need a compliance department because I am the compliance department. I can do it all without having to outsource.”

Floyd said most financial advisors in large firms work with 200 to 300 clients. “I can get to know people a lot better if I have 50 or 100 clients. I’m trying to create a win-win where I’ll always have time for them, and I’ll charge less. I’ll use the same, or better, technology as I did at previous firms, but just with me,” he said.

The hope is that the returns on their investments also will be better by using Floyd’s knowledge, experience and independence. He’s not tied to certain offerings that might be required when working under a larger firm and only being paid directly from clients, not from commissions tied to the investments he recommends.

Floyd holds degrees in finance and economics and is a certified financial advisor, chartered financial analyst and accredited investment fiduciary. He said he believes he is the only advisor in Eastern Washington with all three designations.

A nimble shark

As a single example of his financial strategy, Floyd said he found solid returns for fixed-income annuities, but there’s a lot of paperwork involved that wouldn’t be realistic across hundreds of clients. “You’d have to hire an army to do it,” he said.

But now under Pomona, it could be offered to a smaller base. “I’m not trying to be a huge tugboat in the ocean, more of a nimble shark,” he said.

By reducing his overhead, Floyd said he also can afford to charge lower fees, which are typically tied to a client’s assets and may run about 0.8% with a big box firm for clients with a portfolio valued above $1 million.

At Pomona, these clients might pay half of the investment fees they typically do. “I’m trying to make it more fair for the folks with higher assets, and make it more equal across the board,” he said.

Fee structure

While he’s not trying to beat the market, part of that nimble nature is always trying to look for better ideas.

“I try to take what the market gives you, charge the lowest fees you can and find low-cost investment providers,” he said. “I’d like to say clients will have better returns because I can put in more time and legwork, but no one can guarantee that. I can ensure I’ll have lower fees and the funds I choose will have lower fees, and I also cover all trade costs,” he said.

Floyd said trade costs were once a “pet peeve” when he worked for a larger firm. “You’re paying an advisor a handsome fee to manage the money and then the client is paying every time a trade is made. It’s small, but clients don’t like being nickel-and-dimed,” he said.

He offers a standard fee schedule based on the amount invested but also will offers a “retainer-based model” that offers a flat rate and advice on all investments, whether he manages them or not.

Floyd thinks the financial investment industry is moving toward this retainer-based model. Knowing that people need to have trust in the person managing their money, Floyd said there’s no penalty to leave and no cost to join up with him, either.

Floyd said he has colleagues across the country starting to establish their own boutique firms, too, as more wealth management companies are “gobbled up” by larger ones and investors are feeling more “faceless,” compared to the personal relationship they once enjoyed with their clients.

“Some people care about who’s on the top of the letterhead, but most care about who signs the letter at the bottom,” he said.

Naming his firm for the Greek goddess of “fruitful abundance,” Floyd, as Pomona’s owner and advisor, will be the one answering clients’ questions and providing investment recommendations.

“With large firms, you want advisors to be somewhat expendable, and the firm be the face of the relationship because if the advisor leaves, you don’t want the clients to leave. But what the clients care about is who is in that box. Everyone may try to make the box more fancy or more appealing, but people really just want that personal relationship,” he said.

Pomona Wealth Management: Pomonawm.com, 509-643-6028, kevin@pomonawm.com.