A ‘Thoughtful Strategic Financial Roadmap:’ SCS Financial Services
Peter Mattoon, chief executive of SCS Financial Group in Boston, says his firm does three things well. “We have an incredibly strong investment group. We are superb at developing long-term multigenerational financial strategies for our families. And we are very proactive on the client service and communication front. Some firms have one of those, some firms have two of those. I don’t very many have all three of those, and that’s the necessary ingredient. You need all three of them to have a sound offering to the marketplace.”
SCS Financial’s clients typically are entrepreneurs who are thinking multigenerationally, says Mattoon.
Mattoon says the big difference between a conflict-free advisor such as SCS Financial and a banker broker is that “they are a manufacturing plant, and we are not. Long before there was a credit crisis, they were manufacturing product and selling it to their clients—in some cases for the right reasons, and in some cases for the wrong reasons. We have a completely unconflicted business model. But it still comes back to this: You have to have really smart investors, you have to have the relationship working within the bounds of a really thoughtful strategic financial roadmap, and you have to have client service people who really understand how to communicate effectively and to listen and to speak with or write to clients when the crisis does happen—which is inevitable, it’ll happen again in five to seven years from now.”
Mattoon says his firm’s biggest challenge is to make sure it never takes its eye off risk management. “Our whole mantra is protect first, grow second.”
He says the firm spends a lot of time trying to understand what possible scenarios may play out in the future capital markets, both domestically and globally. The biggest risk everybody, including his clients, faces is the deleveraging of the G-7, which will be take place over a five- or 10-year period, bringing with it tremendous political and capital market risks. “There are a lot of ways for unintended errors to occur. That will lead to downdrafts in the capital markets that are going to be scary.”
Mattoon says SCS Financial constructs portfolios with built-in “airbags”—“they’re not necessarily big allocations, but when there is that crash, the airbags will go off and protect the portfolio. They won’t necessarily make the portfolio have a 30% return, but they will mitigate much of the other downside events that might occur in a given portfolio.”—Michael S. Fischer
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