TUPELO — Hardy Reed Capital Advisors opened in August and may be the only firm of its kind in the state. The two principals, John Hardy and Scott Reed, gave up their brokers’ licenses to form this registered investment advisory firm because they believe they can serve their clients better as consultants.
“It’s hard to leave that license on the table. It was a tough decision to make,” said John Hardy, president of Hardy Reed. “But, it’s all about serving our clients’ interests and we felt we could do it better in a consulting format. There is no conflict of interest this way.”
Chief executive officer Scott Reed says the duo, after becoming certified, developed their own model for managing funds while working for another brokerage firm. “We started managing funds for a fee instead of selling products and liked that,” he said. “We didn’t fit well into a brokerage firm and knew we needed to start our own firm. It was becoming uncomfortable and a conflict of interest.”
He says Hardy Reed is trying to create a pure investment environment for its clients, many of whom came with them from the brokerage firm. “We don’t make money unless our clients do and being brokers was hurting our ability to manage for our clients,” he said. “About 80% of the registered investment firms in the country are also brokers. I think we’re the only one in the state of our type.”
Because Hardy Reed is registered with the Securities and Exchange Commission, the firm has clients in 30 states. They work with institutions, endowments and high net worth individuals to find appropriate investment vehicles. These investments are monitored on a quarterly basis to make sure they’re performing in a way to meet the goals of clients.
“We spend time with clients to determine what they’re trying to achieve. That’s why our educational designations are important,” Hardy said. “We will tweak the investments as clients’ goals change.”
He said the firm will work with more than one generation of families and measures success by client retention. New business mostly comes by referrals.
“First and foremost, we offer trust and our new format reinforces that because we’re taking brokerage out of the equation,” Hardy said. “We also offer experience, education and service to clients.”
Reed says the firm is involved with clients’ attorneys and CPAs. “These are trusted advisors that people have, along with financial advisors, but we’ve found the three don’t always work well together,” he said. “We try to quarterback those efforts. Getting all three on the same page is a relatively new thing and we think it’s important.”
Hardy and Reed say things are going well and that the climate is right for investing. “I couldn’t feel better about it,” Hardy said. “There’s a tremendous amount of wealth in our country right now. It’s a great time to invest. The trick is how and that’s where we come in. We have to understand the scenarios.”
Pointing out that Mississippi is the most generous state in the nation, Reed says that’s good for endowments. “There has been a lack of sophisticated methods of investing,” he said. “Our job is to help our clients with that. We don’t try to hit homeruns but try to meet clients’ goals.”
As for goals for Hardy Reed Capital Advisors, Reed said the main goal by far is to try to develop the best process to do what the firm does. “We’ve created an environment where we’re completely objective and clients can trust us,” he said. “We have the expertise to help them reach their goals — then we’ve met ours.”
He laughingly added that having more revenue than bills is also a goal. “We’re doing well as far as gathering assets and keeping our clients,” he added. “I can control how educated I am and I can control what it takes to be successful.”
Hardy thinks the two are in a sweet spot in their careers and is thrilled about what they’re doing. “We’re both in our mid-40s and will want to work beyond the normal retirement age,” he said. “The number one goal is taking care of our clients and number two, we want conservative growth. We’re not necessarily the right advisor for everyone.”
Reed said the five employees of the firm have 90 years of experience between them and a large amount of education and training. He believes in education for everyone. The group also worked together for a long time at their previous employment.
In addition to business degrees, Hardy and Reed earned certification in investment management through the University of Pennsylvania Wharton School of Business; accredited investment fiduciary through the Center for Fiduciary Studies; and received foundations and endowment certification from the Investment Management Consultants Association also through Wharton.
Although he is the only member of the Reed family not working at Reed’s Department Store, a Tupelo mercantile institution, Scott Reed worked there in the past and understands private business.
“I’m excited about what we’re doing,” he said. “It’s always a good climate for what we do.”
Contact MBJ contributing Lynn Lofton at email@example.com.