Mr. Leggett: As Chief Investment Officer at FirstMerit, I've been actively engaged in working with our various teams in morphing what has been a very good and very solid bank trust department into a broader, more integrated wealth management services organization. Although we've been doing investment management for high net worth individuals and institutions for decades (with roughly 2.3 billion of assets under discretionary management), we upgraded the investment staff over the last four years and also increased the range of investment solutions offered. Not only do we offer stocks, bonds, and mutual funds, but also exchange-traded funds (ETFs), separately managed accounts and brokered CDs. Our investment philosophy is "Active Advice", which means we proactively manage client accounts to capture opportunities, mitigate risk and thus achieve client objectives. We believe this approach goes a long way in addressing the difficult question facing investors: "How can I earn the best returns without taking undue risk of loss?"
TWST: How does that translate into how you work with your clients?
Mr. Leggett: We have a very strong focus on understanding what our clients'
needs are, so we begin by working with them on their investment policy statement
and then operate within that statement in terms of asset allocation. To
implement the policy, we create investment plans that utilize the appropriate
mix of assets and styles.
We know that asset allocation decisions are going to drive investment results.
That is why we spend a lot of effort up front to figure out the best plan for
each of our clients. In terms of our client relationship philosophy, it's really
to deliver that active advice to our clients.
We consistently preach the advantages of diversification to our clients. For
decades, we have used a broad range of stock/bond allocations in our clients'
accounts. As recently as twenty years ago, this was really the only decision to
make. Now of course, we have multitudes of "styles" available, plus the so-
called alternative approaches such as hedge funds and private equity funds. This
has had a significant impact on FirstMerit client portfolios. Several years ago,
we implemented a series of diversified portfolios using mutual funds which
invest in US stocks ranging from large to small and growth to value, as well as
developed and emerging economy international stocks and a range of fixed income
styles. In 2006, we expanded our offerings to include FirstMerit Select
Portfolios (selected external style specific managers). Last year we introduced
etfFIRST which utilizes exchange traded funds to create six asset allocation
models that offer different risk/reward characteristics.
Tickers included in this excerpt: GS, HD, PRU
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