Mark Travis is the CEO and president of Intrepid Capital Management, a Jacksonville Beach, Florida-based boutique investment management and wealth advisory firm offering model portfolios through an open architecture platform along with comprehensive wealth management and planning.
Russ Prince: Tell us about Intrepid Capital Management’s expansion as a traditional asset manager into private client wealth management and planning.
Mark Travis: Intrepid Capital Management began in 1994 as a team of value investors distinguished by contrarian viewpoints and benchmark independence.
An independent boutique investment management firm based in Jacksonville Beach, Florida, we grew on the strength of our suite of mutual funds and separate account strategies, focusing largely on U. small- and mid-cap equity and short-duration high yield debt funds.
We found, however, that our clients wanted to access a broader spectrum of investments and advice. So in 2018, we began expanding into wealth management, adopting an open architecture custodial platform, serving current and former professionals and executives, business owners, entrepreneurs and their high-net-worth families, as well as institutional investors.
We are building out Intrepid Private Wealth almost like a consulting business with financial planning, risk mitigation, and lending solutions. It is intended to serve as an “all-in-one” firm for private clients, building customized financial plans and investment portfolios with concierge-style personal service.
Specifically, we offer financial, insurance, tax, estate, education and charitable planning services. We also offer cash flow optimization, investment consulting, portfolio management, risk mitigation strategies, alternative investments and intellectual capital, as well as lending solutions, corporate trust services, family office services, executive benefits, insurance auditing and aggregated portfolio reporting.
Our goal was to gain a more comprehensive understanding of our clients’ lives. We also wanted the ability to use our products when they were the best fit, and others when they weren’t, for a better, more cost-effective outcome. With our open platform, we can deliver a mix of low-cost passive strategies when markets are bullish and active strategies when we spot market inefficiencies.
We can compete with local banks and national wirehouses as one of the larger independent firms in the area, offering a broad range of financial knowledge, with CFP, CIMA CFA, CPA, and CMT designations among our team. In fact, some former clients have returned to us after leaving those banks or brokerage firms, many of which have had to reduce their offerings in recent years.
Prince: How are you “quarterbacking” your clients’ lives and what makes your approach different?
Travis: We know that investors still tend to “buy high and sell low,” despite advice to the contrary. A recent DALBAR, Inc. fund industry analysis found that the return gap of the average investor doubled to 2.11% in the first half of 2021 after equity investors divested in 2020, missing a bull market surge of 15.25%.
We’ve also seen investors, for example, hold balanced, moderate allocation funds longer than equity funds or equity funds longer than fixed-income funds. Some treat income funds like money market accounts.
With our private wealth model, we can “quarterback” all aspects of our clients’ financial lives, directing them through full-scale wealth management, comprehensive financial planning, and portfolio management.
With a more comprehensive view, we are better positioned to build stronger portfolios. We can assess private equity pitches and insurance coverage as well as analyze liquidity, longevity and legacy issues—all while steering clients away from behavior that erodes assets.
Our private client marketplace helps better detect financial issues before they arise and more thoroughly understand how family dynamics impact financial situations and goals. We review an exhaustive checklist with each new client to develop a comprehensive overview of goals and the steps to achieve them—and conduct a second review six months later, incorporating market changes or new life events into plans. The lists include questions to determine whether clients have high levels of debt in any accounts, whether they need to review emergency fund levels, whether they are on the threshold of a tax bracket, or whether a spouse has recently incurred significant medical expenses.
We also use software to determine where clients fall on the risk tolerance spectrum to avoid selling their assets at the worst time.
Prince: What opportunities are you discussing with clients and how are they taking advantage of them?
Travis: We know clients sometimes have projects they don’t know how to start or problems percolating below the surface they don’t always see. Private clients need broader investment offerings to diversify portfolios as well as specialized attention for their personal and business goals. At Intrepid Private Wealth, we help execute plans.
We scrutinize complex deals and contracts and build tax plans for executive benefits—specifying how they should be paid out and how they should be treated with the rest of the portfolio. Many clients don't think about protecting assets for future children or spouses. We can do that for them.
We have helped families audit and inventory artwork on multiple properties, identifying assets that lack insurance. We’ve helped clients open charitable funds to secure large gift deductions after selling a business. We’ve also helped them convert traditional IRAs to Roth IRAs to unlock the value of a suppressed price of a security, avoiding future ordinary income rates.
With our model, we gain new insights into our clients’ lives, their thinking and communication style. In one case, we intervened in a hacker’s attempt to steal from a client. In that incident, a hacker attempted to authorize a transfer of funds out of a family’s account by writing a letter to our firm using the client’s personal information. We intercepted and blocked the attempt after noticing the author’s voice did not resemble that of our client’s.
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